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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)
Terrence J. Cullen, 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: April 30
Date of reporting period: May 1, 2011 through April 30, 2012
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.
Pioneer Municipal High
Income Trust
--------------------------------------------------------------------------------
Annual Report | April 30, 2012
--------------------------------------------------------------------------------
Ticker Symbol: MHI
[LOGO] PIONEER
Investments(R)
visit us: us.pioneerinvestments.com
Table of Contents
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 10
Prices and Distributions 11
Performance Update 12
Schedule of Investments 13
Financial Statements 23
Financial Highlights 26
Notes to Financial Statements 28
Report of Independent Registered Public Accounting Firm 36
Approval of Investment Advisory Agreement 38
Trustees, Officers and Service Providers 42
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 1
President's Letter
Dear Shareowner,
The U.S. economy continued its recovery through the first quarter of 2012, even
as broader global concerns weighed on investors. The U.S. unemployment rate
fell to 8.1% in April, and some indicators suggest that it may continue to
trend down. The housing market continued to improve, fueled in part by
record-low mortgage rates. The risk of rising oil prices appeared to recede.
The improved outlook helped U.S. equity markets to perform well in the first
quarter, with the Standard & Poor's 500 Index rising by 12%. For bond
investors, the riskier sectors of the bond market fared the best. The broad
bond market, as measured by the Barclays Capital Aggregate Bond Index, rose by
just 0.3%, while the high-yield bond market, as measured by the Bank of America
Merrill Lynch High Yield Master II Index, rose by 5.15%.
We are cautiously optimistic that the U.S. economy will continue to improve.
But we are also closely monitoring macroeconomic concerns that could change the
market's direction, such as the lingering debt woes in Europe, the state of the
Chinese economy, and the U.S. government's fiscal situation. Clouds have
continued to hover over Europe, as the exit of Greece from the Euro-zone
remains a possibility. Meanwhile, China continues to face a potential slowdown
in economic growth. In the U.S., tax increases and spending cuts scheduled to
take effect at year-end should, unless fiscal policy changes, sharply reduce
the budget deficit -- which would be very good for the country in the longer
run -- but also could potentially stall U.S. economic growth in 2013. All of
these considerations may lead to further market volatility.
At Pioneer, we have long advocated the benefits of staying diversified and
investing for the long term. The strategy has generally performed well for many
investors. Our advice, as always, is to work closely with a trusted financial
advisor to discuss your goals and work together to develop an investment
strategy that meets your individual needs. There is no single best strategy
that works for every investor.
Pioneer's investment professionals focus on finding good opportunities to
invest in both equity and bond markets using the same disciplined investment
approach we have used since 1928. Our strategy is to identify undervalued
individual securities with the greatest potential for success, carefully
weighing risk against reward. Our teams of investment professionals continually
2 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
monitor and analyze the relative valuations of different sectors and securities
globally to help build portfolios that we believe can help you achieve your
investment goals.
We invite you to learn more about Pioneer and our time-tested approach to
investing by consulting with your financial advisor or visiting us online at
us.pioneerinvestments.com. We greatly appreciate your trust in us, and we thank
you for investing with Pioneer.
Sincerely,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA, 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 opinion 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.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 3
Portfolio Management Discussion | 4/30/12
Municipal bond investments, including both investment-grade and high-yield
bonds, generated healthy returns over the 12 months ended April 30, 2012, as
investors' confidence in the municipal market returned. In the following
interview, David Eurkus discusses the factors that influenced the performance
of Pioneer Municipal High Income Trust over the 12 months ended April 30, 2012.
Mr. Eurkus, senior vice president and portfolio manager at Pioneer, is
responsible for the daily management of the Trust.
Q How did Pioneer Municipal High Income Trust perform during the 12 months ended
April 30, 2012?
A Pioneer Municipal High Income Trust produced a total return of 18.35% at net
asset value, and 25.95% at market value, during the 12 months ended April 30,
2012. During the same period, the Trust's benchmarks, the Barclays Capital
High Yield Municipal Bond Index and the Barclays Capital Municipal Bond Index,
returned 16.16% and 11.36%, respectively. The Barclays Capital High Yield
Municipal Bond Index is designed to track the performance of lower-rated
municipal bonds. The Barclays Capital Municipal Bond Index is designed to
track the performance of investment-grade municipal bonds. During the same 12
months ended April 30, 2012, the average return (at market value) of the 14
closed end funds in Lipper's High Yield Municipal Debt Closed End Funds
category (which are or may be leveraged) was 6.61%.
The shares of the Trust were selling at a 9.7% premium to net asset value at
the end of the 12 months.
Unlike the Trust, the two Barclays Capital municipal bond indices do not use
leverage. While the use of leverage can increase investment opportunity, it
can also increase investment risk.
On April 30, 2012, the standardized 30-day SEC yield on the Trust's shares was
7.28%.
Q How would you describe the market environment for municipal bonds during the
12 months ended April 30, 2012?
A Municipal bond investments produced solid results over the period against a
favorable backdrop that saw the financial fundamentals of most states improve
and demand for tax-advantaged investments outstrip supply. The Trust's
exposures to both investment-grade and high-yield municipal debt helped
support performance relative to both Barclays Capital benchmarks.
4 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
As the Trust's fiscal year began in May 2011, municipal securities were in the
early stages of a rally that would persist for almost the entire period.
Municipal bond prices were relatively inexpensive at the start of the Trust's
fiscal year, as the market was only just beginning to recover from the effects
of a short-term slump triggered by the highly publicized comments in late 2010
by one analyst who had predicted widespread defaults of municipal securities.
We disagreed strongly with those comments at the time, and believed that there
were excellent values and opportunities available for municipal investors who
had conducted thorough credit research on the underlying securities.
A number of positive factors helped drive the municipal rally during the
period. First, the supply of new municipal bond issues began to contract
during the period -- new issuance for 2011 was about 40% lower than in 2010.
One of the main reasons for the contraction in the municipal market during
2011 was the end of the U.S. government's Build America Bonds (BAB) program on
December 31, 2010. As 2010 wound down, the probability that Congress would not
renew the BAB program increased. Realizing this, many municipalities rushed to
get government-subsidized deals done before the expiration of the BAB program,
particularly in October, November and December of 2010, and the market became
flooded with new issues. The late-2010 spike in new issuance caused 2011's
supply of municipals to be pulled forward, resulting in significantly less new
issuance during the 2011 calendar year.
The second reason for the rally during the 12 months ended April 30, 2012, was
a rise in the demand for tax-advantaged municipal investments. Traditional
buyers started increasing their stakes in municipals, and non- traditional
investors, such as taxable bond funds and pension funds, started to invest in
municipals because of the attractive tax-adjusted yields that the securities
offered relative to taxable securities. At the same time, the domestic economy
continued to recover, albeit at a slow pace, while inflationary pressures
remained low and the Federal Reserve System (the Fed) signaled its intention
to keep short-term interest rates low all the way into 2014.
The third reason for the rally was the continued improvement in the financial
health of most state governments, as most states had reported eight
consecutive quarters of positive revenue changes by the end of the Trust's
fiscal year on April 30, 2012.
Finally, sovereign-debt problems in Europe and uncertainty about the general
global economic environment encouraged investment in the United States, rather
than abroad.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 5
All of the positive developments combined to help both investment-grade and
high-yield municipal debt securities realize price gains during the 12 months
ended April 30, 2012, with lower-rated securities outperforming higher-rated
debt.
Q What investment strategies did you pursue during the 12 months ended April 30,
2012, and how did the strategies affect the Trust's performance?
A We kept the Trust fully invested during the fiscal year. We maintained healthy
portfolio exposures to both investment-grade and high-yield bonds, while
keeping the average weighted quality of the Trust's investments on the
investment-grade side. In addition, we maintained a somewhat longer duration
(an indication of price sensitivity to changes in interest rates) in the
Trust's portfolio than that of the Barclays Capital Municipal Bond Index. The
Trust's duration positioning also helped relative performance, as
longer-maturity bonds outperformed during the period.
We emphasized revenue bonds in the Trust's portfolio during the period.
Revenue bonds are securities that rely on revenues from specific funding
sources -- such as hospital or health care facilities, higher education
institutions or transportation projects -- which have their own fees or
revenue streams. We concentrate the Trust's investments in revenue bonds
because of the reliability of their funding sources. General obligation bonds,
on the other hand, do not rely on dedicated streams of revenues and can more
easily be affected by credit rating downgrades or related fiscal problems
encountered by state and/or local governments.
By sector, the Trust's largest allocation was to the hospitals and health care
group, which accounted for 30.6% of the Trust's total investment portfolio at
the end of the fiscal year on April 30, 2012. We also maintained good
exposures to the three other sectors that we traditionally favor, such as
power and energy, education, and transportation. We generally prefer those
groups because they provide essential services and are likely to continue to
receive support, regardless of the economic cycle. The Trust's biggest
weightings at the end of the period were to hospitals and health care bonds,
because we saw attractive values in securities throughout the credit-quality
spectrum in the sector. We also saw some interesting opportunities open up
because of the new federal health care regulations.
At the end of the Trust's fiscal year, on April 30, 2012, about 54.7% of the
Trust's total investment portfolio was invested in high-yield municipal bonds,
with the remaining 45.3% in investment-grade debt. At the end of the period,
the Trust held positions in 131 different securities, issued in 33 different
states and District of Columbia.
6 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
Q Which individual investments, if any, had a material effect on the Trust's
performance during the 12 months ended April 30, 2012?
A The Trust benefited from solid performance generated by virtually the entire
portfolio of investments during the fiscal year, with most bond holdings
gaining in value against a favorable market backdrop. The only exception was
one Trust holding in an airport facility security backed by revenues from
American Airlines. The security declined in value when AMR, the parent company
of American Airlines, filed for bankruptcy at the end of November 2011. While
we sold the position during the period, we did maintain a very small Trust
position in another AMR-related security because it was secured by assets that
offered protection for investors.
Q How did the level of leverage employed by the Trust change over the 12-month
period ended April 30, 2012?
A At the end of the 12-month period, on April 30, 2012, 24.1% of the Trust's
total managed assets were financed by leverage, compared with 25.8% of the
Trust's total managed assets financed by leverage at the start of the 12-month
period on May 1, 2011. The increase was due to changes in the values of the
bonds in which the Trust invested.
Q What is your investment outlook?
A We believe that the general economic outlook continues to favor investments in
municipal bonds. We also believe the global and domestic economies both should
maintain their growth paths, albeit at modest expansion rates. The U.S.
economy, the largest in the world, appears to be strengthening. Inflationary
pressures have remained muted and monetary policy is likely to remain in
pro-growth mode. Nevertheless, we will continue to be on alert for any
potential developments that could affect the market. Europe's sovereign-debt
situation, most notably in Greece, appears to be continuing to deteriorate,
and some political instability has arisen from the ongoing crisis. At the same
time, economic growth in China has slowed. On the domestic scene, highly
partisan political quarrels have led to stalemate and uncertainty, which has
worried many investors.
We have a very positive, long-term outlook for the municipal market,
particularly as state and local governments rebalance their budgets. The trend
towards greater fiscal discipline can only benefit the quality of municipal
credits in our opinion. Going forward, we will remain focused on credit
research when selecting investments for the Trust's portfolio, analyzing both
the credit-worthiness of each issuer and the reliability and sustainability of
each security's revenue stream.
Please refer to the Schedule of Investments on pages 13-22 for a full listing
of Trust securities.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 7
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 debt securities held by the Trust will
generally fall. Conversely, when interest rates fall the prices of debt
securities held by the Trust generally will rise.
By concentrating in municipal securities, the Trust is more susceptible to
adverse economic, political or regulatory developments than is a portfolio that
invests more broadly.
Investments in the Trust are subject to possible loss due to the financial
failure of the issuers of the underlying securities and the issuers' inability
to meet their debt obligations.
The Trust may invest up to 20% of its total assets in illiquid securities.
Illiquid securities may be difficult to dispose of at a fair price at the times
when the Trust believes it is desirable to do so, and their market price is
generally more volatile than that of more liquid securities. Illiquid
securities are also more difficult to value and investment of the Trust's
assets in illiquid securities may restrict the Trust's ability to take
advantage of market opportunities.
The Trust uses leverage through the issuance of preferred shares. Leverage
creates significant risks, including the risk that the Trust's incremental
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. Since February of 2008, regularly scheduled auctions for the Trust's
preferred shares have failed and preferred shareowners have not been able to
sell their shares at auction. The Board of Trustees of the Trust has
considered, and continues to consider, this issue.
The Trust is required to maintain certain regulatory and rating agency asset
coverage requirements in connection with its outstanding preferred shares. In
order to maintain required asset coverage levels, the Trust may be required to
alter the composition of its investment portfolio or take other actions, such
as redeeming preferred shares with the proceeds from portfolio transactions, at
what might be inopportune times in the market. Such actions could reduce the
net earnings or returns to holders of the Trust's common shares over time.
Risks of investing in the Trust are discussed in greater detail in the Trust's
original offering prospectus and in shareowner reports issued from time to
time.
These risks may increase share price volatility.
8 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
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 opinion as of the date of this report. These statements should
not be relied upon for any other purposes.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 9
Portfolio Summary | 4/30/12
Portfolio Diversification
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[THE DATA BELOW IS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.]
Health Revenue 30.6%
Other Revenue 15.0%
Insured 14.1%
Tobacco Revenue 12.1%
Development Revenue 7.7%
Education Revenue 6.1%
Airport Revenue 5.9%
Facilities Revenue 3.1%
Transportation Revenue 2.7%
Pollution Control Revenue 1.8%
Airline Revenue 0.7%
Housing Revenue 0.2%
Utilities Revenue 0.0%*
* Amount is less than 0.1%
Portfolio Quality
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio; based on Standard & Poor's
ratings)
[THE DATA BELOW IS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.]
AAA 11.2%
AA 14.6%
A 5.5%
BBB 14.0%
BB 4.9%
B 9.8%
CCC 0.1%
CC 0.2%
Not Rated 39.7%
Bond ratings are ordered highest to lowest in portfolio. Based on Standard &
Poor's measures, AAA (highest possible rating) through BBB are considered
investment grade; BB or lower ratings are considered non-investment grade. Cash
equivalents and some bonds may not be rated.
The portfolio is actively managed and current holdings may be different.
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of long-term holdings)*
1. Metropolitan Pier & Exposition Authority Dedicated State Tax Revenue, 0.0%, 6/15/22 3.7%
------------------------------------------------------------------------------------------------------
2. Connecticut Health & Educational Facilities Authority Revenue, RIB, 13.643%,
7/1/42 (144A) 3.4
------------------------------------------------------------------------------------------------------
3. Washington State General Obligation, 0.0%, 6/1/22 2.7
------------------------------------------------------------------------------------------------------
4. North Texas Tollway Authority Revenue, 5.75%, 1/1/33 2.7
------------------------------------------------------------------------------------------------------
5. New York State Dormitory Authority Revenue, RIB, 15.463%, 7/1/26 (144A) 2.6
------------------------------------------------------------------------------------------------------
6. New Jersey Economic Development Authority Revenue, 6.25%, 9/15/29 2.5
------------------------------------------------------------------------------------------------------
7. California State University Revenue, RIB, 12.829%, 11/1/39 (144A) 2.3
------------------------------------------------------------------------------------------------------
8. Texas State, RIB, 14.568%, 4/1/30 (144A) 2.3
------------------------------------------------------------------------------------------------------
9. Massachusetts Development Finance Agency, 5.75%, 1/1/42 2.2
------------------------------------------------------------------------------------------------------
10. Tobacco Settlement Financing Corp., 6.75%, 6/1/39 2.1
------------------------------------------------------------------------------------------------------
* This list excludes temporary cash investments. 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.
10 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
Prices and Distributions | 4/30/12
Market Value per Common Share
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--------------------------------------------------------------------------------
4/30/12 4/30/11
--------------------------------------------------------------------------------
$15.49 $13.40
--------------------------------------------------------------------------------
Premium 9.7% 3.1%
--------------------------------------------------------------------------------
Net Asset Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4/30/12 4/30/11
--------------------------------------------------------------------------------
$14.12 $13.00
--------------------------------------------------------------------------------
Distributions per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net
Investment Short-Term Long-Term
Income Capital Gains Capital Gains
--------------------------------------------------------------------------------
5/1/11-4/30/12 $1.197 $ -- $ --
--------------------------------------------------------------------------------
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 11
Performance Update | 4/30/12
Investment Returns
--------------------------------------------------------------------------------
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
Barclays Capital Municipal Bond Index and Barclays Capital High Yield Municipal
Bond Index.
Average Annual Total Returns
(As of April 30, 2012)
--------------------------------------------------------------------------------
Net Asset Market
Period Value (NAV) Value
--------------------------------------------------------------------------------
Life-of-Trust
(7/17/2003) 7.16% 7.74%
5 Years 3.02 4.78
1 Year 18.35 25.95
--------------------------------------------------------------------------------
[THE DATA BELOW IS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL.]
Market Value of $10,000 Investment
Pioneer Municipal Barclays Capital High Yield Barclays Capital
High Income Trust Municipal Bond Index Municipal Bond Index
7/03 $10,000 $10,000 $10,000
4/04 9,589 10,891 10,441
10,868 12,262 11,153
4/06 10,666 13,177 11,394
12,804 14,487 12,052
4/08 12,511 13,523 12,388
10,153 11,127 12,773
4/10 15,097 14,194 13,904
15,254 14,668 14,211
4/12 19,213 17,038 15,826
Call 1-800-225-6292 or visit us.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 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 sale of Trust shares.
The Barclays Capital Municipal Bond Index is a broad measure of the municipal
bond market. The Barclays Capital High Yield 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, and 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. The indices do not employ leverage. It is not possible to invest
directly in the indices.
12 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
Schedule of Investments | 4/30/12
-----------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
-----------------------------------------------------------------------------------------------------
TAX-EXEMPT OBLIGATIONS -- 125.0% of Net Assets
Alabama -- 2.3%
$ 2,500,000 B-/B2 Alabama Industrial Development Authority Solid
Waste Disposal Revenue, 6.45%, 12/1/23 $ 2,389,975
1,000,000 NR/NR Huntsville-Redstone Village Special Care Facilities
Financing Authority, 5.5%, 1/1/28 953,480
4,500,000 NR/NR Huntsville-Redstone Village Special Care Facilities
Financing Authority, 5.5%, 1/1/43 3,915,270
-------------
$ 7,258,725
-----------------------------------------------------------------------------------------------------
Arizona -- 0.9%
410,000 BBB-/Baa3 Apache County Industrial Development Authority,
5.85%, 3/1/28 $ 410,189
994,000 NR/Baa3 Pima County Industrial Development Authority,
6.75%, 7/1/31 994,199
950,000 NR/Baa3 Pima County Industrial Development Authority,
7.25%, 7/1/31 950,921
500,000 NR/Baa2 Yavapai County Industrial Development Authority,
6.0%, 8/1/33 507,290
-------------
$ 2,862,599
-----------------------------------------------------------------------------------------------------
California -- 10.0%
3,000,000 NR/A1 ABAG Finance Authority for Nonprofit Corp. Revenue
Bonds, 5.75%, 7/1/37 $ 3,169,740
1,000,000 NR/NR California Enterprise Development Authority Recovery
Zone Facility Revenue, 8.5%, 4/1/31 1,134,410
7,885,000(a) AA-/NR California State University Revenue, RIB, 12.829%,
11/1/39 (144A) 9,512,779
3,000,000 BB+/NR California Statewide Communities Development
Authority, 7.25%, 10/1/38 (144A) 3,216,120
568,006(b) NR/NR California Statewide Communities Development
Authority Environmental Facilities Revenue,
9.0%, 12/1/38 5,328
5,150,000+ AA+/Aaa Golden State Tobacco Securitization Corp.,
7.8%, 6/1/42 5,563,236
7,000,000+ AA+/Aaa Golden State Tobacco Securitization Corp.,
7.875%, 6/1/42 7,567,140
2,000,000 B-/Caa1 Tobacco Securitization Authority of Northern
California Tobacco Settlement Revenue,
5.375%, 6/1/38 1,529,180
-------------
$ 31,697,933
-----------------------------------------------------------------------------------------------------
Colorado -- 1.0%
2,000,000 BBB+/NR Colorado Health Facilities Authority Revenue,
5.25%, 5/15/42 $ 2,004,340
1,000,000 NR/NR Kremmling Memorial Hospital District,
7.125%, 12/1/45 1,067,980
-------------
$ 3,072,320
-----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 13
Schedule of Investments | 4/30/12 (continued)
---------------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
---------------------------------------------------------------------------------------------------------
Connecticut -- 6.0%
$ 10,335,000(a) AAA/Aaa Connecticut Health & Educational Facilities Authority
Revenue, RIB, 13.643%, 7/1/42 (144A) $ 13,757,332
1,000,000 NR/NR Hamden Connecticut Facility Revenue, Series
2009A, 7.75%, 1/1/43 1,058,970
5,000,000 B/NR Mohegan Tribe Indians Gaming Authority,
6.25%, 1/1/31 4,365,500
-------------
$ 19,181,802
---------------------------------------------------------------------------------------------------------
District Of Columbia -- 3.6%
5,000,000 BBB/Baa1 District of Columbia Tobacco Settlement Financing
Corp., 6.5%, 5/15/33 $ 5,460,600
6,000,000 BBB/Baa1 District of Columbia Tobacco Settlement Financing
Corp., 6.75%, 5/15/40 6,024,720
-------------
$ 11,485,320
---------------------------------------------------------------------------------------------------------
Florida -- 7.5%
1,500,000 NR/NR Alachua County Health Facilities Authority Revenue,
8.125%, 11/15/41 $ 1,549,905
1,500,000 NR/NR Alachua County Health Facilities Authority Revenue,
8.125%, 11/15/46 1,549,905
1,500,000 NR/NR Beacon Lakes Community Development,
6.9%, 5/1/35 1,540,185
1,000,000 NR/Ba3 Capital Trust Agency Revenue Bonds,
7.75%, 1/1/41 1,055,960
1,000,000 NR/NR Florida Development Finance Corp., Educational
Facilities Revenue, 6.0%, 9/15/40 1,025,700
2,000,000 NR/NR Florida Development Finance Corp., Educational
Facilities Revenue, 7.625%, 6/15/41 2,135,380
1,000,000 NR/NR Florida Development Finance Corp., Educational
Facilities Revenue, 7.75%, 6/15/42 1,068,150
1,000,000+ NR/NR Hillsborough County Industrial Development Authority
Revenue, 8.0%, 8/15/32 1,429,110
2,330,000 NR/NR Liberty County Subordinate Revenue,
8.25%, 7/1/28 2,341,930
2,500,000 A-/A2 Miami-Dade County Aviation Revenue,
5.5%, 10/1/41 2,758,850
1,000,000 NR/NR St. Johns County Industrial Development Authority
Revenue, 5.25%, 1/1/26 862,140
2,000,000 NR/NR St. Johns County Industrial Development Authority
Revenue, 5.375%, 1/1/40 1,557,960
5,000,000 NR/Baa1 Tallahassee Health Facilities Revenue,
6.375%, 12/1/30 5,006,500
-------------
$ 23,881,675
---------------------------------------------------------------------------------------------------------
Georgia -- 2.6%
4,240,000(a) AA-/Aa3 Atlanta Georgia Water and Waste Revenue, RIB,
12.885%, 11/1/43 (144A) $ 4,705,934
The accompanying notes are an integral part of these financial statements.
14 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
-----------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
-----------------------------------------------------------------------------------------------------
Georgia -- (continued)
$ 500,000 CCC+/NR Clayton County Development Authority Revenue,
9.0%, 6/1/35 $ 539,460
2,400,000 NR/NR Fulton County Residential Care Facilities Revenue,
5.0%, 7/1/27 2,045,496
1,100,000 NR/NR Fulton County Residential Care Facilities Revenue,
5.125%, 7/1/42 853,820
-------------
$ 8,144,710
-----------------------------------------------------------------------------------------------------
Idaho -- 1.6%
5,000,000 BBB+/Baa1 Power County Industrial Development Corp.,
6.45%, 8/1/32 $ 5,006,300
-----------------------------------------------------------------------------------------------------
Illinois -- 14.3%
1,000,000(b) NR/NR Illinois Finance Authority Revenue Clare Oaks PJ -
Series A, 6.0%, 11/15/27 $ 499,890
3,865,000 BBB+/NR Illinois Finance Authority Revenue, 6.0%, 8/15/38 4,244,852
2,000,000 AA+/Aa2 Illinois Finance Authority Revenue, 6.0%, 8/15/39 2,305,300
4,000,000(b) NR/NR Illinois Finance Authority Revenue Clare Oaks PJ -
Series A, 6.0%, 11/15/39 1,999,560
2,450,000 NR/NR Illinois Finance Authority Revenue, 6.375%, 5/15/17 2,450,931
2,500,000 NR/Baa2 Illinois Finance Authority Revenue, 6.5%, 4/1/39 2,718,325
500,000 NR/NR Illinois Finance Authority Revenue, 7.0%, 5/15/18 501,895
1,700,000 NR/NR Illinois Finance Authority Revenue, 7.625%, 5/15/25 1,775,871
600,000 NR/NR Illinois Finance Authority Revenue, 7.75%, 5/15/30 624,486
2,000,000 NR/NR Illinois Finance Authority Revenue, 8.0%, 5/15/40 2,092,580
3,200,000 NR/NR Illinois Finance Authority Revenue, 8.0%, 5/15/46 3,348,128
4,000,000 NR/NR Illinois Finance Authority Revenue, 8.25%, 5/15/45 4,105,800
2,500,000 NR/NR Illinois Finance Authority Revenue, 8.25%, 2/15/46 2,538,125
16,880,000(c) AAA/A3 Metropolitan Pier & Exposition Authority Dedicated
State Tax Revenue, 0.0%, 6/15/22 15,046,326
1,515,000 NR/NR Southwestern Illinois Development Authority
Revenue, 5.625%, 11/1/26 1,186,487
-------------
$ 45,438,556
-----------------------------------------------------------------------------------------------------
Indiana -- 1.1%
3,570,000 NR/NR Vigo County Hospital Authority Revenue, 5.8%,
9/1/47 (144A) $ 3,573,249
-----------------------------------------------------------------------------------------------------
Louisiana -- 2.1%
1,500,000 BBB-/Baa3 Louisiana Local Government Environmental Facilities
Revenue, 6.75%, 11/1/32 $ 1,651,470
5,000,000 NR/Baa1 Louisiana Public Facilities Authority Revenue,
5.5%, 5/15/47 5,120,600
-------------
$ 6,772,070
-----------------------------------------------------------------------------------------------------
Maine -- 0.6%
1,500,000 NR/Baa3 Maine Health & Higher Educational Facilities
Authority Revenue, 7.5%, 7/1/32 $ 1,786,380
-----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 15
Schedule of Investments | 4/30/12 (continued)
---------------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
---------------------------------------------------------------------------------------------------------
Massachusetts -- 7.6%
$ 7,100,000 A/WR Massachusetts Development Finance Agency,
5.75%, 1/1/42 $ 8,719,865
2,305,000 NR/NR Massachusetts Development Finance Agency,
7.1%, 7/1/32 2,128,852
860,000 AA/NR Massachusetts Educational Financing Authority
Revenue, 6.0%, 1/1/28 978,671
1,860,000 AAA/Aaa Massachusetts Health & Educational Facilities
Authority Revenue, 5.5%, 7/1/32 2,601,508
1,000,000 NR/Caa1 Massachusetts Health & Educational Facilities
Authority Revenue, 6.0%, 10/1/23 925,150
3,500,000+ NR/WR Massachusetts Health & Educational Facilities
Authority Revenue, 6.25%, 7/1/22 3,570,385
4,500,000(b) NR/NR Massachusetts Health & Educational Facilities
Authority Revenue Quincy MED CTR - Series A,
6.5%, 1/15/38 44,460
5,000,000 BB-/NR Massachusetts Health & Educational Facilities
Authority Revenue, 6.75%, 10/1/33 5,090,750
-------------
$ 24,059,641
---------------------------------------------------------------------------------------------------------
Michigan -- 3.2%
935,000 NR/NR Doctor Charles Drew Academy, 5.7%, 11/1/36 $ 667,057
1,500,000 BB-/NR John Tolfree Health System Corp., 6.0%, 9/15/23 1,363,830
2,000,000 BB+/NR Kent Hospital Finance Authority Revenue,
Metropolitan Hospital Project Series A,
6.25%, 7/1/40 2,055,180
5,830,000 B-/NR Michigan Tobacco Settlement Finance Authority,
6.0%, 6/1/48 4,569,204
1,410,000 BBB/NR Star International Academy Certificates of
Participation, 6.125%, 3/1/37 1,403,627
-------------
$ 10,058,898
---------------------------------------------------------------------------------------------------------
Minnesota -- 0.9%
1,675,000 BB-/NR Duluth Economic Development Authority Health Care
Facilities Revenue, 7.25%, 6/15/32 $ 1,692,939
1,000,000 NR/NR Port Authority of the City of Bloomington Facility
Revenue, 9.0%, 12/1/35 1,101,140
-------------
$ 2,794,079
---------------------------------------------------------------------------------------------------------
Montana -- 0.1%
1,600,000(b)(d) NR/NR Two Rivers Authority, Inc., Correctional Facility
Improvement Revenue, 7.375%, 11/1/27 $ 237,648
---------------------------------------------------------------------------------------------------------
Nevada -- 0.0%*
2,000,000(b)(d) NR/NR Nevada State Department of Business & Industry,
7.25%, 1/1/23 $ 20
---------------------------------------------------------------------------------------------------------
New Jersey -- 9.2%
1,500,000 NR/NR New Jersey Economic Development Authority Energy
Facilities Revenue, 10.5%, 6/1/32 (144A) $ 1,658,160
The accompanying notes are an integral part of these financial statements.
16 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
------------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
------------------------------------------------------------------------------------------------------
New Jersey -- (continued)
$ 10,000,000 B/B3 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/29 $ 10,024,000
6,150,000(e) B/B3 New Jersey Economic Development Authority
Revenue, 7.0%, 11/15/30 6,173,062
3,000,000 B-/B1 Tobacco Settlement Financing Corp.,
4.625%, 6/1/26 2,703,900
8,000,000+ AA+/Aaa Tobacco Settlement Financing Corp.,
6.75%, 6/1/39 8,553,840
-------------
$ 29,112,962
------------------------------------------------------------------------------------------------------
New Mexico -- 1.2%
1,500,000 NR/NR Otero County New Mexico Project Revenue,
6.0%, 4/1/23 $ 1,325,985
2,960,000 NR/NR Otero County New Mexico Project Revenue,
6.0%, 4/1/28 2,471,659
-------------
$ 3,797,644
------------------------------------------------------------------------------------------------------
New York -- 9.2%
2,000,000 NR/NR Chautauqua County Capital Resource Corp. Revenue,
8.0%, 11/15/30 $ 2,139,720
3,000,000 NR/NR Dutchess County Industrial Development Agency
Revenue, 7.5%, 3/1/29 3,060,750
2,000,000 BBB+/NR Hempstead Local Development Corp. Revenue
Bonds, 5.75%, 7/1/39 2,182,320
2,050,000 NR/NR Nassau County New York Industrial Development
Agency Revenue, 6.7%, 1/1/43 1,503,880
2,000,000 BB-/B2 New York City Industrial Development Agency,
5.25%, 12/1/32 1,757,640
2,000,000 BB-/B2 New York City Industrial Development Agency,
7.625%, 12/1/32 2,065,000
2,000,000 NR/C New York City Industrial Development Agency,
8.0%, 8/1/12 2,005,000
1,000,000 NR/Ba1 New York State Dormitory Authority Revenue,
6.125%, 12/1/29 1,055,930
7,040,000(a) AAA/NR New York State Dormitory Authority Revenue, RIB,
15.463%, 7/1/26 (144A) 10,539,584
3,000,000 NR/NR Suffolk County Industrial Development Agency,
7.25%, 1/1/30 3,000,480
-------------
$ 29,310,304
------------------------------------------------------------------------------------------------------
North Carolina -- 2.8%
4,785,000 NR/NR Charlotte North Carolina Special Facilities Revenue,
5.6%, 7/1/27 $ 4,201,039
4,795,000 NR/NR Charlotte North Carolina Special Facilities Revenue,
7.75%, 2/1/28 4,802,480
-------------
$ 9,003,519
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 17
Schedule of Investments | 4/30/12 (continued)
-----------------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
-----------------------------------------------------------------------------------------------------------
Oklahoma -- 0.3%
$ 1,225,000(b) NR/NR Tulsa Municipal Airport Revenue, 6.25%, 6/1/20 $ 1,102,598
-----------------------------------------------------------------------------------------------------------
Pennsylvania -- 2.5%
1,550,000 NR/Baa2 Allegheny County Hospital Development Authority
Revenue, 5.125%, 5/1/25 $ 1,549,938
1,000,000 CC/NR Columbia County Hospital Authority Health Care
Revenue, 5.9%, 6/1/29 992,290
1,280,000(b) NR/NR Langhorne Manor Borough Higher Education &
Health Authority Revenue, 7.35%, 7/1/22 371,046
5,000,000 B-/Caa2 Pennsylvania Economic Development Financing
Authority Solid Waste Disposal Revenue,
6.0%, 6/1/31 4,443,850
500,000 BBB+/NR Pennsylvania Higher Educational Facilities Authority
Revenue, 5.4%, 7/15/36 518,740
-------------
$ 7,875,864
-----------------------------------------------------------------------------------------------------------
Rhode Island -- 2.1%
6,000,000(d) NR/NR Central Falls Detention Facilities Revenue,
7.25%, 7/15/35 $ 4,983,420
1,500,000 NR/NR Rhode Island Health & Educational Building Corp.
Revenue, 8.375%, 1/1/46 1,591,815
-------------
$ 6,575,235
-----------------------------------------------------------------------------------------------------------
South Carolina -- 1.3%
3,185,000+ BBB+/Baa1 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 $ 3,421,422
665,000+ BBB+/Baa1 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 714,802
-------------
$ 4,136,224
-----------------------------------------------------------------------------------------------------------
Tennessee -- 3.8%
7,000,000+ NR/A2 Johnson City Health & Educational Facilities Board
Hospital Revenue, 7.5%, 7/1/33 $ 7,276,220
4,600,000 BBB+/NR Sullivan County Health, Educational & Housing
Facilities Board Hospital Revenue, 5.25%, 9/1/36 4,699,728
-------------
$ 11,975,948
-----------------------------------------------------------------------------------------------------------
Texas -- 15.4%
1,345,000 NR/B3 Bexar County Housing Finance Corp.,
8.0%, 12/1/36 $ 952,650
2,500,000 BB+/Ba1 Central Texas Regional Mobility Authority Revenue,
6.75%, 1/1/41 2,721,925
4,000,000 NR/NR Decatur Hospital Authority Revenue, 7.0%, 9/1/25 4,202,760
725,078(b)(d) NR/NR Gulf Coast Industrial Development Authority,
7.0%, 12/1/36 6,932
3,750,000 B-/B3 Houston Airport System Special Facilities Revenue,
5.7%, 7/15/29 3,568,163
The accompanying notes are an integral part of these financial statements.
18 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
-----------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
-----------------------------------------------------------------------------------------------------
Texas -- (continued)
$ 5,340,000 NR/NR Lubbock Health Facilities Development Corp.,
6.625%, 7/1/36 $ 5,365,952
10,000,000 BBB+/A3 North Texas Tollway Authority Revenue,
5.75%, 1/1/33 10,884,500
2,810,000(a) AAA/Aaa Northside Independent School District, RIB,
13.481%, 6/15/33 (144A) 3,429,689
1,500,000 NR/NR Red River Health Facilities Development Corp.,
Revenue, 8.0%, 11/15/41 1,556,580
2,000,000 NR/NR Tarrant County Cultural Education Facilities Finance
Corp., 8.0%, 11/15/34 2,086,440
1,000,000 NR/NR Tarrant County Cultural Education Facilities Finance
Corp., 8.125%, 11/15/39 1,033,880
1,500,000 NR/NR Tarrant County Cultural Education Facilities Finance
Corp., 8.25%, 11/15/44 1,553,805
7,040,000(a) AA+/Aaa Texas State, RIB, 14.568%, 4/1/30 (144A) 9,195,648
2,500,000 NR/NR Travis County Health Facilities Development Corp.,
7.125%, 1/1/46 2,449,050
-------------
$ 49,007,974
-----------------------------------------------------------------------------------------------------
Vermont -- 0.5%
1,500,000 A-/Baa1 Vermont Educational & Health Buildings Financing
Agency Revenue, 6.0%, 10/1/28 $ 1,578,225
-----------------------------------------------------------------------------------------------------
Virginia -- 0.3%
1,000,000 BBB/Ba1 Peninsula Ports Authority, 6.0%, 4/1/33 $ 1,023,100
-----------------------------------------------------------------------------------------------------
Washington -- 10.0%
4,710,000 A+/A2 Spokane Public Facilities District Hotel/Motel Tax &
Sales, 5.75%, 12/1/27 $ 4,998,393
7,025,000 BBB/Baa1 Tobacco Settlement Authority Revenue,
6.625%, 6/1/32 7,287,384
14,315,000(f) AA+/Aa1 Washington State General Obligation, 0.0%, 6/1/22 10,990,914
3,795,000 A/A2 Washington State Health Care Facilities Authority
Revenue, 6.0%, 1/1/33 4,189,149
5,000,000 NR/NR Washington State Housing Finance Committee
Nonprofit Revenue, 5.625%, 1/1/27 4,268,950
-------------
$ 31,734,790
-----------------------------------------------------------------------------------------------------
West Virginia -- 0.2%
745,000 NR/NR West Virginia Hospital Finance Authority Hospital
Revenue Bonds, 9.125%, 10/1/41 $ 841,448
-----------------------------------------------------------------------------------------------------
Wisconsin -- 0.8%
2,500,000 NR/NR Wisconsin Public Finance Authority Continuing Care
Retirement Community Revenue, 8.25%, 6/1/46 $ 2,733,125
-----------------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT OBLIGATIONS
(Cost $366,820,368) $ 397,120,885
-----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 19
Schedule of Investments | 4/30/12 (continued)
--------------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
--------------------------------------------------------------------------------------------------------
MUNICIPAL COLLATERALIZED DEBT
OBLIGATION -- 2.0% of Net Assets
$10,000,000(d)(e) NR/NR Non-Profit Preferred Funding Trust I, 6.75%,
9/15/37 (144A) $ 6,443,000
--------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL COLLATERALIZED
DEBT OBLIGATION
(Cost $10,000,000) $ 6,443,000
--------------------------------------------------------------------------------------------------------
Shares
--------------------------------------------------------------------------------------------------------
COMMON STOCK -- 0.9% of Net Assets
TRANSPORTATION -- 0.9%
Airlines -- 0.9%
251,078(g) Delta Air Lines, Inc. $ 2,751,815
--------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost $6,612,756) $ 2,751,815
--------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 127.9%
(Cost $383,433,124)(h)(i) $ 406,315,700
--------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- 3.9% $ 12,320,664
--------------------------------------------------------------------------------------------------------
PREFERRED SHARES AT REDEMPTION VALUE,
INCLUDING DIVIDENDS PAYABLE -- (31.8)% $ (101,005,804)
--------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS -- 100.0% $ 317,630,560
========================================================================================================
(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, 2012, the value of these securities amounted to $66,031,495 or 20.8%
of total net assets applicable to common shareowners.
NR Security not rated by S&P or Moody's
WR Withdrawn rating
RIB Residual Interest Bonds
+ Prerefunded bonds have been collateralized by U.S. Treasury or U.S.
Government Agency securities 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.
* Amount rounds to less than 0.1%.
(a) The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The interest rate shown is the coupon rate
at April 30, 2012.
(b) Security is in default and is non-income producing.
(c) 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, 2012.
The accompanying notes are an integral part of these financial statements.
20 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
(d) Indicates a security that has been deemed illiquid. The aggregate cost of
illiquid securities is $20,083,679. The aggregate fair value of
$11,671,020 represents 3.7% of the total net assets applicable to common
shareowners.
(e) The interest rate is subject to change periodically. The interest rate
shown is the coupon rate at April 30, 2012.
(f) Security issued with a zero coupon. Income is recognized through
accretion of discount.
(g) Non-income producing.
(h) The concentration of investments by type of obligation/market sector is
as follows:
Insured:
NATL-RE 7.7%
FSA 3.5
AMBAC 2.2
PSF 0.9
Revenue Bonds:
Health Revenue 30.8
Other Revenue 15.1
Tobacco Revenue 12.2
Development Revenue 7.8
Education Revenue 6.1
Airport Revenue 5.9
Facilities Revenue 3.1
Transportation Revenue 2.7
Pollution Control Revenue 1.8
Housing Revenue 0.2
Utilities Revenue 0.0*
-----
100.0%
=====
* Amount is less than 0.1%.
(i) At April 30, 2012, the net unrealized gain on investments based on cost
for federal income tax purposes of $383,697,516 was as follows:
Aggregate gross unrealized gain in which there is an excess of value over
tax cost $44,517,658
Aggregate gross unrealized loss in which there is an excess of tax cost
over value (21,899,474)
-----------
Net unrealized gain $22,618,184
===========
For financial reporting purposes net unrealized gain on investments was
$22,882,576 and cost of investments aggregated $383,433,124.
Purchases and sales of securities (excluding temporary cash investments) for
the year ended April 30, 2012 aggregated $42,391,661 and $46,735,760,
respectively.
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 21
Schedule of Investments | 4/30/12 (continued)
Various inputs are used in determining the value of the Trust's investments.
These inputs are summarized in the three broad levels listed below.
Level 1 -- quoted prices in active markets for identical securities
Level 2 -- other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit
risk, etc.)
Level 3 -- significant unobservable inputs (including the Trust's own
assumptions in determining fair value of investments)
Generally, equity securities are categorized as Level 1, fixed income
securities and senior loans are categorized as Level 2 and securities valued
using fair value methods (other than prices supplied by independent pricing
services) are categorized as Level 3. See Notes to Financial Statements -- Note
1A.
------------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
------------------------------------------------------------------------------------------------
Tax exempt obligations $ -- $397,120,885 $-- $397,120,885
Municipal collateralized debt obligation -- 6,443,000 -- 6,443,000
Common stocks 2,751,815 -- -- 2,751,815
------------------------------------------------------------------------------------------------
Total $2,751,815 $403,563,885 $-- $406,315,700
================================================================================================
The accompanying notes are an integral part of these financial statements.
22 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
Statement of Assets and Liabilities | 4/30/12
ASSETS:
Investments in securities, at value (cost $383,433,124) $406,315,700
Cash 56,054
Receivables --
Investment securities sold 3,577,976
Interest receivable 8,964,365
Reinvestment of distributions 97,637
Prepaid expenses 39,389
---------------------------------------------------------------------------------
Total assets $419,051,121
---------------------------------------------------------------------------------
LIABILITIES:
Due to affiliates $ 212,683
Administration fee payable 95,668
Accrued expenses 106,406
---------------------------------------------------------------------------------
Total liabilities $ 414,757
---------------------------------------------------------------------------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to 4,040 shares,
including dividends payable of $5,804 $101,005,804
---------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $320,233,060
Undistributed net investment income 7,905,832
Accumulated net realized loss on investments (33,390,908)
Net unrealized gain on investments 22,882,576
---------------------------------------------------------------------------------
Net assets applicable to common shareowners $317,630,560
---------------------------------------------------------------------------------
NET ASSET VALUE PER COMMON SHARE:
No par value (unlimited number of shares authorized)
Based on $317,630,560/22,495,129 common shares $ 14.12
---------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 23
Statement of Operations
For the Year Ended 4/30/12
INVESTMENT INCOME:
Interest $26,326,476
---------------------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 2,447,793
Administrative reimbursements 383,404
Transfer agent fees and expenses 12,352
Auction agent fees 268,481
Custodian fees 16,673
Registration fees 8,409
Professional fees 89,454
Printing expenses 30,529
Trustees' fees 13,960
Miscellaneous 33,076
---------------------------------------------------------------------------------------------------
Total expenses $3,304,131
Less fees paid indirectly (3)
---------------------------------------------------------------------------------------------------
Net expenses 3,304,128
---------------------------------------------------------------------------------------------------
Net investment income $23,022,348
---------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS :
Net realized loss on investments $(8,740,047)
Change in net unrealized gain on investments 37,817,446
---------------------------------------------------------------------------------------------------
Net gain on investments $29,077,399
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS FROM NET
INVESTMENT INCOME: $ (234,733)
---------------------------------------------------------------------------------------------------
Net increase in net assets applicable to common shareowners
resulting from operations $51,865,014
---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
24 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
Statement of Changes in Net Assets
----------------------------------------------------------------------------------------------
Year Ended Year Ended
4/30/12 4/30/11
----------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 23,022,348 $ 25,037,310
Net realized loss on investments (8,740,047) (668,700)
Change in unrealized gain (loss) on investments 37,817,446 (19,362,413)
Distributions to preferred shareowners from net investment
income (234,733) (421,969)
----------------------------------------------------------------------------------------------
Net increase in net assets applicable to common
shareowners resulting from operations $ 51,865,014 $ 4,584,228
----------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREOWNERS:
Net investment income
($1.197 and $1.065 per share, respectively) $(26,857,057) $(23,762,562)
----------------------------------------------------------------------------------------------
Total distributions to common shareowners $(26,857,057) $(23,762,562)
----------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ 1,569,243 $ 1,775,707
----------------------------------------------------------------------------------------------
Net increase in net assets applicable to common
shareowners from Trust share transactions $ 1,569,243 $ 1,775,707
----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to
common shareowners $ 26,577,200 $(17,402,627)
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Beginning of year 291,053,360 308,455,987
----------------------------------------------------------------------------------------------
End of year $317,630,560 $291,053,360
----------------------------------------------------------------------------------------------
Undistributed net investment income $ 7,905,832 $ 11,805,398
==============================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 25
Financial Highlights
-----------------------------------------------------------------------------------------------------
Year Year
Ended Ended
4/30/12 4/30/11
-----------------------------------------------------------------------------------------------------
Per Common Share Operating Performance
Net asset value, beginning of period $13.00 $13.86
-----------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations: (a)
Net investment income $ 1.03 $ 1.12
Net realized and unrealized gain (loss) on investments and interest rate swaps 1.30 (0.89)
Distributions to preferred shareowners from:
Net investment income (0.01) (0.02)
-----------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 2.32 $ 0.21
Distributions to common shareowners from:
Net investment income (1.20) (1.07)
-----------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 1.12 $(0.86)
-----------------------------------------------------------------------------------------------------
Net asset value, end of period (b) $14.12 $13.00
=====================================================================================================
Market value, end of period (b) $15.49 $13.40
=====================================================================================================
Total return at market value (c) 25.95% 1.04%
Ratios to average net assets of common shareowners
Net expenses (d) 1.08% 1.12%
Net investment income before preferred share distributions 7.50% 8.26%
Preferred share distributions 0.08% 0.14%
Net investment income available to common shareowners 7.42% 8.12%
-----------------------------------------------------------------------------------------------------------------
Year Year Year
Ended Ended Ended
4/30/10 4/30/09 4/30/08
-----------------------------------------------------------------------------------------------------------------
Per Common Share Operating Performance
Net asset value, beginning of period $11.18 $ 14.07 $16.02
-----------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations: (a)
Net investment income $ 1.17 $ 1.12 $ 1.08
Net realized and unrealized gain (loss) on investments and interest rate swaps 2.50 (3.05) (2.03)
Distributions to preferred shareowners from:
Net investment income (0.02) (0.11) (0.17)
-----------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 3.65 $ (2.04) $(1.12)
Distributions to common shareowners from:
Net investment income (0.97) (0.85) (0.83)
-----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 2.68 $ (2.89) $(1.95)
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period (b) $13.86 $ 11.18 $14.07
=================================================================================================================
Market value, end of period (b) $14.34 $ 10.40 $13.88
=================================================================================================================
Total return at market value (c) 48.69% (18.85)% (2.28)%
Ratios to average net assets of common shareowners
Net expenses (d) 1.14% 1.19% 1.03%
Net investment income before preferred share distributions 9.07% 9.36% 7.17%
Preferred share distributions 0.16% 0.95% 1.13%
Net investment income available to common shareowners 8.91% 8.41% 6.04%
The accompanying notes are an integral part of these financial statements.
26 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
----------------------------------------------------------------------------------------------
Year Year
Ended Ended
4/30/12 4/30/11
----------------------------------------------------------------------------------------------
Portfolio turnover 11% 10%
Net assets of common shareowners, end of period (in thousands) $317,631 $291,053
Preferred shares outstanding (in thousands) $101,000 $101,000
Asset coverage per preferred share, end of period (e) $103,623 $ 97,044
Average market value per preferred share $ 25,000 $ 25,000
Liquidation value, including dividends payable, per preferred share $ 25,001 $ 25,001
Ratios to average net assets of common shareowners before waivers
and reimbursements of expenses
Net expenses (d) 1.08% 1.12%
Net investment income before preferred share distributions 7.50% 8.26%
Preferred share distributions 0.08% 0.14%
Net investment income available to common shareowners 7.42% 8.12%
==============================================================================================
-----------------------------------------------------------------------------------------------------------
Year Year Year
Ended Ended Ended
4/30/10 4/30/09 4/30/08
-----------------------------------------------------------------------------------------------------------
Portfolio turnover 11% 16% 17%
Net assets of common shareowners, end of period (in thousands) $308,456 $247,560 $311,231
Preferred shares outstanding (in thousands) $101,000 $101,000 $101,000
Asset coverage per preferred share, end of period (e) $101,351 $ 86,278 $102,047
Average market value per preferred share $ 25,000 $ 25,000 $ 25,000
Liquidation value, including dividends payable, per preferred share $ 25,001 $ 25,001 $ 25,010
Ratios to average net assets of common shareowners before waivers
and reimbursements of expenses
Net expenses (d) 1.14% 1.19% 1.03%
Net investment income before preferred share distributions 9.07% 9.36% 7.17%
Preferred share distributions 0.16% 0.95% 1.13%
Net investment income available to common shareowners 8.91% 8.41% 6.04%
===========================================================================================================
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) 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.
(c) 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 brokerage commissions. Past
performance is not a guarantee of future results.
(d) Expense ratios do not reflect the effect of distribution payments to
preferred shareowners.
(e) Market value is redemption value without an active market.
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.
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 27
Notes to Financial Statements | 4/30/12
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
investment objective of the Trust is to seek a high level of current income
exempt from regular federal income tax, and the Trust may, as a secondary
objective, also seek capital appreciation to the extent that it is consistent
with its primary investment objective.
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, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses, and gain or loss 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:
A. Security Valuation
Security transactions are recorded as of trade date. Fixed income securities
with remaining maturity of more than sixty days are valued at prices supplied
by independent pricing services, which consider such factors as market
prices, market events, quotations from one or more brokers, 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. Equity securities that have traded on an
exchange are valued at the last sale price on the principal exchange where
they are traded. Equity securities that have not traded on the date of
valuation, or securities for which sale prices are not available, generally
are valued using the mean between the last bid and asked prices. Short-term
fixed income securities with remaining maturities of sixty days or less
generally are valued at amortized cost. Money market mutual funds are valued
at net asset value.
Securities for which independent pricing services are unable to supply prices
or for which market prices and/or quotations are not readily available or are
28 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
considered to be unreliable are valued using fair value methods pursuant to
procedures adopted by the Board of Trustees. The Trust may use fair value
methods if it is determined that a significant event has occurred after the
close of the exchange or market on which the security trades and prior to the
determination of the Trust's net asset value. Examples of a significant event
might include political or economic news, corporate restructurings, natural
disasters, terrorist activity or trading halts. Thus, the valuation of the
Trust's securities may differ from exchange prices.
At April 30, 2012, no securities were valued using fair value methods (other
than securities valued using prices supplied by independent pricing
services). Inputs used when applying fair value methods to value a security
may include credit ratings, the financial condition of the company, current
market conditions and comparable securities.
Discount and premium on debt securities are accreted or amortized,
respectively, daily into interest income on a yield-to-maturity basis with a
corresponding increase or decrease in the cost basis of the security.
Interest income, including income bearing cash accounts, is recorded on an
accrual basis.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have passed
are recorded as soon as the Trust becomes aware of the ex-dividend data in
the exercise of reasonable diligence.
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. Tax
years for the prior three fiscal years remain subject to examination by
federal and state tax authorities.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal income
tax rules. Therefore, the sources of the Trust's distributions may be shown
in the accompanying financial statements as from or in excess of net
investment income or as from net realized gain (loss) on investment
transactions, or as from paid-in capital, depending on the type of book/tax
differences that may exist.
At April 30, 2012, the Trust reclassified $169,876 to increase undistributed
net investment income and to increase net realized loss on investments to
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 29
reflect permanent book/tax differences. The reclassification has no impact on
the net assets of the Trust and presents the Trust's capital accounts on a
tax basis.
At April 30, 2012, the Trust was permitted to carry forward $2,348,905 of
long term losses under the Regulated Investment Company Modernization Act of
2010 without limitation. Additionally, at April 30, 2012, the Trust had a net
capital loss carryforward of $23,146,406 of which the following amounts will
expire between 2014 and 2018 if not utilized: $5,441,357 in 2014, $4,138,756
in 2015, $4,586,154 in 2017 and $8,980,139 in 2018. Since unlimited losses
are required to be utilized prior to losses incurred in pre-enactment years,
pre-enactment capital loss carryforwards may be more likely to expire unused.
The Trust has elected to defer approximately $8,801,617 of capital losses
recognized between November 1, 2011 and April 30, 2012 to its fiscal year
ending April 30, 2013.
The tax character of distributions paid to common and preferred shareowners
during the years ended April 30, 2012 April 30, 2011 was as follows:
--------------------------------------------------------------------------------
2012 2011
--------------------------------------------------------------------------------
Distribution paid from:
Tax-exempt income $25,801,273 $24,122,149
Ordinary income 1,290,517 62,382
--------------------------------------------------------------------------------
Total taxable distribution $27,091,790 $24,184,531
================================================================================
The following shows the components of distributable earnings (losses) on a
federal income tax basis at April 30, 2012:
--------------------------------------------------------------------------------
2012
--------------------------------------------------------------------------------
Distributable earnings:
Undistributed tax-exempt income $ 8,944,200
Undistributed ordinary income 137,848
Capital loss carryforward (25,495,311)
Post-October loss deferred (8,801,617)
Dividends payable (5,804)
Unrealized appreciation 22,618,184
--------------------------------------------------------------------------------
Total $ (2,602,500)
================================================================================
The difference between book-basis and tax-basis unrealized depreciation is
primarily attributable to the difference between book and tax amortization
methods for premiums and discounts on fixed income securities, book/tax
difference in the accrual of income on securities in default, the deferral of
post-October capital losses for tax purposes and other temporary differences.
30 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
C. Automatic Dividend Reinvestment Plan
All common shareowners whose shares are registered in their own names
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
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.
If a shareowner's shares are held in the name of a brokerage firm, bank or
other nominee, the shareowner can ask the firm or nominee to participate in
the Plan on the shareowner's behalf. If the firm or nominee does not offer
the Plan, dividends will be paid in cash to the shareowner of record. A firm
or nominee may reinvest a shareowner's cash dividends in common shares of the
Trust on terms that differ from the terms of the Plan.
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.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 31
D. Risks
At times, the Trust's investments may represent industries or industry
sectors that are interrelated or have common risks, making the Trust more
susceptible to any economic, political, or regulatory developments or other
risks affecting those industries and sectors. 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 issued from time to time. Please refer to those documents when
considering the Trust's principal risks.
The Trust may invest in both investment grade 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.
2. Management Agreement
Pioneer Investment Management, Inc. (PIM), the Trust's investment adviser, a
wholly owned indirect subsidiary of UniCredit S.p.A. (UniCredit), manages the
Trust's portfolio. Management fees payable under the Trust's Advisory Agreement
with PIM are calculated daily at the annual rate of 0.60% of the Trust's
average daily managed assets. "Managed assets" means (a) the total assets of
the Trust, including any form of investment leverage, minus (b) all accrued
liabilities incurred in the normal course of operations, which shall not
include any liabilities or obligations attributable to investment leverage
obtained through (i) indebtedness of any type (including, without limitation,
borrowing through a credit facility of the issuance of debt securities), (ii)
the issuance of preferred stock or other similar preference securities, and/or
(iii) any other means. For the year ended April 30, 2012, the net management
fee was 0.60% of the Trust's average daily managed assets, which was equivalent
to 0.80% 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, 2012, $212,683 was payable to PIM related to management costs,
administrative costs and certain other reimbursements and is included in "Due
to affiliates" on the Statement of Assets and Liabilities.
Effective September 1, 2010, PIM has retained State Street Bank and Trust
Company (State Street) to provide certain administrative and accounting
services to the Trust on its behalf. For such services, PIM pays State Street a
monthly fee at an annual rate of 0.07% of the Trust's average daily managed
assets up to $500 million and 0.03% for average daily managed assets in excess
32 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
of $500 million, subject to a minimum monthly fee of $10,000. Previously, PIM
had retained Princeton Administrators, LLC (Princeton) to provide such
services. PIM paid Princeton a monthly fee at an annual rate of 0.07% of the
Trust's average daily managed assets up to $500 million and 0.03% for average
daily managed assets in excess of $500 million, subject to a minimum monthly
fee of $10,000. Neither State Street nor Princeton received compensation
directly from the Trust for providing such services.
3. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. (PIMSS), a wholly
owned indirect subsidiary of UniCredit, 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
transfer agent, registrar, dividend paying agent and auction 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.
In addition, the Trust reimburses PIMSS for out-of-pocket expenses incurred by
PIMSS related to shareowner communications activities such as proxy and
statement mailings and outgoing phone calls.
4. Expense Offset Agreements
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, 2012, the Trust
expenses were reduced by $3 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 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
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 33
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. Risk may also arise
with regard to market movements 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.
There were no interest rate swap contracts open during the year ended April 30,
2012 and outstanding at April 30, 2012.
6. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized.
Transactions in common shares of beneficial interest for the years ended April
30, 2012 and April 30, 2011 were as follows:
--------------------------------------------------------------------------------
4/30/12 4/30/11
--------------------------------------------------------------------------------
Shares outstanding at beginning of year 22,381,423 22,251,232
Reinvestment of distributions 113,706 130,191
--------------------------------------------------------------------------------
Shares outstanding at end of year 22,495,129 22,381,423
================================================================================
The Trust may classify or reclassify any unissued shares of beneficial interest
into one or more series of preferred shares of beneficial interest. As of April
30, 2012, 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 to be
reset every seven days based on the results of an auction. An auction fails if
there are more APS offered for sale than there are buyers. When an auction
fails, the dividend rate for the period will be the maximum rate on the auction
dates described in the prospectus for the APS. Preferred shareowners are not
able to sell their APS at an auction if the auction fails. Since February 2008,
the Trust's auctions related to the APS have failed. The maximum rate for each
series is 110% of the 7 day commercial paper rate or adjusted Kenny rate.
Dividend rates on APS ranged from 0.107% to 0.381% during the year ended April
30, 2012.
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, the Trust does not comply with the asset coverage
ratios described in the prospectus for the APS.
34 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
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 certain requirements relating to the composition of
the assets and liabilities of the Trust as set forth in the Statement of
Preferences 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. 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. Subsequent Events
The Board of Trustees of the Trust declared on May 4, 2012 a dividend from
undistributed net investment income of $0.095 per common share payable May 31,
2012, to common shareowners of record on May 17, 2012.
Subsequent to April 30, 2012, dividends declared and paid on preferred shares
totaled $49,588 in aggregate for the two outstanding preferred share series
through June 21, 2012.
On May 2, 2012, Moody's announced that it placed all securities issued by
closed-end funds on review for a possible downgrade as a result of an update of
its rating methodology. If the ratings of the Trust's preferred securities were
downgraded, the Trust's financing costs may increase slightly. A more definite
determination of any potential impact cannot be made at this time.
Effective May 1, 2012, PIM has retained Brown Brothers Harriman & Co. (BBH) to
provide certain administrative and accounting services to the Trust.
Previously, PIM had retained State Street Bank and Trust Company (State Street)
to provide such services.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 35
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, 2012, 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 five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. 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, 2012, by correspondence with
the custodian and brokers. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Municipal High Income Trust at April 30, 2012, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the five years in the period then ended, in conformity with U.S. generally
accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
June 27, 2012
36 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
ADDITIONAL INFORMATION (unaudited)
During the period, there have been no material changes in the Trust's
investment objective or fundamental policies that have not been approved by the
shareowners. There have been no changes in the Trust's charter or By-Laws that
would delay or prevent a change in control of the Trust which has not been
approved by the shareowners. There have been no changes in the principal risk
factors associated with investment in the Trust. There were no changes in the
persons who are primarily responsible for the day-to-day management of the
Trust's portfolio.
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.
IMPORTANT TAX INFORMATION (unaudited)
The following summarizes the taxable per share distributions paid by Pioneer
Municipal High Income Trust during the taxable year ended April 30, 2012:
--------------------------------------------------------------------------------
Payable Ordinary
Date Income
--------------------------------------------------------------------------------
Common Shareowners 12/29/11 $0.0567
Preferred Shareowners
Series A 2/1/12 $0.7200
2/8/12 $0.7200
2/15/12 $1.1700
2/22/12 $1.4100
2/29/12 $0.2900
Series B 2/2/12 $0.6700
2/9/12 $0.7200
2/16/12 $1.2500
2/23/12 $1.4100
3/1/12 $0.2300
All the other net investment income distributions paid by the Trust qualify as
tax-exempt interest dividends for federal income tax purposes.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 37
Approval of Investment Advisory Agreement
Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to
Pioneer Municipal High Income Trust (the Trust) pursuant to an investment
advisory agreement between PIM and the Trust. In order for PIM to remain the
investment adviser of the Trust, the Trustees of the Trust must determine
annually whether to renew the investment advisory agreement for the Trust.
The contract review process began in March 2011 as the Trustees of the Trust
agreed on, among other things, an overall approach and timeline for the
process. In July 2011, the Trustees approved the format of the contract review
materials and submitted their formal request to PIM to furnish information
necessary to evaluate the terms of the investment advisory agreement. The
contract review materials were provided to the Trustees in July 2011 and
September 2011. After reviewing and discussing the materials, the Trustees
submitted a request for additional information to PIM, and materials were
provided in response to this request. Meetings of the Independent Trustees of
the Trust were held in July, September, October, and November, 2011 to review
and discuss the contract review materials. In addition, the Trustees took into
account the information related to the Trust provided to the Trustees at each
regularly scheduled meeting.
At a meeting held on November 29, 2011, based on their evaluation of the
information provided by PIM and third parties, the Trustees of the Trust,
including the Independent Trustees voting separately, unanimously approved the
renewal of the investment advisory agreement for another year. In considering
the renewal of the investment advisory agreement, the Trustees considered
various factors that they determined were relevant, including the factors
described below. The Trustees did not identify any single factor as the
controlling factor in determining to approve the renewal of the agreement.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services that had
been provided by PIM to the Trust, taking into account the investment objective
and strategy of the Trust. The Trustees reviewed the terms of the investment
advisory agreement. The Trustees also reviewed PIM's investment approach for
the Trust, its research process and its process for trade execution. The
Trustees considered the resources of PIM and the personnel of PIM who provide
investment management services to the Trust. The Trustees considered the
non-investment resources and personnel of PIM involved in PIM's services to the
Trust, including PIM's compliance and legal resources and personnel. The
Trustees also considered the substantial attention and high priority given by
PIM's senior management to the Pioneer fund complex. In addition, the
38 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
Trustees considered PIM's plans to increase resources in its investment
management function and other enhancements to PIM's advisory capabilities.
The Trustees considered that PIM supervises and monitors the performance of the
Trust's service providers and provides the Trust with personnel (including
Trust officers) and other resources that are necessary for the Trust's business
management and operations. The Trustees also considered that, as administrator,
PIM is responsible for the administration of the Trust's business and other
affairs. The Trustees considered the fees paid to PIM for the provision of
administration services.
Based on these considerations, the Trustees concluded that the nature, extent
and quality of services that had been provided by PIM to the Trust were
satisfactory and consistent with the terms of the investment advisory
agreement.
Performance of the Trust
The Trustees considered the performance results of the Trust over various time
periods. They reviewed information comparing the Trust's performance with the
performance of its peer group of funds as classified by Morningstar, Inc.
(Morningstar), an independent provider of investment company data, and with the
performance of the Trust's benchmark index. The Trustees considered that the
Trust's annualized total return was in the first quintile of its Morningstar
category for the one and three year periods ended June 30, 2011 and in the
second quintile of its Morningstar category for the five year period ended June
30, 2011. (In all quintile rankings referred to throughout this disclosure,
first quintile is most favorable to the Trust's shareowners. Thus, highest
relative performance would be first quintile and lowest relative expenses would
also be first quintile.) The Trustees considered that the Trust's twelve month
average gross portfolio yield (using month end 30 day effective yields)
exceeded the twelve month average yield of the Trust's benchmark index. The
Trustees also reviewed data provided by PIM showing how leverage had benefited
the Trust's common shareholders. The Trustees concluded that the investment
performance of the Trust was satisfactory.
Management Fee and Expenses
The Trustees considered information on the fees and expenses of the Trust in
comparison to the management fees and the expense ratios of a peer group of
funds selected on the basis of criteria determined by the Independent Trustees
for this purpose using data provided by Strategic Insight Mutual Fund Research
and Consulting, LLC (Strategic Insight), an independent third party. The
Trustees considered that the Trust's management fee rate (based on managed
assets) for the twelve months ended June 30, 2011 was in the third quintile
relative to the management fees paid by other funds in its Strategic Insight
peer group for the comparable period. The Trustees also considered that the
Trust's expense ratio (based on managed assets) for the twelve months ended
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 39
June 30, 2011 was in the second quintile relative to its Strategic Insight peer
group for the comparable period.
The Trustees reviewed gross and net management fees charged by PIM to its
institutional and other clients, including publicly offered European funds,
U.S. registered investment companies (in a sub-advisory capacity), and
unaffiliated foreign and domestic separate accounts. The Trustees also
considered PIM's costs in providing services to the Trust and to its other
clients and considered the differences in management fees and profit margins
for PIM's Trust and non-Trust services. In evaluating the fees associated with
PIM's client accounts, the Trustees took into account the respective demands,
resources and complexity associated with the Trust and client accounts. The
Trustees noted that in some instances the fee rates for those clients were
lower than the management fee for the Trust and considered that, under the
investment advisory agreement with the Trust, PIM performs additional services
for the Trust that it does not provide to those other clients or services that
are broader in scope, including oversight of the Trust's other service
providers and activities related to compliance and the extensive regulatory and
tax regimes to which the Trust is subject. The Trustees also considered the
different entrepreneurial risks associated with PIM's management of the Trust
and the other client accounts. The Trustees concluded that the management fee
payable by the Trust to PIM was reasonable in relation to the nature and
quality of the services provided by PIM.
Profitability
The Trustees considered information provided by PIM regarding the profitability
of PIM with respect to the advisory services provided by PIM to the Trust,
including the methodology used by PIM in allocating certain of its costs to the
management of the Trust. The Trustees also considered PIM's profit margin in
connection with the overall operation of the Trust. They further reviewed the
financial results realized by PIM and its affiliates from non-fund businesses.
The Trustees considered PIM's profit margins with respect to the Trust in
comparison to the limited industry data available and noted that the
profitability of any adviser was affected by numerous factors, including its
organizational structure and method for allocating expenses. The Trustees
concluded that PIM's profitability with respect to the management of the Trust
was not unreasonable.
Economies of Scale
The Trustees considered the extent to which PIM may realize economies of scale
or other efficiencies in managing and supporting the Trust. Since the Trust is
a closed-end fund that has not raised additional capital, the Trustees
concluded that economies of scale were not a relevant consideration in the
renewal of the investment advisory agreement.
40 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
Other Benefits
The Trustees considered the other benefits to PIM from its relationship with
the Trust. The Trustees considered the character and amount of fees paid by the
Trust, other than under the investment advisory agreement, for services
provided by PIM and its affiliates. The Trustees further considered the
revenues and profitability of PIM's businesses other than the fund business.
The Trustees considered the intangible benefits to PIM by virtue of its
relationship with the Trust and the other Pioneer funds. The Trustees concluded
that the receipt of these benefits was reasonable in the context of the overall
relationship between PIM and the Trust.
Conclusion
After consideration of the factors described above as well as other factors,
the Trustees, including all of the Independent Trustees, concluded that the
investment advisory agreement between PIM and the Trust, including the fees
payable thereunder, was fair and reasonable and voted to approve the proposed
renewal of the investment advisory agreement for the Trust.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 41
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
Bingham McCutchen 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
State Street Bank and Trust Company
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 us.pioneerinvestments.com. This information is also available on
the Securities and Exchange Commission's web site at www.sec.gov.
Trustees and Officers
The Trust's Trustees and officers are listed on the following pages, together
with their principal occupations during at least 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. West, serves as a Trustee of each of the 56 U.S. registered investment
portfolios for which Pioneer serves as investment adviser (the "Pioneer
Funds"). Mr. West serves as a Trustee of 44 U.S. registered investment
portfolios for which Pioneer serves as investment adviser. The address for all
Trustees and all officers of the Trust is 60 State Street, Boston,
Massachusetts 02109.
The Statement of Additional Information of the Trust includes additional
information about the Trustees and is available, without charge, upon request,
by calling 1-800-225-6292.
42 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
Interested Trustees
--------------------------------------------------------------------------------
Position Held Length of Service
Name and Age With the Trust and Term of Office
--------------------------------------------------------------------------------
John F. Cogan, Jr. (85)* Chairman of the Board, Class I Trustee since
Trustee and President 2003. Term expires in
2013. Elected by Preferred
Shares only.
--------------------------------------------------------------------------------
Daniel K. Kingsbury (53)* Trustee and Executive Class II Trustee since
Vice President 2007. Term expires in
2014.
--------------------------------------------------------------------------------
Interested Trustees
-------------------------------------------------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation Held by this Trustee
-------------------------------------------------------------------------------------------------------------------
John F. Cogan, Jr. (85)* Non-Executive Chairman and a director of Pioneer Investment None
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) (until October 2011);
President and a director of Pioneer Alternative Investment
Management (Bermuda) Limited and affiliated funds; Deputy
Chairman and a director of Pioneer Global Asset Management S.p.A.
("PGAM") (until April 2010); Director of PIOGLOBAL Real Estate
Investment Fund (Russia) (until June 2006); Director of Nano-C,
Inc. (since 2003); Director of Cole Management Inc. (2004 -
2011); Director of Fiduciary Counseling, Inc. (until December
2001); President and Director of Pioneer Funds Distributor, Inc.
("PFD") (until May 2006); President of all of the Pioneer Funds;
and Retired Partner, Wilmer Cutler Pickering Hale and Dorr LLP
-------------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (53)* Director, CEO and President of PIM-USA (since February 2007); None
Director and President of Pioneer and Pioneer Institutional Asset
Management, Inc. (since February 2007); Executive Vice President
of all of the Pioneer Funds (since March 2007); Director of PGAM
(2007 - 2010); Head of New Europe Division, PGAM (2000 - 2005);
and Head of New Markets Division, PGAM (2005 - 2007)
-------------------------------------------------------------------------------------------------------------------
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because they are officers
or directors of the Trust's investment adviser and certain of its affiliates.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 43
Independent Trustees
-------------------------------------------------------------
Position Held Length of Service
Name and Age With the Trust and Term of Office
-------------------------------------------------------------
David R. Bock (68) Trustee Class I Trustee since
2005. Term expires in
2013.
-------------------------------------------------------------
Mary K. Bush (63) Trustee Class III Trustee since
2003. Term expires in
2012.
Independent Trustees
--------------------------------------------------------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation Held by this Trustee
--------------------------------------------------------------------------------------------------------------------------
David R. Bock (68) Managing Partner, Federal City Capital Advisors (corporate Director of Enterprise
advisory services company) (1997 - 2004 and 2008 - present); Community Investment, Inc.
Interim Chief Executive Officer, Oxford Analytica, Inc. (privately (privately held affordable
held research and consulting company) (2010); Executive Vice housing finance company)
President and Chief Financial Officer, I-trax, Inc. (publicly traded (1985 - 2010); Director of
health care services company) (2004 - 2007); and Executive Oxford Analytica, Inc. (2008
Vice President and Chief Financial Officer, Pedestal Inc. - present); Director of The
(internet-based mortgage trading company) (2000 - 2002) Swiss Helvetia Fund, Inc.
(closed-end fund) (2010 -
present); and Director of
New York Mortgage Trust
(publicly traded mortgage
REIT) (2004 - 2009,
2012 - present)
--------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (63) Chairman, Bush International, LLC (international financial Director of Marriott
advisory firm) (1991 - present); Senior Managing Director, Brock International, Inc. (2008 -
Capital Group, LLC (strategic business advisors) (2010 - present); Director of Discover
present); Managing Director, Federal Housing Finance Board (over- Financial Services (credit
sight of Federal Home Loan Bank system) (1989 - 1991); Vice card issuer and electronic
President and Head of International Finance, Federal National payment services) (2007 -
Mortgage Association (1988 - 1989); U.S. Alternate Executive present); Former Director of
Director, International Monetary Fund (1984 - 1988); Executive Briggs & Stratton Co.
Assistant to Deputy Secretary of the U.S. Treasury, U.S. Treasury (engine manufacturer)
Department (1982 - 1984); and Vice President and Team (2004 - 2009); Former
Leader in Corporate Banking, Bankers Trust Co. (1976 - 1982) Director of UAL Corporation
(airline holding company)
44 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
----------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Other Directorships
Name and Age With the Trust and Term of Office Principal Occupation Held by this Trustee
----------------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (continued) (2006 - 2010); Director of
ManTech International Corporation
(national security, defense, and
intelligence technology firm)
(2006 - present); Member, Board of
Governors, Investment Company
Institute (2007 - present); Member,
Board of Governors, Independent
Directors Council (2007 - present);
Former Director of Brady Corporation
(2000 - 2007); Former Director of
Mortgage Guaranty Insurance Corporation
(1991 - 2006); Former Director of
Millennium Chemicals, Inc. (commodity
chemicals) (2002 - 2005); Former
Director, R.J. Reynolds Tobacco Holdings,
Inc. (tobacco) (1999 - 2005); and
Former Director of Texaco, Inc.
(1997 - 2001)
----------------------------------------------------------------------------------------------------------------------------------
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 45
Independent Trustees (continued)
--------------------------------------------------------------------------------
Position Held Length of Service
Name and Age With the Trust and Term of Office
--------------------------------------------------------------------------------
Benjamin M. Friedman (67) Trustee Class II Trustee since
2008. Term expires in
2014.
--------------------------------------------------------------------------------
Margaret B.W. Graham (64) Trustee Class II Trustee since
2003. Term expires in
2014.
--------------------------------------------------------------------------------
Thomas J. Perna (61) Trustee Class III Trustee since
2006. Term expires in
2012.
--------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation Held by this Trustee
-----------------------------------------------------------------------------------------------------------------------------
Benjamin M. Friedman (67) William Joseph Maier Professor of Political Economy, Harvard Trustee, Mellon Institutional
University (1972 - present) Funds Investment Trust and
Mellon Institutional Funds
Master Portfolio (oversaw
17 portfolios in fund complex)
(1989 - 2008)
-----------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (64) Founding Director, Vice President and Corporate Secretary, The None
Winthrop Group, Inc. (consulting firm) (1982 - present);
Desautels Faculty of Management, McGill University (1999 -
present); and Manager of Research Operations and Organizational
Learning, Xerox PARC, Xerox's Advance Research Center (1990 -
1994)
-----------------------------------------------------------------------------------------------------------------------------
Thomas J. Perna (61) Chairman and Chief Executive Officer, Quadriserv, Inc. Director, Broadridge Financial
(technology products for securities lending industry) Solutions, Inc. (investor
(2008 - present); private investor (2004 - 2008); and communications and securities
Senior Executive Vice President, The Bank of New York processing provider for
(financial and securities services) (1986 - 2004) financial services industry)
(2009 - present); Director,
Quadriserv, Inc. (2005 -
present); and Commissioner,
New Jersey State Civil Service
Commission (2011 - present)
-----------------------------------------------------------------------------------------------------------------------------
46 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
-------------------------------------------------------------------
Position Held Length of Service
Name and Age With the Trust and Term of Office
-------------------------------------------------------------------
Marguerite A. Piret (63) Trustee Class III Trustee since
2003. Term expires in
2012. Elected by
Preferred Shares only.
-------------------------------------------------------------------
Stephen K. West (83) Trustee Class I Trustee since
2003. Term expires
in 2013.
-------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation Held by this Trustee
---------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (63) President and Chief Executive Officer, Newbury, Piret & Company, Director of New America
Inc. (investment banking firm) (1981 - present) High Income Fund, Inc.
(closed-end investment
company) (2004 - present);
and member, Board of
Governors, Investment Company
Institute (2000 - 2006)
---------------------------------------------------------------------------------------------------------------------------
Stephen K. West (83) Senior Counsel, Sullivan & Cromwell LLP (law firm) (1998 - Director, The Swiss Helvetia
present); and Partner, Sullivan & Cromwell LLP (prior to 1998) Fund, Inc. (closed-end
investment company); and
Director, Invesco, Ltd.
(formerly AMVESCAP, PLC)
(investment manager)
(1997 - 2005)
---------------------------------------------------------------------------------------------------------------------------
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 47
Fund Officers
------------------------------------------------------------------------
Position Held Length of Service
Name and Age With the Trust and Term of Office
------------------------------------------------------------------------
Christopher J. Kelley (47) Secretary Since 2010. Serves at
the discretion of the
Board.
------------------------------------------------------------------------
Carol B. Hannigan (51) Assistant Secretary Since 2010. Serves at
the discretion of the
Board.
------------------------------------------------------------------------
Thomas Reyes (49) Assistant Secretary Since 2010. Serves at
the discretion of the
Board.
------------------------------------------------------------------------
Mark E. Bradley (52) Treasurer Since 2008. Serves at
the discretion of the
Board.
------------------------------------------------------------------------
Luis I. Presutti (46) Assistant Treasurer Since 2003. Serves at
the discretion of the
Board.
------------------------------------------------------------------------
Gary Sullivan (53) Assistant Treasurer Since 2003. Serves at
the discretion of the
Board.
------------------------------------------------------------------------
Fund Officers
--------------------------------------------------------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation Held by this Trustee
--------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (47) Vice President and Associate General Counsel of Pioneer since None
January 2008 and Secretary of all of the Pioneer Funds since June
2010; Assistant Secretary of all of the Pioneer Funds from
September 2003 to May 2010; and Vice President and Senior Counsel
of Pioneer from July 2002 to December 2007
--------------------------------------------------------------------------------------------------------------------------
Carol B. Hannigan (51) Fund Governance Director of Pioneer since December 2006 and None
Assistant Secretary of all the Pioneer Funds since June 2010;
Manager -- Fund Governance of Pioneer from December 2003 to
November 2006; and Senior Paralegal of Pioneer from January 2000
to November 2003
--------------------------------------------------------------------------------------------------------------------------
Thomas Reyes (49) Counsel of Pioneer since June 2007 and Assistant Secretary of all None
the Pioneer Funds since June 2010; and Vice President and Counsel
at State Street Bank from October 2004 to June 2007
--------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (52) Vice President -- Fund Accounting, Administration and None
Controllership Services of Pioneer; Treasurer of all of the
Pioneer Funds since March 2008; Deputy Treasurer of Pioneer from
March 2004 to February 2008; and Assistant Treasurer of all of the
Pioneer Funds from March 2004 to February 2008
--------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (46) Assistant Vice President -- Fund Accounting, Administration and None
Controllership Services of Pioneer; and Assistant Treasurer of all
of the Pioneer Funds
--------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (53) Fund Accounting Manager -- Fund Accounting, Administration and None
Controllership Services of Pioneer; and Assistant Treasurer of all
of the Pioneer Funds
--------------------------------------------------------------------------------------------------------------------------
48 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
------------------------------------------------------------------------
Position Held Length of Service
Name and Age With the Trust and Term of Office
------------------------------------------------------------------------
David F. Johnson (32) Assistant Treasurer Since 2009. Serves at
the discretion of the
Board.
------------------------------------------------------------------------
Jean M. Bradley (59) Chief Compliance Officer Since 2010. Serves at
the discretion of the
Board.
------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Other Directorships
Name and Age Principal Occupation Held by this Trustee
----------------------------------------------------------------------------------------------------------------
David F. Johnson (32) Fund Administration Manager -- Fund Accounting, Administration None
and Controllership Services since November 2008; Assistant
Treasurer of all of the Pioneer Funds since January 2009; and
Client Service Manager -- Institutional Investor Services at State
Street Bank from March 2003 to March 2007
----------------------------------------------------------------------------------------------------------------
Jean M. Bradley (59) Chief Compliance Officer of Pioneer and of all the Pioneer Funds None
since March 2010; Director of Adviser and Portfolio Compliance
at Pioneer since October 2005; and Senior Compliance Officer
for Columbia Management Advisers, Inc. from October 2003 to
October 2005
----------------------------------------------------------------------------------------------------------------
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 49
This page for your notes.
50 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
This page for your notes.
Pioneer Municipal High Income Trust | Annual Report | 4/30/12 51
This page for your notes.
52 Pioneer Municipal High Income Trust | Annual Report | 4/30/12
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 checks, American Stock
change of address, lost stock certificates, Transfer & Trust
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
Visit our web site: www.amstock.com
For additional information, please contact your investment advisor or visit our
web site us.pioneerinvestments.com.
The Trust files a complete schedule 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 www.sec.gov. The filed form also may 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.
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 (see attachment);
(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
$42,100 in 2012 and $42,100 in 2011.
(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
Audit related fees for the Trust's audit related
services totaled approximately $9,652 and $9,652 in
2012 and 2011, respectively.
(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 $8,290 and $8,290 for
2012 and 2011, 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 in 2012 and 2011.
(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,
2012 and 2011, 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 $17,942 in
2012 and $17,942 in 2011.
(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
committee established 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.
1
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
2
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
3
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.
4
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
5
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.
6
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.
7
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.
8
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.
9
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.
10
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.
11
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%.
12
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.
13
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.
14
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.
15
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.
16
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, 2012. 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 MANAGER TYPE OF ACCOUNT NUMBER OF ACCOUNTS MANAGED
------------------------- --------------- --------------------------
TOTAL ASSETS MANAGED NUMBER OF ACCOUNTS MANAGED FOR WHICH ADVISORY FEE IS
-------------------- ----------------------------------------------------
PERFORMANCE-BASED ASSETS MANAGED FOR WHICH ADVISORY FEE IS PERFORMANCE-BASED
----------------- ----------------------------------------------------------
David Eurkus
------------
Other Registered Investment Companies 3 $1,955,559,000 N/A
------------------------------------- - -------------- ---
N/A
---
Other Pooled Investment Vehicles 0 $0 N/A N/A
-------------------------------- - -- --- ---
Other Accounts 1 $9,652,000 N/A N/A
-------------- - ----------- --- ---
NAME OF PORTFOLIO MANAGER TYPE OF ACCOUNT NUMBER OF ACCOUNTS MANAGED
------------------------- --------------- --------------------------
TOTAL ASSETS MANAGED NUMBER OF ACCOUNTS MANAGED FOR WHICH ADVISORY FEE IS
-------------------- ----------------------------------------------------
PERFORMANCE-BASED ASSETS MANAGED FOR WHICH ADVISORY FEE IS PERFORMANCE-BASED
----------------- ----------------------------------------------------------
Timothy Pynchon
---------------
Other Registered Investment Companies 3 $1,955,559,000 N/A
------------------------------------- - -------------- ---
N/A
---
Other Pooled Investment Vehicles 0 $0 N/A N/A
-------------------------------- - -- --- ---
Other Accounts 0 $0 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 interest 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 interest. See "Compensation of Portfolio
Managers" below.
- 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.
- 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.
- 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.
- 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.
- 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 that seeks to align the financial interests
of the portfolio managers with those of shareholders of the accounts (including
Pioneer funds) the portfolio managers manage, as well as with the financial
performance of Pioneer. 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 align the interests of the investment
professional with those of shareholders, as well as with the financial
performance of Pioneer. 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:
- Quantitative Investment Performance. The quantitative investment
performance calculation is based on pre-tax investment 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 Barclay's Capital Municipal Bond Index and the Barclay's Capital
High Yield 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.
- 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.
- 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.
The quantitative and qualitative performance components comprise 80% and 20%,
respectively, of the overall bonus calculation (on a pre-adjustment basis). A
portion of the annual bonus is deferred for a specified period and may be
invested in one or more Pioneer funds.
Certain portfolio managers may participate in other programs designed to reward
and retain key contributors. Senior executives or other key employees may be
granted performance units based on the stock price performance of UniCredit and
the financial performance of Pioneer Global Asset Management S.p.A., which are
affiliates of Pioneer. Portfolio managers also may participate in a deferred
compensation program, whereby deferred amounts are invested in one or more
Pioneer funds.
SHARE OWNERSHIP BY PORTFOLIO MANAGERS. The following table indicates as of
April 30, 2012 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
------------ -
Timothy Pynchon C
--------------- -
*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, 2012
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, 2012
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer & Chief Accounting & Financial Officer
Date June 29, 2012
* Print the name and title of each signing officer under his or her signature.