For the year ended May 31, 2010, the tax character of dividends paid by the Funds was as follows:
At May 31, 2011, the Funds have capital loss carryforwards expiring in the following years:
For the year ended May 31, 2011, the Funds had capital capital loss carryforwards which were utilized and/or expired as follows:
For the fiscal year ended May 31, 2011, permanent “book-tax” adjustments were as follows:
Net investment income, net realized gains or losses and net assets were not affected by these adjustments.
| |
PIMCO Municipal Income Funds II | Notes to Financial Statements |
May 31, 2011 | |
| | |
6. Income Tax Information (continued)
At May 31, 2011, the aggregate cost basis and the net unrealized appreciation (depreciation) of investments for federal income tax purposes were as follows:
| | | | | | | | | | | | | | | |
| | Federal Tax Cost
Basis(3) | | Unrealized
Appreciation | | Unrealized
Depreciation | | Net Unrealized
Appreciation
(Depreciation) | |
| | | | | | | | | | |
| | | | | | | | | | | | | |
Municipal II | | $983,325,367 | | | $34,566,035 | | $(46,458,099) | | | $(11,892,064) | | |
California Municipal II | | | 385,439,771 | | | | 22,211,012 | | (9,954,247) | | | 12,256,765 | | |
New York Municipal II | | | 185,487,211 | | | | 6,806,669 | | (5,051,087) | | | 1,755,582 | | |
(3) Differences between book and tax cost basis were primarily attributable to inverse floater transactions. |
7. Auction-Rate Preferred Shares
Municipal II has 2,936 shares of Preferred Shares Series A, 2,936 shares of Preferred Shares Series B, 2,936 shares of Preferred Shares Series C, 2,936 shares of Preferred Shares Series D and 2,936 shares of Preferred Shares Series E outstanding, each with a liquidation preference value of $25,000 per share plus any accumulated, unpaid dividends.
California Municipal II has 1,304 shares of Preferred Shares Series A, 1,304 shares of Preferred Shares Series B, 1,304 shares of Preferred Shares Series C, 1,304 shares of Preferred Shares Series D and 1,304 shares of Preferred Shares Series E outstanding, each with a liquidation preference value of $25,000 per share plus any accumulated, unpaid dividends.
New York Municipal II has 1,580 shares of Preferred Shares Series A and 1,580 shares of Preferred Shares Series B outstanding, each with a liquidation preference value of $25,000 per share plus any accumulated, unpaid dividends.
Dividends are accumulated daily at an annual rate (typically re-set every seven days) through auction procedures (or through default provisions in the event of failed auctions). Distributions of net realized capital gains, if any, are paid annually.
For the year ended May 31, 2011, the annualized dividend rates for each Fund ranged from:
| | | | | | | | | | |
| | High | | Low | | At May 31, 2011 | |
| | | | | | | | |
| | | | | | | | | | |
Municipal II: | | | | | | | | | | |
Series A | | | 0.686% | | | 0.305% | | | 0.305% | |
Series B | | | 0.686% | | | 0.305% | | | 0.305% | |
Series C | | | 0.686% | | | 0.305% | | | 0.305% | |
Series D | | | 0.686% | | | 0.305% | | | 0.305% | |
Series E | | | 0.686% | | | 0.305% | | | 0.305% | |
| | | | | | | | | | |
California Municipal II: | | | | | | | | | | |
Series A | | | 0.686% | | | 0.305% | | | 0.305% | |
Series B | | | 0.686% | | | 0.305% | | | 0.305% | |
Series C | | | 0.686% | | | 0.305% | | | 0.305% | |
Series D | | | 0.686% | | | 0.305% | | | 0.305% | |
Series E | | | 0.686% | | | 0.305% | | | 0.305% | |
| | | | | | | | | | |
New York Municipal II: | | | | | | | | | | |
Series A | | | 0.686% | | | 0.305% | | | 0.305% | |
Series B | | | 0.686% | | | 0.305% | | | 0.305% | |
The Funds are subject to certain limitations and restrictions while Preferred Shares are outstanding. Failure to comply with these limitations and restrictions could preclude the Funds from declaring or paying any dividends or distributions to common shareholders or repurchasing common shares and/or could trigger the mandatory redemption of Preferred Shares at their liquidation preference value plus any accumulated, unpaid dividends.
Preferred shareholders, who are entitled to one vote per share, generally vote together with the common shareholders but vote separately as a class to elect two Trustees and on any matters affecting the rights of the Preferred Shares.
5.31.11 | PIMCO Municipal Income Funds II Annual Report 41
| |
PIMCO Municipal Income Funds II | Notes to Financial Statements |
May 31, 2011 | |
| | |
7. Auction-Rate Preferred Shares (continued)
Since mid-February 2008, holders of auction-rate preferred shares (“ARPS”) issued by the Funds have been directly impacted by an unprecedented lack of liquidity, which has similarly affected ARPS holders in many of the nation’s closed-end funds. Since then, regularly scheduled auctions for ARPS issued by the Funds have consistently “failed” because of insufficient demand (bids to buy shares) to meet the supply (shares offered for sale) at each auction. In a failed auction, ARPS holders cannot sell all, and may not be able to sell any, of their shares tendered for sale. While repeated auction failures have affected the liquidity for ARPS, they do not constitute a default or automatically alter the credit quality of the ARPS, and the ARPS holders have continued to receive dividends at the defined “maximum rate” equal to the higher of the 30-day “AA” Composite Commercial Paper Rate multiplied by 110% or the Taxable Equivalent of the Short-Term Municipal Obligations Rate-defined as 90% of the quotient of (A) the per annum rate expressed on an interest equivalent basis equal to the Kenny S&P 30-day High Grade Index divided by (B) 1.00 minus the Marginal Tax Rate (expressed as a decimal) multiplied by 110% (which is a function of short-term interest rates and typically higher than the rate that would have otherwise been set through a successful auction). If the Funds’ ARPS auctions continue to fail and the “maximum rate” payable on the ARPS rises as a result of changes in short-term interest rates, returns for the Funds’ common shareholders could be adversely affected.
See “Note 8–Legal Proceedings” for a discussion of shareholder demand letters received by certain closed-end funds managed by the Investment Manager including Municipal II.
8. Legal Proceedings
In June and September 2004, the Investment Manager and certain of its affiliates (including PEA Capital LLC (“PEA”), Allianz Global Investors Distributors LLC and Allianz Global Investors of America, L.P.) agreed to settle, without admitting or denying the allegations, claims brought by the Securities and Exchange Commission (“SEC”) and the New Jersey Attorney General alleging violations of federal and state securities laws with respect to certain open-end funds for which the Investment Manager serves as investment adviser. The settlements related to an alleged “market timing” arrangement in certain open-end funds formerly sub-advised by PEA. The Investment Manager and its affiliates agreed to pay a total of $68 million to settle the claims. In addition to monetary payments, the settling parties agreed to undertake certain corporate governance, compliance and disclosure reforms related to market timing, and consented to cease and desist orders and censures. Subsequent to these events, PEA deregistered as an investment adviser and dissolved. None of the settlements alleged that any inappropriate activity took place with respect to the Funds.
Since February 2004, the Investment Manager and certain of its affiliates and their employees have been named as defendants in a number of pending lawsuits concerning “market timing,” which allege the same or similar conduct underlying the regulatory settlements discussed above. The market timing lawsuits have been consolidated in a multi-district litigation proceeding in the U.S. District Court for the District of Maryland (the “MDL Court”). After a number of claims in the lawsuits were dismissed by the MDL Court, the parties entered into a stipulation of settlement, which was publicly filed with the MDL Court in April 2010, resolving all remaining claims. In April 2011, the MDL Court granted final approval of the settlement.
In addition, in a lawsuit filed in the Northern District of Illinois Eastern Division, plaintiffs challenged certain trades by Sub-Adviser in the June 2005 10 year futures contract. Sub-Adviser’s position is that all such trades were properly designed to secure best execution for its clients. The parties resolved this matter through settlement, which resolves all of the claims against the Sub-Adviser. In settling this matter, Sub-Adviser denies any liability. This settlement is purely private in nature and not a regulatory matter.
Beginning in May 2010, several closed-end funds managed by the Investment Manager, including Municipal Income Fund II and certain other funds sub-advised by the Sub-Adviser, each received a demand letter from a law firm on behalf of certain common shareholders. The demand letters allege that the Investment Manager and certain officers and trustees of the funds breached their fiduciary duties in connection with the redemption at par of a portion of the funds’ ARPS and demand that the boards of trustees take certain action to remedy those alleged breaches. After conducting an investigation in August 2010, the independent trustees of Municipal Income Fund II rejected the demands made in the demand letters.
The Investment Manager and the Sub-Adviser believe that these matters are not likely to have a material adverse effect on the Funds or on their ability to perform their respective investment advisory activities relating to the Funds.
42 PIMCO Municipal Income Funds II Annual Report | 5.31.11
| |
PIMCO Municipal Income Funds II | Notes to Financial Statements |
May 31, 2011 | |
| | |
9. Subsequent Events
On June 1, 2011, the following dividends were declared to common shareholders payable July 1, 2011 to shareholders of record on June 13, 2011:
| | |
Municipal II | | $0.065 per common share |
California Municipal II | | $0.0625 per common share |
New York Municipal II | | $0.06625 per common share |
On July 1, 2011, the following dividends were declared to common shareholders payable August 1, 2011 to shareholders of record on July 11, 2011:
| | |
Municipal II | | $0.065 per common share |
California Municipal II | | $0.0625 per common share |
New York Municipal II | | $0.06625 per common share |
At the June 14-15, 2011 annual Board meeting, the Funds’ Board of Trustees approved a voluntary investment management fee waiver of 0.05% for the period from July 1, 2011 through June 30, 2012.
Effective June 24, 2011, the address of the Fund and the Investment Manager changed to 1633 Broadway, New York, NY 10019.
5.31.11 | PIMCO Municipal Income Funds II Annual Report 43
| |
PIMCO Municipal Income Fund II | Financial Highlights |
For a common share outstanding throughout each year: |
| | | | | | | | | | | | | | | |
| | Year ended May 31, |
| | 2011 | | 2010 | | 2009 | | 2008 | | 2007 |
Net asset value, beginning of year | | $10.77 | | | $8.97 | | | $13.86 | | | $15.05 | | | $14.71 | |
Investment Operations: | | | | | | | | | | | | | | | |
Net investment income | | 0.91 | | | 0.88 | | | 1.02 | | | 1.13 | | | 1.13 | |
Net realized and change in unrealized gain (loss) on investments, futures contracts, options written and swaps | | (0.75 | ) | | 1.73 | | | (4.94 | ) | | (1.24 | ) | | 0.33 | |
Total from investment operations | | 0.16 | | | 2.61 | | | (3.92 | ) | | (0.11 | ) | | 1.46 | |
Dividends on Preferred Shares from Net Investment Income | | (0.03 | ) | | (0.03 | ) | | (0.19 | ) | | (0.30 | ) | | (0.30 | ) |
Net increase (decrease) in net assets applicable to common shareholders resulting from investment operations | | 0.13 | | | 2.58 | | | (4.11 | ) | | (0.41 | ) | | 1.16 | |
Dividends to Common Shareholders from Net Investment Income | | (0.78 | ) | | (0.78 | ) | | (0.78 | ) | | (0.78 | ) | | (0.82 | ) |
Net asset value, end of year | | $10.12 | | | $10.77 | | | $8.97 | | | $13.86 | | | $15.05 | |
Market price, end of year | | $10.45 | | | $11.12 | | | $9.56 | | | $14.14 | | | $15.42 | |
Total Investment Return (1) | | 1.30 | % | | 25.49 | % | | (26.46 | )% | | (3.09 | )% | | 12.64 | % |
RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | |
Net assets applicable to common shareholders, end of year (000s) | | $610,800 | | | $645,589 | | | $534,046 | | | $819,740 | | | $886,815 | |
Ratio of expenses to average net assets including interest expense (2)(3)(4) | | 1.37 | % | | 1.38 | %(5) | | 1.73 | %(5) | | 1.68 | %(5) | | 1.50 | %(5) |
Ratio of expenses to average net assets, excluding interest expense (2)(3) | | 1.24 | % | | 1.24 | %(5) | | 1.35 | %(5) | | 1.19 | %(5) | | 1.01 | %(5) |
Ratio of net investment income to average net assets (2) | | 8.80 | % | | 8.77 | %(5) | | 10.23 | %(5) | | 7.90 | %(5) | | 7.45 | %(5) |
Preferred shares asset coverage per share | | $66,606 | | | $68,974 | | | $61,376 | | | $65,570 | | | $68,889 | |
Portfolio turnover | | 21 | % | | 6 | % | | 42 | % | | 21 | % | | 4 | % |
| |
(1) | Total investment return is calculated assuming a purchase of a common share at the market price on the first day and a sale of a common share at the market price on the last day of each year reported. Income dividends and capital gains, if any, are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges in connection with the purchase or sale of Fund shares. |
(2) | Calculated on the basis of income and expenses applicable to both common and preferred shares relative to the average net assets of common shareholders. |
(3) | Inclusive of expenses offset by custody credits earned on cash balances at the custodian bank (See note 1(i) in Notes to Financial Statements). |
(4) | Interest expense relates to the liability for floating rate notes issued in connection with Inverse Floater transactions and/or participation in reverse repurchase agreement transactions. |
(5) | During the years indicated above, the Investment Manager waived a portion of its investment management fee. The effect of such waiver relative to the average net assets of common shareholders was 0.004%, 0.10%, 0.17% and 0.24% for the years ended May 31, 2010, May 31, 2009, May 31, 2008 and May 31, 2007, respectively. |
44 PIMCO Municipal Income Funds II Annual Report | 5.31.11 | See accompanying Notes to Financial Statements
| |
PIMCO California Municipal Income Fund II | Financial Highlights |
For a common share outstanding throughout each year: |
| | | | | | | | | | | | | | | |
| | Year ended May 31, |
| | 2011 | | 2010 | | 2009 | | 2008 | | 2007 |
Net asset value, beginning of year | | $8.11 | | | $7.48 | | | $13.34 | | | $14.89 | | | $14.58 | |
Investment Operations: | | | | | | | | | | | | | | | |
Net investment income | | 0.74 | | | 0.76 | | | 0.85 | | | 1.06 | | | 1.08 | |
Net realized and change in unrealized gain (loss) on investments, futures contracts, options written and swaps | | (0.70 | ) | | 0.67 | | | (5.69 | ) | | (1.49 | ) | | 0.34 | |
Total from investment operations | | 0.04 | | | 1.43 | | | (4.84 | ) | | (0.43 | ) | | 1.42 | |
Dividends on Preferred Shares from Net Investment Income | | (0.02 | ) | | (0.03 | ) | | (0.18 | ) | | (0.28 | ) | | (0.27 | ) |
Net increase (decrease) in net assets applicable to common shareholders resulting from investment operations | | 0.02 | | | 1.40 | | | (5.02 | ) | | (0.71 | ) | | 1.15 | |
Dividends to Common Shareholders from Net investment income | | (0.75 | ) | | (0.77 | ) | | (0.80 | ) | | (0.84 | ) | | (0.84 | ) |
Return of capital | | — | | | — | | | (0.04 | ) | | — | | | — | |
Net asset value, end of year | | $7.38 | | | $8.11 | | | $7.48 | | | $13.34 | | | $14.89 | |
Market price, end of year | | $9.21 | | | $9.33 | | | $8.78 | | | $14.25 | | | $15.96 | |
Total Investment Return (1) | | 7.53 | % | | 16.44 | % | | (32.26 | )% | | (5.17 | )% | | 15.35 | % |
RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | |
Net assets applicable to common shareholders, end of year (000s) | | $231,486 | | | $252,816 | | | $231,415 | | | $409,769 | | | $455,284 | |
Ratio of expenses to average net assets including interest expense (2)(3)(4) | | 1.55 | % | | 1.56 | %(5) | | 3.15 | %(5) | | 3.23 | %(5) | | 2.89 | %(5) |
Ratio of expenses to average net assets, excluding interest expense (2)(3) | | 1.37 | % | | 1.33 | %(5) | | 1.43 | %(5) | | 1.18 | %(5) | | 1.01 | %(5) |
Ratio of net investment income to average net assets (2) | | 9.73 | % | | 9.78 | %(5) | | 9.31 | %(5) | | 7.65 | %(5) | | 7.28 | %(5) |
Preferred shares asset coverage per share | | $60,503 | | | $63,773 | | | $60,490 | | | $64,390 | | | $68,765 | |
Portfolio turnover | | 15 | % | | 9 | % | | 62 | % | | 6 | % | | 3 | % |
| |
(1) | Total investment return is calculated assuming a purchase of a common share at the market price on the first day and a sale of a common share at the market price on the last day of each year reported. Income dividends, capital gains and return of capital distributions, if any, are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges in connection with the purchase or sale of Fund shares. |
(2) | Calculated on the basis of income and expenses applicable to both common and preferred shares relative to the average net assets of common shareholders. |
(3) | Inclusive of expenses offset by custody credits earned on cash balances at the custodian bank (See note 1(i) in Notes to Financial Statements). |
(4) | Interest expense relates to the liability for floating rate notes issued in connection with Inverse Floater transactions and/or participation in reverse repurchase agreement transactions. |
(5) | During the years indicated above, the Investment Manager waived a portion of its investment management fee. The effect of such waiver relative to the average net assets of common shareholders was 0.004%, 0.10%, 0.17% and 0.24% for the years ended May 31, 2010, May 31, 2009, May 31, 2008 and May 31, 2007, respectively. |
See accompanying Notes to Financial Statements | 5.31.11 | PIMCO Municipal Income Funds II Annual Report 45
| |
PIMCO New York Municipal Income Fund II | Financial Highlights |
For a common share outstanding throughout each year: |
| | | | | | | | | | | | | | | |
| | Year ended May 31, |
| | 2011 | | 2010 | | 2009 | | 2008 | | 2007 |
Net asset value, beginning of year | | $10.90 | | | $9.56 | | | $13.67 | | | $14.79 | | | $14.66 | |
Investment Operations: | | | | | | | | | | | | | | | |
Net investment income | | 0.88 | | | 0.98 | | | 1.00 | | | 1.07 | | | 1.10 | |
Net realized and change in unrealized gain (loss) on investments, futures contracts, options written and swaps | | (0.85 | ) | | 1.19 | | | (4.13 | ) | | (1.11 | ) | | 0.11 | |
Total from investment operations | | 0.03 | | | 2.17 | | | (3.13 | ) | | (0.04 | ) | | 1.21 | |
Dividends on Preferred Shares from Net Investment Income | | (0.03 | ) | | (0.03 | ) | | (0.19 | ) | | (0.29 | ) | | (0.28 | ) |
Net increase (decrease) in net assets applicable to common shareholders resulting from investment operations | | 0.00 | | | 2.14 | | | (3.32 | ) | | (0.33 | ) | | 0.93 | |
Dividends to Common Shareholders from Net Investment Income | | (0.80 | ) | | (0.80 | ) | | (0.79 | ) | | (0.79 | ) | | (0.80 | ) |
Net asset value, end of year | | $10.10 | | | $10.90 | | | $9.56 | | | $13.67 | | | $14.79 | |
Market price, end of year | | $10.92 | | | $11.42 | | | $10.26 | | | $14.42 | | | $15.49 | |
Total Investment Return (1) | | 3.03 | % | | 19.92 | % | | (22.95 | )% | | (1.46 | )% | | 15.51 | % |
RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | |
Net assets applicable to common shareholders, end of year (000s) | | $109,256 | | | $117,161 | | | $102,126 | | | $145,100 | | | $156,218 | |
Ratio of expenses to average net assets including interest expense (2)(3)(4) | | 1.55 | % | | 1.53 | %(5) | | 1.88 | %(5) | | 2.07 | %(5) | | 2.13 | %(5) |
Ratio of expenses to average net assets, excluding interest expense (2)(3) | | 1.44 | % | | 1.43 | %(5) | | 1.51 | %(5) | | 1.25 | %(5) | | 1.14 | %(5) |
Ratio of net investment income to average net assets (2) | | 8.46 | % | | 9.51 | %(5) | | 9.63 | %(5) | | 7.69 | %(5) | | 7.33 | %(5) |
Preferred shares asset coverage per share | | $59,574 | | | $62,073 | | | $57,316 | | | $65,294 | | | $68,386 | |
Portfolio turnover | | 7 | % | | 5 | % | | 33 | % | | 9 | % | | 3 | % |
| |
(1) | Total investment return is calculated assuming a purchase of a common share at the market price on the first day and a sale of a common share at the market price on the last day of each year reported. Income dividends and capital gains, if any, are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges in connection with the purchase or sale of Fund shares. |
(2) | Calculated on the basis of income and expenses applicable to both common and preferred shares relative to the average net assets of common shareholders. |
(3) | Inclusive of expenses offset by custody credits earned on cash balances at the custodian bank (See note 1(i) in Notes to Financial Statements). |
(4) | Interest expense relates to the liability for floating rate notes issued in connection with Inverse Floater transactions and/or participation in reverse repurchase agreement transactions. |
(5) | During the years indicated above, the Investment Manager waived a portion of its investment management fee. The effect of such waiver relative to the average net assets of common shareholders was 0.004%, 0.10%, 0.17% and 0.24% for the years ended May 31, 2010, May 31, 2009, May 31, 2008 and May 31, 2007, respectively. |
46 PIMCO Municipal Income Funds II Annual Report | 5.31.11 | See accompanying Notes to Financial Statements
| |
PIMCO Municipal Income Funds II | Report of Independent Registered Public
Accounting Firm |
| |
To the Shareholders and Board of Trustees of:
PIMCO Municipal Income Fund II,
PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets applicable to common shareholders and of cash flows (for PIMCO California Municipal Income Fund II only) and the financial highlights present fairly, in all material respects, the financial position of PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and PIMCO New York Municipal Income Fund II (collectively hereafter referred to as the “Funds”) at May 31, 2011, the results of their operations and of cash flows (for PIMCO California Municipal Income Fund II only) for the year then ended, the changes in their net assets applicable to common shareholders 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 accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements 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 are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at May 31, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
July 20, 2011
5.31.11 | PIMCO Municipal Income Funds II Annual Report 47
| |
PIMCO Municipal Income Funds II | Tax Information/Annual Shareholder
Meeting Results/ Changes to Board of
Trustees (unaudited) |
| |
Tax Information:
For the year ended May 31, 2011, the Funds designate the following percentages of the ordinary income dividends (or such greater percentages that constitute the maximum amount allowable pursuant to code sections 103(a) and 852(b)(5)), as exempt-interest dividends which are exempt from federal income tax other than the alternative minimum tax.
| | | | | |
| Municipal II | | | 99.11 | % |
| California Municipal II | | | 90.95 | % |
| New York Municipal II | | | 93.00 | % |
Since the Funds’ tax year is not the calendar year, another notification will be sent with respect to calendar year 2011. In January 2012, shareholders will be advised on IRS Form 1099-DIV as to the federal tax status of the dividends and distributions received during calendar 2011. The amount that will be reported will be the amount to use on your 2011 federal income tax return and may differ from the amount which must be reported in connection with the Funds’ tax year ended May 31, 2011. Shareholders are advised to consult their tax advisers as to the federal, state and local tax status of the dividend income received from the Funds. In January 2012, an allocation of interest income by state will be provided which may be of value in reducing a shareholder’s state and local tax liability, if any.
|
| |
|
Annual Shareholder Meeting Results: |
The Funds held their joint annual meeting of shareholders on December 14, 2010. Common/Preferred shareholders voted as indicated below:
| | | | | | |
| | Affirmative | | Withheld
Authority |
| | | | | |
| | | | | | |
Municipal II | | | | | | |
Re-election of Paul Belica – Class II to serve until 2013 | | | 53,889,723 | | | 1,827,839 |
Election of James A. Jacobson* – Class II to serve until 2013 | | | 11,618 | | | 179 |
Election of Alan Rappaport – Class I to serve until 2012 | | | 54,271,846 | | | 1,445,716 |
| | | | | | |
California Municipal II | | | | | | |
Re-election of Paul Belica – Class II to serve until 2013 | | | 25,677,044 | | | 1,390,672 |
Election of James A. Jacobson* – Class II to serve until 2013 | | | 4,129 | | | 21 |
Election of Alan Rappaport – Class I to serve until 2012 | | | 25,785,464 | | | 1,282,252 |
| | | | | | |
New York Municipal II | | | | | | |
Re-election of Paul Belica – Class II to serve until 2013 | | | 9,287,460 | | | 378,002 |
Election of James A. Jacobson* – Class II to serve until 2013 | | | 1,327 | | | 47 |
Election of Alan Rappaport – Class I to serve until 2012 | | | 9,370,705 | | | 294,757 |
The other members of the Board of Trustees at the time of the meeting, namely Messrs. Hans W. Kertess*, John C. Maney†, and William B. Ogden, IV, continued to serve as Trustees of the Funds.
| | |
| | |
* | Preferred Shares Trustee |
† | Interested Trustee |
|
| |
|
Changes to Board of Trustees: |
Effective December 15, 2010, the Funds’ Board of Trustees appointed Bradford K. Gallagher as a Class III Trustee to serve until 2011.
Effective March 7, 2011, the Funds’ Board of Trustees appointed Deborah A. Zoullas as a Class II Trustee to serve until 2011.
48 PIMCO Municipal Income Funds II Annual Report | 5.31.11
| |
PIMCO Municipal Income Funds II | Privacy Policy/Proxy Voting Policies &
Procedures (unaudited) |
| | |
Privacy Policy:
Our Commitment to You
We consider customer privacy to be a fundamental aspect of our relationship with shareholders and are committed to maintaining the confidentiality, integrity and security of our current, prospective and former shareholders’ personal information. To ensure our shareholders’ privacy, we have developed policies that are designed to protect this confidentiality, while allowing shareholders’ needs to be served.
Obtaining Personal Information
In the course of providing shareholders with products and services, we may obtain non-public personal information about shareholders, which may come from sources such as account applications and other forms, from other written, electronic or verbal correspondence, from shareholder transactions, from a shareholder’s brokerage or financial advisory firm, financial adviser or consultant, and/or from information captured on our internet web sites.
Respecting Your Privacy
As a matter of policy, we do not disclose any personal or account information provided by shareholders or gathered by us to non-affiliated third parties, except as required for our everyday business purposes, such as to process transactions or service a shareholder’s account, or as otherwise permitted by law. As is common in the industry, non-affiliated companies may from time to time be used to provide certain services, such as preparing and mailing prospectuses, reports, account statements and other information, and gathering shareholder proxies. We may also retain non-affiliated financial services providers, such as broker-dealers, to market our shares or products and we may enter into joint-marketing arrangements with them and other financial companies. We may also retain marketing and research service firms to conduct research on shareholder satisfaction. These companies may have access to a shareholder’s personal and account information, but are permitted to use this information solely to provide the specific service or as otherwise permitted by law. We may also provide a shareholder’s personal and account information to their respective brokerage or financial advisory firm, Custodian, and/or to their financial advisor or consultant.
Sharing Information with Third Parties
We reserve the right to disclose or report personal information to non-affiliated third parties, in limited circumstances, where we believe in good faith that disclosure is required under law to cooperate with regulators or law enforcement authorities, to protect our rights or property or upon reasonable request by any Fund in which a shareholder has chosen to invest. In addition, we may disclose information about a shareholder or shareholder’s accounts to a non-affiliated third party only if we receive a shareholder’s written request or consent.
Sharing Information with Affiliates
We may share shareholder information with our affiliates in connection with our affiliates’ everyday business purposes, such as servicing a shareholder’s account, but our affiliates may not use this information to market products and services to you except in conformance with applicable laws or regulations. The information we share includes information about our experiences and transactions with a shareholder and may include, for example, a shareholder’s participation in one of the Funds or in other investment programs, a shareholder’s ownership of certain types of accounts (such as IRAs), or other data about a shareholder’s transactions or accounts. Our affiliates, in turn, are not permitted to share shareholder information with non-affiliated entities, except as required or permitted by law.
Procedures to Safeguard Private Information
We take seriously the obligation to safeguard shareholder non-public personal information. In addition to this policy, we have also implemented procedures that are designed to restrict access to a shareholder’s non-public personal information only to internal personnel who need to know that information in order to provide products or services to such shareholders. In addition, we have physical, electronic and procedural safeguards in place to guard a shareholder’s non-public personal information.
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Disposal of Confidential Records
We will dispose of records, if any, that are knowingly derived from data received from a consumer reporting agency regarding a shareholder that is an individual in a manner that ensures the confidentiality of the data is maintained. Such records include, among other things, copies of consumer reports and notes of conversations with individuals at consumer reporting agencies. |
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Proxy Voting Policies & Procedures: |
A description of the policies and procedures that the Funds have adopted to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities held during the most recent twelve month period ended June 30 is available (i) without charge, upon request, by calling the Funds’ shareholder servicing agent at (800) 254-5197; (ii) on the Funds’ website at www.allianzinvestors.com/closedendfunds; and (iii) on the Securities and Exchange Commission website at www.sec.gov |
5.31.11 | PIMCO Municipal Income Funds II Annual Report 49
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PIMCO Municipal Income Funds II | Dividend Reinvestment Plan (unaudited) |
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Pursuant to the Funds’ Dividend Reinvestment Plan (the “Plan”), all Common Shareholders whose shares are registered in their own names will have all dividends, including any capital gain dividends, reinvested automatically in additional Common Shares by BNY Mellon, as agent for the Common Shareholders (the “Plan Agent”), unless the shareholder elects to receive cash. An election to receive cash may be revoked or reinstated at the option of the shareholder. In the case of record shareholders such as banks, brokers or other nominees that hold Common Shares for others who are the beneficial owners, the Plan Agent will administer the Plan on the basis of the number of Common Shares certified from time to time by the record shareholder as representing the total amount registered in such shareholder’s name and held for the account of beneficial owners who are to participate in the Plan. Shareholders whose shares are held in the name of a bank, broker or nominee should contact the bank, broker or nominee for details. All distributions to investors who elect not to participate in the Plan (or whose broker or nominee elects not to participate on the investor’s behalf), will be paid cash by check mailed, in the case of direct shareholder, to the record holder by BNY Mellon, as the Funds’ dividend disbursement agent.
Unless you elect (or your broker or nominee elects) not to participate in the Plan, the number of Common Shares you will receive will be determined as follows:
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(1) | If on the payment date the net asset value of the Common Shares is equal to or less than the market price per Common Share plus estimated brokerage commissions that would be incurred upon the purchase of Common Shares on the open market, the Funds will issue new shares at the greater of (i) the net asset value per Common Share on the payment date or (ii) 95% of the market price per Common Share on the payment date; or |
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(2) | If on the payment date the net asset value of the Common Shares is greater than the market price per Common Share plus estimated brokerage commissions that would be incurred upon the purchase of Common Shares on the open market, the Plan Agent will receive the dividend or distribution in cash and will purchase Common Shares in the open market, on the NYSE or elsewhere, for the participants’ accounts. It is possible that the market price for the Common Shares may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed the market price on the payment date, resulting in the purchase of fewer shares than if the dividend or distribution had been paid in Common Shares issued by the Funds. The Plan Agent will use all dividends and distributions received in cash to purchase Common Shares in the open market on or shortly after the payment date, but in no event later than the ex-dividend date for the next distribution. Interest will not be paid on any uninvested cash payments. |
You may withdraw from the Plan at any time by giving notice to the Plan Agent. If you withdraw or the Plan is terminated, you will receive a certificate for each whole share in your account under the Plan and you will receive a cash payment for any fraction of a share in your account. If you wish, the Plan Agent will sell your shares and send you the proceeds, minus brokerage commissions.
The Plan Agent maintains all shareholders’ accounts in the Plan and gives written confirmation of all transactions in the accounts, including information you may need for tax records. The Plan Agent will also furnish each person who buys Common Shares with written instructions detailing the procedures for electing not to participate in the Plan and to instead receive distributions in cash. Common Shares in your account will be held by the Plan Agent in non-certificated form. Any proxy you receive will include all Common Shares you have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or distributions in Common Shares. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases.
Automatically reinvested dividends and distributions are taxed in the same manner as cash dividends and distributions.
The Funds and the Plan Agent reserve the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, the Funds reserve the right to amend the Plan to include a service charge payable by the participants. Additional information about the Plan may be obtained from the Funds’ shareholder servicing agent, BNY Mellon, P.O. Box 43027, Providence, RI 02940-3027, telephone number (800) 254-5197.
50 PIMCO Municipal Income Funds II Annual Report | 5.31.11
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PIMCO Municipal Income Funds II | Board of Trustees (unaudited) |
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Name, Date of Birth, Position(s) Held with
Fund, Length of Service, Other Trusteeships/
Directorships Held by Trustee; Number of
Portfolios in Fund Complex/Outside Fund
Complexes Currently Overseen by Trustee | | Principal Occupation(s) During Past 5 Years: |
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The address of each trustee is 1633 Broadway, New York, NY 10019. |
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Hans W. Kertess | | President, H. Kertess & Co., a financial advisory company. Formerly, Managing Director, Royal Bank of Canada Capital Markets. |
Date of Birth: 7/12/39 | |
Chairman of the Board of Trustees since: 2007 | |
Trustee since: 2002 | |
Term of office: Expected to stand for re-election at | |
2012 annual meeting of shareholders. | |
Trustee/Director of 55 funds in Fund Complex; | |
Trustee/Director of no funds outside of Fund | |
Complex | | |
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Paul Belica | | Retired. Formerly Director, Student Loan Finance Corp., Education Loans, Inc., Goal Funding, Inc., Goal Funding II, Inc. and Surety Loan Fund, Inc. Formerly, Manager of Stratigos Fund LLC, Whistler Fund LLC, Xanthus Fund LLC & Wynstone Fund LLC. |
Date of Birth: 9/27/21 | |
Trustee since: 2002 | |
Term of office: Expected to stand for re-election at | |
2013 annual meeting of shareholders. | |
Trustee/Director of 55 funds in Fund Complex | |
Trustee/Director of no funds outside of Fund | |
Complex | |
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Bradford K. Gallagher | | Founder, Spyglass Investments LLC, a private investment vehicle (since 2001); Founder, President and CEO of Cypress Holding Company and Cypress Tree Investment Management Company (since 1995); Trustee, The Common Fund (since 2005); Director, Anchor Point Inc. (since 1995); Chairman and Trustee, Atlantic Maritime Heritage Foundation (since 2007); Director, Shielding Technology Inc. (since 2006). |
Date of Birth: 2/28/44 | |
Trustee since: 2010 | |
Term of office: Expected to stand for election at | |
2011 annual meeting of shareholders. | |
Trustee/Director of 55 funds in Fund Complex | |
Trustee/Director of no funds outside of Fund | |
Complex | |
Formerly, Chairman and Trustee of Grail Advisors | |
ETF Trust (2009-2010) and Trustee of Nicholas- | |
Applegate Institutional Funds (2007-2010). | |
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James A. Jacobson | | Retired. Formerly, Vice Chairman and Managing Director of Spear, Leeds & Kellogg Specialists, LLC, a specialist firm on the New York Stock Exchange. |
Date of Birth: 2/3/45 | |
Trustee since: 2009 | |
Term of office: Expected to stand for re-election at | |
2013 annual meeting of shareholders. | |
Trustee/Director of 55 funds in Fund Complex | |
Trustee/Director of 16 funds in the Alpine Mutual | |
Funds Complex | |
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John C. Maney† | | Management Board, Managing Director and Chief Executive Officer of Allianz Global Investors Fund Management LLC; Management Board and Managing Director of Allianz Global Investors of America L.P. since January 2005 and also Chief Operating Officer of Allianz Global Investors of America L.P. since November 2006. |
Date of Birth: 8/3/59 | |
Trustee since: 2006 | |
Term of office: Expected to stand for re-election at | |
2011 annual meeting of shareholders. | |
Trustee/Director of 80 funds in Fund Complex | |
Trustee/Director of no funds outside of Fund | |
Complex | |
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William B. Ogden, IV | | Asset Management Industry Consultant. Formerly, Managing Director, Investment Banking Division of Citigroup Global Markets Inc. |
Date of Birth: 1/11/45 | |
Trustee since: 2006 | |
Term of office: Expected to stand for re-election at | |
2012 annual meeting of shareholders. | |
Trustee/Director of 55 funds in Fund Complex; | |
Trustee/Director of no funds outside of Fund | |
Complex | |
5.31.11 | PIMCO Municipal Income Funds II Annual Report 51
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PIMCO Municipal Income Funds II | Board of Trustees (unaudited) (continued) |
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Name, Date of Birth, Position(s) Held with
Fund, Length of Service, Other Trusteeships/
Directorships Held by Trustee; Number of
Portfolios in Fund Complex/Outside Fund
Complexes Currently Overseen by Trustee | | Principal Occupation(s) During Past 5 Years: |
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Alan Rappaport | | Vice Chairman, Roundtable Investment Partners (since 2009); Chairman (formerly President), Private Bank of Bank of America; Vice Chairman, US Trust (2001-2008). |
Date of Birth: 3/13/53 | |
Trustee since: 2010 | |
Term of office: Expected to stand for re-election at | |
2012 annual meeting of shareholders. | |
Trustee/Director of 55 funds in Fund Complex | |
Trustee/Director of no funds outside of Fund | |
Complex | |
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Deborah A. Zoullas | | Advisory Director, Morgan Stanley & Co., Inc. (since 1996); Director, Helena Rubenstein Foundation (since 1997); Co-Chair Special Projects Committee, Memorial Sloan Kettering (since 2005); Board Member and Member of the Investment and Finance Committees, Henry Street Settlement (since 2007); Trustee, Stanford University (since 2010). Formerly, Advisory Council, Stanford Business School (2002-2008) and Director, Armor Holdings, a manufacturing company (2002-2007). |
Date of Birth: 11/13/52 | |
Trustee since: 2011 | |
Term of office: Expected to stand for election at | |
2011 annual meeting of shareholders. | |
Trustee/Director of 55 funds in Fund Complex | |
Trustee/Director of no funds outside of Fund | |
Complex | |
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† Mr. Maney is an “interested person” of the Funds, as defined in Section 2(a)(19) of the 1940 Act, due to his positions set forth in the table above, among others with the Funds’ Investment Manager and various affiliated entities. |
52 PIMCO Municipal Income Funds II Annual Report | 5.31.11
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PIMCO Municipal Income Funds II | Fund Officers (unaudited) |
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Name, Date of Birth, Position(s)
Held with Funds | | Principal Occupation(s) During Past 5 Years: |
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Brian S. Shlissel
Date of Birth: 11/14/64
President & Chief Executive Officer since: 2002 | | Management Board, Managing Director and Head of Mutual Fund Services, Allianz Global Investors Fund Management LLC; President and Chief Executive Officer of 29 funds in the Fund Complex; President of 51 funds in the Fund Complex and Treasurer, Principal Financial and Accounting Officer of The Korea Fund, Inc. Formerly, Treasurer, Principal Financial and Accounting Officer of 50 funds in the Fund Complex. |
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Lawrence G. Altadonna
Date of Birth: 3/10/66
Treasurer, Principal Financial and Accounting
Officer since: 2002 | | Senior Vice President and Director of Fund Administration, Allianz Global Investors Fund Management LLC; Treasurer, Principal Financial and Accounting Officer of 80 funds in the Fund Complex; Assistant Treasurer of The Korea Fund, Inc. Formerly, Assistant Treasurer of 50 funds in the Fund Complex. |
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Thomas J. Fuccillo
Date of Birth: 3/22/68
Vice President, Secretary & Chief Legal
Officer since: 2004 | | Executive Vice President, Chief Legal Officer and Secretary, Allianz Global Investors Fund Management LLC; Executive Vice President of Allianz Global Investors of America L.P; Vice President, Secretary and Chief Legal Officer of 80 funds in the Fund Complex; Secretary and Chief Legal Officer of The Korea Fund, Inc. |
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Scott Whisten
Date of Birth: 3/13/71
Assistant Treasurer since: 2007 | | Senior Vice President, Allianz Global Investors Fund Management LLC; Assistant Treasurer of 80 funds in the Fund Complex. |
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Richard J. Cochran
Date of Birth: 1/23/61
Assistant Treasurer since: 2008 | | Vice President, Allianz Global Investors Fund Management LLC, Assistant Treasurer of 80 funds in the Funds Complex and The Korea Fund, Inc. Formerly, Tax Manager, Teacher Insurance Annuity Association/College Retirement Equity Fund (TIAA-CREF) (2002-2008). |
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Orhan Dzemaili
Date of Birth: 4/18/74
Assistant Treasurer since: 2011 | | Vice President, Allianz Global Investors Fund Management LLC; Assistant Treasurer of 80 funds in the Fund Complex. Formerly, Accounting Manager, Prudential Investments LLC (2004-2007). |
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Youse E. Guia
Date of Birth: 9/3/72
Chief Compliance Officer since: 2004 | | Senior Vice President and Chief Compliance Officer, Allianz Global Investors of America L.P.; Chief Compliance Officer of 80 funds in the Fund Complex and of The Korea Fund, Inc. |
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Lagan Srivastava
Date of Birth: 9/20/77
Assistant Secretary since: 2006 | | Vice President, Allianz Global Investors of America L.P.; Assistant Secretary of 80 funds in the Fund Complex and of The Korea Fund, Inc. |
Officers hold office at the pleasure of the Board and until their successors are appointed and qualified or until their earlier resignation or removal.
5.31.11 | PIMCO Municipal Income Funds II Annual Report 53
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Trustees | Fund Officers |
Hans W. Kertess | Brian S. Shlissel |
Chairman of the Board of Trustees | President & Chief Executive Officer |
Paul Belica | Lawrence G. Altadonna |
Bradford K. Gallagher | Treasurer, Principal Financial & Accounting Officer |
James A. Jacobson | Thomas J. Fuccillo |
John C. Maney | Vice President, Secretary & Chief Legal Officer |
William B. Ogden, IV | Scott Whisten |
Alan Rappaport | Assistant Treasurer |
Deborah A. Zoullas | Richard J. Cochran |
| Assistant Treasurer |
| Orhan Dzemaili |
| Assistant Treasurer |
| Youse E. Guia |
| Chief Compliance Officer |
| Lagan Srivastava |
| Assistant Secretary |
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Investment Manager |
Allianz Global Investors Fund Management LLC
1633 Broadway
New York, NY 10019 |
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Sub-Adviser |
Pacific Investment Management Company LLC
840 Newport Center Drive
Newport Beach, CA 92660 |
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Custodian & Accounting Agent |
State Street Bank & Trust Co.
Lafayette Corporate Center, 5th Floor
2 Avenue De Lafayette
Boston, MA 02111 |
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Transfer Agent, Dividend Paying Agent and Registrar |
BNY Mellon
P.O. Box 43027
Providence, RI 02940-3027 |
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Independent Registered Public Accounting Firm |
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017 |
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Legal Counsel |
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199 |
This report, including the financial information herein, is transmitted to the shareholders of PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and PIMCO New York Municipal Income Fund II for their information. It is not a prospectus, circular or representation intended for use in the purchase of shares of the Funds or any securities mentioned in this report.
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Funds may purchase their common shares in the open market.
The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of their fiscal year on Form N-Q. Each Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. The information on Form N-Q is also available on the Funds’ website at www.allianzinvestors.com/closedendfunds.
Information on the Funds is available at www.allianzinvestors.com/closedendfunds or by calling the Funds’ shareholder servicing agent at (800) 254-5197.
Receive this report electronically and eliminate paper mailings. To enroll, go to www.allianzinvestors.com/edelivery.
AZ611AR_053111
ITEM 2. CODE OF ETHICS
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(a) | As of the end of the period covered by this report, the registrant has adopted a code of ethics (the “Section 406 Standards for Investment Companies — Ethical Standards for Principal Executive and Financial Officers”) that applies to the registrant’s Principal Executive Officer and Principal Financial Officer; the registrant’s Principal Financial Officer also serves as the Principal Accounting Officer. The registrant undertakes to provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-254-5197. The code of ethics is included as an Exhibit 99.CODE ETH hereto. |
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(b) | During the period covered by this report, there were not any amendments to a provision of the code of ethics adopted in 2(a) above. |
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(c) | During the period covered by this report, there were not any waivers or implicit waivers to a provision of the code of ethics adopted in 2(a) above. |
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant’s Board has determined that Paul Belica and James A. Jacobson, members of the Board’s Audit Oversight Committee are “audit committee financial experts,” and they are “independent,” for purposes of this Item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
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a) | Audit fees. The aggregate fees billed for each of the last two fiscal years (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant’s annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $33,887 in 2010 and $33,685 in 2011. |
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b) | Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the principal accountant that are reasonably related to the performance of the audit registrant’s financial statements and are not reported under paragraph (e) of this Item were $6,399 in 2010 and $6,313 in 2011. These services consist of accounting consultations, agreed upon procedure reports (inclusive of annual review of basic maintenance testing associated with the Preferred Shares), attestation reports and comfort letters. |
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c) | Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax service and tax planning (“Tax Services”) were $10,000 in 2010 and $10,150 in 2011 These services consisted of review or preparation of U.S. federal, state, local and excise tax returns and calculation of excise tax distributions. |
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d) | All Other Fees. There were no other fees billed in the Reporting Periods for products and services provided by the Auditor to the Registrant. |
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e) | 1. Audit Committee Pre-Approval Policies and Procedures. The Registrant’s Audit Committee has established policies and procedures for pre-approval of all audit and permissible non-audit services by the Auditor for the Registrant, as well as the Auditor’s engagements related directly to the operations and financial reporting of the Registrant. The Registrant’s policy is stated below. |
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| PIMCO California Municipal Income Fund II (the “Fund”) |
AUDIT OVERSIGHT COMMITTEE POLICY FOR PRE-APPROVAL OF SERVICES PROVIDED BY THE INDEPENDENT ACCOUNTANTS
The Fund’s Audit Oversight Committee (“Committee”) is charged with the oversight of the Fund’s financial reporting policies and practices and their internal controls. As part of this responsibility, the Committee must pre-approve any independent accounting firm’s engagement to render audit and/or permissible non-audit services, as required by law. In evaluating a proposed engagement by the independent accountants, the Committee will assess the effect that the engagement might reasonably be expected to have on the accountant’s independence. The Committee’s evaluation will be based on:
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| a review of the nature of the professional services expected to provided, |
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| the fees to be charged in connection with the services expected to be provided, |
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| a review of the safeguards put into place by the accounting firm to safeguard independence, and |
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| periodic meetings with the accounting firm. |
POLICY FOR AUDIT AND NON-AUDIT SERVICES TO BE PROVIDED TO THE FUND
On an annual basis, the Fund’s Committee will review and pre-approve the scope of the audit of the Fund and proposed audit fees and permitted non-audit (including audit-related) services that may be performed by the Fund’s independent accountants. At least annually, the Committee will receive a report of all audit and non-audit services that were rendered in the previous calendar year pursuant to this Policy. In addition to the Committee’s pre-approval of services pursuant to this Policy, the engagement of the independent accounting firm for any permitted non-audit service provided to the Fund will also require the separate written pre-approval of the President of the Fund, who will confirm, independently, that the accounting firm’s engagement will not adversely affect the firm’s independence. All non-audit services performed by the independent accounting firm will be disclosed, as required, in filings with the Securities and Exchange Commission.
AUDIT SERVICES
The categories of audit services and related fees to be reviewed and pre-approved annually by the Committee are:
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| Annual Fund financial statement audits |
| Seed audits (related to new product filings, as required) |
| SEC and regulatory filings and consents |
| Semiannual financial statement reviews |
AUDIT-RELATED SERVICES
The following categories of audit-related services are considered to be consistent with the role of the Fund’s independent accountants and services falling under one of these categories will be pre-approved by the Committee on an annual basis if the Committee deems those services to be consistent with the accounting firm’s independence:
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| Accounting consultations
Fund merger support services
Agreed upon procedure reports (inclusive of quarterly review of Basic Maintenance testing associated with issuance of Preferred Shares and semiannual report review)
Other attestation reports
Comfort letters
Other internal control reports |
Individual audit-related services that fall within one of these categories and are not presented to the Committee as part of the annual pre-approval process described above, may be pre-approved, if deemed consistent with the accounting firm’s independence, by the Committee Chair (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.
TAX SERVICES
The following categories of tax services are considered to be consistent with the role of the Fund’s independent accountants and services falling under one of these categories will be pre-approved by the Committee on an annual basis if the Committee deems those services to be consistent with the accounting firm’s independence:
Tax compliance services related to the filing or amendment of the following:
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| Federal, state and local income tax compliance; and, sales and use tax compliance
Timely RIC qualification reviews
Tax distribution analysis and planning
Tax authority examination services
Tax appeals support services
Accounting methods studies
Fund merger support service
Other tax consulting services and related projects |
Individual tax services that fall within one of these categories and are not presented to the Committee as part of the annual pre-approval process described above, may be pre-approved, if deemed consistent with the accounting firm’s independence, by the Committee Chairman (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.
PROSCRIBED SERVICES
The Fund’s independent accountants will not render services in the following categories of non-audit services:
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| Bookkeeping or other services related to the accounting records or financial statements of the Fund
Financial information systems design and implementation
Appraisal or valuation services, fairness opinions, or contribution-in-kind reports
Actuarial services
Internal audit outsourcing services
Management functions or human resources
Broker or dealer, investment adviser or investment banking services
Legal services and expert services unrelated to the audit |
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Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible
PRE-APPROVAL OF NON-AUDIT SERVICES PROVIDED TO OTHER ENTITIES WITHIN THE FUND COMPLEX
The Committee will pre-approve annually any permitted non-audit services to be provided to Allianz Global Investors Fund Management LLC (Formerly, PA Fund Management LLC) or any other investment manager to the Funds (but not including any sub-adviser whose role is primarily portfolio management and is sub-contracted by the investment manager) (the “Investment Manager”) and any entity controlling, controlled by, or under common control with the Investment Manager that provides ongoing services to the Fund (including affiliated sub-advisers to the Fund), provided, in each case, that the engagement relates directly to the operations and financial reporting of the Fund (such entities, including the Investment Manager, shall be referred to herein as the “Accounting Affiliates”). Individual projects that are not presented to the Committee as part of the annual pre-approval process, may be pre-approved, if deemed consistent with the accounting firm’s independence, by the Committee Chairman (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.
Although the Committee will not pre-approve all services provided to the Investment Manager and its affiliates, the Committee will receive an annual report from the Fund’s independent accounting firm showing the aggregate fees for all services provided to the Investment Manager and its affiliates.
DE MINIMUS EXCEPTION TO REQUIREMENT OF PRE-APPROVAL OF NON-AUDIT SERVICES
With respect to the provision of permitted non-audit services to a Fund or Accounting Affiliates, the pre-approval requirement is waived if:
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| (1) | The aggregate amount of all such permitted non-audit services provided constitutes no more than (i) with respect to such services provided to the Fund, five percent (5%) of the total amount of revenues paid by the Fund to its independent accountant during the fiscal year in which the services are provided, and (ii) with respect to such services provided to Accounting Affiliates, five percent (5%) of the total amount of revenues paid to the Fund’s independent accountant by the Fund and the Accounting Affiliates during the fiscal year in which the services are provided; |
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| (2) | Such services were not recognized by the Fund at the time of the engagement for such services to be non-audit services; and |
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| (3) | Such services are promptly brought to the attention of the Committee and approved prior to the completion of the audit by the Committee or by the Committee Chairman (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this Committee Chairman or other delegate shall be reported to the full Committee at its next regularly scheduled meeting. |
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| | e) | 2. No services were approved pursuant to the procedures contained in paragraph (C) (7) (i) (C) of Rule 2-01 of Registration S-X. |
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| | f) | Not applicable |
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| | g) | Non-audit fees. The aggregate non-audit fees billed by the Auditor for services rendered to |
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| | the Registrant, and rendered to the Adviser, for the 2010 reporting Period was $3,618,948 and the 2011 Reporting Period was $5,077,810. |
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| h) | Auditor Independence. The Registrant’s Audit Oversight Committee has considered whether the provision of non-audit services that were rendered to the Adviser which were not pre- approved is compatible with maintaining the Auditor’s independence. |
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANT
The Fund has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The audit committee of the Fund is comprised of Paul Belica, Bradford K. Gallagher, James A. Jacobson, Hans W. Kertess, Alan Rappaport, William B. Ogden, IV, Alan Rappaport and Deborah Zoullas.
ITEM 6. INVESTMENTS
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| a) | The registrant’s Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this form. |
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| b) | Not applicable |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
PIMCO MUNICIPAL INCOME FUND II
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
PIMCO NEW YORK MUNICIPAL INCOME FUND II
(each a “TRUST”)
PROXY VOTING POLICY
1. It is the policy of each Trust that proxies should be voted in the interest of its shareholders, as determined by those who are in the best position to make this determination. Each Trust believes that the firms and/or persons purchasing and selling securities for the Trust and analyzing the performance of the Trust’s securities are in the best position and have the information necessary to vote proxies in the best interests of the Trust and its shareholders, including in situations where conflicts of interest may arise between the interests of shareholders, on one hand, and the interests of the investment adviser, a sub-adviser and/or any other affiliated person of the Trust, on the other. Accordingly, each Trust’s policy shall be to delegate proxy voting responsibility to those entities with portfolio management responsibility for the Trust.
2. Each Trust delegates the responsibility for voting proxies to Allianz Global Investors Fund Management LLC (“AGIFM”), which will in turn delegate such responsibility to the sub-adviser of the particular Trust. AGIFM’s Proxy Voting Policy Summary is attached as Appendix A hereto. Summaries of the detailed proxy voting policies of the Trusts’ current sub-advisers are set forth in Appendix B attached hereto. Such summaries may be revised from time to time to reflect changes to the sub-advisers’ detailed proxy voting policies.
3. The party voting the proxies (i.e., the sub-adviser) shall vote such proxies in accordance with such party’s proxy voting policies and, to the extent consistent with such policies, may rely on information and/or recommendations supplied by others.
4. AGIFM and each sub-adviser of a Trust with proxy voting authority shall deliver a copy of its respective proxy voting policies and any material amendments thereto to the applicable Board of the Trust promptly after the adoption or amendment of any such policies.
5. The party voting the proxy shall: (i) maintain such records and provide such voting information as is required for the Trusts’ regulatory filings including, without limitation, Form N-PX and the required disclosure of policy called for by Item 18 of Form N-2 and Item 7 of Form N-CSR; and (ii) shall provide such additional information as may be requested, from time to time, by the Board or the Trusts’ Chief Compliance Officer.
6. This Proxy Voting Policy Statement, the Proxy Voting Policy Summary of AGIFM and summaries of the detailed proxy voting policies of each sub-adviser of a Trust with proxy voting authority and how each Trust voted proxies relating to portfolio securities held during the most recent twelve month period ending June 30, shall be made available (i) without charge, upon request, by calling 1-800-254-5197; (ii) on the Trusts’ website at www.allianzinvestors.com; and (iii) on the Securities and Exchange Commission’s (“SEC’s”) website at http://www.sec.gov. In addition, to the extent required by applicable law or determined by the Trusts’ Chief Compliance Officer or Board of Trustees, the Proxy Voting Policy Summary of AGIFM and summaries of the detailed proxy voting policies of each sub-adviser with proxy voting authority shall also be included in the Trusts’ Registration Statements or Form N-CSR filings.
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Appendix A
ALLIANZ GLOBAL INVESTORS FUND MANAGEMENT LLC (“AGIFM”)
1. It is the policy of AGIFM that proxies should be voted in the interest of the shareholders of the applicable fund, as determined by those who are in the best position to make this determination. AGIFM believes that the firms and/or persons purchasing and selling securities for the funds and analyzing the performance of the funds’ securities are in the best position and have the information necessary to vote proxies in the best interests of the funds and their shareholders, including in situations where conflicts of interest may arise between the interests of shareholders, on one hand, and the interests of the investment adviser, a sub-adviser and/or any other affiliated person of the fund, on the other. Accordingly, AGIFM’s policy shall be to delegate proxy voting responsibility to those entities with portfolio management responsibility for the funds.
2. AGIFM, for each fund which it acts as an investment adviser, delegates the responsibility for voting proxies to the sub-adviser for the respective fund, subject to the terms hereof.
3. The party voting the proxies (e.g., the sub-adviser) shall vote such proxies in accordance with such party’s proxy voting policies and, to the extent consistent with such policies, may rely on information and/or recommendations supplied by others.
4. AGIFM and each sub-adviser of a fund shall deliver a copy of its respective proxy voting policies and any material amendments thereto to the board of the relevant fund promptly after the adoption or amendment of any such policies.
5. The party voting the proxy shall: (i) maintain such records and provide such voting information as is required for such funds’ regulatory filings including, without limitation, Form N-PX and the required disclosure of policy called for by Item 18 of Form N-2 and Item 7 of Form N-CSR; and (ii) shall provide such additional information as may be requested, from time to time, by such funds’ respective boards or chief compliance officers.
6. This Proxy Voting Policy Summary and summaries of the proxy voting policies for each sub-adviser of a fund advised by AGIFM shall be available (i) without charge, upon request, by calling 1-800-254-5197 and (ii) at www.allianzinvestors.com. In addition, to the extent required by applicable law or determined by the relevant fund’s board of directors/trustees or chief compliance officer, this Proxy Voting Policy Summary and summaries of the detailed proxy voting policies of each sub-adviser and each other entity with proxy voting authority for a fund advised by AGIFM shall also be included in the Registration Statement or Form N-CSR filings for the relevant funds.
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Appendix B
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
Pacific Investment Management Company LLC (“PIMCO”) has adopted written proxy voting policies and procedures (“Proxy Policy”) as required by Rule 206(4)-6 under the Advisers Act. The Proxy Policy applies generally to voting and/or consent rights of PIMCO, on behalf of each Fund, with respect to debt securities, including but not limited to, plans of reorganization, and waivers and consents under applicable indentures. The Proxy Policy does not apply, however, to consent rights that primarily entail decisions to buy or sell investments, such as tender or exchange offers, conversions, put options, redemption and Dutch auctions. The Proxy Policy is designed and implemented in a manner reasonably expected to ensure that voting and consent rights are exercised in the best interests of the Funds and their shareholders.
PIMCO exercises voting and consent rights directly with respect to debt securities held by a Fund. PIMCO considers each proposal regarding a debt security on a case-by-case basis taking into consideration any relevant contractual obligations as well as other relevant facts and circumstances at the time of the vote. In general, PIMCO reviews and considers corporate governance issues related to proxy matters and generally supports proposals that foster good corporate governance practices. PIMCO may vote proxies as recommended by management on routine matters related to the operation of the issuer and on matters not expected to have a significant economic impact on the issuer and/or its shareholders.
PIMCO may determine not to vote a proxy for a debt security if: (1) the effect on the applicable Fund’s economic interests or the value of the portfolio holding is insignificant in relation to the Fund’s portfolio; (2) the cost of voting the proxy outweighs the possible benefit to the applicable Fund, including, without limitation, situations where a jurisdiction imposes share blocking restrictions which may affect the ability of the portfolio managers to effect trades in the related security; or (3) PIMCO otherwise has determined that it is consistent with its fiduciary obligations not to vote the proxy.
For all debt security proxies, PIMCO will review the proxy to determine whether there is a material conflict between PIMCO and the applicable Fund or between the Fund and another Fund or PIMCO-advised account. If no material conflict exists, the proxy will be voted according to the portfolio managers’ recommendation. If a material conflict does exist, PIMCO will seek to resolve the conflict in good faith and in the best interests of the applicable Fund, as provided by the Proxy Policy. The Proxy Policy permits PIMCO to seek to resolve material conflicts of interest by pursuing any one of several courses of action. With respect to material conflicts of interest between PIMCO and a Fund, the Proxy Policy permits PIMCO to either: (i) convene a committee to assess and resolve the conflict (the “Proxy Conflicts Committee”); or (ii) vote in accordance with protocols previously established by the Proxy Conflicts Committee with respect to specific types of conflicts. With respect to material conflicts of interest between a Fund and one or more other Funds or PIMCO-advised accounts, the Proxy Policy permits PIMCO to: (i) designate a PIMCO portfolio manager who is not subject to the conflict to determine how to vote the proxy if the conflict exists between two Funds or accounts with at least one portfolio manager in common; or (ii) permit the respective portfolio managers to vote the proxies in accordance with each Fund’s or account’s best interests if the conflict exists between Funds or accounts managed by different portfolio managers.
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ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
(a)(1)
As of August 1, 2011, the following individual has primary responsibility for the day-to-day implementation of the PIMCO Municipal Income Fund II (PML), PIMCO California Municipal Income Fund II (PCK) and PIMCO New York Municipal Income Fund II (PNI) (each a “Fund” and collectively, the “Funds”):
Joe Deane
Mr. Deane has been the portfolio manager for the Funds since July 21, 2011. Mr. Deane, an Executive Vice President at Pacific Investment Management Company LLC ("PIMCO"), joined PIMCO in 2011 and is the head of the municipal bond portfolio management team. Prior to joining PIMCO, he served as Managing Director, Co-Head of the Tax-Exempt Department for Western Asset Management Company. Previously he was Managing Director, Head of Tax-Exempt Investments for Smith Barney/Citigroup Asset Management from 1993 to 2005. He has 41 years of investment experience and holds a bachelor's degree from Iona College.
(a)(2)
The following summarizes information regarding each of the accounts, excluding the respective Fund managed by the Portfolio Manager as of July 21, 2011, including accounts managed by a team, committee, or other group that includes the Portfolio Manager. Unless mentioned otherwise, the advisory fee charged for managing each of the accounts listed below is not based on performance.
| | | Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts* |
| PM | Fund | # | AUM($million) | # | AUM($million) | # | AUM($million) |
| Joe Deane | PML | 18 | 4,471,103,336 | 0 | 0 | 0 | 0 |
| PCK | 18 | 5,070,030,539 | 0 | 0 | 0 | 0 |
| | PNI | 18 | 5,280,807,085 | 0 | 0 | 0 | 0 |
PIMCO anticipates that the needs of the Funds for services may create certain issues, including the following; although the issuer described below would not necessarily be different than those raised for PIMCO’s other accounts.
A portfolio manager may be responsible for different investment mandates. From time to time, potential conflicts of interest may arise between a portfolio manager’s management of the investments of the Funds, and the management of other accounts. In certain situations, the other accounts might have similar investment objectives or strategies as the Funds, track the same index the Funds tracks, or otherwise hold, purchase, or sell securities that are eligible to be held, purchased or sold by the Funds. In other instances, the other accounts might have different
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investment objectives or strategies than the Funds. Described below are specific conflicts that may arise due to a portfolio manager’s management of multiple accounts.
Knowledge and Timing of Portfolio Trades: A potential conflict of interest may arise as a result of a portfolio manager’s day-to-day management of the Funds. In the course of managing the Funds, a portfolio manager knows the size, timing and possible market impact of the Funds’ trades. Therefore, it is theoretically possible that a portfolio manager could use this information to the advantage of other accounts he manages and to the possible detriment of the Funds. The portfolio manager attempts to mitigate this conflict using some of the policies described below.
Investment Opportunities: A potential conflict of interest may arise as a result of a portfolio manager’s management of a number of accounts with varying investment guidelines. Often, an investment opportunity may be suitable for both the Funds and other accounts managed by a portfolio manager, but may not be available in sufficient quantities for both the Funds and the other accounts to participate fully. Similarly, there may be limited opportunity to sell an investment held by the Funds and another account. PIMCO has adopted policies and procedures reasonably designed to allocate investment opportunities on a fair and equitable basis over time. Under PIMCO’s allocation procedures, investment opportunities are allocated among various investment strategies based on individual account investment guidelines and PIMCO’s investment outlook. PIMCO has also adopted additional procedures to complement the general trade allocation policy that are designed to address potential conflicts of interest due to the side-by-side management of the Funds and certain pooled investment vehicles, including investment opportunity allocation issues.
Performance Fees: A portfolio manager may advise certain accounts for which the advisory fee is based entirely or partially on performance. Performance fee arrangements may create a conflict of interest for a portfolio manager in that such portfolio manager may have an incentive to allocate the investment opportunities that he believes might be the most profitable to such other accounts instead of allocating them to the Funds. PIMCO has adopted policies and procedures reasonably designed to allocate investment opportunities between the Funds and such other accounts on a fair and equitable basis over time.
(a) (3)
As of July 21, 2011, the following explains the compensation structure of the individual that shares primary responsibility for day-to-day portfolio management of the Fund:
PIMCO has adopted a Total Compensation Plan for its professional level employees, including its portfolio managers, that is designed to pay competitive compensation and reward performance, integrity and teamwork consistent with the firm’s mission statement. The Total Compensation Plan includes an incentive component that rewards high performance standards, work ethic and consistent individual and team contributions to the firm. The compensation of portfolio managers consists of a base salary, discretionary performance bonus, and may include an equity or long term incentive component.
Portfolio managers who are Managing Directors of PIMCO also receive compensation from PIMCO’s profits. Certain employees of PIMCO, including portfolio managers, may elect to defer compensation through PIMCO’s deferred compensation plan. PIMCO also offers its employees a non-contributory defined contribution plan through which PIMCO makes a contribution based on the employee’s compensation.
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The Total Compensation Plan consists of three components:
• Base Salary - Base salary is determined based on core job responsibilities, market factors and business considerations. Salary levels are reviewed annually or when there is a significant change in job responsibilities or the market.
• Performance Bonus – Performance bonuses are designed to reward high performance standards, work ethic and consistent individual and team contributions to the firm. Each professional and his or her supervisor will agree upon performance objectives to serve as the basis for performance evaluation during the year. The objectives will outline individual goals according to pre-established measures of group or department success. Achievement against these goals is measured by the employee and supervisor will be an important, but not exclusive, element of the bonus decision process.
• Equity or Long Term Incentive Compensation – Equity allows certain professionals to participate in the long-term growth of the firm. The M unit program provides for annual option grants which vest over a number of years and may convert into PIMCO equity that shares in the profit distributions of the firm. M Units are non-voting common equity of PIMCO and provide a mechanism for individuals to build a significant equity stake in PIMCO over time. Option awards may represent a significant portion of individual’s total compensation.
In certain countries with significant tax implications for employees to participate in the M Unit Option Plan, PIMCO continues to use the Long Term Incentive Plan (“LTIP”) in place of the M Unit Option Plan. The LTIP provides cash awards that appreciate or depreciate based upon the performance of PIMCO’s parent company, Allianz Global Investors, and PIMCO over a three-year period. The aggregate amount available for distribution to participants is based upon Allianz Global Investors’ profit growth and PIMCO’s profit growth.
Participation in the M Unit Option Plan and LTIP is contingent upon continued employment at PIMCO.
In addition, the following non-exclusive list of qualitative criteria may be considered when specifically determining the total compensation for portfolio managers:
| | • | | 3-year, 2-year and 1-year dollar-weighted and account-weighted, pre-tax investment performance as judged against the applicable benchmarks for each account managed by a portfolio manager (including the Funds) and relative to applicable industry peer groups; |
| | • | | Appropriate risk positioning that is consistent with PIMCO’s investment philosophy and the Investment Committee/CIO approach to the generation of alpha; |
| | • | | Amount and nature of assets managed by the portfolio manager; |
| | • | | Consistency of investment performance across portfolios of similar mandate and guidelines (reward low dispersion); |
| | • | | Generation and contribution of investment ideas in the context of PIMCO’s secular and cyclical forums, portfolio strategy meetings, Investment Committee meetings, and on a day-to-day basis; |
| | • | | Absence of defaults and price defaults for issues in the portfolios managed by the portfolio manager; |
| | • | | Contributions to asset retention, gathering and client satisfaction; |
| | • | | Contributions to mentoring, coaching and/or supervising; and |
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| | • | | Personal growth and skills added. |
A portfolio manager’s compensation is not based directly on the performance of any Fund or any other account managed by that portfolio manager.
Profit Sharing Plan. Instead of a bonus, portfolio managers who are Managing Directors of PIMCO receive compensation from a non-qualified profit sharing plan consisting of a portion of PIMCO’s net profits. Portfolio managers who are Managing Directors receive an amount determined by the Partner Compensation Committee, based upon an individual’s overall contribution to the firm.
(a)(4)
The following summarizes the dollar range of securities the portfolio manager for the Fund beneficially owned of the Fund that he managed as of July 21, 2011.
PIMCO Municipal Income Fund II PIMCO California Municipal Income Fund II PIMCO New York Municipal Income Fund II |
| Portfolio Manager | Dollar Range of Equity Securities in the Fund |
Joe Deane | None |
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ITEM 9.
Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Companies
None
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board of Trustees since the Fund last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES
(a) The registrant’s President and Chief Executive Officer and Treasurer, Principal Financial Accounting Officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c)), as amended) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.
(b) There were no significant changes in internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d))) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
ITEM 12. EXHIBITS
(a) (1) Exhibit 99.CODE ETH - Code of Ethics
(a) (2) Exhibit 99.302 Cert. - Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(a) (3) Not applicable
(b) Exhibit 99.906 Cert. – Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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Signature
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.
PIMCO California Municipal Income Fund II
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By: | /s/ Brian S. Shlissel |
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President and Chief Executive Officer |
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Date: | August 1, 2011 |
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By: | /s/ Lawrence G. Altadonna |
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Treasurer, Principal Financial & Accounting Officer |
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Date: | August 1, 2011 |
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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. |
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By: | /s/ Brian S. Shlissel |
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President and Chief Executive Officer |
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Date: | August 1, 2011 |
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By: | /s/ Lawrence G. Altadonna |
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Treasurer, Principal Financial & Accounting Officer |
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Date: | August 1, 2011 |
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