OMB APPROVAL
OMB Number: 3235-0570
Expires: November 30, 2005
Estimated average burden
hours per response..... 5.0
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 811-21409
Pioneer Municipal High Income Advantage Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: March 31
Date of reporting period: April 1, 2005 through September 30, 2005
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
ADVANTAGE
TRUST
Semiannual
Report
9/30/05
[LOGO] PIONEER
Investments(R)
Table of Contents
- --------------------------------------------------------------------------------
Letter to Shareowners 1
Portfolio Summary 2
Prices and Distributions 3
Performance Update 4
Portfolio Management Discussion 5
Schedule of Investments 8
Financial Statements 19
Financial Highlights 22
Notes to Financial Statements 23
Results of Shareowner Meeting 31
Trustees, Officers and Service Providers 32
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
LETTER TO SHAREOWNERS 9/30/05
- --------------------------------------------------------------------------------
Dear Shareowner,
- --------------------------------------------------------------------------------
Questions about the economic outlook moved from theoretical to real when
Hurricanes Katrina and Rita wreaked devastation on people and property across
much of the Gulf Coast. Before the storms struck, the economy had been motoring
forward, with strong profit growth and good jobs numbers being reported across a
range of sectors. Despite ten straight hikes by the Federal Reserve Board,
interest rates were at tolerable levels, and businesses and households were
managing to live with rising energy costs. The Fed raised rates again in
September, suggesting continued concern that inflationary fires are merely
banked, not extinguished. The stimulative effect of massive recovery spending
may have been a factor in the Fed's decision. Damage to many Gulf area
facilities may also keep oil and gasoline supplies tight and restrain GDP growth
for a time. By late in the third quarter, energy prices had backed off peak
levels, but remained high enough to prompt worries over their impact on
consumers and the economy in general.
Consumers are key to the economy's direction. The national savings rate stands
near zero, leaving households with little financial slack to continue absorbing
punishing prices at the pump and in their heating and utility bills; confidence
understandably sagged after the storms. However, U.S. consumers are notably
resilient. If conditions in the job market rebound from storm-induced
disruptions, their behavior seems unlikely to change very much.
Barring surprises, the hurricanes have not undercut our favorable expectations
for the rest of the year. We believe carefully selected, high-quality stocks and
bonds still show potential for solid results even in a slower-growth
environment. With that in mind, our global investment experts are well
positioned to seek attractive opportunities around the world.
Another Fund Group Joins the Pioneer Family
Pioneer Investment Management recently completed the acquisition of AmSouth
Bancorporation's mutual fund management business. This transaction, our fifth in
two years, adds seven new funds to our lineup and expands assets under
management by over $5 billion. Transactions such as these increase our ability
to offer competitively priced products to our shareowners and other investors
through the services of their financial advisors. Please consider the fund's
investment objectives, risks, charges and expenses. Contact your advisor or
Pioneer investments for a prospectus containing this information. Please read
the information carefully.
Respectfully,
/s/ Osbert M. Hood
Osbert M. Hood, President
Pioneer Investment Management, Inc.
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
PORTFOLIO SUMMARY 9/30/05
- --------------------------------------------------------------------------------
Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[The following data was represented as a pie chart in the printed material]
Health Revenue 25.3%
Airport Revenue 15.0%
Development Revenue 10.1%
Insured 10.0%
Tobacco Revenue 10.0%
Pollution Control Revenue 7.8%
Transportation Revenue 6.0%
Power Revenue 3.5%
Facilities Revenue 3.2%
Housing Revenue 2.7%
Education Revenue 2.7%
Water Revenue 2.2%
General Obligation 1.2%
Other 0.3%
Portfolio Maturity
- --------------------------------------------------------------------------------
(As a percentage of long-term holdings)
[The following data was represented as a pie chart in the printed material]
0-1 years 7.1%
1-3 years 1.3%
3-6 years 51.0%
6-8 years 16.7%
8-10 years 14.2%
10+ years 9.7%
Quality Distribution
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio; based on S&P ratings)
[The following data was represented as a pie chart in the printed material]
AAA 12.3%
AA 4.1%
A 1.8%
BBB 23.8%
BB & Lower 57.7%
Cash Equivalents 0.3%
This list excludes temporary cash and derivative instruments. The portfolio is
actively managed, and current holdings may be different.
2
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
PRICES AND DISTRIBUTIONS 9/30/05
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Market Value
per Common Share 9/30/05 3/31/05
$14.70 $14.37
Net Asset Value
per Common Share 9/30/05 3/31/05
$14.67 $14.64
Distributions per
Common Share Income Short-Term Long-Term
(4/1/05 - 9/30/05) Dividends Capital Gains Capital Gains
$0.5025 $ - $ -
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of long-term holdings)
1. Alaska State Housing Finance Corp., 6.0%, 6/1/49 2.77%
2. Dallas-Fort Worth International Airport Revenue, 6.0%, 11/1/14 2.34
3. Massachusetts State Housing Finance Agency, 5.35%, 12/1/45 2.33
4. New Jersey Economic Development Authority Revenue,
6.25%, 9/15/29 2.24
5. New York State Environmental Facilities Corp., 5.0%, 6/15/33 2.22
6. Indiana State Development Finance Authority Revenue,
5.75%, 10/1/11 2.21
7. Miami-Dade County Aviation Revenue, 5.0%, 10/1/37 2.21
8. Port Seattle Washington Special Facilities Revenue,
5.0%, 4/1/31 2.18
9. Tobacco Settlement Financing Corp., 5.875%, 5/15/39 2.12
10. Valley Health System Hospital Revenue, 6.875%, 5/15/23 2.08
This list excludes temporary cash and derivative investments. The portfolio is
actively managed, and current holdings may be different.
3
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 9/30/05
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in common shares of Pioneer Municipal High Income Advantage
Trust, compared to that of the Lehman Brothers Municipal Bond Index and Lehman
Brothers Non-Investment Grade Municipal Bond Index.
- ----------------------------------------------------
Cumulative Total Returns
(As of September 30, 2005)
Net Asset Market
Period Value (NAV) Price
Life-of-Trust
(10/20/03) 18.42% 13.36%
1 Year 15.08 13.76
- ----------------------------------------------------
[The following data was represented as a line chart in the printed material]
Lehman
Brothers
Lehman Pioneer Non-Investment
Brothers Municipal Grade
Municipal High Income Municipal
Bond Advantage Bond
Index Trust Index
10/03 $10,000 $10,000 $10,000
9,957 10,513 10,864
3/05 11,335 10,939 12,032
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
Performance data shown represents past performance. Past performance is no
guarantee of future results. Investment return and market price will fluctuate,
and your shares may trade below net asset value ("NAV"), due to such factors as
interest rate changes, and the perceived credit quality of borrowers.
Total investment return does not reflect broker sales charges or commissions.
All performance is for common shares of the Trust.
Closed-end funds, unlike open-end funds, are not continuously offered. There is
a one-time public offering and, once issued, shares of closed-end funds are sold
in the open market through a stock exchange and frequently trade at prices lower
than their NAV. NAV is total assets less total liabilities which includes
preferred shares divided by the number of common shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested at
the greater of NAV or 95% of the market price. When NAV is higher, dividends are
assumed to be reinvested at market price.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the redemption of Trust
shares.
Index comparison begins October 31, 2003. The Lehman Brothers Municipal Bond
Index is a broad measure of the municipal bond market. Lehman Brothers
Non-Investment Grade Municipal Bond Index totals over $26 billion in market
value and maintains over 1300 securities. Municipal bonds in this index have the
following requirements: maturities of one year or greater, sub investment grade
(below Baa or non-rated), fixed coupon rate, dated date greater than 12-31-90,
deal size over $20 million, maturity size of at least $3 trillion. Index returns
are calculated monthly, assume reinvestment of dividends and, unlike Trust
returns, do not reflect any fees, expenses or sales charges. You cannot invest
directly in the Indexes.
4
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 9/30/05
- --------------------------------------------------------------------------------
In an environment of rising interest rates, surging energy prices and
devastation in the Gulf of Mexico caused by hurricane Katrina, shareowners in
Pioneer Municipal High Income Advantage Trust continued to earn a relatively
high level of income over the six-month period ended September 30, 2005. In the
following interview, David Eurkus, a member of the management team for Pioneer
Municipal High Income Advantage Trust, reviews the factors that affected the
Trust's performance over the six months.
Q: What was the investment environment like during the six-month period ended
September 30, 2005?
A. Despite rising interest rates and record high oil prices, the economy
continued to grow at a moderate rate. The Federal Reserve hiked interest
rates four times during the six months, each time by a quarter percentage
point. On September 30, 2005, the Federal funds rate, the rate banks charge
for overnight loans, stood at 3.75%, up from 2.75% on March 31, 2005. In
the wake of the Fed's actions, yields on investment-grade municipal bonds
(those rated BBB or better) rose across the maturity spectrum, with yields
on short-term securities moving higher than those on longer-term
securities. Yields on lower-quality bonds (those rated BB or lower)
declined slightly.
Q: How did the Trust perform in this environment?
A. For the period, Pioneer Municipal High Income Advantage Trust produced a
total return of 3.66% at net asset value and 5.82% at market price. As of
September 30, 2005, the Trust was selling at a premium of market price to
net asset value of 0.2%. The Lehman Brothers Municipal Bond Index returned
2.80% for the same period. At the end of the six months, the Trust held 131
issues in 34 states, territories and the District of Columbia. On September
30, 2005, the Trust's 30-day SEC yield was 3.32%. During the period, the
Trust waived a portion of its fees. Had the waiver not been in effect, the
Trust's 30-day SEC yield would have been 3.31%.
When reviewing the Trust's relative performance, it is important to note
that the Lehman Brothers Municipal Bond Index tracks the performance only
of investment-grade bonds and does not include below investment-grade
bonds, which are a significant part of the portfolio.
5
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 9/30/05 (continued)
- --------------------------------------------------------------------------------
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: What contributed to the Trust's outperformance during the period?
A. The Trust was fully invested in a variety of economic sectors, including
health care, education, public power, energy and transportation. We
invested in both investment-grade securities (42.0% of net assets) and
below-investment-grade securities (57.7% of net assets). The lower-quality
securities gave performance the biggest boost, because as their yields
declined slightly their prices rose, providing capital appreciation to the
Trust. On September 30, 2005, the average credit quality of the Trust was
BBB.
We maintained our leveraging strategy as a way to generate additional
income. Historically low interest rates enabled the Trust to borrow funds
at low rates and invest those funds in high-yield bonds. We sought bonds
that, in our opinion, were undervalued and whose prices were likely to go
up in an improving economic environment. The Trust not only benefited from
the income that higher yielding bonds produced, but it was also helped by
the price appreciation that those bonds provided as they increased in
value. On September 30, 2005, about 31% of the Trust was leveraged.
Bonds in almost every sector benefited performance. At 10.00% of total
portfolio, tobacco bonds were the biggest drivers of return. These bonds
are backed by tobacco companies' payments to states as part of the Master
Settlement Agreement in which states agreed to drop their lawsuits against
tobacco companies in return for a series of payments. Hospital bonds, which
accounted for (25.3% of net assets), turned in the next best performance,
followed by education (2.7% of total portfolio).
Q: Were there detractors from performance?
A. While the Trust's position in transportation bonds (6.0% of total
portfolio) was positive, we had two defaults in the sector - Northwest
Airlines and Delta Airlines. During a period of soaring energy prices,
rising fuel costs was one of the factors that drove both of
6
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
these companies into voluntary bankruptcy, even though their passenger
revenues had risen substantially. Both the companies have undertaken
substantial restructuring programs; consequently, we're maintaining their
bonds for now.
Q: What is your outlook?
A. We believe economic growth will continue at a moderate pace. While some
sectors, such as energy, appear to be inflationary, we do not expect core
inflation to rise substantially over the near term. Nevertheless, we expect
the Federal Reserve to continue its policy of raising rates at measured
pace. We plan to keep the Trust diversified among economic sectors and to
have a mix of investment-grade and below investment-grade bonds in the
portfolio.
At times, the Trust's investments may represent industries or industry sectors
that are interrelated or have common risks, making it more susceptible to any
economic, political, or regulatory developments or other risks affecting those
industries and sectors.
The Trust's primary investment objective is to provide its common shareowners
with a high level of current income exempt from regular federal income tax. As a
secondary investment objective, the Trust also may seek capital appreciation to
the extent consistent with its primary investment objective. Distributions from
sources other than interest income from the Trust's portfolio of municipal
securities, including capital gain distributions, are not exempt from regular
federal income tax. There can be no assurance that the Trust will achieve its
investment objectives. Municipal securities of below investment grade quality
are regarded as having predominantly speculative characteristics with respect to
the issuer's capacity to pay interest and repay principal, and are commonly
referred to as "junk bonds" or "high yield securities".
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
7
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/05 (unaudited)
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
TAX-EXEMPT OBLIGATIONS - 141.0% of Net Assets
Alabama - 2.1%
$5,000,000 AAA/Aaa Birmingham Alabama Waterworks & Sewer
Revenue, 5.0%, 1/1/43 $ 5,137,350
3,450,000 NR/NR Huntsville Carlton Cove Alabama Special Care
Facilities Financing Authority, 8.125%,
11/15/31 1,897,431
------------
$ 7,034,781
------------
Alaska - 3.9%
12,500,000 AAA/Aaa Alaska State Housing Finance Corp., 6.0%,
6/1/49 $ 13,015,875
------------
Arizona - 5.4%
5,000,000 NR/NR Casa Grande Industrial Development Authority,
Hospital Revenue, 7.625%, 12/1/29 $ 5,476,800
3,130,000 B-/NR Coconino County Arizona Pollution Control Corp.
Revenue, 5.35%, 10/1/22 3,069,090
1,615,000 B-/NR Coconino County Arizona Pollution Control Corp.
Revenue, 6.375%, 10/1/36 1,654,826
7,500,000 D/NR Gila County Industrial Development Authority
Revenue, 5.55%, 1/1/27* 4,256,250
1,000,000 NR/Baa3 Pima County Industrial Development Authority,
6.3%, 7/1/31 1,035,170
1,570,000 NR/Baa3 Pima County Industrial Development Authority,
6.75%, 7/1/31 1,647,354
1,000,000 NR/NR Pima County Industrial Development Authority,
7.5%, 7/1/34 1,011,640
------------
$ 18,151,130
------------
California - 3.8%
2,680,000 BBB/Baa3 Golden State Tobacco Securitization Corp., 6.75%,
6/1/39 $ 3,085,993
9,745,000 B+/NR Valley Health System Hospital Revenue, 6.875%,
5/15/23 9,757,863
------------
$ 12,843,856
------------
Colorado - 2.1%
2,850,000 BBB/Baa3 Denver Health & Hospital Authority Healthcare
Revenue, 6.0%, 12/1/31 $ 3,024,306
3,650,000 BB+/Ba1 Northwest Parkway Public Highway Authority,
7.125%, 6/15/41 3,951,089
------------
$ 6,975,395
------------
8 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Connecticut - 0.9%
$3,000,000 NR/NR Bridgeport Connecticut Senior Living Facilities
Revenue, 7.25%, 4/1/35 $ 2,966,520
------------
District of Columbia - 2.3%
2,700,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.5%, 5/15/33 $ 3,175,794
4,000,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.75%, 5/15/40 4,435,920
------------
$ 7,611,714
------------
Florida - 5.8%
4,500,000 BBB-/Baa2 Hillsborough County Florida Industrial Development
Authority Pollution Control Revenue,
5.5%, 10/1/23 $ 4,659,750
2,000,000 NR/NR Hillsborough County Florida Industrial Development
Authority Pollution Control Revenue,
6.75%, 7/1/29 2,033,940
500,000 BB+/NR Miami Beach Health Facilities Authority,
5.375%, 11/15/28 501,965
1,500,000 BB+/Ba2 Miami Beach Health Facilities Authority,
6.7%, 11/15/19 1,645,425
10,000,000 AAA/Aaa Miami-Dade County Aviation Revenue,
5.0%, 10/1/37 10,400,600
------------
$ 19,241,680
------------
Georgia - 1.9%
2,500,000 NR/NR Brunswick & Glynn County Development Authority
Revenue, 7.125%, 1/1/25 $ 2,627,250
1,065,000 NR/Ba2 Effingham County Industrial Development Authority,
6.5%, 6/1/31 1,126,877
5,500,000 D/C Fulton County Development Authority Revenue,
6.95, 11/1/12* 825,000
1,650,000 NR/NR Savannah Georgia Economic Development
Authority Revenue, 7.4%, 1/1/34 1,725,587
------------
$ 6,304,714
------------
Guam - 1.6%
5,000,000 B+/Ba3 Northern Mariana Islands, 6.75%, 10/1/33 $ 5,457,650
------------
The accompanying notes are an integral part of these financial statements. 9
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Idaho - 2.4%
$2,000,000 BBB-/Baa3 Power County Industrial Development Corp.,
6.45%, 8/1/32 $ 2,105,660
5,920,000 BBB-/Baa3 Power County Pollution Control Revenue,
5.625% 10/1/14 5,973,931
------------
$ 8,079,591
------------
Illinois - 3.5%
4,000,000 NR/NR Centerpoint Intermodal Center,
8.0%, 6/15/23 (144A) $ 3,884,560
3,810,000 D/C Chicago O'Hare International Airport Facilities
Revenue, 6.45%, 5/1/18* 590,550
1,645,000 NR/NR Illinois Health Facilities Authority Revenue,
5.5%, 11/15/19 1,519,190
1,530,000 NR/B2 Illinois Health Facilities Authority Revenue,
6.7%, 3/1/14 1,531,224
2,400,000 NR/B2 Illinois Health Facilities Authority Revenue,
6.75%, 3/1/24 2,394,816
1,500,000 NR/NR Illinois Health Facilities Authority Revenue,
6.9%, 11/15/33 1,614,990
------------
$ 11,535,330
------------
Indiana - 5.7%
1,200,000 BBB-/Ba3 Indiana State Development Finance Authority
Pollution Control Revenue, 7.25%, 11/1/11 $ 1,251,612
10,000,000 BBB-/Ba3 Indiana State Development Finance Authority
Revenue, 5.75%, 10/1/11 10,405,800
5,000,000 NR/Ba2 Jasper County Industrial Economic Development
Revenue, 5.6%, 4/1/29 4,970,900
2,385,000 NR/NR Vincennes Industrial Economic Development
Revenue, 6.25%, 1/1/24 2,388,840
------------
$ 19,017,152
------------
Kentucky - 1.4%
500,000 BB-/NR Kentucky Economic Development Finance Authority
Hospital System Revenue, 5.7%, 10/1/10 $ 506,005
4,400,000 BB-/NR Kentucky Economic Development Finance Authority
Hospital System Revenue, 5.875%, 10/1/22 4,314,332
------------
$ 4,820,337
------------
10 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Louisiana - 3.2%
$ 750,000 BBB+/NR Opelousas Louisiana General Hospital Authority
Revenue, 5.75%, 10/1/23 $ 765,308
9,415,000 BBB/Baa3 Tobacco Settlement Financing Corp., 5.875%,
5/15/39 9,975,475
------------
$ 10,740,783
------------
Massachusetts - 8.4%
3,900,000 AAA/Aaa Lynn Massachusetts Water & Sewer Commission
General Revenue, 5.0%, 12/1/32 $ 4,061,616
2,195,000 BBB-/Baa3 Massachusetts Health & Educational Facilities
Authority Revenue, 5.375%, 7/15/28 2,195,724
1,000,000 BBB-/Baa3 Massachusetts Health & Educational Facilities
Authority Revenue, 6.35%, 7/15/32 1,061,500
1,740,000 BB/NR Massachusetts State Development Finance
Agency, 5.25%, 10/1/18 1,654,966
1,990,000 NR/Ba2 Massachusetts State Development Finance
Agency, 6.0%, 11/1/28 2,003,711
4,800,000 NR/NR Massachusetts State Development Finance
Agency, 7.1%, 7/1/32 4,913,808
10,760,000 AA-/Aa3 Massachusetts State Housing Finance Agency,
5.35%, 12/1/45 10,947,332
1,000,000 AAA/Aaa Massachusetts State Port Authority Revenue,
5.0%, 7/1/16 1,085,090
------------
$ 27,923,747
------------
Michigan - 4.5%
3,000,000+ AAA/Baa2 Delta County Michigan Economic Development
Corp., 6.25%, 4/15/27 $ 3,464,730
3,000,000 BB/NR Macomb County Hospital Finance Authority,
5.875%, 11/15/34 3,042,690
4,130,000 BB-/Ba3 Michigan State Hospital Finance Authority
Revenue, 5.25%, 8/15/23 3,988,506
1,000,000 NR/NR Michigan State Strategic Fund Solidwaste Disposal
Revenue, 7.375%, 1/15/22 1,036,760
3,000,000 NR/NR Wayne Charter County Michigan Special Airport
Facilities Revenue, 6.0%, 12/1/29* 1,650,000
3,405,000 NR/NR Wayne Charter County Michigan Special Airport
Facilities Revenue, 6.75%, 12/1/15* 1,779,112
------------
$ 14,961,798
------------
The accompanying notes are an integral part of these financial statements. 11
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Minnesota - 0.9%
$4,800,000 NR/NR Minneapolis/St. Paul Metropolitan Airports, 7.0%,
4/1/25* $ 3,168,000
------------
Nevada - 2.4%
2,425,000 B-/NR Clark County Industrial Development Revenue,
5.5%, 10/1/30 $ 2,409,019
2,500,000 B-/NR Clark County Industrial Development Revenue,
5.9%, 11/1/32 2,500,150
1,600,000 NR/NR Nevada State Department of Business & Industry,
7.25%, 1/1/23 1,673,808
1,000,000 NR/NR Nevada State Department of Business & Industry,
7.375%, 1/1/30 1,051,550
500,000 NR/NR Nevada State Department of Business & Industry,
7.375%, 1/1/40 523,470
------------
$ 8,157,997
------------
New Hampshire - 1.6%
1,000,000 A/NR New Hampshire Health & Educational Facilities
Authority Revenue, 5.375%, 1/1/34 $ 1,031,330
1,125,000 NR/NR New Hampshire Health & Educational Facilities
Authority Revenue, 5.875%, 7/1/34 1,163,959
3,000,000 NR/NR New Hampshire Higher Educational & Health
Facilities Authority Revenue, 6.25%, 1/1/18 3,028,560
------------
$ 5,223,849
------------
New Jersey - 7.6%
13,000,000 B/Caa2 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/29 $ 10,531,300
2,500,000 BBB/Baa1 New Jersey Health Care Facilities Financing
Authority Revenue, 5.375%, 7/1/33 2,584,600
1,420,000 CCC/B3 New Jersey Health Care Facilities Financing
Authority Revenue, 7.5%, 7/1/21 1,421,846
1,000,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
6.25%, 6/1/43 1,119,250
3,250,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
6.75%, 6/1/39 3,765,288
5,000,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
7.0%, 6/1/41 5,967,350
------------
$ 25,389,634
------------
12 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
New York - 11.4%
$3,000,000 NR/NR Dutchess County Industrial Development Agency
Revenue, 7.5%, 3/1/29 $ 3,273,240
5,000,000 A/A3 Nassau County New York Industrial Development
Agency Revenue, 5.25%, 6/1/27 5,171,800
6,980,000 BB-/Ba2 New York City Industrial Development Agency,
5.25%, 12/1/32 6,246,821
2,000,000 A/NR New York City Industrial Development Agency,
5.375%, 6/1/23 2,071,380
2,000,000 CCC/Caa2 New York City Industrial Development Agency,
6.9%, 8/1/24 1,562,020
3,950,000 BB-/Ba2 New York City Industrial Development Agency,
7.625%, 12/1/32 4,289,661
2,900,000 NR/NR New York City Industrial Development Agency,
7.8%, 1/1/16 2,993,409
10,000,000 AAA/Aaa New York State Environmental Facilities Corp.,
5.0%, 6/15/33 10,421,200
2,000,000 NR/NR Yonkers Industrial Development Agency Civic
Facilities Revenue, 6.15%, 3/1/15 (144A) 1,835,280
------------
$ 37,864,811
------------
North Carolina - 6.6%
11,250,000 NR/NR Charlotte North Carolina Special Facilities
Revenue, 5.6%, 7/1/27 $ 7,298,325
7,140,000 NR/NR Charlotte North Carolina Special Facilities
Revenue, 7.75%, 2/1/28 6,246,500
8,000,000 AA+/Aa1 North Carolina Capital Facilities Finance Agency,
5.0%, 10/1/41 8,325,840
------------
$ 21,870,665
------------
Ohio - 2.5%
3,900,000 B/NR Belmont County Health System Revenue,
5.7%, 1/1/13 $ 3,734,406
1,000,000 B/NR Belmont County Health System Revenue,
5.8%, 1/1/18 920,750
5,000,000 B-/Caa2 Cleveland Airport Special Revenue,
5.375%, 9/15/27 3,664,450
------------
$ 8,319,606
------------
The accompanying notes are an integral part of these financial statements. 13
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Oklahoma - 1.2%
$ 2,345,000 BB/NR Jackson County Memorial Hospital Authority
Revenue, 7.3%, 8/1/15 $ 2,382,543
1,500,000 B-/Caa2 Tulsa Municipal Airport Transportation Revenue,
7.35%, 12/1/11 1,495,965
------------
$ 3,878,508
------------
Oregon - 5.0%
5,900,000 NR/NR Klamath Falls Electric Revenue, 5.75%, 1/1/13 $ 5,953,336
8,000,000 NR/NR Klamath Falls Electric Revenue, 6.0%, 1/1/25 8,072,480
2,500,000 NR/NR Western Generation Agency Cogeneration Project
Revenue, 7.125%, 1/1/21 2,537,950
------------
$ 16,563,766
------------
Pennsylvania - 6.8%
3,000,000 B/B1 Allegheny County Hospital Development Authority
Revenue, 9.25%, 11/15/22 $ 3,599,520
500,000 B/B1 Allegheny County Hospital Development Authority
Revenue, 9.25%, 11/15/30 597,690
1,000,000 BBB-/NR Clarion County Hospital Authority Revenue,
5.625%, 7/1/21 965,970
3,735,000 BB-/NR Columbia County Hospital Authority Revenue,
5.85%, 6/1/24 3,432,689
1,250,000 BBB/Ba2 Hazleton Health Services Authority Hospital
Revenue, 6.125%, 7/1/16 1,235,825
3,360,000 NR/Baa3 Montgomery County Higher Education & Health
Authority Hospital Revenue, 6.6%, 7/1/10 3,467,184
1,430,000 BB+/NR Pennsylvania Economic Development Financing
Authority Revenue, 5.125%, 6/1/18 1,280,107
1,805,000 BB+/NR Pennsylvania Economic Development Financing
Authority Revenue, 5.3%, 6/1/10 1,787,239
2,330,000 BB+/NR Pennsylvania Economic Development Financing
Authority Revenue, 5.35%, 6/1/11 2,308,517
2,005,000 B-/NR Scranton-Lackawanna Health & Welfare Authority
Revenue, 6.1%, 7/1/11 1,920,469
2,245,000 B-/NR Scranton-Lackawanna Health & Welfare Authority
Revenue, 6.15%, 7/1/12 2,137,599
------------
$ 22,732,809
------------
14 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Rhode Island - 4.1%
$4,485,000 NR/NR Central Falls Rhode Island Detention Facilities
Revenue, 7.25%, 7/15/35 $ 4,655,385
8,285,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
6.25%, 6/1/42 8,914,163
------------
$ 13,569,548
------------
South Carolina - 6.0%
1,500,000 B-/NR Connector 2000 Association, Inc., Toll Road
Revenue, 5.375%, 1/1/38 $ 1,255,200
1,600,000 BBB/NR Loris Community Hospital District,
5.625%, 1/1/29 1,604,528
8,000,000 BBB+/Baa1 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 8,807,120
3,000,000 NR/NR South Carolina Jobs Economic Development
Authority Revenue, 8.0%, 10/1/31 3,307,500
4,400,000 BBB/Baa3 Tobacco Settlement Revenue Management,
6.375%, 5/15/30 5,012,920
------------
$ 19,987,268
------------
Tennessee - 2.6%
1,000,000 BBB+/Baa2 Johnson City Health & Educational Facilities Board
Hospital Revenue, 7.5%, 7/1/33 $ 1,176,790
7,000,000 NR/Baa3 Knox County Health Educational & Housing
Facilities Board Hospital Revenue,
6.5%, 4/15/31 7,436,030
------------
$ 8,612,820
------------
Texas - 17.6%
11,300,000 CCC/Caa2 Alliance Airport Authority Special Facilities
Revenue, 7.5%, 12/1/29 $ 8,994,574
8,650,000 BBB-/Baa2 Brazos River Authority Pollution Control Revenue,
6.75%, 10/1/38 9,621,049
13,885,000 CCC/Caa2 Dallas-Fort Worth International Airport Revenue,
6.0%, 11/1/14 11,019,553
485,000 D/C Dallas-Fort Worth International Airport Revenue,
6.25%, 11/1/13* 72,750
6,230,000 D/C Dallas-Fort Worth International Airport Revenue,
7.125%, 11/1/26* 934,500
2,800,000 D/C Dallas-Fort Worth International Airport Revenue,
7.6%, 11/1/11* 420,000
7,715,000 D/C Dallas-Fort Worth International Airport Revenue,
7.625%, 11/1/21* 1,157,250
The accompanying notes are an integral part of these financial statements. 15
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
Texas - (continued)
$10,000,000 B-/Caa2 Houston Texas Airport System Revenue,
6.75%, 7/1/29 $ 8,687,800
7,750,000 BBB-/Ba1 Matagorda County Navigation District Number 1
Revenue, 5.95%, 5/1/30 7,911,975
4,835,000 D/NR Nueces River Authority Environmental Improvement
Revenue, 5.6%, 4/1/18* 2,743,863
1,910,000 NR/Ba2 Panhandle Texas Regional Housing Finance,
8.125%, 3/1/31 1,992,417
5,000,000 NR/Baa3 Tomball Hospital Authority, 6.0%, 7/1/25 5,160,050
------------
$ 58,715,781
------------
Virginia - 0.5%
1,555,000 BB-/Ba3 Pocahontas Parkway Association of Virginia Toll
Road Revenue, 5.25%, 8/15/09 $ 1,619,812
------------
Washington - 4.7%
10,000,000 AAA/Aaa Port Seattle Washington Special Facilities
Revenue, 5.0%, 4/1/31 $ 10,265,700
5,500,000 NR/NR Port Seattle Washington Special Facilities
Revenue, 7.25%, 4/1/30* 3,850,000
1,420,000 BBB/Baa3 Tobacco Settlement Authority Revenue,
6.5%, 6/1/26 1,573,246
------------
$ 15,688,946
------------
Wisconsin - 0.6%
1,000,000 NR/NR Wisconsin State Health & Educational Facilities
Authority Revenue, 6.125%, 4/1/24 $ 1,018,220
1,000,000 NR/NR Wisconsin State Health & Educational Facilities
Authority Revenue, 6.25%, 4/1/34 1,016,460
------------
$ 2,034,680
------------
TOTAL TAX-EXEMPT OBLIGATIONS
(Cost $446,688,838) $470,080,553
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Value
TAX-EXEMPT MONEY MARKET MUTUAL FUND - 0.5%
of Net Assets
1,625,306 BlackRock Provident Institutional Municipal Fund $ 1,625,306
-------------
TOTAL TAX-EXEMPT MONEY MARKET MUTUAL FUND
(Cost $1,625,306) $ 1,625,306
-------------
TOTAL INVESTMENTS IN SECURITIES - 141.5%
(Cost $448,314,144) (a)(b) $ 471,705,859
-------------
OTHER ASSETS AND LIABILITIES - 3.5% $ 11,573,531
-------------
PREFERRED SHARES AT REDEMPTION VALUE
INCLUDING DIVIDENDS PAYABLE - (45.0)% $(150,038,130)
=============
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS - 100.0% $ 333,241,260
=============
(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
September 30, 2005, the value of these securities amounted to
$5,719,840, or 1.7% of total net assets applicable to common
shareowners.
NR Security not rated by S&P or Moody's.
+ Prerefunded bonds have been collateralized by U.S. Treasury 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.
* Security is in default and is non-income producing.
(a) The concentration of investments by type of obligation/market sector is
as follows:
Insured 10.0%
General Obligation 1.2
Revenue Bonds:
Health Revenue 25.3
Airport Revenue 15.0
Development Revenue 10.1
Tobacco Revenue 10.0
Pollution Control Revenue 7.8
Transportation Revenue 6.0
Power Revenue 3.5
Facilities Revenue 3.2
Housing Revenue 2.7
Education Revenue 2.7
Water Revenue 2.2
Other 0.3
-----
100.0%
=====
The accompanying notes are an integral part of these financial statements. 17
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
(b) At September 30, 2005, the net unrealized gain on investments based on
cost for federal income tax purposes of $446,514,746 was as follows:
Aggregate gross unrealized gain for all investments in which there is
an excess of value over tax cost $37,125,377
Aggregate gross unrealized loss for all investments in which there is
an excess of tax cost over value (11,934,264)
-----------
Net unrealized gain $25,191,113
===========
For financial reporting purposes net unrealized gain on investments was
$23,391,715 and cost of investments aggregated $448,314,144
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended September 30, 2005, aggregated $28,887,159 and $23,474,115,
respectively.
18 The accompanying notes are an integral part of these financialstatements.
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 9/30/05 (unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $448,314,144) $471,705,859
Receivables -
Investment securities sold 1,048,055
Interest 9,010,265
Reinvestment of distributions 214,769
Unrealized appreciation on interest rate swaps 1,690,307
Prepaid expenses and other assets 43,700
------------
Total assets $483,712,955
------------
LIABILITIES:
Due to affiliate $ 238,455
Administration fee payable 28,057
Accrued expenses 167,053
------------
Total liabilities $ 433,565
------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to 6,000
shares, including dividends payable of $38,130 $150,038,130
------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $323,254,886
Undistributed net investment income 936,270
Accumulated net realized loss on investments and interest
rate swaps (16,031,918)
Net unrealized gain on investments 23,391,715
Net unrealized gain on interest rate swaps 1,690,307
------------
Net assets applicable to common shareowners $333,241,260
============
NET ASSET VALUE PER SHARE:
No par value, (unlimited number of shares authorized)
Based on $333,241,260/22,712,687 common shares $ 14.67
============
The accompanying notes are an integral part of these financial statements. 19
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended 9/30/05
INVESTMENT INCOME:
Interest $ 15,194,370
------------
EXPENSES:
Management fees $ 1,481,053
Administration fees and reimbursement 190,996
Transfer agent fees and expenses 25,506
Auction agent fees 195,830
Custodian fees 6,956
Registration fees 12,066
Professional fees 26,445
Printing expense 11,812
Trustees' fees 6,853
Pricing fees 10,942
Miscellaneous 14,526
------------
Total expenses $ 1,982,985
Less management fees waived and expenses
reimbursed by Pioneer Investment Management, Inc. (8,248)
------------
Net expenses $ 1,974,737
------------
Net investment income $ 13,219,633
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND INTEREST RATE SWAPS:
Net realized loss from:
Investments $(10,227,180)
Interest rate swaps (78,001) $(10,305,181)
------------ ------------
Change in net unrealized gain on:
Investments $ 10,892,599
Interest rate swaps 56,787 $ 10,949,386
------------ ------------
Net gain on investments and interest rate swaps $ 644,205
------------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS FROM
NET INVESTMENT INCOME $ (1,805,880)
------------
Net increase in net assets applicable to common
shareowners resulting from operations $ 12,057,958
============
20 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 9/30/05 and the Year Ended from 3/31/05
Six Months
Ended Year
9/30/05 Ended
(unaudited) 3/31/05
FROM OPERATIONS:
Net investment income $ 13,219,633 $ 28,408,228
Net realized loss on investments and interest
rate swaps (10,305,181) (6,801,211)
Net unrealized gain on investments and interest
rate swaps 10,949,386 10,791,646
Distributions to preferred shareowners from:
Net investment income (1,805,880) (2,038,110)
Net realized gains - (115,290)
------------- -------------
Net increase in net assets applicable to
common shareowners $ 12,057,958 $ 30,245,263
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON
SHAREOWNERS FROM:
Net investment income ($0.50 and $1.13 per
share, respectively) $ (11,405,769) $ (25,460,141)
Net realized gains ($0.00 and $0.09 per
share, respectively) - (1,929,676)
------------- -------------
Total distributions to common shareowners $ (11,405,769) $ (27,389,817)
------------- -------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ 214,769 $ 1,703,729
Changes in estimated common share offering
costs charged to paid-in capital - 296,168
Changes in estimated preferred share offering
costs charged to paid-in capital - 26,483
------------- -------------
Net increase in net assets applicable to common
shareowners resulting from Trust share
transactions $ 214,769 $ 2,026,380
------------- -------------
Net increase in net assets applicable to
common shareowners $ 866,958 $ 4,881,826
NET ASSETS APPLICABLE TO
COMMON SHAREOWNERS:
Beginning of period 332,374,302 327,492,476
------------- -------------
End of period (including undistributed net investment
income of $936,270 and $928,286, respectively) $ 333,241,260 $ 332,374,302
============= =============
The accompanying notes are an integral part of these financial statements. 21
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended Year 10/20/03(b)
9/30/05 Ended to
Per Common Share Operating Performance (unaudited) 3/31/05 3/31/04
Net asset value, beginning of period $ 14.64 $ 14.51 $ 14.33(c)
-------- -------- --------
Increase (decrease) from investment operations:(a)
Net investment income(d) $ 0.58 $ 1.26 $ 0.46
Net realized and unrealized gain on investments and interest
rate swaps 0.03 0.18 0.23
Dividends and distributions to preferred shareowners from:
Net investment income (0.08) (0.09) (0.02)
Net realized gains - (0.01) -
-------- -------- --------
Net increase from investment operation $ 0.53 $ 1.34 $ 0.67
Dividends and distributions to common shareowners from:
Net investment income (0.50) (1.13) (0.38)
Net realized gains - (0.09) -
Changes in estimated offering costs charged to paid-capital
with respect to issuance of:
Common shares - 0.01 (0.03)
Preferred shares - - (0.08)
-------- -------- --------
Net increase in net asset value $ 0.03 $ 0.13 $ 0.18
-------- -------- --------
Net asset value, end of period(e) $ 14.67 $ 14.64 $ 14.51
-------- -------- --------
Market value, end of period(e) $ 14.70 $ 14.37 $ 15.05
-------- -------- --------
Total return(f) 5.82% 4.07% 2.93%
Ratios to average net assets of common shareowners
Net expenses(g) 1.15%(h) 1.18% 1.01%(h)
Net investment income before preferred share dividends(g) 7.70%(h) 8.94% 6.98%(h)
Preferred share dividends 1.05%(h) 0.64% 0.26%(h)
Net investment income available to common shareowners 6.65%(h) 8.30% 6.72%(h)
Portfolio turnover 5% 39% 62%
Net assets of common shareowners, end of period (in thousands) $333,241 $332,374 $327,492
Preferred shares outstanding (in thousands) $150,000 $150,000 $150,000
Asset coverage per preferred share, end of period $ 80,547 $ 80,396 $ 79,582
Average market value per preferred share $ 25,000 $ 25,000 $ 25,000
Liquidation value, including dividends payable, per preferred share $ 25,006 $ 25,000 $ 25,000
Ratios to average net assets of common shareowners before
waivers and reimbursement of expenses
Net expenses(g) 1.15%(h) 1.19% 1.04%(h)
Net investment income before preferred share dividends(g) 7.70%(h) 8.93% 6.95%(h)
Preferred share dividends 1.05%(h) 0.64% 0.26%(h)
Net investment income available to common shareowners 6.65%(h) 8.29% 6.69%(h)
(a) The per share data presented above is based upon the average common shares
outstanding for the periods presented.
(b) Trust shares were first publicly offered on October 15, 2003.
(c) Net asset value immediately after the closing of the first public offering
was $14.30.
(d) Based on average shares outstanding.
(e) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and
Saturday.
(f) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment return less than a full period is not annualized. Past
performance is not a guarantee of future results.
(g) Ratios do not reflect the effect of dividend payments to preferred
shareowners.
(h) Annualized.
The information above represents the operating performance data for a share of
common stock outstanding, total investment return, ratios to average net assets
of common shareowners and other supplemental data for the periods indicated.
This information has been determined based upon financial information provided
in the financial statements and market value data for the Trust's common
shares.
22 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/05 (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Municipal High Income Advantage Trust (the "Trust") was organized as a
Delaware statutory trust on August 6, 2003. Prior to commencing operations on
October 20, 2003, the Trust had no operations other than matters relating to its
organization and registration as a diversified, closed-end management investment
company under the Investment Company Act of 1940, as amended.
The Trust may invest in municipal securities with a broad range of maturities
and credit ratings, including both investment grade and below investment grade
municipal securities.
The Trust invests in below investment grade (high-yield) municipal securities.
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.
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 gains and losses on investments during the
reporting period. 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. Securities are valued
at prices supplied by independent pricing services, which consider such
factors as Treasury spreads, yields, maturities and ratings. Valuations may
be supplemented by dealers and other sources, as required. The values of
interest rate swaps are determined by obtaining dealer quotations.
Securities for which market quotations are not readily available are valued
at their fair values as determined by, or under the direction of, the Board
of Trustees. As of September 30, 2005, there were no securities fair
valued. Temporary cash investments are valued at amortized cost.
23
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
Discount and premium on debt securities are accreted or amortized daily,
respectively, on an effective yield to maturity basis and are included in
interest income. Interest income is recorded on an accrual basis.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the source of the Trust's distributions may be
shown in the accompanying financial statements as either from or in excess
of net investment income or net realized gain on investments transactions,
or from paid-in capital, depending on the type of book/tax differences that
may exist.
At March 31, 2005, the Trust had a capital loss carryforward of $360,350,
which will expire in 2013 if not utilized.
The tax character of distributions paid to common and preferred shareowners
will be determined at the end of the fiscal year. Distributions during the
year ended March 31, 2005 were as follows:
- --------------------------------------------------------------------------------
2005
Distributions paid from:
Tax exempt income $27,466,541
Ordinary income 2,076,676
-----------
Total $29,543,217
===========
- --------------------------------------------------------------------------------
24
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The following shows components of distributable earnings on a federal
income tax basis at March 31, 2005.
- --------------------------------------------------------------------------------
2005
Undistributed tax-exempt income $ 1,854,616
Capital loss carry forward (360,350)
Dividend payable (2,127,942)
Unrealized appreciation 15,334,248
Post October loss deferred (5,366,387)
-----------
Total $ 9,334,185
===========
- --------------------------------------------------------------------------------
The difference between book-basis and tax-basis unrealized appreciation is
attributable to the difference between book and tax amortization methods
for premiums and discounts on fixed income securities and other book/tax
differences.
C. Automatic Dividend Reinvestment Plan
All common shareowners automatically participate in the Automatic Dividend
Reinvestment Plan (the "Plan"), under which participants receive all
dividends and capital gain distributions (collectively, "dividends") in
full and fractional common shares of the Trust in lieu of cash. Shareowners
may elect not to participate in the Plan. Shareowners not participating in
the Plan receive all dividends and capital gain distributions in cash.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time by notifying Mellon Investor Services LLC, the agent
for shareowners in administering the Plan (the "Plan Agent"), prior to any
dividend record date; otherwise such termination or resumption will be
effective with respect to any subsequently declared dividend or other
distribution. Whenever the Trust declares a dividend on common shares
payable in cash, participants in the Plan will receive the equivalent in
common shares acquired by the Plan Agent either (i) through receipt of
additional unissued but authorized common shares from the Trust or (ii) by
purchase of outstanding common shares on the New York Stock Exchange or
elsewhere. If, on the payment date for any dividend the net asset value per
common share is equal to or less than the market price per share plus
estimated brokerage trading fees ("market premium"), the Plan Agent will
invest the dividend amount in newly issued common shares. The number of
newly issued common shares to be credited to each
25
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
account will be determined by dividing the dollar amount of the dividend by
the net asset value per common share on the date the shares are issued,
provided that the maximum discount from the then current market price per
share on the date of issuance does not exceed 5%. If, on the payment date
for any dividend, the net asset value per common share is greater than the
market value ("market discount"), the Plan Agent will invest the dividend
amount in common shares acquired in open-market purchases. There are no
brokerage charges with respect to newly issued common shares. However, each
participant will pay a pro rata share of brokerage trading fees incurred
with respect to the Plan Agent's open-market purchases. Participating in
the Plan does not relieve shareowners from any federal, state or local
taxes which may be due on dividends paid in any taxable year. Shareowners
holding Plan shares in a brokerage account may not be able to transfer the
shares to another broker and continue to participate in the Plan.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of Unicredito Italiano S.p.A.
("Unicredito Italiano"), manages the Trust's portfolio. Management fees are
calculated daily at the annual rate of 0.60% of the Trust's average daily
managed assets. "Managed assets" is the average daily value of the Trust's total
assets minus the sum of the Trust's liabilities, which liabilities exclude debt
related to leverage, short-term debt and the aggregate liquidation preference of
any outstanding preferred shares. At September 30, 2005, $238,455 was payable to
PIM related to management fees.
In addition, under PIM's management and administration agreements, certain other
services and costs are paid by PIM and reimbursed by the Trust. For the six
months ended September 30, 2005, the Trust recorded $18,207 in reimbursement and
is included in "Administration fees and reimbursement" on the Statement of
Operations.
The Trust has retained Princeton Administrators, L.P. ("Princeton"), an
affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated, to provide
certain administrative services to the Trust on its behalf. The Trust pays
Princeton a monthly fee at an annual rate of 0.07% of the average daily value of
the Trust's managed assets, subject to a minimum monthly fee of $10,000.
26
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Also, PIM has agreed for the first three years of the Trust's investment
operations to limit the Trust's total annual expenses (excluding offering costs
for common and preferred shares, interest expense, the cost of defending or
prosecuting any claim or litigation to which the Trust is a party (together with
any amount in judgment or settlement), indemnification expense or taxes incurred
due to the failure of the Trust to qualify as a regulated investment company
under the Code or any other non-recurring or non-operating expenses) to 0.80% of
the Trusts average daily managed assets. The dividend on any preferred shares is
not an expense for this purpose. For the six months ended September 30, 2005,
the expense reduction under such arrangements was $8,248.
3. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. ("PIMSS"), a wholly
owned indirect subsidiary of UniCredito Italiano, through a sub-transfer agency
agreement with Mellon Investor Services LLC, provides substantially all transfer
agent and shareowner services related to the Trust's common shares at negotiated
rates which are paid by the Trust. Deutsche Bank Trust Company Americas is the
transfer agent, registrar, dividend paying agent and redemption agent with
respect to the Trust's Auction Preferred Shares ("APS"). The Trust pays Deutsche
Bank Trust Company Americas an annual fee, as is agreed to from time to time by
the Trust and Deutsche Bank Trust Company Americas, for providing such services.
4. Interest Rate Swaps
The Trust may enter into interest rate swap transactions to attempt to protect
itself from increasing dividend or interest expense on its leverage resulting
from increasing short-term interest rates. The cost of leverage may rise with an
increase in interest rates, generally having the effect of lower yields and
potentially lower dividends to common shareowners. Interest rate swaps can be
used to "lock in" the cost of leverage and reduce the negative impact that
rising short-term interest rates would have on the Trust's leveraging costs.
An interest rate swap is an agreement between two parties, which involves
exchanging a floating rate and fixed rate interest payments for a specified
period of time. Interest rate swaps involve the accrual of the net interest
payments between the parties on a daily basis, with the net amount recorded
within the unrealized appreciation/
27
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
depreciation of interest rate swaps on the Statement of Assets and Liabilities.
Once the interim payments are settled in cash, at the pre-determined dates
specified in the agreement, the net amount is recorded as realized gain or loss
from interest rate swaps on the Statement of Operations. During the term of the
swap, changes in the value of the swap are recognized as unrealized gains and
losses by "marking-to market" the market value of the swap based on values
obtained from dealer quotations. When the swap is terminated, the Trust will
record a realized gain or loss equal to the difference, if any, between the
proceeds from (or cost of) closing the contract and the cost basis of the
contract. The Trust is exposed to credit risk in the event of non-performance by
the other party to the interest rate swap. However, at September 30, 2005 the
Trust does not anticipate non-performance by any counterparty. 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.
Under the terms of the agreement entered into by the Trust, the Trust receives a
floating rate of interest and pays a fixed rate of interest for the term.
Details of the swap agreement outstanding as of September 30, 2005 were as
follows:
- -----------------------------------------------------------------------------------
Termination Notional Fixed Floating Unrealized
Counterparty Date Amount (000) Rate Rate Appreciation
- ------------ ---- ------------ ---- ---- ------------
UBS AG April 5, 2009 $ 75,000 2.665% 1 month BMA $ 1,690,307
- -----------------------------------------------------------------------------------
5. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized. Of the 22,712,687 common shares of beneficial interest outstanding
at September 30, 2005, PIM owned 6,981 shares.
28
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Transactions in common shares of beneficial interest for the six months ended
September 30, 2005 and the year ended March 31, 2005 were as follows:
- --------------------------------------------------------------------------------
9/2005 3/2005
Shares outstanding at
beginning of period 22,698,047 22,576,128
Reinvestment of distributions 14,640 121,919
---------- ----------
Shares outstanding at end
of period 22,712,687 22,698,047
========== ==========
- --------------------------------------------------------------------------------
The Trust may classify or reclassify any unissued common shares of beneficial
interest into one or more series of preferred shares of beneficial interest. As
of September 30, 2005, there were 6,000 APS as follows: Series A-3,000 and
Series B-3,000.
Dividends on Series A and Series B APS are cumulative at a rate, which is reset
every seven days based on the results of an auction. Dividend rates ranged from
1.25% to 2.85% during the six months ended September 30, 2005.
The Trust may not declare dividends or make other distributions on its common
shares or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
preferred shares would be less than 200%.
The APS are redeemable at the option of the Trust, in whole or in part, on any
dividend payment date at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared. The APS are also subject to mandatory
redemption at $25,000 per share plus any accumulated or unpaid dividends,
whether or not declared, if certain requirements relating to the composition of
the assets and liabilities of the Trust as set forth in the Agreement and
Declaration of Trust are not satisfied.
The holders of APS have voting rights equal to the holders of the Trust's common
shares (one vote per share) and will vote together with holders of the common
shares as a single class. However, holders of APS are also entitled to elect two
of the Trust's Trustees. In addition, the Investment Company Act of 1940, as
amended, requires that along with approval by shareowners that might otherwise
be required, the approval of the holders of a majority of any outstanding
29
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/05 (unaudited) (continued)
- --------------------------------------------------------------------------------
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.
6. Subsequent Events
Subsequent to September 30, 2005, the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.08375 per common share
payable October 31, 2005, to shareowners of record on October 17, 2005.
For the period October 1, 2005 to October 31, 2005, dividends declared on
preferred shares totaled $326,340 in aggregate for the two outstanding preferred
share series.
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 have not been
approved by the shareowners. There have been no changes in the principal risk
factors associated with investment in the Trust. There have been 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.
30
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
RESULTS OF SHAREOWNER MEETING
- --------------------------------------------------------------------------------
On August 16, 2005, Pioneer Municipal High Income Advantage Trust held its
annual meeting of shareowners to elect Trustees. All Trustees were elected. Here
are the detailed results of the votes.
Proposal 1 - To elect Class II trustees.
- --------------------------------------------------------------------------------
Nominee Affirmative Withheld
- ------- ----------- --------
Margaret B.W. Graham 23,530,216 553,249
Osbert M. Hood 23,541,612 541,853
John Winthrop 23,534,266 549,199
- --------------------------------------------------------------------------------
31
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
David R. Bock Osbert M. Hood, Executive
Mary K. Bush Vice President
Margaret B.W. Graham Vincent Nave, Treasurer
Osbert M. Hood Dorothy E. Bourassa, Secretary
Marguerite A. Piret
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
Mellon Investor Services LLC
Preferred Share Auction/Transfer Agent and Registrar
Deutsche Bank Trust Company Americas
Sub-Administrator
Princeton Administrators, L.P.
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 months ended June 30, is publicly available to shareowners at
www.pioneerfunds.com. This information is also available on our web site at
www.pioneerfunds.com and on the Securities and Exchange Commission's web site at
http://www.sec.gov.
32
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
33
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
34
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
35
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
36
- --------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact Mellon
for assistance or information.
You can call Mellon Investor Services LLC for:
Account Information 1-800-710-0935
Telecommunications Device for the Deaf (TDD) 1-800-231-5469
Or write to Mellon Investor Services LLC:
For Write to
General inquiries, lost dividend checks P.O. Box 3315
South Hackensack, NJ
07606-1915
Change of address, account consolidation P.O. Box 3316
South Hackensack, NJ
07606-1916
Lost stock certificates P.O. Box 3317
South Hackensack, NJ
07606-1917
Stock transfer P.O. Box 3312
South Hackensack, NJ
07606-1912
Dividend reinvestment plan (DRIP) P.O. Box 3338
South Hackensack, NJ
07606-1938
For additional information, please contact your investment advisor or visit our
web site www.pioneerfunds.com.
The Trust files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
N/A
(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.
N/A
(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.
N/A
(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.
N/A
(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.
N/A
(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.
N/A
(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 Fund's independent auditor, Ernst &
Young LLP ("E&Y"), has advised the Audit
Committee of the Fund's Board of Trustees that
E&Ys Spanish affiliate (E&Y Spain) performed
certain non-audit work for Pioneer Global
Investments Limited ("PGIL"), an affiliate of the
Funds investment adviser. The services involved
the receipt and disbursement of monies transferred
to E&Y Spain by PGIL in payment of individual
payroll and related income tax withholdings due on
returns prepared by E&Y Spain for certain PGIL
employees located in Spain from February 2001 to
October 2005. E&Y became auditors of the Fund in
May 2002. These payroll and tax services were
discontinued in November 2005. The annual fee
received by E&Y Spain for all such services totaled
approximately 9,000 Euro per year. E&Y has informed
the Audit Committee that based on its internal
reviews and the de minimus nature of the services
provided and fees received, E&Y does not believe
its independence with respect to the Fund has been
impaired or that it is disqualified from acting as
independent auditors to the Fund.
ITEMS 5-6. [RESERVED]
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.
Not applicable to open-end management investment companies.
ITEM 8. [RESERVED]
ITEM 9. 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 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.
ITEM 10. 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 Advantage Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date November 29, 2005
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 November 29, 2005
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date November 29, 2005
* Print the name and title of each signing officer under his or her signature.