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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21321
Pioneer Municipal High Income Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: October 31
Date of reporting period: November 1, 2006 through April 30, 2007
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
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PIONEER
--------
MUNICIPAL
HIGH
INCOME
TRUST
Annual
Report
4/30/07
[LOGO]PIONEER
Investments(R)
Table of Contents
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Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 8
Prices and Distributions 9
Performance Update 10
Schedule of Investments 11
Financial Statements 19
Notes to Financial Statements 23
Report of Independent Registered Public Accounting Firm 33
Results of Shareowner Meeting 34
Factors Considered by the Independent Trustees in Approving
the Management Contract 35
Trustees, Officers and Service Providers 40
President's
Dear Shareowner,
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Staying diversified and keeping your portfolio invested in the markets are two
general investment principles that have served investors well over time. Those
were particularly useful guides during the past year, as U.S. and global stock
and bond markets grew strongly during the period.
The markets were supported by relatively low short-term interest rates and
generally strong economies around the globe. The U.S. stock market, as measured
by the Standard & Poor's 500 Stock Index, gained approximately 15% over the
twelve months ending April 30, 2007. European and Emerging Markets equities
performed even better, with MSCI's indexes of those regions rising
approximately 27% and 18%, respectively. The U.S. bond market, despite growing
concerns about the health of the U.S. mortgage industry, gained roughly 8%, as
measured by the Lehman Brothers Aggregate Bond Index. The High Yield market, as
measured by the Merrill Lynch High Yield Bond Master II Index, returned
approximately 12%.
The climate for investors continues to appear generally positive. While still
strong, the U.S. economy has slowed. That was due in large part to a slowdown
in new home construction and, in part, to the lagging effects of rising energy
and commodity prices and rising short-term interest rates. This was also due,
in part, to the natural maturation of the cyclical expansion as U.S. factories
approach full utilization and the labor markets approach full employment.
We have enjoyed a cyclical recovery with strong economic growth, and although
U.S. economic growth has slowed, we believe it will continue to grow, albeit at
a slower rate. The Federal Reserve Board has indicated a reduced likelihood of
future rate hikes, but continues to highlight its commitment to keeping
inflationary pressures contained. This is in keeping with "best practices"
among the world's central banks: low and stable inflation is believed to be the
best backdrop for stable economic growth and low average unemployment.
In Europe, healthy labor markets are supporting growing consumption and solid
GDP growth, helped by productivity gains and a positive operating environment
for European companies that are finding strong export markets for their goods
and services around the globe.
2
Letter
European inflationary pressures appear to be largely under control, with the
European Central bank remaining strongly vigilant. Japanese economic growth
continues to make progress, and the country has become a more attractive market
as deflationary problems recede. Economic growth in emerging market countries
remains faster than in the developed world as they continue to "catch up," led
by China, which continues its rise as a world economic power.
While the economic outlook appears generally favorable for investors, sudden
swings in the markets are always to be expected. Just as staying diversified
and invested are important investment principles, it is also important to pay
attention to asset allocation. As always, we encourage shareholders to work
closely with their financial advisor to find the mix of stocks, bonds and money
market assets that is aligned to your particular risk tolerance and investment
objective.
Respectfully,
/s/Daniel K. Kingsbury
Daniel K. Kingsbury President and CEO
Pioneer Investment Management, Inc.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
3
Pioneer Municipal High Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 4/30/07
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Throughout the Trust's fiscal year, investors in Pioneer Municipal High Income
Trust benefited from a well diversified portfolio of securities that provided a
relatively high level of tax-free income. In the following interview, David
Eurkus, who is responsible for the Trust's day-to-day management, discusses
some of the factors that had an impact on the municipal bond market and the
Trust. Mr. Eurkus is supported by Pioneer's fixed-income team.
Q: How did the Trust perform?
A: For the 12 months ended April 30, 2007, Pioneer Municipal High Income Trust
earned a total return of 11.50% at net asset value and 20.04% at market
price. As of April 30, 2007, the Trust was selling at a discount of market
price to net asset value of 6.05% compared with 12.74% on April 30, 2006.
The Lehman Brothers Municipal Bond Index, which tracks the performance of
investment-grade bonds, returned 5.78% for the same period. The Lehman
Brothers High Yield Municipal Bond Index returned 9.94% for the same
period. While the Trust invested in municipal securities with a broad range
of maturities and credit ratings, it maintained a dollar-weighted average
portfolio credit quality of BBB. On April 30, 2007 the Trust held 113
issues in various states, territories and the District of Columbia. On
April 30, 2007, the Trust's current yield was 5.10%, and its 30-day SEC
yield based on market price was 6.81%.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: What was the investment environment like during the year?
A: As economic growth moderated during the fiscal year, the Federal Reserve
Board continued to voice concerns about the potential for accelerating
inflation. In this environment, the central bank kept the Federal funds
rate at 5.25%, where it has stood since June 2006. (The Federal funds rate
is the rate banks charge each other
4
Pioneer Municipal High Income Trust
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for overnight loans.) The fixed-income markets were generally positive
throughout the 12 months, with market rates declining across the maturity
spectrum, although yields on longer-term bonds went down more than those on
shorter-term securities. Investors continued to favor the riskier areas of
the fixed-income markets, boosting the prices of lower quality,
higher-yielding bonds. For the entire fiscal period, these lower quality
assets led the fixed-income market.
Q: What strategies did you use in managing the Trust?
A: In keeping with our buy-and-hold strategy, we made relatively few changes
to the Trust, maintaining a mix of 45.2% of total investments in
investment-grade bonds, 54.3% of total investments in below
investment-grade bonds, and 0.5% of total investments in cash equivalents.
We kept the Trust invested in sectors that constitute the economic fabric
of the United States, including airport and transportation, education,
healthcare, and public power, among others. In addition, we had a position
in tobacco bonds, which are backed by tobacco companies' payments to
states. We also created a position in bonds issued by correctional
institutions that have been privatized by the federal government and are
now being built and managed by private corporations.
On April 30, 2007, 22% of the Trust was leveraged, which means that in the
past we borrowed funds at low rates and invested those funds in
high-yielding bonds. This leveraging strategy has aided returns for several
years. Should rates decline, the cost of borrowing would also go down,
providing the Trust with a modest amount of additional income. A rise in
short-term interest rates in the future would add to the Trust's borrowing
costs, and the ability to sustain present dividend levels could be
affected.
Q: What contributed to performance?
A: Nearly all of the portfolio's positions contributed to results, but the
biggest gains came from transportation and education bonds. In addition,
the Trust's higher-yielding, below investment-grade bonds outperformed the
investment-grade bonds in the portfolio.
5
Pioneer Municipal High Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 4/30/07 (continued)
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Q: What detracted from performance?
A: Our holdings in the housing sector, which accounted for 2.2% of total
investments, underperformed because of weakness in the real estate industry
in general and concerns about the rise in sub-prime mortgage defaults in
particular. Also, because of the relatively strong economy, many issuers
have a surplus of cash, which they are using to pay down their bond debt
earlier than expected. As some of our bonds have been called, or redeemed,
before their maturity dates, we have invested the proceeds in new
securities that, because of current market conditions, have lower yields
than the redeemed bonds. Having bonds called sooner than expected is a
normal part of the fixed-income process, and we continue to find attractive
investment opportunities.
Q: What is your outlook over the next six months?
A: We believe the environment will continue to be attractive for municipal
bonds, as economic growth moderates and interest rates and inflation remain
at relatively low levels. While new bond issuance has declined, demand for
municipal securities remains robust as new types of investors, such as
hedge funds and property and casualty insurers, seek tax-advantaged yields.
This supply/demand dynamic is positive for the Trust because it has the
potential of increasing the value of the bonds in the portfolio. As we look
ahead, we plan to maintain our investment approach of keeping the Trust
fully invested in sectors that are vital to the U.S. economy.
Investments in high-yield or lower-rated securities are subject to
greater-than-average risk. The Trust may invest in securities of issuers that
are in default or that are in bankruptcy.
A portion of income may be subject to state, federal, and/or alternative
minimum tax. Capital gains, if any, are subject to a capital gains tax. When
interest rates rise, the prices of fixed-income securities in the Trust will
generally fall. Conversely, when interest rates fall the prices of fixed-income
securities in the Trust will generally rise. By concentrating in municipal
securities, the portfolio is more susceptible to adverse economic, political or
regulatory developments than is a portfolio that invests more broadly.
6
Pioneer Municipal High Income Trust
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Investments in the Trust are subject to possible loss due to the financial
failure of underlying securities and their inability to meet their debt
obligations.
The Trust may use leverage through the issuance of preferred shares with an
aggregate liquidation preference of up to 25% of the Trust's total assets after
such issuance. Leverage creates significant risks, including the risk that the
Trust's income or capital appreciation will not be sufficient to cover the cost
of leverage, which may adversely affect the return for the holders of common
shares.
Risks of investing in the Trust are discussed in greater detail in the Trust's
registration statement on Form N-2 relating to its common shares.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
7
Pioneer Municipal High Income Trust
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PORTFOLIO SUMMARY 4/30/07
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[THE FOLLOWING DATA IS REPRESENTED IN THE PRINTED MATERIAL AS A PIE CHART]
Health Revenue 26.6%
Airport Revenue 14.9%
Insured 14.1%
Tobacco Revenue 10.4%
General Obligation 6.9%
Education Revenue 4.8%
Pollution Control Revenue 4.4%
Development Revenue 4.1%
Power Revenue 2.8%
Transportation Revenue 2.6%
Facilities Revenue 2.6%
Housing Revenue 2.2%
Other Revenue 1.6%
Gaming Revenue 1.2%
School District Revenue 0.6%
Utilites Revenue 0.2%
Portfolio Maturity
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(As a percentage of long-term holdings)
[THE FOLLOWING DATA IS REPRESENTED IN THE PRINTED MATERIAL AS A PIE CHART]
0-1 years 7.5%
1-3 years 18.5%
3-6 years 37.4%
6-8 years 13.6%
8-10 years 3.9%
10+ years 19.1%
Quality Distribution
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(As a dollar-weighted percentage of holdings; based on S&P ratings)
[THE FOLLOWING DATA IS REPRESENTED IN THE PRINTED MATERIAL AS A PIE CHART]
AAA 23.1%
AA 0.7%
A 3.7%
BBB 17.7%
BB 2.3%
B 15.9%
CCC 4.3%
Not Rated 31.8%
Cash Equivalents 0.5%
The portfolio is actively managed and current holdings may be different.
8
Pioneer Municipal High Income Trust
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PRICES AND DISTRIBUTIONS
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Share Prices and Distributions
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Market Value
per Common Share 4/30/07 4/30/06
$15.05 $13.22
Net Asset Value
per Common Share 4/30/07 4/30/06
$16.02 $15.15
Net
Distributions Investment Short-Term Long-Term
per Common Share Income Capital Gains Capital Gains
(5/1/06 - 4/30/07) $0.7680 $ - $ -
10 Largest Holdings
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(As a percentage of long-term holdings)*
1. Allegheny County Hospital Development Authority Revenue,
9.25%, 11/15/30 3.23%
2. New Jersey Economic Development Authority Revenue,
6.25%, 9/15/29 3.07
3. New York City Industrial Development Agency, 6.9%, 8/1/24 2.95
4. Tobacco Settlement Financing Corp., 6.75%, 6/1/39 2.59
5. Massachusetts State Development Finance Agency, RIB,
6.983%, 10/1/39 (144A) 2.54
6. Metropolitan Pier & Exposition Authority Dedicated State Ta
Revenue, 0.0%, 6/15/22 2.52
7. Non-Profit Preferred Funding Trust I, Series E, 8.0%, 9/15/37 2.23
8. New York State Dormitory Authority Revenue, RIB, 7.223%
7/1/26 (144A) 1.97
9. Golden State Tobacco Securitization Corp., 7.875%, 6/1/42 1.90
10. Oklahoma Development Finance Authority Revenue,
5.625%, 8/15/29 1.87
* This list excludes temporary cash and derivative instruments. The portfolio
is actively managed, and current holdings may be different. The holdings
listed should not be considered recommendations to buy or sell any security
listed.
9
Pioneer Municipal High Income Trust
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PERFORMANCE UPDATE 4/30/07
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Investment Returns
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The mountain chart on the right shows the change in market value, including
reinvestment of dividends and distributions, of a $10,000 investment made in
common shares of Pioneer Municipal High Income Trust, compared to that of the
Lehman Brothers Municipal Bond Index and Lehman Brothers Non-Investment Grade
Municipal Bond Index.
[THE FOLLOWING DATA IS REPRESENTED IN THE PRINTED MATERIAL AS A MOUNTAIN CHART]
Pioneer Municipal Lehman Brothers Lehman Brothers Non-Investment
High Income Trust Municipal Bond Index* Grade Municipal Bond Index*
7/03 10,000 10,000 10,000
4/04 9,589 10,441 11,014
4/05 10,868 11,153 12,399
4/06 10,666 11,394 13,325
4/07 12,804 12,052 14,649
Cumulative Total Returns
(As of April 30, 2007)
Net Asset Market
Period Value (NAV) Price
Life-of-Trust
(7/21/03) 42.66% 28.03%
1 Year 11.50 20.04
*Index comparison begins July 31, 2003
Call 1-800-225-6292 or visit pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
Performance data shown represents past performance. Past performance is no
guarantee of future results. Investment return and market price will
fluctuate, and your shares may trade below net asset value ("NAV"), due to
such factors as interest rate changes, and the perceived credit quality of
borrowers.
Total investment return does not reflect broker sales charges or
commissions. All performance is for common shares of the Trust.
Closed-end funds, unlike open-end funds, are not continuously offered.
There is a one-time public offering and once issued, shares of closed-end
funds are sold in the open market through a stock exchange and frequently
trade at prices lower than their NAV. NAV is total assets less total
liabilities, which includes preferred shares, divided by the number of
common shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested
at the greater of NAV or 95% of the market price. When NAV is higher,
dividends are assumed to be reinvested at prices obtained under the Trust's
dividend reinvestment plan.
The performance table and graph do not reflect the deduction of fees and
taxes that a shareowner would pay on Trust distributions or the redemption
of Trust shares.
The Lehman Brothers Municipal Bond Index is a broad measure of the
municipal bond market. Lehman Brothers Non-Investment Grade Municipal Bond
Index totals over $26 billion in market value and maintains over 1300
securities. Municipal bonds in this index have the following requirements:
maturities of one year or greater, sub investment grade (below Baa or
non-rated), fixed coupon rate, issued after 12/31/90, deal size over $20
million, maturity size of at least $3 million. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Trust returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in
the Indices.
10
Pioneer Municipal High Income Trust
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SCHEDULE OF INVESTMENTS 4/30/07
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
TAX EXEMPT OBLIGATIONS - 123.9% of Net Assets
Alabama - 1.3%
$ 1,500,000 BBB/NR Camden Alabama Industrial Development Board,
6.125%, 12/1/24 $ 1,641,285
1,000,000 NR/NR Huntsville-Redstone Village Special Care Facilities
Financing Authority, 5.5%, 1/1/28 1,000,660
2,000,000 NR/NR Huntsville-Redstone Village Special Care Facilities
Financing Authority, 5.5%, 1/1/43 1,979,460
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$ 4,621,405
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Arizona - 5.5%
5,000,000 B+/Baa3 Apache County Industrial Development Authority,
5.85%, 3/1/28 $ 5,003,250
5,000,000 B+/Baa3 Apache County Industrial Development Authority,
5.875%, 3/1/33 5,003,350
7,000,000(a) NR/Aaa Downtown Phoenix Hotel Corp., RIB,
6.827%, 7/1/40 (144A) 8,008,420
1,000,000 NR/Baa3 Pima County Industrial Development Authority,
7.25%, 7/1/31 1,112,350
500,000 NR/Baa2 Yavapai County Industrial Development Authority,
6.0%, 8/1/33 540,440
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$ 19,667,810
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California - 10.6%
7,270,000 A+/A1 California State General Obligation,
5.25%, 2/1/28 $ 7,759,634
5,000,000 A+/A1 California Statewide Communities Development
Authority Revenue, 5.0%, 8/15/34 5,210,950
5,150,000+ AAA/Baa3 Golden State Tobacco Securitization Corp.,
7.8%, 6/1/42 6,261,576
7,000,000+ AAA/Baa3 Golden State Tobacco Securitization Corp.,
7.875%, 6/1/42 8,536,640
2,000,000 AAA/Aaa San Diego Unified School District, 5.0%, 7/1/25 2,076,380
2,500,000 AAA/Aaa University of California Revenue, 5.0%, 5/15/25 2,626,100
5,000,000 B+/NR Valley Health System Hospital Revenue,
6.5%, 5/15/25 5,031,200
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$ 37,502,480
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Connecticut - 3.5%
2,205,000 BBB-/Baa3 Connecticut State Health & Educational Facilities
Authority Revenue, 5.375%, 7/1/17 $ 2,247,512
4,800,000 BBB-/Baa3 Connecticut State Health & Educational Facilities
Authority Revenue, 5.5%, 7/1/27 4,890,864
5,000,000 BB/NR Mohegan Tribe Indians Gaming Authority,
6.25%, 1/1/31 (144A) 5,312,350
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$ 12,450,726
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The accompanying notes are an integral part of these financial statements. 11
Pioneer Municipal High Income Trust
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SCHEDULE OF INVESTMENTS 4/30/07 (continued)
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Delaware - 0.3%
$ 500,000 NR/NR Sussex County Delaware Revenue, 5.9%, 1/1/26 $ 519,750
600,000 NR/NR Sussex County Delaware Revenue, 6.0%, 1/1/35 626,298
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$ 1,146,048
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District of Columbia - 3.5%
5,000,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.5%, 5/15/33 $ 5,959,400
6,000,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.75%, 5/15/40 6,591,600
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$ 12,551,000
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Florida - 3.6%
2,000,000 NR/NR Beacon Lakes Community Development,
6.9%, 5/1/35 $ 2,187,000
1,650,000 BBB-/Baa2 Polk County Industrial Development Revenue,
5.85%, 12/1/30 1,685,195
1,000,000 NR/NR St. Johns County Industrial Development Authority
Revenue, 5.25%, 1/1/26 1,014,530
2,000,000 NR/NR St. Johns County Industrial Development Authority
Revenue, 5.375%, 1/1/40 2,041,100
5,500,000 NR/Baa2 Tallahassee Health Facilities Revenue,
6.375%, 12/1/30 5,871,525
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$ 12,799,350
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Guam - 1.4%
5,000,000 NR/NR Northern Mariana Islands, 5.0%, 10/1/22 $ 5,054,400
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Georgia - 2.8%
4,240,000(a) NR/Aaa Atlanta Georgia Water & Waste Revenue, RIB,
6.975%, 11/1/43 (144A) $ 4,858,531
2,400,000 NR/NR Fulton County Residential Care Facilities Revenue,
5.0%, 7/1/27 2,413,152
2,600,000 NR/NR Fulton County Residential Care Facilities Revenue,
5.125%, 7/1/42 2,623,426
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$ 9,895,109
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Idaho - 1.5%
5,000,000 BBB-/Baa3 Power County Industrial Development Corp.,
6.45%, 8/1/32 $ 5,300,000
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Illinois - 6.5%
1,000,000 NR/NR Centerpoint Intermodal Center,
8.0%, 6/15/23 (144A) $ 1,035,460
5,000,000 AAA/Aaa Chicago Illinois O'Hare International Airport
Revenue, 5.0%, 1/1/33 5,254,450
1,000,000 NR/NR Illinois Finance Authority Revenue,
6.0%, 11/15/27 1,057,240
12 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Illinois - (continued)
$ 1,000,000 NR/NR Illinois Finance Authority Revenue,
6.0%, 11/15/39 $ 1,048,050
1,500,000 NR/NR Illinois Health Facilities Authority Revenue,
6.9%, 11/15/33 1,657,575
16,880,000(b) AAA/Aaa Metropolitan Pier & Exposition Authority \Dedicated
State Tax Revenue, 0.0%, 6/15/22 11,322,091
1,800,000 NR/NR Southwestern Illinois Development Authority
Revenue, 5.625%, 11/1/26 1,834,488
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$ 23,209,354
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Indiana - 1.6%
1,000,000 BBB+/Baa1 Indiana State Development Finance Authority
Revenue, 5.6%, 12/1/32 $ 1,031,290
4,300,000 BBB/Ba1 Indiana State Development Finance Authority
Revenue, 5.75%, 10/1/11 4,461,594
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$ 5,492,884
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Massachusetts - 10.5%
4,000,000 AAA/Aa2 Massachusetts Bay Transportation Authority,
5.0%, 7/1/31 $ 4,476,160
1,335,000 AAA/Aaa Massachusetts Health & Educational Facilities
Authority Revenue, 5.0%, 7/15/35 1,382,499
7,050,000 AAA/Aaa Massachusetts Health & Educational Facilities
Authority Revenue, 5.125%, 7/15/37 7,398,834
3,500,000 BBB/Baa3 Massachusetts Health & Educational Facilities
Authority Revenue, 6.25%, 7/1/22 3,812,305
5,000,000 BBB-/NR Massachusetts Health & Educational Facilities
Authority Revenue, 6.75%, 10/1/33 5,512,650
9,810,000(a) NR/Aaa Massachusetts State Development Finance
Agency, RIB, 6.983%, 10/1/39 (144A) 11,417,467
3,055,000 AA-/Aa3 Massachusetts State Housing Finance Agency,
5.25%, 12/1/33 3,146,161
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$ 37,146,076
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Michigan - 4.1%
950,000 NR/NR Doctor Charles Drew Academy, 5.7%, 11/1/36 $ 977,797
1,500,000 BBB-/NR John Tolfree Health System Corp., 6.0%, 9/15/23 1,536,600
2,000,000 BB-/Ba3 Michigan State Hospital Finance Authority
Revenue, 5.5%, 8/15/23 1,991,300
4,010,000 BBB-/Ba1 Michigan State Hospital Finance Authority
Revenue, 6.0%, 2/1/24 4,012,005
7,720,000(c) NR/NR Wayne Charter County Michigan Special Airport
Facilities Revenue, 6.75%, 12/1/15 5,909,274
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$ 14,426,976
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The accompanying notes are an integral part of these financial statements. 13
Pioneer Municipal High Income Trust
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SCHEDULE OF INVESTMENTS 4/30/07 (continued)
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Minnesota - 0.5%
$ 1,675,000 BB/NR Duluth Economic Development Authority Health
Care Facilities Revenue, 7.25%, 6/15/32 $ 1,850,021
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Mississippi - 0.9%
3,000,000 BBB-/Ba1 Mississippi Business Finance Corp. Pollution
Control Revenue, 5.9%, 5/1/22 $ 3,031,800
-------------
Montana - 0.5%
1,600,000 NR/NR Two Rivers Authority, Inc. Correctional Facility
Improvement Revenue, 7.375%, 11/1/27 $ 1,652,224
-------------
Nevada - 2.2%
1,000,000 BBB-/Baa3 Clark County Industrial Development Revenue,
5.45%, 3/1/38 $ 1,050,310
4,600,000 B/NR Clark County Industrial Development Revenue,
5.5%, 10/1/30 4,586,568
2,000,000 NR/NR Nevada State Department of Business & Industry,
7.25%, 1/1/23 2,095,260
-------------
$ 7,732,138
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New Hampshire - 0.9%
3,000,000 AAA/Aaa Manchester School Facilities Revenue,
5.125%, 6/1/28 $ 3,164,520
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New Jersey - 9.9%
2,000,000 B/Caa1 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/19 $ 2,062,860
13,350,000 B/Caa1 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/29 13,796,290
1,000,000 B/Caa1 New Jersey Economic Development Authority
Revenue, 6.4%, 9/15/23 1,033,410
6,150,000 B/Caa1 New Jersey Economic Development Authority
Revenue, 7.0%, 11/15/30 6,557,438
10,000,000+ AAA/Aaa Tobacco Settlement Financing Corp.,
6.75%, 6/1/39 11,618,500
-------------
$ 35,068,498
-------------
New Mexico - 0.4%
1,350,000+ BBB-/NR Santa Fe Educational Facilities Revenue,
5.75%, 10/1/28 $ 1,519,236
-------------
New York - 10.7%
2,000,000 A/NR New York City Industrial Development Agency,
5.375%, 6/1/23 $ 2,103,660
12,990,000 CCC+/Caa2 New York City Industrial Development Agency,
6.9%, 8/1/24 13,249,800
5,000,000 AAA/Aaa New York City Trust Cultural Resources Revenue,
5.125%, 7/1/31 5,248,150
14 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
New York - (continued)
$ 7,040,000(a) NR/Aaa New York State Dormitory Authority Revenue, RIB,
7.223%, 7/1/26 (144A) $ 8,829,286
2,000,000 NR/NR Suffolk County Industrial Development Agency,
7.25%, 1/1/30 2,102,880
6,000,000 AAA/Aaa Triborough Bridge & Tunnel Authority Revenue,
5.25%, 11/15/30 6,410,040
-------------
$ 37,943,816
-------------
North Carolina - 2.5%
4,030,000 NR/NR Charlotte North Carolina Special Facilities
Revenue, 5.6%, 7/1/27 $ 4,053,334
4,600,000 NR/NR Charlotte North Carolina Special Facilities
Revenue, 7.75%, 2/1/28 4,893,940
-------------
$ 8,947,274
-------------
Oklahoma - 6.0%
3,000,000+ AAA/Aaa Oklahoma Development Finance Authority
Revenue, 5.625%, 8/15/19 $ 3,154,200
8,000,000+ AAA/Aaa Oklahoma Development Finance Authority
Revenue, 5.625%, 8/15/29 8,411,200
4,100,000 B/Caa2 Tulsa Municipal Airport Revenue, 5.65%, 12/1/35 4,141,000
1,225,000 B/Caa2 Tulsa Municipal Airport Revenue, 6.25%, 6/1/20 1,226,090
4,350,000 B/Caa2 Tulsa Municipal Airport Revenue, 7.35%, 12/1/11 4,365,399
-------------
$ 21,297,889
-------------
Pennsylvania - 5.6%
1,550,000 NR/Baa1 Allegheny County Hospital Development Authority
Revenue, 5.125%, 5/1/25 $ 1,553,518
12,300,000 B+/Ba3 Allegheny County Hospital Development Authority
Revenue, 9.25%, 11/15/30 14,510,433
1,000,000 B/NR Columbia County Hospital Authority Health Care
Revenue, 5.9%, 6/1/29 922,630
1,000,000 BBB/Ba2 Hazleton Health Services Authority Hospital
Revenue, 5.625%, 7/1/17 1,000,420
1,280,000 NR/B2 Langhorne Manor Borough Higher Education &
Health Authority Revenue, 7.35%, 7/1/22 1,311,232
500,000 BBB+/NR Pennsylvania Higher Educational Facilities Authority
Revenue, 5.4%, 7/15/36 526,815
-------------
$ 19,825,048
-------------
Rhode Island - 1.3%
4,000,000 NR/NR Central Falls Detention Facilities Revenue,
7.25%, 7/15/35 $ 4,495,440
-------------
The accompanying notes are an integral part of these financial statements. 15
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 4/30/07 (continued)
--------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
South Carolina - 1.9%
$ 5,185,000+ BBB+/Baa1 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 $ 5,915,307
665,000+ BBB+/Baa1 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 756,883
------------
$ 6,672,190
------------
Tennessee - 3.6%
7,000,000 BBB+/Baa2 Johnson City Health & Educational Facilities Board
Hospital Revenue, 7.5%, 7/1/33 $ 8,107,540
4,480,000 NR/Baa3 Knox County Health Educational & Housing
Facilities Board Hospital Revenue,
6.375%, 4/15/22 4,601,274
------------
$ 12,708,814
------------
Texas - 10.9%
1,000,000 BB/Ba2 Austin Convention Enterprises, Inc.,
5.75%, 1/1/34 $ 1,054,520
1,345,000 NR/Ba2 Bexar County Housing Finance Corp.,
8.0%, 12/1/36 1,431,726
1,000,000 CCC+/Caa2 Dallas-Fort Worth International Airport Revenue,
6.0%, 11/1/14 1,002,500
5,000,000 CCC+/Caa2 Dallas-Fort Worth International Airport Revenue,
6.15%, 5/1/29 5,018,950
4,000,000 NR/NR Decatur Hospital Authority Revenue, 7.0%, 9/1/25 4,390,680
1,000,000+ NR/NR Georgetown Health Facilities Development Corp.,
6.25%, 8/15/29 1,072,250
2,000,000 NR/NR Gulf Coast Industrial Development Authority
Revenue, 7.0%, 12/1/36 2,152,360
3,750,000 B-/Caa1 Houston Airport System Special Facilities Revenue,
5.7%, 7/15/29 3,809,812
5,340,000 NR/NR Lubbock Health Facilities Development Corp.,
6.625%, 7/1/36 5,615,224
2,450,000(a) NR/NR Northside Independent School District, RIB,
7.387%, 6/15/33 (144A) 2,879,387
500,000 BBB-/Baa2 Sabine River Authority Pollution Control Revenue,
6.15%, 8/1/22 534,510
7,040,000(a) NR/Aa1 Texas State, RIB, 6.843%, 4/1/30 (144A) 8,227,226
1,365,000 NR/NR Willacy County Local Government Corp. Revenue,
6.0%, 3/1/09 1,381,394
------------
$ 38,570,539
------------
Utah - 0.2%
800,000 NR/NR Spanish Fork City Charter School Revenue,
5.55%, 11/15/26 (144A) $ 822,768
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Vermont - 0.5%
$ 1,500,000 A-/A3 Vermont Educational & Health Buildings Financing
Agency Revenue, 6.0%, 10/1/28 $ 1,663,830
-------------
Virginia - 1.5%
1,000,000 BBB+/Baa2 Peninsula Ports Authority, 6.0%, 4/1/33 $ 1,090,270
4,000,000+ AAA/NR Pocahontas Parkway Association of Virginia Toll
Road Revenue, 5.5%, 8/15/28 4,170,720
-------------
$ 5,260,990
-------------
Washington - 7.2%
4,710,000 AAA/Aaa Spokane Public Facilities District Hotel/Motel
Tax & Sales, 5.75%, 12/1/27 $ 5,174,359
7,025,000 BBB/Baa3 Tobacco Settlement Authority Revenue,
6.625%, 6/1/32 7,821,986
14,315,000 AAA/Aaa Washington State General Obligation,
0.0%, 6/1/22 7,479,015
5,000,000 NR/NR Washington State Housing Finance Committee
Nonprofit Revenue Bonds, 5.625%, 1/1/27 5,170,650
-------------
$ 25,646,010
-------------
TOTAL TAX-EXEMPT OBLIGATIONS
(Cost $389,166,301) $ 439,136,663
-------------
MUNICIPAL COLLATERALIZED DEBT
OBLIGATION - 2.8% of Net Assets
10,000,000(d) NR/NR Non-Profit Preferred Funding Trust I, Series E,
8.0%, 9/15/37 (144A) $ 10,021,000
-------------
TOTAL MUNICIPAL COLLATERALIZED
DEBT OBLIGATION
(Cost $10,000,000) $ 10,021,000
=============
Shares TAX-EXEMPT MONEY MARKET MUTUAL
FUND - 0.7% of Net Assets
2,435,150 BlackRock Liquidity Funds MuniFund Portfolio $ 2,435,150
-------------
TOTAL TAX-EXEMPT MONEY MARKET
MUTUAL FUND
(Cost $2,435,150) $ 2,435,150
-------------
TOTAL INVESTMENTS IN SECURITIES - 127.4%
(Cost $401,601,451) (e)(f) $ 451,592,813
-------------
OTHER ASSETS AND LIABILITIES - 1.1% $ 3,952,066
-------------
PREFERRED SHARES AT REDEMPTION VALUE,
INCLUDING DIVIDENDS PAYABLE - (28.5)% $(101,058,545)
-------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS - 100.0% $ 354,486,334
=============
The accompanying notes are an integral part of these financial statements. 17
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 4/30/07 (continued)
--------------------------------------------------------------------------------
RIB Residual Interest Bonds
NR Security not rated by S&P or Moody's.
(144A) Security is exempt from registration under Rule 144A of the Securities
Act of 1933. Such securities may be resold normally to qualified
institutional buyers in a transaction exempt from registration. At April
30, 2007 the value of these securities amounted to $61,411,895 or 17.3% of
net assets applicable to common shareowners.
+ Prerefunded bonds have been collateralized by U.S. Treasury securities or
U.S. Government Agencies which are held in escrow to pay interest and
principal on the tax exempt issue and to retire the bonds in full at the
earliest refunding date.
(a) The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The interest rate shown is the rate at April
30, 2007.
(b) Debt obligation initially issued at one coupon which converts to a higher
coupon at a specific date. The rate shown is the rate at April 30, 2007.
(c) Security is in default and is non-income producing.
(d) The interest rate is subject to change periodically. The interest rate
shown is the rate at April 30, 2007.
(e) The concentration of investments by type of obligation/market sector is as
follows:
Insured 14.1%
General Obligation 6.9
Revenue Bonds:
Health Revenue 26.6
Airport Revenue 14.9
Tobacco Revenue 10.4
Education Revenue 4.8
Pollution Control Revenue 4.4
Development Revenue 4.1
Power Revenue 2.8
Transportation Revenue 2.6
Facilities Revenue 2.6
Housing Revenue 2.2
Other Revenue 1.6
Gaming Revenue 1.2
School District Revenue 0.6
Utilities Revenue 0.2
-----
100.0%
=====
(f) At April 30, 2007, the net unrealized gain on investments based on cost for
federal income tax purposes of $399,739,253 was as follows:
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost
Aggregate gross unrealized loss for all investments in which there is an $52,635,467
excess of tax cost over value (781,907)
-----------
Net unrealized gain $51,853,560
===========
For financial reporting purposes net unrealized gain on investments was
$49,991,362 and cost of investments aggregated $401,601,451.
Purchases and sales of securities (excluding temporary cash investments) for
the year ended April 30, 2007, aggregated $81,731,667 and $80,531,488,
respectively.
18 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 4/30/07
--------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $401,601,451) $ 451,592,813
Receivables -
Interest 7,957,089
Unrealized appreciation on interest rate swaps 688,156
Prepaid expenses 30,169
--------------
Total assets $ 460,268,227
--------------
LIABILITIES:
Payable -
Investment securities purchased $ 2,969,100
Due to custodian 1,416,659
Due to affiliate 230,159
Administration fee payable 26,083
Accrued expenses 81,347
--------------
Total liabilities $ 4,723,348
--------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to 4,040
shares, including dividends payable of $58,545 $ 101,058,545
--------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $ 315,162,552
Undistributed net investment income 2,489,891
Accumulated net realized loss on investments and interest
rate swaps (13,845,627)
Net unrealized gain on investments 49,991,362
Net unrealized gain on interest rate swaps 688,156
--------------
Net assets applicable to common shareowners $354,486,334
--------------
NET ASSET VALUE PER SHARE:
No par value, (unlimited number of shares authorized)
Based on $354,486,334/22,120,893 common shares $ 16.02
=============
The accompanying notes are an integral part of these financial statements. 19
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
For the Year Ended 4/30/07
INVESTMENT INCOME:
Interest $ 26,277,002
------------
EXPENSES:
Management fees $ 2,696,972
Administration fees and reimbursement 419,672
Transfer agent fees and expenses 43,935
Auction agent fees 267,790
Custodian fees 23,317
Registration fees 23,750
Professional fees 134,819
Printing expense 19,795
Trustees' fees 9,294
Pricing fees 17,113
Insurance fees 12,412
Miscellaneous 16,228
-----------
Total expenses $ 3,685,097
------------
Less management fees waived and
expenses reimbursed by Pioneer
Investment Management, Inc. (6,974)
Less fees paid indirectly (30)
------------
Net expenses $ 3,678,093
------------
Net investment income $ 22,598,909
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND INTEREST RATE SWAPS:
Net realized gain from:
Investments $ 977,844
Interest rate swaps 455,171 $ 1,433,015
----------- ------------
Change in net unrealized gain from:
Investments $16,518,684
Interest rate swaps (672,989) $ 15,845,695
----------- ------------
Net gain on investments and interest
rate swaps $ 17,278,710
------------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS
FROM NET INVESTMENT INCOME $ (3,523,640)
------------
Net increase in net assets applicable to common
shareowners resulting from operations $ 36,353,979
============
20 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
For the Years Ended 4/30/07 and 4/30/06
Year Ended Year Ended
4/30/07 4/30/06
FROM OPERATIONS:
Net investment income $ 22,598,909 $ 22,503,967
Net realized gain (loss) on investments and interest
rate swaps 1,433,015 (12,990,275)
Change in net unrealized gain on investments and
interest rate swaps 15,845,695 2,489,681
Distributions to preferred shareowners from net
investment income (3,523,640) (2,704,921)
------------- -------------
Net increase in net assets applicable to common
shareowners $ 36,353,979 $ 9,298,452
------------- -------------
DISTRIBUTIONS TO COMMON SHAREOWNERS FROM:
Net investment income
($0.77 and $0.89 per share, respectively) $ (16,988,846) $ (19,731,837)
------------- -------------
Total distributions to common shareowners $ (16,988,846) $ (19,731,837)
------------- -------------
Net increase (decrease) in net assets applicable
to common shareowners $ 19,365,133 $ (10,433,385)
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS:
Beginning of year 335,121,201 345,554,586
------------- -------------
End of year $ 354,486,334 $ 335,121,201
============= =============
Undistributed (distributions in excess of)
net investment income $ 2,489,891 $ (37,943)
============= =============
The accompanying notes are an integral part of these financial statements. 21
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Year Year Year 7/21/03 (b)
Ended Ended Ended to
4/30/07 4/30/06 4/30/05 4/30/04
Per Common Share Operating Performance
Net asset value, beginning of period $ 15.15 $ 15.62 $ 14.76 $ 14.33(c)
-------- ------- --------- ---------
Increase (decrease) from investment operations:(a)
Net investment income $ 1.02 $ 1.02 $ 1.14 $ 0.80
Net realized and unrealized gain (loss) on investments and
interest rate swaps 0.78 (0.48) 0.95 0.46
Dividends and distributions to preferred shareowners from:
Net investment income (0.16) (0.12) (0.07) (0.02)
Net realized gains - - 0.00(d) -
-------- ------- --------- ---------
Net increase from investment operations $ 1.64 $ 0.42 $ 2.02 $ 1.24
Dividends and distributions to common shareowners from:
Net investment income (0.77) (0.89) (1.07) (0.72)
Net realized gains - - (0.09) -
Capital charge with respect to issuance of:
Common shares - - 0.00(d) (0.03)
Preferred shares - - - (0.06)
-------- ------- --------- ---------
Net increase (decrease) in net asset value $ 0.87 $ (0.47) $ 0.86 $ 0.43
-------- ------- --------- ---------
Net asset value, end of period(e) $ 16.02 $ 15.15 $ 15.62 $ 14.76
======== ======= ========= =========
Market value, end of period(e) $ 15.05 $ 13.22 $ 14.33 $ 13.70
-------- ------- --------- ---------
Total return(f) 20.04% (1.85)% 13.34% (4.11)%
Ratios to average net assets of common shareowners
Net expenses(g) 1.06% 1.03% 1.04% 0.95% (h)
Net investment income before preferred share dividends 6.49% 6.64% 7.60% 6.91% (h)
Preferred share dividends 1.01% 0.80% 0.43% 0.21% (h)
Net investment income available to common shareowners 5.48% 5.84% 7.17% 6.70% (h)
Portfolio turnover 18% 20% 25% 54%
Net assets of common shareowners, end of period
(in thousands) $354,486 $335,121 $345,555 $326,590
Preferred shares outstanding (in thousands) $101,000 $101,000 $101,000 $101,000
Asset coverage per preferred share, end of period $112,759 $107,962 $110,533 $105,839
Average market value per preferred share $ 25,000 $25,000 $25,000 $ 25,000
Liquidation value, including dividends payable, per
preferred share $ 25,014 $25,011 $25,000 $ 25,000
Ratios to average net assets of common shareowners before
reimbursement waivers and reimbursement of expenses
Net expenses(g) 1.06% 1.03% 1.04% 0.96% (h)
Net investment income before preferred share dividends 6.49% 6.64% 7.60% 6.90% (h)
Preferred share dividends 1.01% 0.80% 0.43% 0.21% (h)
Net investment income available to common shareowners 5.48% 5.84% 7.17% 6.69% (h)
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) The Trust's common shares were first publicly offered on July 18, 2003.
(c) Net asset value immediately after the closing of the first public offering
was $14.30.
(d) Amount is less than $0.01 per share.
(e) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and
Saturday.
(f) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect shareowner brokerage commissions.
Total investment return less than a full period is not annualized. Past
performance is not a guarantee of future results.
(g) Expense ratios do not reflect the effect of dividend payments to preferred
shareowners.
(h) Annualized.
The information above represents the audited operating performance data for
a share of common stock outstanding, total investment return, ratios to
average net assets of common shareowners and other supplemental data for
the periods indicated. This information has been determined based upon
financial information provided in the financial statements and market value
data for the Trust's common shares.
22 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/07
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Municipal High Income Trust (the "Trust") was organized as a Delaware
statutory trust on March 13, 2003. Prior to commencing operations on July 21,
2003, the Trust had no operations other than matters relating to its
organization and registration as a diversified, closed-end management
investment company under the Investment Company Act of 1940, as amended. The
Trust's primary investment objective is to provide its common shareholders with
a high level of current income exempt from regular federal income tax. As a
secondary investment objective, the Trust also may seek capital appreciation to
the extent consistent with its primary investment objective.
The Trust may invest in both investment and below investment grade (high-yield)
municipal securities with a broad range of maturities and credit ratings. Debt
securities rated below investment grade are commonly referred to as "junk
bonds" and are considered speculative. These securities involve greater risk of
loss, are subject to greater price volatility, and are less liquid, especially
during periods of economic uncertainty or change, than higher rated debt
securities.
Information regarding the Trust's principal risks is contained in the Trust's
original offering prospectus with additional information included in the
Trust's shareowner reports. Please refer to those documents when considering
the Trust's investment risks. At times, the Trust's investments may represent
industries or industry sectors that are interrelated or have common risks,
making it more susceptible to any economic, political, or regulatory
developments or other risks affecting those industries and sectors.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, and the reported amounts of income,
expenses and gains and losses on investments during the reporting year. Actual
results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements, which are consistent with
those policies generally accepted in the investment company industry:
23
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/07 (continued)
--------------------------------------------------------------------------------
A. Security Valuation
Security transactions are recorded as of trade date. Securities are valued
at prices supplied by independent pricing services, which consider such
factors as Treasury spreads, yields, maturities and ratings. Valuations may
be supplemented by dealers and other sources, as required. The values of
interest rate swaps are determined by obtaining dealer quotations.
Securities for which market quotations are not readily available are valued
at their fair values as determined by, or under the direction of, the Board
of Trustees. At April 30, 2007 there were no securities fair valued.
Temporary cash investments are valued at net asset value.
Discount and premium on debt securities are accreted or amortized,
respectively, daily on an effective yield to maturity basis and are
included in interest income. Interest income, including interest bearing
cash accounts, is recorded on an accrual basis.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. 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
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the source of the Trust's distributions may be
shown in the accompanying financial statements as either from or in excess
of net investment income or net realized gain on investment transactions,
or from paid in-capital, depending on the type of book/tax differences that
may exist.
At April 30, 2007, the Trust reclassified $441,411 to increase
undistributed net investment income and to increase accumulated net
realized loss on investments. The reclassification has no impact on the net
asset value of the Trust and presents the Trust's capital accounts on a tax
basis.
24
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
At April 30, 2007, the Trust had a capital loss carryforward of $13,845,627
which is comprised of $9,706,870 which will expire in 2014 and $4,138,757
which will expire in 2015, if not utilized.
The tax character of distributions paid to common and preferred shareowners
during the years ended April 30, 2007 and April 30, 2006 were as follows:
--------------------------------------------------------------------------------
2007 2006
--------------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $20,032,010 $22,436,758
Ordinary income 480,476 -
----------- -----------
Total $20,512,486 $22,436,758
=========== ===========
--------------------------------------------------------------------------------
The following shows the components of distributable earnings on a federal income
tax basis at April 30, 2007.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Undistributed tax-exempt income $ 682,501
Undistributed ordinary income 192,444
Capital loss carryforward (13,845,627)
Dividend payable (58,545)
Unrealized appreciation 52,353,009
-----------
Total $39,323,782
============
--------------------------------------------------------------------------------
The difference between book-basis and tax-basis unrealized appreciation is
primarily attributable to the difference between book and tax amortization
methods for premiums and discounts on fixed income securities, the accrual
of income on securities in default and the difference between book and tax
accounting for swap agreements.
C. Automatic Dividend Reinvestment Plan
All common shareowners automatically participate in the Automatic Dividend
Reinvestment Plan (the "Plan"), under which participants receive all
dividends and capital gain distributions (collectively, "dividends") in
full and fractional common shares of the Trust in lieu of cash. Shareowners
may elect not to participate in the Plan. Shareowners not participating in
the Plan receive all dividends and
25
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/07 (continued)
--------------------------------------------------------------------------------
capital gain distributions in cash. Participation in the Plan is completely
voluntary and may be terminated or resumed at any time without penalty by
notifying American Stock Transfer & Trust Company, the agent for
shareowners in administering the Plan (the "Plan Agent"), in writing prior
to any dividend record date; otherwise such termination or resumption will
be effective with respect to any subsequently declared dividend or other
distribution.
Whenever the Trust declares a dividend on common shares payable in cash,
participants in the Plan will receive the equivalent in common shares
acquired by the Plan Agent either (i) through receipt of additional
unissued but authorized common shares from the Trust or (ii) by purchase of
outstanding common shares on the New York Stock Exchange or elsewhere. If,
on the payment date for any dividend the net asset value per common share
is equal to or less than the market price per share plus estimated
brokerage trading fees ("market premium"), the Plan Agent will invest the
dividend amount in newly issued common shares. The number of newly issued
common shares to be credited to each account will be determined by dividing
the dollar amount of the dividend by the net asset value per common share
on the date the shares are issued, provided that the maximum discount from
the then current market price per share on the date of issuance does not
exceed 5%. If, on the payment date for any dividend, the net asset value
per common share is greater than the market value ("market discount"), the
Plan Agent will invest the dividend amount in common shares acquired in
open-market purchases. There are no brokerage charges with respect to newly
issued common shares. However, each participant will pay a pro rata share
of brokerage trading fees incurred with respect to the Plan Agent's
open-market purchases. Participating in the Plan does not relieve
shareowners from any federal, state or local taxes which may be due on
dividends paid in any taxable year. Shareowners holding Plan shares in a
brokerage account may not be able to transfer the shares to another broker
and continue to participate in the Plan.
2. Management Agreement
Pioneer Investment Management, Inc. ("PIM"), a wholly owned indirect subsidiary
of UniCredito Italiano S.p.A. ("UniCredito Italiano") manages the Trust's
portfolio. Management fees payable under the Trust's Advisory Agreement with PIM
are calculated daily at the annual
26
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
rate of 0.60% of the Trust's average daily managed assets. "Managed assets" is
the average daily value of the Trust's total assets minus the sum of the
Trust's liabilities, which liabilities exclude debt related to leverage,
short-term debt and the aggregate liquidation preference of any outstanding
preferred shares. Also, PIM has agreed for the first three years of the Trust's
investment operations to limit the Trust's total annual expenses excluding
offering costs for common and preferred shares, interest expense, the cost of
defending or prosecuting any claim or litigation to which the Trust is a party
(together with any amount in judgment or settlement), indemnification expenses
or taxes incurred due to the failure of the Trust to qualify as a regulated
investment company under the Code or any other non-recurring or non-operating
expenses to 0.80% of the Trust's average daily managed assets. The dividend on
any preferred shares is not an expense for this purpose. As of July 22, 2006,
the expense limitation was no longer in effect. For the year ended April 30,
2007, the expense reduction under such arrangements was $6,974. For the year
ended April 30, 2007, the net management fee was equivalent to 0.60% of the
Trust's average daily managed assets, which was equivalent to 0.77% of the
Trust's average daily net assets attributable to the common shareowners.
In addition, under PIM's management and administration agreements, certain
other services and costs are paid by PIM and reimbursed by the Trust. At April
30, 2007, $230,159 was payable to PIM related to management costs,
administrative costs and certain other services and is included in "Due to
affiliate" on the Statement of Assets and Liabilities.
The Trust has retained Princeton Administrators, LLC ("Princeton") to provide
certain administrative services to the Trust on its behalf. The Trust pays
Princeton a monthly fee at an annual rate of 0.07% of the average weekly value
of the Trust's managed assets, subject to a minimum monthly fee of $10,000.
3. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. ("PIMSS"), a wholly
owned indirect subsidiary of UniCredito Italiano, through a sub-transfer agency
agreement with American Stock Transfer & Trust Company provides substantially
all transfer agent and shareowner services related to the Trust's common shares
at negotiated rates. Deutsche Bank Trust Company Americas ("Deutsche Bank") is
the
27
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/07 (continued)
--------------------------------------------------------------------------------
transfer agent, registrar, dividend paying agent and redemption agent with
respect to the Trust's Auction Preferred Shares ("APS"). The Trust pays
Deutsche Bank an annual fee, as is agreed to from time to time by the Trust and
Deutsche Bank, for providing such services.
4. Expense Offset Arrangements
The Trust has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion
of the Trust's custodian expenses. For the year ended April 30, 2007, the
Trust's expenses were reduced by $30 under such arrangement.
5. Interest Rate Swaps
The Trust may enter into interest rate swap transactions to attempt to protect
itself from increasing dividend or interest expense on its leverage resulting
from increasing short-term interest rates. The cost of leverage may rise with
an increase in interest rates, generally having the effect of lower yields and
potentially lower dividends to common shareowners. Interest rate swaps can be
used to "lock in" the cost of leverage and reduce the negative impact that
rising short-term interest rates would have on the Trust's leveraging costs.
An interest rate swap is an agreement between two parties, which involves
exchanging a floating rate and fixed rate interest payments for a specified
period of time. Interest rate swaps involve the accrual of the net interest
payments between the parties on a daily basis, with the net amount recorded
within the unrealized appreciation/ depreciation of interest rate swaps on the
Statement of Assets and Liabilities. Once the interim payments are settled in
cash, at the pre-determined dates specified in the agreement, the net amount is
recorded as realized gain or loss from interest rate swaps on the Statement of
Operations. During the term of the swap, changes in the value of the swap are
recognized as unrealized gains and losses by "marking-to-market" the value of
the swap based on values obtained from dealer quotations. When the swap is
terminated, the Trust will record a realized gain or loss equal to the
difference, if any, between the proceeds from (or cost of) closing the contract
and the cost basis of the contract. The Trust is exposed to credit risk in the
event of non-performance by the other party to the interest rate swap. However,
at April 30, 2007, the Trust does not anticipate non-performance by any
counterparty. Risk may also arise with regard to market movements
28
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
in the value of the swap arrangement that do not exactly offset the changes in
the related dividend requirement or interest expense on the Trust's leverage.
Under the terms of the agreement entered into by the Trust, the Trust receives
a floating rate of interest and pays a fixed rate of interest for the term.
Details of the swap agreement outstanding as of April 30, 2007 were as follows:
---------------------------------------------------------------------------------------
Notional
Termination Amount Fixed Floating Unrealized
Counterparty Date (000) Rate Rate Appreciation
---------------------------------------------------------------------------------------
UBS AG April 5, 2009 $50,000 2.665% 1 month BMA $688,156
6. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized. Of the 22,120,893 common shares of beneficial interest outstanding
at April 30, 2007, PIM owned 6,981 shares.
During the year ended April 30, 2007 and the year ended April 30, 2006, there
were no share transactions by the Trust. All reinvested distributions were
satisfied with previously issued shares purchased in the open market by the
Plan Agent and credited to shareowner accounts.
The Trust may classify or reclassify any unissued common shares of beneficial
interest into one or more series of preferred shares of beneficial interest. As
of April 30, 2007, there were 4,040 APS as follows: Series A-2,000 and Series
B-2,040.
Dividends on Series A and Series B are cumulative at a rate which is reset
every seven days based on the results of an auction. Dividend rates ranged from
2.90% to 4.05% during the year ended April 30, 2007.
The Trust may not declare dividends or make other distributions on its common
shares or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
preferred shares would be less than 200%.
The APS are redeemable at the option of the Trust, in whole or in part, on any
dividend payment date at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared. The APS are also subject to mandatory
redemption at $25,000 per share plus any accumulated or unpaid dividends,
whether or not declared, if
29
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/07 (continued)
--------------------------------------------------------------------------------
certain requirements relating to the composition of the assets and liabilities
of the Trust as set forth in the Agreement and Declaration of Trust are not
satisfied.
The holders of APS have voting rights equal to the holders of the Trust's
common shares (one vote per share) and will vote together with holders of the
common shares as a single class. However, holders of APS are also entitled to
elect two of the Trust's Trustees. In addition, the Investment Company Act of
1940, as amended, requires that along with approval by shareowners that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class, would be required
to (a) adopt any plan of reorganization that would adversely affect the
preferred shares and (b) take any action requiring a vote of security holders,
including, among other things, changes in the Trust's subclassification as a
closed-end management investment company or changes in its fundamental
investment restrictions.
7. New Pronouncements
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in
the course of preparing the Trust's tax returns to determine whether the tax
positions have a "more-likely-than-not" probability of being sustained by the
applicable tax authority. Tax positions deemed to not meet the
more-likely-than-not threshold would be recorded as a tax benefit or expense in
the reporting period in which they are realized. Adoption of FIN 48 is required
for fiscal years beginning after December 15, 2006 and is to be applied to all
open tax years as of no later than October 31, 2007. At this time, management
is evaluating the implications of FIN 48 and any impact in the financial
statement has not yet determined.
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. At this time, management is currently evaluating the
30
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
impactions of SFAS 157 and its impact on the Trust's financial statement
disclosures, if any, has not yet been determined.
8. Subsequent Events
Subsequent to April 30, 2007, the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.064 per common share
payable May 31, 2007, to shareowners of record on May 15, 2007.
Subsequent to April 30, 2007, dividends declared and paid on preferred shares
totaled $357,311 in aggregate for the two outstanding preferred share series
through June 7, 2007.
ADDITIONAL INFORMATION (unaudited)
During the period, there were no material changes in the Trust's investment
objective or fundamental policies that were not approved by the shareowners.
There were no changes in the Trust's charter or By-Laws that would delay or
prevent a change in control of the Trust which have not been approved by the
shareowners. There have been no changes in the principal risk factors
associated with investment in the Trust. Day-to-day management of the Trust's
portfolio is the responsibility of David Eurkus. Mr. Eurkus is supported by the
fixed income team. Members of this team manage other Pioneer funds investing
primarily in fixed income securities. Mr. Eurkus joined Pioneer as a senior
vice president in January 2000 and has been an investment professional since
1969.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its common
shares in the open market.
CEO CERTIFICATION DISCLOSURE (unaudited)
The Trust's Chief Executive Officer has submitted to the New York Stock
Exchange the annual CEO certification as required by Section 303A.12(a) of the
NYSE Listed Company Manual. In addition, the Trust has filed with the
Securities and Exchange Commission the certification of its Chief Executive
Officer and Chief Financial Officer required by Section 302 of the
Sarbanes-Oxley Act.
31
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 4/30/07 (continued)
--------------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid by Pioneer Municipal High
Income Trust during the taxable year ended April 30, 2007 qualify as tax-exempt
interest dividends for federal income tax purposes except the following per
share distributions:
--------------------------------------------------------------------------------
Payable Ordinary
Date Income
--------------------------------------------------------------------------------
Common Shareowners 12/20/2006 $0.0184
Preferred Shareowners
Series A 12/20/2006 $ 18.32
Series B 12/21/2006 $ 16.88
Series B 12/28/2006 $ 1.29
--------------------------------------------------------------------------------
32
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
To the Board of Trustees and the Shareowners of
Pioneer Municipal High Income Trust:
We have audited the accompanying statement of assets and liabilities of Pioneer
Municipal High Income Trust (the "Trust"), including the schedule of
investments, as of April 30, 2007, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of
the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Trust's internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Trust's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of April 30, 2007, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Municipal High Income Trust at April 30, 2007, the results of its
operations for the year then ended, the changes in its net assets for each of
the periods indicated therein, and the financial highlights for each of the
four years in the period then ended, in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst + Young LLP
Boston, Massachusetts
June 15, 2007
33
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
RESULTS OF SHAREOWNER MEETING
On September 21, 2006, Pioneer Municipal High Income Trust held its annual
meeting of shareowners to elect Class III Trustees. All Class III Trustees were
elected. Here are the detailed results of the votes.
Proposal 1 - To elect Class III Trustees.
--------------------------------------------------------------------------------
Nominee Affirmative Withheld
--------------------------------------------------------------------------------
Mary K. Bush 20,875,944 599,481
Thomas J. Perna 20,881,546 593,879
Marguerite A. Piret+ 3,563 4
--------------------------------------------------------------------------------
+ Elected by Preferred Shares only
34
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT
--------------------------------------------------------------------------------
The Investment Company Act of 1940 requires that both the Board of Trustees and
a majority of the Independent Trustees (collectively "the Trustees"), voting
separately, annually approve the Trust's management contract (the "Management
Contract"). At a meeting November 14, 2006, the Trustees determined that the
terms of the Management Contract are fair and reasonable and that renewal of
the contract: (i) will enable the Trust to receive quality investment advisory
services at a fee deemed reasonable; and (ii) is in the best interests of the
Trust and its shareowners. In making such determinations, the Independent
Trustees relied upon the assistance of counsel to the Independent Trustees and
counsel to the Trust.
Throughout the year, the Independent Trustees regularly met in executive
session, separately from the Interested Trustees of the Trust and any officer
of Pioneer Investment Management, Inc., the Trust's adviser (the "Investment
Adviser"), or its affiliates. While the Trustees, including the Interested
Trustees, act on all major matters relating to the Trust, a significant portion
of the activities of the Board of Trustees (including certain of those
described herein) is conducted through committees, the members of which are
comprised exclusively of Independent Trustees. Such committee meetings are
attended by officers of the Trust and/or officers of the Investment Adviser to
the extent requested by the members of the committee.
In evaluating the Management Contract, the Trustees conducted a review that was
specifically focused upon the renewal of the Management Contract, and also
relied upon their knowledge, resulting from their meetings throughout the year,
of the Investment Adviser, its services and the Trust. Both in meetings
specifically dedicated to renewal of the Management Contract and at other
meetings during the course of the year, the Trustees, including the Independent
Trustees, received materials relating to the Investment Adviser's investment
and management services under the Management Contract. These materials included
information on (i) the investment performance of the Trust, a peer group of
funds as classified by Morningstar, Inc., an independent evaluation service
("Morningstar") and an index considered appropriate by the Independent Trustees
for this purpose, (ii) the general investment outlook in the markets in which
the Trust invests, (iii) the procedures employed to determine the value of each
of the Trust's assets, (iv) the Investment Adviser's management of the
relationships with the Trust's unaffiliated service providers, (v) the record
of compliance with the Trust's investment policies and restrictions
35
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
--------------------------------------------------------------------------------
and with the Trust's Code of Ethics and the structure and responsibilities of
the Investment Adviser's compliance department, (vi) the nature, cost and
character of non-investment management services provided by the Investment
Adviser and its affiliates, (vii) analyses of the benefits and costs of the use
of leverage through the issuance of the Trust's preferred shares and
sensitivity analyses based on changes in interest rates and (viii) the discount
or premium of the market price of the Trust's common stock relative to its net
asset value and measures that are or could be taken to address any discount.
Specifically in connection with the Independent Trustees' review of the
Management Contract, the Independent Trustees requested, and the Investment
Adviser provided, additional information in order to evaluate the quality of
the Investment Adviser's services and the reasonableness of the fee under the
Management Contract. Among other items, this information included data or
analyses of (1) investment performance for one year period for the Trust and a
peer group of funds selected on the basis of criteria considered appropriate by
the Independent Trustees for this purpose, (2) management and other fees
incurred by a peer group of funds selected on the basis of criteria considered
appropriate by the Independent Trustees for this purpose, (3) the advisory fees
of comparable portfolios of other clients of the Investment Adviser, (4)
expense ratios for the Trust and a peer group of funds selected on the basis of
criteria considered appropriate by the Independent Trustees for this purpose,
(5) the overall organization of the Investment Adviser, (6) the Investment
Adviser's financial results and condition, including its and certain of its
affiliates' profitability in providing services to the Trust, (7)
administrative reimbursements paid to the Investment Adviser or affiliates, (8)
investment management staffing, and (9) operating expenses paid by the funds to
third parties.
The following summarizes factors considered by the Trustees in connection with
reviewing the information described above and their renewal of the Trust's
Management Contract. The Trustees did not identify any single factor as
all-important or controlling, and the summary does not detail all the matters
that were considered.
A. Ancillary Benefits to Shareowners. The Trustees considered the benefits to
shareowners of investing in a closed-end fund that is part of an
established group of open and closed-end funds. The Trustees also noted
that the relationship of the market price
36
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
relative to the Trust's net assets attributed to its common shares was at
least comparable to other closed-end funds with similar investment
approaches.
B. Compliance and Investment Performance. The Trustees determined that the
Investment Adviser had policies and systems reasonably designed to achieve
compliance with the Trust's investment objective and regulatory
requirements. The Trustees also reviewed the Trust's absolute investment
performance based upon total return, as well as the Trust's performance
relative to the performance of a peer group considered appropriate by the
Independent Trustees for this purpose. The Trust's performance, based upon
total return, was in the fourth quintile of its Morningstar category peer
group for the 12 months ended June 30, 2006. (In all quintile rankings
referred to throughout this discussion first quintile is most favorable to
the Trust's shareowners. Thus, highest relative performance would be first
quintile and lowest relative expenses also would be first quintile.) The
Trustees also considered the yield of the Trust, before deduction of
expenses, compared to the yield of the Lehman Municipal Bond Index. The
Trustees concluded that the Trust underperformed relative to its peers
during the short period since its inception.
C. The Investment Adviser's Personnel and Methods. The Trustees reviewed the
background of members of the team responsible for the daily management of
the Trust and the Trust's investment objective and discipline. The
Independent Trustees also have had discussions with senior management of
the Investment Adviser responsible for investment operations and the senior
management of the Investment Adviser's fixed income group. Among other
things, the Trustees considered the size, education and experience of the
Investment Adviser's investment staff and their use of technology and
emphasis on analytics in view of the risk profile of securities in which
the Trust invests. The Trustees concluded that the Investment Adviser had
the quality and depth of personnel and the well-developed methods essential
to perform its duties under the Management Contract.
D. Nature and Quality of Other Services. The Trustees considered the nature,
quality and extent of other services provided to shareowners of the Trust,
including administrative and shareowner
37
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
--------------------------------------------------------------------------------
services performed by the Investment Adviser under the Management Contract.
The Trustees also considered the reasonableness of the arrangements for
reimbursement of the Investment Adviser's out-of-pocket costs and expenses,
including overhead, for certain administrative services that the Investment
Adviser is not required to provide under the Management Contract. The
Trustees also considered the nature and extent of the other services
provided by the Investment Adviser or its affiliates under other contracts,
as well as the Investment Adviser's supervision of third party service
providers. Based on these considerations, the Trustees concluded that the
nature, quality and extent of such services are satisfactory and reliable
and serve the shareowners of the Trust well.
E. Management Fee and Expenses. The Trustees considered the Investment
Adviser's fee under the Management Contract relative to the management fees
charged by its Morningstar category peer group. The Trust's management fee
for the 12 months ended June 30, 2006 was in the second quintile relative
to the management fees paid by the other funds in that peer group for the
comparable period. The Trustees also considered the Trust's expense ratio
for the 12 months ended June 30, 2006 and expense ratios for the comparable
period of the peer group of funds selected on the basis of criteria
considered appropriate by the Independent Trustees for this purpose using
data provided by Strategic Insight Mutual Fund Research and Consulting,
LLC, an independent third party. The Trustees found the Trust's expense
ratio for the 12 months ended June 30, 2006 to be in the second quintile,
according to data for the applicable peer group for the most recent fiscal
year.
F. Profitability. The Trustees considered the level of the Investment
Adviser's profits with respect to the management of the Pioneer funds,
including a review of the Investment Adviser's methodology in allocating
certain of its costs to the management of each fund, as well as the
financial results realized by the Investment Adviser in connection with the
operation of the Trust. They further considered the profits realized by the
Investment Adviser and its affiliates from non-fund businesses that may
benefit from or be related to the Trust's business. The Trustees considered
the Investment Adviser's profit margins in comparison with the limited
industry data available. The Trustees concluded that the Investment
38
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Adviser's profits from management of the Pioneer funds, including the
financial results derived from the Trust, bear a reasonable relationship to
the services rendered and are fair for the management of the Trust.
G. Economies of Scale. The Trustees considered whether the Trust had
appropriately benefited from any economies of scale, and whether there was
potential for realization of any further economies of scale. Since the
Trust is a closed-end fund and its size is relatively stable at an asset
level that was anticipated when the management fee was initially set, the
Trustees concluded that economies of scale were not a relevant
consideration.
H. Other Benefits to the Investment Adviser. The Trustees also considered the
character and amount of fees paid by the Trust, other than under the
Management Contract, for services provided by the Investment Adviser and
affiliates. The Trustees further considered the revenues and profitability
of the Investment Adviser's businesses other than the Trust business,
including the Investment Adviser's institutional investment advisory
business. The Trustees considered the intangible benefits that accrue to
the Investment Adviser and its affiliates by virtue of its relationship
with the Trust and the Pioneer funds as a group. The Trustees concluded
that all these types of benefits accruing to the Investment Adviser were
reasonable in the context of the overall relationship between the
Investment Adviser and the Trust.
Conclusion. In light of the Investment Adviser's overall performance, the
Trustees considered it appropriate to continue to retain the management
services of the Investment Adviser. Based on their review of the overall nature
and quality of services provided by the Investment Adviser and the fees charged
by other funds in the Trust's relevant peer group, and taking into account all
material factors deemed relevant by the Trustees as well as the advice of
independent counsel, the Trustees concluded that the Management Contract with
the Trust, including the fee payable thereunder, was fair and reasonable and
that its renewal was in the best interests of the Trust and its shareholders.
Accordingly, the Trustees voted to approve the continuation of the Management
Contract for another year.
39
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
--------------------------------------------------------------------------------
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
American Stock Transfer & Trust Company
Preferred Share Auction/Transfer Agent and Registrar
Deutsche Bank Trust Company Americas
Sub-Administrator
Princeton Administrators, LLC
Trustees and Officers
The Trust's Board of Trustees provides broad supervision over the Trust's
affairs. The officers of the Trust are responsible for the Trust's operations.
The Trust's Trustees and officers are listed below, together with their
principal occupations during the past five years. Trustees who are interested
persons of the Trust within the meaning of the 1940 Act are referred to as
Interested Trustees. Trustees who are not interested persons of the Trust are
referred to as Independent Trustees. Each of the Trustees (except Mr. Kingsbury
and Mr. West) serves as a trustee of each of the 82 U.S. registered investment
portfolios for which Pioneer Investment Management, Inc. ("Pioneer") serves as
investment adviser (the "Pioneer Funds"). Mr. Kingsbury and Mr. West each
serves as Trustee of 33 of the 82 Pioneer Funds. The address for all Interested
Trustees and all officers of the Trust is 60 State Street, Boston,
Massachusetts 02109.
Proxy Voting Policies and Procedures of the Trust are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Trust voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30 is publicly available to
shareowners at pioneerinvestments.com. This information is also available on
the Securities and Exchange Commission's web site at http://www.sec.gov.
40
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
INTERESTED TRUSTEES
--------------------------------------------------------------------------------
Positions Held Length of Service
Name and Age With the Trust and Term of Office
John F. Cogan, Jr. (80)* Chairman of the Class I
Board, Trustee and Trustee since
President 2003. Term
expires in 2007.
Elected by
Preferred
Shares only.
--------------------------------------------------------------------------------
Daniel K. Kingsbury (48)* Trustee and Class II
Executive Vice Trustee since
President 2007. Term
expires in 2008.
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are
an officer or director of the Trust's investment adviser and certain
of its affiliates.
--------------------------------------------------------------------------------
Other Directorships Held
Name and Age Principal Occupation During Past Five Years by this Trustee
John F. Cogan, Jr. (80)* Deputy Chairman and a Director of Pioneer Global Asset Director of ICI Mutual
Management S.p.A. ("PGAM"); Non-Executive Chairman Insurance Company
and a Director of Pioneer Investment Management USA
Inc. ("PIM-USA"); Chairman and a Director of Pioneer;
Chairman and Director of Pioneer Institutional Asset
Management, Inc. (since 2006); Director of Pioneer
Alternative Investment Management Limited (Dublin);
President and a Director of Pioneer Alternative
Investment Management (Bermuda) Limited and
affiliated funds; Director of PIOGLOBAL Real Estate
Investment Fund (Russia) (until June 2006); Director
of Nano-C, Inc. (since 2003); Director of Cole
Management Inc. (since 2004); Director of Fiduciary
Counseling, Inc.; President and Director of Pioneer
Funds Distributor, Inc. ("PFD") (until May 2006);
President of all of the Pioneer Funds; and of Counsel,
Wilmer Cutler Pickering Hale and Dorr LLP (counsel to
PIM-USA and the Pioneer Funds)
---------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (48)* Director, CEO and President of Pioneer Investment None
Management USA Inc.; Pioneer Investment
Management, Inc. and Pioneer Institutional
Asset Management, Inc. (since March 2007); Executive
Vice President of all of the Pioneer Funds (since
March 2007); Director of Pioneer Global Asset
Management S.p.A. (since March 2007); Head of New
Markets Division, Pioneer Global Asset Management
S.p.A. (2000 - 2007)
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are an officer or director of the Trust's
investment adviser and certain of its affiliates.
---------------------------------------------------------------------------------------------------------------
41
--------------------------------------------------------------------------------
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
--------------------------------------------------------------------------------
Positions Held Length of Service
Name, Age and Address With the Trust and Term of Office
David R. Bock (63) Trustee Class I
3050 K Street NW, Trustee since
Washington, DC 20007 2005. Term
expires in 2007.
--------------------------------------------------------------------------------
Mary K. Bush (58) Trustee Class III
3509 Woodbine Street Trustee since
Chevy Chase, MD 20815 2003. Term
expires in 2009.
--------------------------------------------------------------------------------
Margaret B.W. Graham (59) Trustee Class II
1001 Sherbrooke Street West, Trustee since
Montreal, Quebec, Canada 2003. Term
H3A 1G5 expires in 2008.
--------------------------------------------------------------------------------
Other Directorships Held
Name, Age and Address Principal Occupation During Past Five Years by this Trustee
David R. Bock (63) Executive Vice President and Chief Financial Officer, Director of The Enterprise
3050 K Street NW, I-trax, Inc. (publicly traded health care services Social Investment
Washington, DC 20007 company) (2004 - present); Partner, Federal City Company (privately-held
Capital Advisors (boutique merchant bank) (1997 to affordable housing
2004); and Executive Vice President and Chief Financial finance company); and
Officer, Pedestal Inc. (internet-based mortgage trading Director of New York
company) (2000 - 2002) Mortgage Trust (publicly
traded mortgage REIT)
---------------------------------------------------------------------------------------------------------------
Mary K. Bush (58) President, Bush International, LLC (international Director of Brady
3509 Woodbine Street financial advisory firm) Corporation (industrial
Chevy Chase, MD 20815 identification and
specialty coated material
products manufacturer);
Director of Briggs &
Stratton Co. (engine
manufacturer); Director of
UAL Corporation (airline
holding company);
and Director of
Mantech International
Corporation (national
security, defense,
and intelligence
technology firm)
---------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (59) Founding Director, Vice-President and Corporate None
1001 Sherbrooke Street West, Secretary, The Winthrop Group, Inc. (consulting firm);
Montreal, Quebec, Canada and Desautels Faculty of Management, McGill University
H3A 1G5
---------------------------------------------------------------------------------------------------------------
42
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Positions Held Length of Service
Name, Age and Address With the Trust and Term of Office
Thomas J. Perna (56) Trustee Class III
89 Robbins Avenue, Trustee since
Berkeley Heights, NJ 07922 February 2006.
Term expires
in 2009.
---------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (58) Trustee Class III
200 State Street, 12th Floor, Trustee since
Boston, MA 02109 2003. Term
expires in 2009.
Elected by
Preferred
Shares only.
---------------------------------------------------------------------------------------------------------------
Stephen K. West (78) Trustee Class I
125 Broad Street, Trustee since
New York, NY 10004 2003. Term
expires in 2007.
---------------------------------------------------------------------------------------------------------------
John Winthrop (70) Trustee Class II
One North Adgers Wharf, Trustee since
Charleston, SC 29401 2003. Term
expires in 2008.
--------------------------------------------------------------------------------------------------------------------
Other Directorships Held
Name, Age and Address Principal Occupation During Past Five Years by this Trustee
Thomas J. Perna (56) Private investor (2004 - present); and Senior Executive Director of Quadriserv Inc.
89 Robbins Avenue, Vice President, The Bank of New York (financial and (technology products for
Berkeley Heights, NJ 07922 securities services) (1986 - 2004) securities lending
industry)
--------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (58) President and Chief Executive Officer, Newbury, Piret & Director of New America
200 State Street, 12th Floor, Company, Inc. (investment banking firm) High Income Fund, Inc.
Boston, MA 02109 (closed-end investment
company)
--------------------------------------------------------------------------------------------------------------------
Stephen K. West (78) Senior Counsel, Sullivan & Cromwell (law firm) Director, The Swiss
125 Broad Street, Helvetia Fund, Inc.
New York, NY 10004 (closed-end investment
company)
--------------------------------------------------------------------------------------------------------------------
John Winthrop (70) President, John Winthrop & Co., Inc. (private None
One North Adgers Wharf, investment firm)
Charleston, SC 29401
--------------------------------------------------------------------------------------------------------------------
43
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
TRUST OFFICERS
--------------------------------------------------------------------------------
Positions Held Length of Service
Name and Age With the Trust and Term of Office
Dorothy E. Bourassa (59) Secretary Since 2003. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------
Christopher J. Kelley (42) Assistant Secretary Since 2003. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------
Christopher P. Harvey (45) Assistant Secretary Since 2006. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------
Vincent Nave (61) Treasurer Since 2003. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------
Mark E. Bradley (47) Assistant Treasurer Since 2004. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------
Luis I. Presutti (42) Assistant Treasurer Since 2003. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------
Other Directorships Held
Name and Age Principal Occupation During Past Five Years by this Officer
Dorothy E. Bourassa (59) Secretary of PIM-USA; Senior Vice President - Legal None
of Pioneer; Secretary/Clerk of most of PIM-USA's
subsidiaries; and Secretary of all of the Pioneer Funds
since September 2003 (Assistant Secretary from
November 2000 to September 2003)
--------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (42) Vice President and Senior Counsel of Pioneer since None
July 2002; Vice President and Senior Counsel of BISYS
Fund Services, Inc. (April 2001 to June 2002); Senior
Vice President and Deputy General Counsel of Funds
Distributor, Inc. (July 2000 to April 2001), and
Assistant Secretary of all of the Pioneer Funds since
September 2003
--------------------------------------------------------------------------------------------------------------------
Christopher P. Harvey (45) Partner, Wilmer Cutler Pickering Hale and Dorr LLP; and None
Assistant Secretary of all of the Pioneer Funds since
July 2006
--------------------------------------------------------------------------------------------------------------------
Vincent Nave (61) Vice President - Fund Accounting, Administration and None
Controllership Services of Pioneer; and Treasurer of all
of the Pioneer Funds
--------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (47) Deputy Treasurer of Pioneer since 2004; Treasurer and None
Senior Vice President, CDC IXIS Asset Management
Services from 2002 to 2003; and Assistant Treasurer
of all of the Pioneer Funds since November 2004
--------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (42) Director of Fund Administration of Pioneer; and None
Assistant Treasurer of all of the Pioneer Funds
--------------------------------------------------------------------------------------------------------------------
44
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Positions Held Length of Service
Name and Age With the Trust and Term of Office
Gary Sullivan (48) Assistant Treasurer Since 2003. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------------------------------------------
Katherine Kim Sullivan (33) Assistant Treasurer Since 2003. Serves
at the discretion of
the Board
--------------------------------------------------------------------------------------------------------------------
Teri W. Anderholm (47) Chief Compliance Since January 2007.
Officer Serves at the
discretion of the
Board
--------------------------------------------------------------------------------------------------------------------
Other Directorships Held
Name and Age Principal Occupation During Past Five Years by this Officer
Gary Sullivan (48) Fund Accounting Manager - Fund Accounting, None
Administration and Controllership Services of Pioneer;
and Assistant Treasurer of all of the Pioneer Funds
since May 2002
--------------------------------------------------------------------------------------------------------------------
Katherine Kim Sullivan (33) Fund Administration Manager - Fund Accounting, None
Administration and Controllership Services since
June 2003; Assistant Vice President - Mutual Fund
Operations of State Street Corporation from June 2002
to June 2003 (formerly Deutsche Bank Asset
Management); Pioneer Fund Accounting, Administration
and Controllership Services (Fund Accounting
Manager from August 1999 to May 2002); and
Assistant Treasurer of all of the Pioneer Funds since
September 2003
--------------------------------------------------------------------------------------------------------------------
Teri W. Anderholm (47) Chief Compliance Officer of Pioneer since None
December 2006 and of all the Pioneer Funds since
January 2007; Vice President and Compliance Officer,
MFS Investment Management (August 2005 to
December 2006); Consultant, Fidelity Investments
(February 2005 to July 2005): Independent Consultant
(July 1997 to February 2005)
--------------------------------------------------------------------------------------------------------------------
The outstanding capital stock of PFD, Pioneer and PIMSS is indirectly wholly
owned by UniCredito Italiano S.p.A. ("UniCredito Italiano"), one of the largest
banking groups in Italy. Pioneer, the Trust's investment adviser, provides
investment management and financial services to mutual funds, institutional and
other clients.
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HOW TO CONTACT PIONEER
--------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call American Stock Transfer & Trust Company (AST) for:
Account Information 1-800-710-0935
Or write to AST:
For Write to
General inquiries, lost dividend American Stock
checks, change of address, lost Transfer & Trust
stock certificates, stock transfer Operations Center
6201 15th Ave.
Brooklyn, NY 11219
Dividend reinvestment plan (DRIP) American Stock
Transfer & Trust
Wall Street Station
P.O. Box 922
New York, NY 10269-0560
Website www.amstock.com
For additional information, please contact your investment advisor or visit
our web site www.pioneerinvestments.com.
The Trust files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied
at the Commission's Public Reference Room in Washington, DC. Information
regarding the operations of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.
The Trust's Chief Executive Officer - Finance and Administrations is required
by the New York Stock Exchange's Listing Standards to file annually with the
Exchange a certification that he is not aware of any violation by the Trust of
the Exchange's Corporate Governance Standards applicable to the Trust. The
Trust has filed such certification.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
Audit Fees
Fees for audit services provided to the Trust, including fees associated
with the filings to update its Form N-2 and issuance of comfort letters,
totaled approximately $38,545 in 2007 and $26,335 in 2006.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit-Related Fees
Fees for the Trust's audit-related services totaled approximately $9,285
in 2007 and $8,500 in 2006, which were related to the issuance of agreed
upon procedures report to the rating agencies.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
Tax Fees
Fees for tax compliance services, primarily for tax returns, totaled
approximately $7,820 and $6,800 for 2007 and 2006, respectively.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
Other Fees
There were no fees for other services provided to the Trust during the
fiscal years ended April 30, 2007 and 2006.
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
--------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into on or after
May 6, 2003, the effective date of the new SEC pre-approval rules, the
Trust's audit committee is required to pre-approve services to affiliates
defined by SEC rules to the extent that the services are determined to have
a direct impact on the operations or financial reporting of the Trust. For
the years ended April 30, 2007 and 2006, there were no services provided to
an affiliate that required the Trust's audit committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The aggregate non-audit fees for the Trust and affiliates, as previously
defined, totaled approximately $17,105 in 2007 and $15,300 in 2006.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Trust's audit committee of the Board of Trustees has considered
whether the provision of non-audit services that were rendered to the
Affiliates (as defined) that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining
the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
The registrant has a separately-designated standing audit
committe eestablished in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Proxy Voting Policies and Procedures of
Pioneer Investment Management, Inc.
VERSION DATED July, 2004
Overview
Pioneer Investment Management, Inc. ("Pioneer") is a fiduciary that owes
each of its client's duties of care and loyalty with respect to all
services undertaken on the client's behalf, including proxy voting. When
Pioneer has been delegated proxy-voting authority for a client, the duty of
care requires Pioneer to monitor corporate events and to vote the proxies.
To satisfy its duty of loyalty, Pioneer must place its client's interests
ahead of its own and must cast proxy votes in a manner consistent with the
best interest of its clients. Pioneer will vote all proxies presented in a
timely manner.
The Proxy Voting Policies and Procedures are designed to complement
Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of
companies that are issuers of securities held in accounts managed by
Pioneer. Pioneer's Proxy Voting Policies summarize Pioneer's position on a
number of issues solicited by companies held by Pioneer's clients. The
policies are guidelines that provide a general indication on how Pioneer
would vote but do not include all potential voting scenarios.
Pioneer's Proxy Voting Procedures detail monitoring of voting, exception
votes, and review of conflicts of interest and ensure that case-by-case
votes are handled within the context of the overall guidelines (i.e. best
interest of client). The overriding goal is that all proxies for US and
non-US companies that are received promptly will be voted in accordance
with Pioneer's policies or specific client instructions. All shares in a
company held by Pioneer-managed accounts will be voted alike, unless a
client has given us specific voting instructions on an issue or has not
delegated authority to us or the Proxy Voting Oversight Group determines
that the circumstances justify a different approach.
Pioneer does not delegate the authority to vote proxies relating to its
clients to any of its affiliates, which include other subsidiaries of
UniCredito.
Any questions about these policies and procedures should be directed to the
Proxy Coordinator.
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Proxy Voting Procedures
Proxy Voting Service
Pioneer has engaged an independent proxy voting service to assist in the
voting of proxies. The proxy voting service works with custodians to ensure
that all proxy materials are received by the custodians and are processed
in a timely fashion. To the extent applicable, the proxy voting service
votes all proxies in accordance with the proxy voting policies established
by Pioneer. The proxy voting service will refer proxy questions to the
Proxy Coordinator (described below) for instructions under circumstances
where: (1) the application of the proxy voting guidelines is unclear; (2) a
particular proxy question is not covered by the guidelines; or (3) the
guidelines call for specific instructions on a case-by-case basis. The
proxy voting service is also requested to call to the Proxy Coordinator's
attention specific proxy questions that, while governed by a guideline,
appear to involve unusual or controversial issues. Pioneer reserves the
right to attend a meeting in person and may do so when it determines that
the company or the matters to be voted on at the meeting are strategically
important to its clients.
Proxy Coordinator
Pioneer's Director of Investment Operations (the "Proxy Coordinator")
coordinates the voting, procedures and reporting of proxies on behalf of
Pioneer's clients. The Proxy Coordinator will deal directly with the proxy
voting service and, in the case of proxy questions referred by the proxy
voting service, will solicit voting recommendations and instructions from
the Director of Portfolio Management US or, to the extent applicable,
investment sub-advisers. The Proxy Coordinator is responsible for ensuring
that these questions and referrals are responded to in a timely fashion and
for transmitting appropriate voting instructions to the proxy voting
service. The Proxy Coordinator is responsible for verifying with the
Compliance Department whether Pioneer's voting power is subject to any
limitations or guidelines issued by the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries).
Referral Items
From time to time, the proxy voting service will refer proxy questions to
the Proxy Coordinator that are described by Pioneer's policy as to be voted
on a case-by-case basis, that are not covered by Pioneer's guidelines or
where Pioneer's guidelines may be unclear with respect to the matter to be
voted on. Under such certain circumstances, the Proxy Coordinator will seek
a written voting recommendation from the Director of Portfolio Management
US. Any such recommendation will include: (i) the manner in which the
proxies should be voted; (ii) the rationale underlying any such decision;
and (iii) the disclosure of any contacts or communications made between
Pioneer and any outside parties concerning the proxy proposal prior to the
time that the voting instructions are provided. In addition, the Proxy
Coordinator will ask the Compliance Department to review the question for
any actual or apparent conflicts of interest as described below under
"Conflicts of
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Interest." The Compliance Department will provide a "Conflicts of Interest
Report," applying the criteria set forth below under "Conflicts of
Interest," to the Proxy Coordinator summarizing the results of its review.
In the absence of a conflict of interest, the Proxy Coordinator will vote
in accordance with the recommendation of the Director of Portfolio
Management US.
If the matter presents a conflict of interest for Pioneer, then the Proxy
Coordinator will refer the matter to the Proxy Voting Oversight Group for a
decision. In general, when a conflict of interest is present, Pioneer will
vote according to the recommendation of the Director of Portfolio
Management US where such recommendation would go against Pioneer's interest
or where the conflict is deemed to be immaterial. Pioneer will vote
according to the recommendation of its proxy voting service when the
conflict is deemed to be material and the Pioneer's internal vote
recommendation would favor Pioneer's interest, unless a client specifically
requests Pioneer to do otherwise. When making the final determination as to
how to vote a proxy, the Proxy Voting Oversight Group will review the
report from the Director of Portfolio Management US and the Conflicts of
Interest Report issued by the Compliance Department.
Conflicts of Interest
A conflict of interest occurs when Pioneer's interests interfere, or appear
to interfere with the interests of Pioneer's clients. Occasionally, Pioneer
may have a conflict that can affect how its votes proxies. The conflict may
be actual or perceived and may exist when the matter to be voted on
concerns:
o An affiliate of Pioneer, such as another company belonging to
the UniCredito Italiano S.p.A. banking group (a "UniCredito
Affiliate");
o An issuer of a security for which Pioneer acts as a sponsor,
advisor, manager, custodian, distributor, underwriter, broker, or
other similar capacity (including those securities specifically
declared by PGAM to present a conflict of interest for Pioneer);
o An issuer of a security for which UniCredito has informed Pioneer
that a UniCredito Affiliate acts as a sponsor, advisor, manager,
custodian, distributor, underwriter, broker, or other similar
capacity; or
o A person with whom Pioneer (or any of its affiliates) has an
existing, material contract or business relationship that was not
entered into in the ordinary course of Pioneer's business.
o Pioneer will abstain from voting with respect to companies
directly or indirectly owned by UniCredito Italiano Group, unless
otherwise directed by a client. In addition, Pioneer will inform
PGAM Global Compliance and the PGAM Independent Directors before
exercising such rights.
Any associate involved in the proxy voting process with knowledge of any
apparent or actual conflict of interest must disclose such conflict to the
Proxy Coordinator and the Compliance Department. The Compliance Department
will review each item referred to Pioneer to determine whether an actual or
potential conflict of interest with Pioneer exists in connection with the
proposal(s) to be voted upon. The review will be conducted by comparing the
apparent parties affected by the proxy proposal being
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voted upon against the Compliance Department's internal list of interested
persons and, for any matches found, evaluating the anticipated magnitude
and possible probability of any conflict of interest being present. For
each referral item, the determination regarding the presence or absence of
any actual or potential conflict of interest will be documented in a
Conflicts of Interest Report to the Proxy Coordinator.
Securities Lending
In conjunction with industry standards Proxies are not available to be
voted when the shares are out on loan through either Pioneer's lending
program or a client's managed security lending program. However, Pioneer
will reserve the right to recall lent securities so that they may be voted
according to the Pioneer's instructions. If a portfolio manager would like
to vote a block of previously lent shares, the Proxy Coordinator will work
with the portfolio manager and Investment Operations to recall the
security, to the extent possible, to facilitate the vote on the entire
block of shares.
Share-Blocking
"Share-blocking" is a market practice whereby shares are sent to a
custodian (which may be different than the account custodian) for record
keeping and voting at the general meeting. The shares are unavailable for
sale or delivery until the end of the blocking period (typically the day
after general meeting date).
Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and Investment Operations
Department to recall the shares (as allowable within the market time-frame
and practices) and/or communicate with executing brokerage firm. A list of
countries with "share-blocking" is available from the Investment Operations
Department upon request.
Record Keeping
The Proxy Coordinator shall ensure that Pioneer's proxy voting service:
o Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);
o Retains a record of the vote cast;
o Prepares Form N-PX for filing on behalf of each client that is a
registered investment company; and
o Is able to promptly provide Pioneer with a copy of the voting
record upon its request.
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The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:
o A record memorializing the basis for each referral vote cast;
o A copy of any document created by Pioneer that was material in
making the decision on how to vote the subject proxy; and
o A copy of any conflict notice, conflict consent or any other
written communication (including emails or other electronic
communications) to or from the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries)
regarding the subject proxy vote cast by, or the vote
recommendation of, Pioneer.
o Pioneer shall maintain the above records in the client's file for a
period not less than ten (10) years.
Disclosure
Pioneer shall take reasonable measures to inform its clients of the process
or procedures clients must follow to obtain information regarding how
Pioneer voted with respect to assets held in their accounts. In addition,
Pioneer shall describe to clients its proxy voting policies and procedures
and will furnish a copy of its proxy voting policies and procedures upon
request. This information may be provided to clients through Pioneer's Form
ADV (Part II) disclosure, by separate notice to the client, or through
Pioneer's website.
Proxy Voting Oversight Group
The members of the Proxy Voting Oversight Group are Pioneer's: Director of
Portfolio Management US, Head of Investment Operations, and Director of
Compliance. Other members of Pioneer will be invited to attend meetings and
otherwise participate as necessary. The Head of Investment Operations will
chair the Proxy Voting Oversight Group.
The Proxy Voting Oversight Group is responsible for developing, evaluating,
and changing (when necessary) Pioneer's Proxy Voting Policies and
Procedures. The group meets at least annually to evaluate and review these
policies and procedures and the services of its third-party proxy voting
service. In addition, the Proxy Voting Oversight Group will meet as
necessary to vote on referral items and address other business as
necessary.
Amendments
Pioneer may not amend its Proxy Voting Policies And Procedures without the
prior approval of the Proxy Voting Oversight Group and its corporate
parent, Pioneer Global Asset Management S.p.A
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Proxy Voting Policies
Pioneer's sole concern in voting proxies is the economic effect of the
proposal on the value of portfolio holdings, considering both the short-
and long-term impact. In many instances, Pioneer believes that supporting
the company's strategy and voting "for" management's proposals builds
portfolio value. In other cases, however, proposals set forth by management
may have a negative effect on that value, while some shareholder proposals
may hold the best prospects for enhancing it. Pioneer monitors developments
in the proxy-voting arena and will revise this policy as needed.
All proxies that are received promptly will be voted in accordance with the
specific policies listed below. All shares in a company held by
Pioneer-managed accounts will be voted alike, unless a client has given us
specific voting instructions on an issue or has not delegated authority to
us. Proxy voting issues will be reviewed by Pioneer's Proxy Voting
Oversight Group, which consists of the Director of Portfolio Management US,
the Director of Investment Operations (the Proxy Coordinator), and the
Director of Compliance.
Pioneer has established Proxy Voting Procedures for identifying and
reviewing conflicts of interest that may arise in the voting of proxies.
Clients may request, at any time, a report on proxy votes for securities
held in their portfolios and Pioneer is happy to discuss our proxy votes
with company management. Pioneer retains a proxy voting service to provide
research on proxy issues and to process proxy votes.
Administrative
While administrative items appear infrequently in U.S. issuer proxies, they
are quite common in non-U.S. proxies.
We will generally support these and similar management proposals:
o Corporate name change.
o A change of corporate headquarters.
o Stock exchange listing.
o Establishment of time and place of annual meeting.
o Adjournment or postponement of annual meeting.
o Acceptance/approval of financial statements.
o Approval of dividend payments, dividend reinvestment plans and other
dividend-related proposals.
o Approval of minutes and other formalities.
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o Authorization of the transferring of reserves and allocation of
income.
o Amendments to authorized signatories.
o Approval of accounting method changes or change in fiscal year-end.
o Acceptance of labor agreements.
o Appointment of internal auditors.
Pioneer will vote on a case-by-case basis on other routine business;
however, Pioneer will oppose any routine business proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of
the proposal. Pioneer has also instructed its proxy voting service to
inform Pioneer of its analysis of any administrative items inconsistent, in
its view, with supporting the value of Pioneer portfolio holdings so that
Pioneer may consider and vote on those items on a case-by-case basis.
Auditors
We normally vote for proposals to:
o Ratify the auditors. We will consider a vote against if we are
concerned about the auditors' independence or their past work for
the company. Specifically, we will oppose the ratification of
auditors and withhold votes from audit committee members if
non-audit fees paid by the company to the auditing firm exceed the
sum of audit fees plus audit-related fees plus permissible tax
fees according to the disclosure categories proposed by the
Securities and Exchange Commission.
o Restore shareholder rights to ratify the auditors.
We will normally oppose proposals that require companies to:
o Seek bids from other auditors.
o Rotate auditing firms, except where the rotation is statutorily
required or where rotation would demonstrably strengthen financial
disclosure.
o Indemnify auditors.
o Prohibit auditors from engaging in non-audit services for the
company.
Board of Directors
On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in
instances where corporate performance has been very poor or where the board
appears to lack independence.
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General Board Issues
Pioneer will vote for:
o Audit, compensation and nominating committees composed of
independent directors exclusively.
o Indemnification for directors for actions taken in good faith in
accordance with the business judgment rule. We will vote against
proposals for broader indemnification.
o Changes in board size that appear to have a legitimate business
purpose and are not primarily for anti-takeover reasons.
o Election of an honorary director.
We will vote against:
o Minimum stock ownership by directors.
o Term limits for directors. Companies benefit from experienced
directors, and shareholder control is better achieved through
annual votes.
o Requirements for union or special interest representation on the
board.
o Requirements to provide two candidates for each board seat.
We will vote on a case-by case basis on these issues:
o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate
performance.
Elections of Directors
In uncontested elections of directors we will vote against:
o Individual directors with absenteeism above 25% without valid
reason. We support proposals that require disclosure of director
attendance.
o Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the
purposes of our policy, we accept the definition of affiliated
directors provided by our proxy voting service.
We will also vote against:
o Directors who have failed to act on a takeover offer where the
majority of shareholders have tendered their shares.
o Directors who appear to lack independence or are associated with
very poor corporate performance.
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We will vote on a case-by case basis on these issues:
o Re-election of directors who have implemented or renewed a
dead-hand or modified dead-hand poison pill (a "dead-hand poison
pill" is a shareholder rights plan that may be altered only by
incumbent or "dead " directors. These plans prevent a potential
acquirer from disabling a poison pill by obtaining control of the
board through a proxy vote).
o Contested election of directors.
o Prior to phase-in required by SEC, we would consider supporting
election of a majority of independent directors in cases of poor
performance.
o Mandatory retirement policies.
o Directors who have ignored a shareholder proposal that has been
approved by shareholders for two consecutive years.
Takeover-Related Measures
Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high.
Pioneer will vote for:
o Cumulative voting.
o Increase ability for shareholders to call special meetings.
o Increase ability for shareholders to act by written consent.
o Restrictions on the ability to make greenmail payments.
o Submitting rights plans to shareholder vote.
o Rescinding shareholder rights plans ("poison pills").
o Opting out of the following state takeover statutes:
o Control share acquisition statutes, which deny large holders voting
rights on holdings over a specified threshold.
o Control share cash-out provisions, which require large holders to
acquire shares from other holders.
o Freeze-out provisions, which impose a waiting period on large
holders before they can attempt to gain control.
o Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.
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o Disgorgement provisions, which require acquirers to disgorge profits
on purchases made before gaining control.
o Fair price provisions.
o Authorization of shareholder rights plans.
o Labor protection provisions.
o Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider
voting against proposals that require a supermajority vote to
repeal or amend the provision. Finally, we will consider the
mechanism used to determine the fair price; we are generally
opposed to complicated formulas or requirements to pay a premium.
o Opting out of state takeover statutes regarding fair price
provisions. We will use the criteria used for fair price
provisions in general to determine our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end mutual funds.
o Limiting shareholder ability to remove or appoint directors. We
will support proposals to restore shareholder authority in this
area. We will review on a case-by-case basis proposals that
authorize the board to make interim appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support
proposals to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we
believe that management should have full control over corporate
funds.
o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g.,
amend charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally
allow shareholders to buy additional shares at a below-market
price in the event of a change in control and may deter some bids.
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Capital Structure
Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals
in this area. We will, however, reject proposals that impose high barriers
to potential takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Share repurchase programs, if all shareholders may participate on
equal terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank-check common stock placements (other than
shares issued in the normal course of business) submitted for
shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination
considering, among other factors:
o Number of shares currently available for issuance;
o Size of requested increase (we would normally approve increases of up to
100% of current authorization);
o Proposed use of the additional shares; and
o Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).
o Blank-check preferred. We will normally oppose issuance of a new
class of blank-check preferred, but may approve an increase in a
class already outstanding if the company has demonstrated that it
uses this flexibility appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's
financing flexibility.
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Compensation
Pioneer supports compensation plans that link pay to shareholder returns
and believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same
time, stock-related compensation plans have a significant economic impact
and a direct effect on the balance sheet. Therefore, while we do not want
to micromanage a company's compensation programs, we will place limits on
the potential dilution these plans may impose.
Pioneer will vote for:
o 401(k) benefit plans.
o Employee stock ownership plans (ESOPs), as long as shares
allocated to ESOPs are less than 5% of outstanding shares. Larger
blocks of stock in ESOPs can serve as a takeover defense. We will
support proposals to submit ESOPs to shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act
of 1993 (OBRA), including:
o Amendments to performance plans to conform with OBRA;
o Caps on annual grants or amendments of administrative features;
o Adding performance goals; and
o Cash or cash-and-stock bonus plans.
o Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.
o Require that option repricings be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension
benefits).
o Employee stock purchase plans where the purchase price is equal to
at least 85% of the market price, where the offering period is no
greater than 27 months and where potential dilution (as defined
below) is no greater than 10%.
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We will vote on a case-by-case basis on the following issues:
o Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:
o The program must be of a reasonable size. We will approve plans
where the combined employee and director plans together would
generate less than 15% dilution. We will reject plans with 15% or
more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.
o The plan must not:
o Explicitly permit unlimited option repricing authority or that
have repriced in the past without shareholder approval.
o Be a self-replenishing "evergreen" plan, plans that grant
discount options and tax offset payments.
o We are generally in favor of proposals that increase participation beyond
executives.
o We generally support proposals asking companies to adopt rigorous
vesting provisions for stock option plans such as those that vest
incrementally over, at least, a three- or four-year period with a pro
rata portion of the shares becoming exercisable on an annual basis
following grant date.
o We generally support proposals asking companies to disclose their
window period policies for stock transactions. Window period policies
ensure that employees do not exercise options based on insider
information contemporaneous with quarterly earnings releases and other
material corporate announcements.
o We generally support proposals asking companies to adopt stock holding
periods for their executives.
o All other employee stock purchase plans.
o All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee programs
and retirement plans.
o All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions,
repricing options, lengthening exercise periods or accelerating
distribution of awards and pyramiding and cashless exercise
programs.
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We will vote against:
o Pensions for non-employee directors. We believe these retirement
plans reduce director objectivity.
o Elimination of stock option plans.
We will vote on a case-by case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
Corporate Governance
Pioneer will vote for:
o Confidential Voting.
o Equal access provisions, which allow shareholders to contribute
their opinion to proxy materials.
o Proposals requiring directors to disclose their ownership of shares
in the company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support
reincorporations supported by valid business reasons. We will
oppose those that appear to be solely for the purpose of
strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the
proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
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Mergers and Restructurings
Pioneer will vote on the following and similar issues on a case-by-case
basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset
sales, joint ventures, conversions to holding company and
conversions to self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger
opportunities.
We will normally vote against shareholder proposals requiring that the
company be put up for sale.
Mutual Funds
Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments
raises several unique proxy voting issues.
Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes
that do not affect the investment objective or overall risk level
of the fund. We will examine more fundamental changes on a
case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end mutual funds, but will typically
support such proposals.
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Social Issues
Pioneer will abstain on stockholder proposals calling for greater
disclosure of corporate activities with regard to social issues. "Social
Issues" may generally be described as shareholder proposals for a company
to:
o Conduct studies regarding certain issues of public concern and
interest;
o Study the feasibility of the company taking certain actions with
regard to such issues; or
o Take specific action, including ceasing certain behavior and
adopting company standards and principles, in relation to issues
of public concern and interest.
We believe these issues are important and should receive management
attention.
Pioneer will vote against proposals calling for substantial changes in the
company's business or activities. We will also normally vote against
proposals with regard to contributions, believing that management should
control the routine disbursement of funds.
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Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
PORTFOLIO MANAGEMENT
Additional Information About the Portfolio Managers
Other Accounts Managed by the Portfolio Managers. The table below indicates, for
each portfolio manager of the fund, information about the accounts other than
the fund over which the portfolio manager has day-to-day investment
responsibility. All information on the number of accounts and total assets in
the table is as of April 30, 2007. For purposes of the table, "Other Pooled
Investment Vehicles" may include investment partnerships, undertakings for
collective investments in transferable securities ("UCITS") and other non-U.S.
investment funds and group trusts, and "Other Accounts" may include separate
accounts for institutions or individuals, insurance company general or separate
accounts, pension funds and other similar institutional accounts but generally
do not include the portfolio manager's personal investment accounts or those
which the manager may be deemed to own beneficially under the code of ethics.
Certain funds and other accounts managed by the portfolio manager may have
substantially similar investment strategies.
------------------ ---------------------------- ---------------------- ---------------- ------------------------- ------------------
Name of Portfolio Type of Account Number of Accounts Total Assets Number of Accounts Assets Managed for
Manager Managed Managed Managed for which which Advisory Fee
Advisory Fee is is Performance-
Performance-Based Based
------------------ ---------------------------- ---------------------- ---------------- ------------------------- ------------------
------------------ ---------------------------- ---------------------- ---------------- ------------------------- ------------------
David Eurkus Other Registered 6 $2,366,411,000 N/A N/A
Investment Companies
---------------------------- ---------------------- ---------------- ------------------------- ------------------
---------------------------- ---------------------- ---------------- ------------------------- ------------------
Other Pooled Investment 0 $0 N/A N/A
Vehicles
---------------------------- ---------------------- ---------------- ------------------------- ------------------
---------------------------- ---------------------- ---------------- ------------------------- ------------------
Other Accounts 1 $6,038,000 N/A N/A
------------------ ---------------------------- ---------------------- ---------------- ------------------------- ------------------
Potential Conflicts of Interest. When a portfolio manager is responsible for the
management of more than one account, the potential arises for the portfolio
manager to favor one account over another. The principal types of potential
conflicts of interest that may arise are discussed below. For the reasons
outlined below, Pioneer does not believe that any material conflicts are likely
to arise out of a portfolio manager's responsibility for the management of the
fund as well as one or more other accounts. Although Pioneer has adopted
procedures that it believes are reasonably designed to detect and prevent
violations of the federal securities laws and to mitigate the potential for
conflicts of interest to affect its portfolio management decisions, there can be
no assurance that all conflicts will be identified or that all procedures will
be effective in mitigating the potential for such risks. Generally, the risks of
such conflicts of interests are increased to the extent that a portfolio manager
has a financial incentive to favor one account over another. Pioneer has
structured its compensation arrangements in a manner that is intended to limit
such potential for conflicts of interests. See "Compensation of Portfolio
Managers" below.
o A portfolio manager could favor one account over another in allocating new
investment opportunities that have limited supply, such as initial public
offerings and private placements. If, for example, an initial public
offering that was expected to appreciate in value significantly shortly
after the offering was allocated to a single account, that account may be
expected to have better investment performance than other accounts that did
not receive an allocation of the initial public offering. Generally,
investments for which there is limited availability are allocated based
upon a range of factors including available cash and consistency with the
accounts' investment objectives and policies. This allocation methodology
necessarily involves some subjective elements but is intended over time to
treat each client in an equitable and fair manner. Generally, the
investment opportunity is allocated among participating accounts on a pro
rata basis. Although Pioneer believes that its practices are reasonably
designed to treat each client in an equitable and fair manner, there may be
instances where a fund may not participate, or may participate to a lesser
degree than other clients, in the allocation of an investment opportunity.
o A portfolio manager could favor one account over another in the order in
which trades for the accounts are placed. If a portfolio manager determines
to purchase a security for more than one account in an aggregate amount
that may influence the market price of the security, accounts that
purchased or sold the security first may receive a more favorable price
than accounts that made subsequent transactions. The less liquid the market
for the security or the greater the percentage that the proposed aggregate
purchases or sales represent of average daily trading volume, the greater
the potential for accounts that make subsequent purchases or sales to
receive a less favorable price. When a portfolio manager intends to trade
the same security on the same day for more than one account, the trades
typically are "bunched," which means that the trades for the individual
accounts are aggregated and each account receives the same price. There are
some types of accounts as to which bunching may not be possible for
contractual reasons (such as directed brokerage arrangements).
Circumstances may also arise where the trader believes that bunching the
orders may not result in the best possible price. Where those accounts or
circumstances are involved, Pioneer will place the order in a manner
intended to result in as favorable a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater degree
than other accounts managed by the portfolio manager. If, for example, the
portfolio manager receives a bonus based upon the performance of certain
accounts relative to a benchmark while other accounts are disregarded for
this purpose, the portfolio manager will have a financial incentive to seek
to have the accounts that determine the portfolio manager's bonus achieve
the best possible performance to the possible detriment of other accounts.
Similarly, if Pioneer receives a performance-based advisory fee, the
portfolio manager may favor that account, whether or not the performance of
that account directly determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager has a
beneficial interest in the account, in order to benefit a large client or
to compensate a client that had poor returns. For example, if the portfolio
manager held an interest in an investment partnership that was one of the
accounts managed by the portfolio manager, the portfolio manager would have
an economic incentive to favor the account in which the portfolio manager
held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could arise.
For example, if a portfolio manager purchases a security for one account
and sells the same security for another account, such trading pattern may
disadvantage either the account that is long or short. In making portfolio
manager assignments, Pioneer seeks to avoid such potentially conflicting
situations. However, where a portfolio manager is responsible for accounts
with differing investment objectives and policies, it is possible that the
portfolio manager will conclude that it is in the best interest of one
account to sell a portfolio security while another account continues to
hold or increase the holding in such security.
Compensation of Portfolio Managers. Pioneer has adopted a system of compensation
for portfolio managers and seeks to align the financial interests of the
portfolio managers with both those of shareholders of the accounts the portfolio
managers manage, through incentive payments based in part on the relative
investment performance of those funds, and also Pioneer through incentive
payments based in part on Pioneer's financial performance. Pioneer's
compensation arrangements with its portfolio managers are determined on the
basis of the portfolio manager's overall services to Pioneer and its affiliates
and not on the basis of specific funds or accounts managed by the portfolio
manager. The compensation program for all Pioneer portfolio managers includes a
base salary (determined by the rank and tenure of the employee) and an annual
bonus program, as well as customary benefits that are offered generally to all
full-time employees. Base compensation is fixed and normally reevaluated on an
annual basis. Pioneer seeks to set base compensation at market rates, taking
into account the experience and responsibilities of the portfolio manager. The
bonus plan is intended to provide a competitive level of annual bonus
compensation that is tied to the portfolio manager achieving superior investment
performance and aligns the financial incentives of Pioneer and the investment
professional. Any bonus under the plan is completely discretionary, with a
maximum annual bonus that may be in excess of base salary. The annual bonus is
based upon a combination of the following factors:
o Quantitative Investment Performance. The quantitative investment
performance calculation is based on pre-tax performance of all of the
accounts managed by the portfolio manager (which includes the fund and any
other accounts managed by the portfolio manager) over a one-year period
(20% weighting) and four-year period (80% weighting), measured for periods
ending on December 31. The accounts, which include the fund, are ranked
against a group of mutual funds with similar investment objectives and
investment focus (60%) and a broad-based securities market index measuring
the performance of the same type of securities in which the accounts invest
(40%), which, in the case of the fund, is the Lehman Brothers Municipal
Bond Index and the Lehman Brothers Non-Investment Grade Municipal Bond
Index. As a result of these two benchmarks, the performance of the
portfolio manager for compensation purposes is measured against the
criteria that are relevant to the portfolio manager's competitive universe.
o Qualitative Performance. The qualitative performance component with respect
to all of the accounts managed by the portfolio manager includes
objectives, such as effectiveness in the areas of teamwork, leadership,
communications and marketing, that are mutually established and evaluated
by each portfolio manager and management.
o Pioneer Results and Business Line Results. Pioneer's financial performance,
as well as the investment performance of its investment management group,
affect a portfolio manager's actual bonus by a leverage factor of plus or
minus (+/-) a predetermined percentage.
Certain portfolio managers participate in an incentive plan whereby senior
executives or other key employees are granted options in stock of Pioneer Global
Asset Management S.p.A., an affiliate of Pioneer, at the then fair value of the
underlying stock. These options are generally exercisable within three years.
Share Ownership by Portfolio Managers. The following table indicates as of April
30, 2007 the value, within the indicated range, of shares beneficially owned by
the portfolio managers of the fund.
------------------------------ -------------------------------------
Name of Portfolio Manager Beneficial Ownership of the Fund*
------------------------------ -------------------------------------
------------------------------ -------------------------------------
David Eurkus A
------------------------------ -------------------------------------
*Key to Dollar Ranges
A. None
B. $1 - $10,000
C. $10,001 - $50,000
D. $50,001 - $100,000
E. $100,001 - $500,000
F. $500,001 - $1,000,000
G. Over $1,000,000
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
During the period covered by this report, there were no purchases
made by or on behalf of the registrant or any affiliated purchaser
as defined in Rule 10b-18(a)(3) under the Securities Exchange Act
of 1934 (the Exchange Act), of shares of the registrants equity
securities that are registered by the registrant pursuant to
Section 12 of the Exchange Act.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on their evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant 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 have materially affected, or are
reasonably likely to materially affect, the
registrant's internal control over financial
reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
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) Pioneer Municipal High Income Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date June 29, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date June 29, 2007
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date June 29, 2007
* Print the name and title of each signing officer under his or her signature.