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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21409
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, 2004 through September 30, 2004
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
9/30/04
[logo] Pioneer
Investments(R)
Table of Contents
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Letter to Shareowners 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 4
Schedule of Investments 7
Financial Statements 17
Notes to Financial Statements 21
Trustees, Officers and Service Providers 29
Pioneer Municipal High Income Advantage Trust
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LETTER TO SHAREOWNERS 9/30/04
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Dear Shareowner,
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High energy prices and rising interest rates caused concern among investors
during the third quarter of 2004. As oil prices touched $50 per barrel for the
first time, many consumers, faced with high priced gasoline and anticipating a
winter of hefty heating bills, responded by holding back on spending. Consumers
account for the bulk of the nation's economic activity, and retail sales over
the summer were erratic. Beyond soaring energy costs, which have the effect of
a tax increase on individuals and businesses, the slack job creation data of
the last few months also undermined confidence in the economic outlook. The
markets in general fell during the third quarter. Continued unsettled
conditions in Iraq and the ever present specter of terrorism also weighed on
investors' minds. Overseas, global markets were fairly stable, after stumbling
earlier in the year.
But the fuzzy economic picture was good news for bond investors. Despite three
hikes in short-term interest rates, the first increases in four years, bond
prices rose and yields fell over the period. Longer-term Treasury securities
were the strongest performers, with corporate bonds, including high-yield
issues, also delivering favorable returns. Lower long-term rates were also
beneficial to the housing and mortgage industries. Behind the rally in bonds
lies investor skepticism about the strength and durability of the current
economic recovery. A slowing recovery leading to an easing of inflationary
pressures may convince the Federal Reserve Board to slow the pace of future
rate increases. Less inflation would also mean better real returns for bond
holders.
Pioneer believes that the economy will continue to expand in 2005, but at a
more measured tempo. After an extended period of cutting costs and bolstering
balance sheets, many corporations are financially stronger than they have been
in some time. And although short-term interest rates have risen, they are still
relatively low and do not appear to be a barrier for companies needing to
borrow for expansion. Equity valuations now appear better aligned with earnings
prospects than was the case a year ago, when prices ran ahead of profit
expectations. Therefore, steady but moderate expansion in corporate profits has
the potential to drive stock prices higher.
As always we thank you for your investment in Pioneer Municipal High Income
Advantage Trust.
Respectfully,
/s/ Osbert M. Hood
Osbert M. Hood, President
Pioneer Investment Management, Inc.
Any information in this shareholder 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
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PORTFOLIO SUMMARY 9/30/04
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[THE FOLLOWING WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Revenue Bonds:
Health 26.4%
Airport 11.6%
Insured 11.4%
Development 9.4%
Pollution Control 8.8%
Tobacco 8.7%
Transportation 5.0%
Other 5.0%
Power 3.7%
Housing 2.9%
Education 2.6%
Water 2.3%
General Obligation 1.1%
Facilities 0.9%
Gaming 0.2%
Portfolio Maturity
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(Effective life as a percentage of long-term holdings)
[THE FOLLOWING WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
10+ years 27.6%
8-10 years 8.7%
6-8 years 34.1%
3-6 years 25.1%
1-3 years 2.6%
0-1 years 1.9%
Quality Distribution
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(As a percentage of total investment portfolio)
[THE FOLLOWING WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
BB & Lower 51.3%
BBB 26.7%
AAA 13.0%
AA 4.6%
A 3.0%
Cash Equivalents 1.4%
10 Largest Holdings
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(As a percentage of long-term holdings)*
1. Valley Health System Hospital Revenue, 6.875%, 5/15/23 3.08%
2. Alaska State Housing Finance Corp., 6.0%, 6/1/49 2.96
3. Massachusetts State Housing Finance Agency, 5.35%, 12/1/45 2.47
4. New York State Environmental Facilities Corp., 5.0%, 6/15/33 2.33
5. Miami-Dade County Aviation Revenue, 5.0%, 10/1/37 2.31
6. Port Seattle Washington Special Facilities Revenue, 5.0%, 4/1/31 2.29
7. Indiana State Development Finance Authority Revenue, 5.75%, 10/1/11 2.17
8. Brazos River Authority Pollution Control Revenue, 6.75%, 10/1/38 2.07
9. South Carolina Jobs Economic Development Authority Revenue, 6.375%, 8/1/34 1.93
10. Tobacco Settlement Financing Corp., 5.875%, 5/15/39 1.83
* This list excludes temporary cash and derivative investments. The portfolio is
actively managed, and current holdings may be different.
2
Pioneer Municipal High Income Advantage Trust
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PERFORMANCE UPDATE 9/30/04
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Share Prices and Distributions
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Market Value
per Common Share 9/30/04 3/31/04
$13.98 $15.05
Net Asset Value
per Common Share 9/30/04 3/31/04
$13.79 $14.51
Distributions per
Common Share Income Short-Term Long-Term
(4/1/04 - 9/30/04) Dividends Capital Gains Capital Gains
$0.5625 $ - $
-
Investment Returns
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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.
Lehman Brothers
Pioneer Lehman Brothers Non-Investment Grade
Municipal Advantage Municipal Bond Municipal Bond
High Income Trust Index Index
------------------- --------------- --------------------
10/03 $10,000 $10,000 10,000
3/04 $10,410 $10,363 10,565
9/04 $ 9,965 $10,513 10,864
Cumulative Total Returns
(As of September 30, 2004)
Net Asset Market
Period Value Price
Life-of-Trust
(10/20/03) 2.89% -0.35%
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. 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 widely recognized, unmanaged measure of approximately 15,000
municipal bonds. Bonds in the Index have a minimum credit rating of BBB, were
part of at least a $50 million issuance made within the past five years and have
a maturity of at least two years. 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
Index.
3
Pioneer Municipal High Income Advantage Trust
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PORTFOLIO MANAGEMENT DISCUSSION 9/30/04
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Investors in Pioneer Municipal High Income Advantage Trust were rewarded with a
relatively high level of income during the period April 1, 2004 through
September 30, 2004. In the following interview, David Eurkus, a member of the
management team for Pioneer Municipal High Income Advantage Trust, reviews the
Trust's investment process, strategy and outlook.
Q: How did the Trust perform during the six-month period ended September 30,
2004?
A: Pioneer Municipal High Income Advantage Trust returned -0.95% at net asset
value and -3.19% at market price. As of September 30, 2004, the Trust was
selling at a premium of market price to net asset value of 1.4%. The
Lehman Brothers Municipal Bond Index returned 1.43% for the same period.
At the end of the period, the Trust held 133 issues in 36 states,
territories and District of Columbia. On September 30, 2004, the Trust's
30-day SEC yield was 7.62%. This yield reflects the waiver of certain
expenses by the investment adviser; without the waiver, the 30-day SEC
yield for Class A shares would have been 7.61%.
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.
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. The Trust's underperformance can be attributed to certain below
investment-grade bonds in the portfolio, most notably, those in the air
transportation sector. Rising oil prices had a big impact on this sector,
as the cost of jet fuel substantially increased the airlines' operating
costs. In addition, widespread publicity about potential bankruptcies for
some high profile airlines pulled down the whole sector.
Q: What was the investment environment like during the six months?
A: At first there was strong evidence that economic growth was accelerating.
By almost any measure - employment numbers, consumer spending, corporate
earnings - the economy appeared to be on a strong recovery course. In this
environment, the Federal Reserve adopted a tighter monetary policy and
began raising the federal
4
Pioneer Municipal High Income Advantage Trust
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funds rate. By the end of September, the Fed had raised rates on three
occasions, each time by 0.25%. As the period progressed, oil prices rose
substantially, and a number of reports associated with the economy
indicated that the rapid pace of growth had shifted to a slower but steady
rate.
Q: What strategies had the biggest positive impact on performance?
A: The Trust remained fully invested in a broad pool of municipal bonds in
sectors that are essential to the growth of the U.S. economy. These
primarily include the health care, public power and energy, transportation
and education sectors. Keeping with our investment mandate of providing a
relatively high level of income, we sought high-yielding securities in
both the below investment-grade and investment-grade areas of the market.
This investment approach allowed us to provide a substantial amount of
tax-free income.
Below investment-grade municipal bonds - which had the highest yields -
accounted for 51.3% of net assets. There was a large supply of such bonds
selling at attractive valuations. Many were issued in industries that had
been affected negatively by the general economic slowdown. We favored the
debt of companies whose businesses we viewed as sound and poised to
improve as the economy strengthened. This lower quality debt accounted for
the biggest contribution to performance.
Investment-grade bonds also aided total return. Those rated BBB accounted
for 26.7% of net assets. The rest of the Trust's assets were invested as
follows: AAA-rated securities - 13.0%; AA-rated securities - 4.6%; A-rated
securities - 3.0%; cash - 1.4%.
Historically low interest rates enabled the Trust to borrow funds to
invest in below investment-grade and investment-grade high-yield bonds.
The strategy generated additional income to the Trust. On September 30,
2004, about 32% of the Trust was leveraged, giving a boost to performance
as high-yield bonds gained in value.
Q: What is your outlook going into 2005?
A: We believe that the outlook for high-yield bonds continues to be favorable.
We think that the economy will continue to grow at a slower pace with no
substantial increase in inflation. We also expect corporate earnings to
remain relatively strong, although earnings growth may moderate from the
extremely high rates of
5
Pioneer Municipal High Income Advantage Trust
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PORTFOLIO MANAGEMENT DISCUSSION 9/30/04 (continued)
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the past year. The backdrop should be supportive of the high-yield bonds
in the Trust. We expect to keep the Trust well diversified in a
combination of below investment-grade and investment-grade bonds in a
variety of economic sectors.
Any information in this shareholder 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.
The Trust's primary investment objective is to provide its common shareholders
with a high level of current income exempt from regular federal income tax. As
a secondary investment objective, the Trust also may seek capital appreciation
to the extent consistent with its primary investment objective. 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".
The Trust's total return at net asset value for the six months ended September
30, 2004, after net expenses and dividends to the preferred shareowners, was
- -0.95%. The Trust's total return for the six months ended September 30, 2004
based on changes in market price was -3.19%.
6
Pioneer Municipal High Income Advantage Trust
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SCHEDULE OF INVESTMENTS 9/30/04 (unaudited)
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S&P/
Principal Moody's
Amount Ratings Value
TAX EXEMPT OBLIGATIONS - 141.1% of Net Assets
Alabama - 2.3%
$5,000,000 AAA/Aaa Birmingham Alabama Waterworks & Sewer
Revenue, 5.0%, 1/1/43 $ 5,046,750
3,450,000 NR/NR Huntsville Carlton Cove Alabama Special Care
Facilities Financing Authority, 8.125%, 11/15/31 2,068,689
------------
$ 7,115,439
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Alaska - 4.2%
12,500,000 AAA/Aaa Alaska State Housing Finance Corp., 6.0%, 6/1/49 $ 13,054,375
------------
Arizona - 5.7%
5,000,000 NR/NR Casa Grande Industrial Development Authority,
Hospital Revenue, 7.625%, 12/1/29 $ 5,264,700
3,130,000 B-/NR Coconino County Arizona Pollution Control Corp.,
Revenue, 5.35%, 10/1/22 2,869,208
1,615,000 B-/NR Coconino County Arizona Pollution Control Corp.,
Revenue, 6.375%, 10/1/36 1,623,753
5,000,000 B-/Ca Gila County Industrial Development Authority
Revenue, 5.55%, 1/1/27 4,267,550
1,000,000 NR/Baa3 Pima County Industrial Development Authority,
6.3%, 7/1/31 1,007,900
1,570,000 NR/Baa3 Pima County Industrial Development Authority,
6.75%, 7/1/31 1,618,607
1,000,000 NR/NR Pima County Industrial Development Authority,
7.5%, 7/1/34 1,008,070
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$ 17,659,788
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California - 5.2%
2,680,000 BBB/Baa3 Golden State Tobacco Securitization Corp.,
6.75%, 6/1/39 $ 2,589,362
14,000,000 B+/NR Valley Health System Hospital Revenue,
6.875%, 5/15/23 13,549,620
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$ 16,138,982
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Colorado - 2.2%
2,850,000 BBB/Baa3 Denver Health & Hospital Authority Healthcare
Revenue, 6.0%, 12/1/31 $ 2,936,640
3,650,000 BB+/Ba1 Northwest Parkway Public Highway Authority,
7.125%, 6/15/41 3,874,110
------------
$ 6,810,750
------------
The accompanying notes are an integral part of these financial statements. 7
Pioneer Municipal High Income Advantage Trust
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SCHEDULE OF INVESTMENTS 9/30/04 (unaudited) (continued)
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S&P/
Principal Moody's
Amount Ratings Value
Connecticut - 0.3%
$1,000,000 BBB-/NR Mohegan Tribe Indians Gaming Authority,
5.25%, 1/1/33 $ 996,990
------------
District of Columbia - 2.0%
2,700,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.5%, 5/15/33 $ 2,496,339
4,000,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.75%, 5/15/40 3,808,880
------------
$ 6,305,219
------------
Florida - 7.1%
2,500,000 BBB-/Baa2 Hillsborough County Florida Industrial Development
Authority Pollution Control Revenue,
5.1%, 10/1/13 $ 2,586,275
4,500,000 BBB-/Baa2 Hillsborough County Florida Industrial Development
Authority Pollution Control Revenue,
5.5%, 10/1/23 4,513,860
2,000,000 NR/NR Hillsborough County Florida Industrial Development
Authority Pollution Control Revenue,
6.75%, 7/1/29 1,711,160
500,000 BB/NR Miami Beach Health Facilities Authority,
5.375%, 11/15/28 438,730
1,500,000 BB/Ba2 Miami Beach Health Facilities Authority,
6.7%, 11/15/19 1,551,225
10,000,000 AAA/Aaa Miami-Dade County Aviation Revenue,
5.0%, 10/1/37 10,153,400
1,000,000 NR/NR Seminole Tribe Convention-A, 8.95%, 10/1/33 1,160,270
------------
$ 22,114,920
------------
Georgia - 2.2%
2,500,000 NR/NR Brunswick & Glynn County Development Authority
Revenue, 7.125%, 1/1/25 $ 2,451,100
1,065,000 NR/Ba3 Effingham County Industrial Development Authority,
6.5%, 6/1/31 1,088,707
5,500,000 CC/Ca Fulton County Development Authority Special
Facilities Revenue, 6.95%, 11/1/12 1,650,000
1,650,000 NR/NR Savannah Georgia Economic Development
Authority Revenue, 7.4%, 1/1/34 1,668,166
------------
$ 6,857,973
------------
8 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
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S&P/
Principal Moody's
Amount Ratings Value
Guam - 1.6%
$5,000,000 B+/Ba3 Northern Mariana Islands, 6.75%, 10/1/33 $ 5,124,550
------------
Idaho - 2.6%
2,000,000 BB+/Ba3 Power County Industrial Development Corp.,
6.45%, 8/1/32 $ 2,048,640
5,920,000 BB+/Ba3 Power County Pollution Control Revenue,
5.625% 10/1/14 5,953,507
------------
$ 8,002,147
------------
Illinois - 5.1%
4,000,000 NR/NR Centerpoint Intermodal Center, 8.0%,
6/15/23 (144A) $ 3,894,720
2,340,000 NR/Baa2 Illinois Educational Facilities Authority Student
Housing Revenue, 6.25%, 5/1/34 2,402,478
1,625,000 BB+/NR Illinois Health Facilities Authority Revenue,
5.5%, 11/15/19 1,444,625
1,650,000 NR/B2 Illinois Health Facilities Authority Revenue,
6.7%, 3/1/14 1,433,619
2,400,000 NR/B2 Illinois Health Facilities Authority Revenue,
6.75%, 3/1/24 2,000,016
1,500,000 NR/NR Illinois Health Facilities Authority Revenue,
6.9%, 11/15/33 1,501,995
4,300,000 CC/Caa1 Illinois Health Facilities Authority Revenue,
7.0%, 1/1/15 3,220,829
------------
$ 15,898,282
------------
Indiana - 5.7%
1,200,000 CCC+/Caa2 Indiana State Development Finance Authority
Pollution Control Revenue, 7.25%, 11/1/11 $ 1,187,436
10,000,000 CCC+/Caa2 Indiana State Development Finance Authority
Revenue, 5.75%, 10/1/11 9,561,700
5,000,000 NR/Ba3 Jasper County Industrial Economic Development
Revenue, 5.6%, 4/1/29 4,696,250
2,450,000 NR/NR Vincennes Industrial Economic Development
Revenue, 6.25%, 1/1/24 2,329,632
------------
$ 17,775,018
------------
Kansas - 1.7%
4,640,000 AAA/Aaa Wyandotte County Unified Government Utility
System Revenue, 5.65%, 9/1/19 $ 5,416,597
------------
The accompanying notes are an integral part of these financial statements. 9
Pioneer Municipal High Income Advantage Trust
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SCHEDULE OF INVESTMENTS 9/30/04 (unaudited) (continued)
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S&P/
Principal Moody's
Amount Ratings Value
Kentucky - 1.5%
$ 500,000 BB-/NR Kentucky Economic Development Finance Authority
Hospital System Revenue, 5.7%, 10/1/10 $ 498,920
4,400,000 BB-/NR Kentucky Economic Development Finance Authority
Hospital System Revenue, 5.875%, 10/1/22 4,087,776
------------
$ 4,586,696
------------
Louisiana - 2.8%
750,000 BBB+/NR Opelousas Louisiana General Hospital Authority
Revenue, 5.75%, 10/1/23 $ 761,565
9,415,000 BBB/Baa3 Tobacco Settlement Financing Corp., 5.875%,
5/15/39 8,040,692
------------
$ 8,802,257
------------
Massachusetts - 8.4%
3,900,000 AAA/Aaa Lynn Massachusetts Water & Sewer Commission
General Revenue, 5.0%, 12/1/32 $ 3,983,460
2,195,000 BBB-/Baa2 Massachusetts Health & Educational Facilities
Authority Revenue, 5.375%, 7/15/28 2,028,685
1,000,000 BBB-/Baa2 Massachusetts Health & Educational Facilities
Authority Revenue, 6.35%, 7/15/32 1,033,390
1,740,000 BB/NR Massachusetts State Development Finance
Agency, 5.25%, 10/1/18 1,505,952
1,990,000 NR/Ba2 Massachusetts State Development Finance
Agency, 6.0%, 11/1/28 1,918,042
4,900,000 NR/NR Massachusetts State Development Finance
Agency, 7.1%, 7/1/32 4,726,981
10,760,000 AA-/Aa3 Massachusetts State Housing Finance Agency,
5.35%, 12/1/45 10,860,176
------------
$ 26,056,686
------------
Michigan - 3.6%
3,000,000 BBB/Baa2 Delta County Michigan Economic Development
Corp., 6.25%, 4/15/27 $ 3,190,320
3,000,000 BBB-/NR Macomb County Hospital Finance Authority,
5.875%, 11/15/34 2,809,470
1,000,000 NR/NR Michigan State Strategic Fund Solidwaste Disposal
Revenue 7.375%, 1/15/22 1,019,290
2,000,000 NR/NR Wayne Charter County Michigan Special Airport
Facilities Revenue, 6.0%, 12/1/29 1,434,640
3,285,000 NR/NR Wayne Charter County Michigan Special Airport
Facilities Revenue, 6.75%, 12/1/15 2,768,171
------------
$ 11,221,891
------------
10 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
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S&P/
Principal Moody's
Amount Ratings Value
Minnesota - 2.9%
$ 5,000,000 A-/NR Duluth Economic Development Authority Health
Care Facilities Revenue, 5.25%, 2/15/28 $ 5,025,050
4,800,000 NR/NR Minneapolis/St. Paul Metropolitan Airports,
7.0%, 4/1/25 3,978,288
------------
$ 9,003,338
------------
Nevada - 1.4%
1,400,000 B-/NR Clark County Industrial Development Revenue,
5.5%, 10/1/30 $ 1,303,722
1,600,000 NR/NR Nevada State Department of Business & Industry,
7.25%, 1/1/23 1,595,728
1,000,000 NR/NR Nevada State Department of Business & Industry,
7.375%, 1/1/30 1,000,000
500,000 NR/NR Nevada State Department of Business & Industry,
7.375%, 1/1/40 505,130
------------
$ 4,404,580
------------
New Hampshire - 1.3%
1,000,000 A/NR New Hampshire Health & Educational Facilities
Authority Revenue, 5.375%, 1/1/34 $ 1,007,050
3,000,000 NR/NR New Hampshire Higher Educational & Health
Facilities Authority Revenue, 6.25%, 1/1/18 2,986,290
------------
$ 3,993,340
------------
New Jersey - 5.6%
515,000 B/Caa2 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/19 $ 405,099
5,000,000 B/Caa2 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/29 3,719,750
750,000 B/Caa2 New Jersey Economic Development Authority
Revenue, 6.625%, 9/15/12 663,877
2,500,000 BBB/Baa1 New Jersey Health Care Facilities Financing
Authority Revenue, 5.375%, 7/1/33 2,511,050
1,420,000 CCC/B2 New Jersey Health Care Facilities Financing
Authority Revenue, 7.5%, 7/1/21 1,392,353
1,000,000 BBB/Baa3 Tobacco Settlement Financing Corp., 6.25%, 6/1/43 888,220
3,250,000 BBB/Baa3 Tobacco Settlement Financing Corp., 6.75%, 6/1/39 3,119,740
5,000,000 BBB/Baa3 Tobacco Settlement Financing Corp., 7.0%, 6/1/41 4,915,150
------------
$ 17,615,239
------------
The accompanying notes are an integral part of these financial statements. 11
Pioneer Municipal High Income Advantage Trust
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SCHEDULE OF INVESTMENTS 9/30/04 (unaudited) (continued)
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S&P/
Principal Moody's
Amount Ratings Value
New York - 10.3%
$ 3,000,000 NR/NR Dutchess County Industrial Development Agency
Revenue, 7.5%, 3/1/29 $ 2,966,310
5,000,000 A/A3 Nassau County New York Industrial Development
Agency Revenue, 5.25%, 6/1/27 5,078,250
6,980,000 BB+/Ba2 New York City Industrial Development Agency,
5.25%, 12/1/32 5,122,831
2,000,000 A/NR New York City Industrial Development Agency,
5.375%, 6/1/23 2,041,580
3,750,000 BB+/Ba2 New York City Industrial Development Agency,
7.625%, 12/1/32 3,712,538
3,000,000 NR/NR New York City Industrial Development Agency,
7.8%, 1/1/16 3,128,790
10,000,000 AAA/Aaa New York State Environmental Facilities Corp.,
5.0%, 6/15/33 10,247,600
------------
$ 32,297,899
------------
North Carolina - 2.9%
11,245,000(a) NR/NR Charlotte North Carolina Special Facilities
Revenue, 5.6%, 7/1/27 $ 3,823,300
3,140,000(a) NR/NR Charlotte North Carolina Special Facilities
Revenue, 7.75%, 2/1/28 1,161,800
4,000,000 AA+/Aa1 North Carolina Special Facilities Revenue,
5.125%, 7/1/42 4,064,800
------------
$ 9,049,900
------------
Ohio - 2.5%
3,900,000 B/NR Belmont County Health System Revenue,
5.7%, 1/1/13 $ 3,627,312
1,000,000 B/NR Belmont County Health System Revenue,
5.8%, 1/1/18 890,980
5,000,000 B-/Caa2 Cleveland Airport Special Revenue,
5.375%, 9/15/27 3,218,400
------------
$ 7,736,692
------------
Oklahoma - 1.2%
2,500,000 BB/NR Jackson County Memorial Hospital Authority
Revenue, 7.3%, 8/1/15 $ 2,520,050
1,500,000 B-/Caa2 Tulsa Municipal Airport Transportation Revenue,
7.35%, 12/1/11 1,351,290
------------
$ 3,871,340
------------
12 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
S&P/
Principal Moody's
Amount Ratings Value
Oregon - 5.2%
$ 5,900,000 NR/NR Klamath Falls Electric Revenue, 5.75%, 1/1/13 $ 5,960,416
8,000,000 NR/NR Klamath Falls Electric Revenue, 6.0%, 1/1/25 7,874,800
2,500,000 NR/NR Western Generation Agency Cogeneration Project
Revenue, 7.125%, 1/1/21 2,546,925
------------
$ 16,382,141
------------
Pennsylvania - 7.2%
3,000,000 B/B2 Allegheny County Hospital Development Authority
Revenue, 9.25%, 11/15/22 $ 3,420,480
500,000 B/B2 Allegheny County Hospital Development Authority
Revenue, 9.25%, 11/15/30 573,780
1,000,000 BBB-/NR Clarion County Hospital Authority Revenue,
5.625%, 7/1/21 923,740
3,730,000 BB-/NR Columbia County Hospital Authority Health Care
Revenue, 5.8%, 6/1/19 3,257,596
1,250,000 BBB/Ba2 Hazleton Health Services Authority Hospital
Revenue, 6.125%, 7/1/16 1,138,937
3,360,000 NR/Baa3 Montgomery County Higher Education & Health
Authority Hospital Revenue, 6.6%, 7/1/10 3,514,157
1,430,000 BB+/NR Pennsylvania Economic Development Financing
Authority Revenue, 5.125%, 6/1/18 1,153,896
1,805,000 BB+/NR Pennsylvania Economic Development Financing
Authority Revenue, 5.3%, 6/1/10 1,643,525
2,330,000 BB+/NR Pennsylvania Economic Development Financing
Authority Revenue, 5.35%, 6/1/11 2,087,494
1,300,000 B-/B2 Philadelphia Hospitals & Higher Education
Facilities Authority Revenue, 6.2%, 5/1/11 1,004,393
2,005,000 B/NR Scranton-Lackawanna Health & Welfare Authority
Revenue, 6.1%, 7/1/11 1,782,966
2,245,000 B/NR Scranton-Lackawanna Health & Welfare Authority
Revenue, 6.15%, 7/1/12 1,976,184
------------
$ 22,477,148
------------
Puerto Rico - 1.8%
5,000,000 BBB+/Baa2 Puerto Rico Public Finance Corp., 5.75%, 8/1/27 $ 5,597,450
------------
Rhode Island - 2.4%
8,285,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
6.25%, 6/1/42 $ 7,363,708
------------
The accompanying notes are an integral part of these financial statements. 13
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/04 (unaudited) (continued)
- --------------------------------------------------------------------------------
S&P/
Principal Moody's
Amount Ratings Value
South Carolina - 5.2%
$1,500,000 B-/NR Connector 2000 Association Inc., Toll Road
Revenue, 5.375%, 1/1/38 $ 1,062,885
1,600,000 BBB/NR Loris Community Hospital District, 5.625%, 1/1/29 1,521,712
1,000,000 BBB-/NR South Carolina Educational Facilities Authority
Revenue, 5.75%, 3/1/29 1,029,990
8,000,000 BBB/Baa2 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 8,489,680
4,400,000 BBB/Baa3 Tobacco Settlement Revenue Management,
6.375%, 5/15/30 4,064,280
------------
$ 16,168,547
------------
Tennessee - 2.6%
1,000,000 BBB+/Baa2 Johnson City Health & Educational Facilities Board
Hospital Revenue, 7.5%, 7/1/33 $ 1,167,360
7,000,000 NR/Baa3 Knox County Health Educational & Housing Facilities
Board Hospital Revenue, 6.5%, 4/15/31 6,948,130
------------
$ 8,115,490
------------
Texas - 16.3%
11,300,000 CCC/Caa2 Alliance Airport Authority Special Facilities
Revenue, 7.5%, 12/1/29 $ 7,458,113
8,650,000 BBB/Baa2 Brazos River Authority Pollution Control Revenue,
6.75%, 10/1/38 9,099,454
4,000,000 CCC/Caa2 Dallas-Fort Worth International Airport Revenue,
6.0%, 11/1/14 2,600,240
12,550,000 CC/Ca Dallas-Fort Worth International Airport Revenue,
7.125%, 11/1/26 3,325,750
6,965,000 CC/Ca Dallas-Fort Worth International Airport Revenue,
7.625%, 11/1/21 1,845,725
10,000,000 B-/Caa2 Houston Texas Airport System Revenue, 6.75%, 7/1/29 7,875,500
7,750,000 BBB-/Ba2 Matagorda County Navigation District Number 1
Revenue, 5.95%, 5/1/30 7,749,535
1,620,000 B-/Ca Nueces River Authority Environmental Improvement
Revenue, 5.6%, 4/1/18 1,428,727
3,055,000 B-/Ca Nueces River Authority Environmental Improvement
Revenue, 5.6%, 1/1/27 2,615,202
1,935,000 NR/Ba1 Panhandle Texas Regional Housing Finance,
8.125%, 3/1/31 2,069,927
5,000,000 NR/Baa3 Tomball Hospital Authority, 6.0%, 7/1/25 4,978,900
------------
$ 51,047,073
------------
14 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
S&P/
Principal Moody's
Amount Ratings Value
Virginia - 2.3%
$ 5,000,000 AA+/NR Fairfax County Certificates of Participation,
6.1%, 4/15/32 $ 5,705,750
1,555,000 BB/NR Pocahontas Parkway Association of Virginia Toll
Road Revenue, 5.25%, 8/15/09 1,561,531
--------------
$ 7,267,281
--------------
Washington - 5.2%
10,000,000 AAA/Aaa Port Seattle Washington Special Facilities
Revenue, 5.0%, 4/1/31 $ 10,094,100
5,500,000 NR/NR Port Seattle Washington Special Facilities
Revenue, 7.25%, 4/1/30 4,608,615
1,460,000 BBB/Baa3 Tobacco Settlement Authority Revenue,
6.5%, 6/1/26 1,436,523
--------------
$ 16,139,238
--------------
Wisconsin - 0.6%
1,000,000 NR/NR Wisconsin State Health & Educational Facilities
Authority Revenue, 6.125%, 4/1/24 $ 980,830
1,000,000 NR/NR Wisconsin State Health & Educational Facilities
Authority Revenue, 6.25%, 4/1/34 972,210
--------------
$ 1,953,040
--------------
TOTAL TAX-EXEMPT OBLIGATIONS
(Cost $453,213,679) $ 440,422,004
==============
Shares TAX-EXEMPT MONEY MARKET MUTUAL FUND - 1.9%
of Net Assets
6,104,458 BlackRock Provident Institutional Municipal Fund $ 6,104,458
--------------
TOTAL TAX-EXEMPT MONEY MARKET MUTUAL FUND
(Cost $6,104,458) $ 6,104,458
==============
TOTAL INVESTMENTS IN SECURITIES - 143.0%
(Cost $459,318,137) (b)(c) $ 446,526,462
--------------
OTHER ASSETS AND LIABILITIES 5.0% $ 15,679,106
--------------
PREFERRED SHARES AT
REDEMPTION VALUE - (48.0)% $ (150,000,000)
--------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS - 100.0% $ 312,205,568
==============
The accompanying notes are an integral part of these financial statements. 15
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/04 (unaudited) (continued)
- --------------------------------------------------------------------------------
144A Security is exempt from registration under Rule 144A of the Securities Act
of 1933. Such securities may be resold normally to qualfied institutional
buyers in a transaction exempt from registration. At September 30, 2004,
the value of these securities amounted to $3,894,720, or 1.2% of total net
assets.
NR Security not rated by S&P or Moody's.
(a) Security is in default and is non-income producing.
(b) The concentration of investments by type of obligation/market sector is as follows:
Insured 11.4%
General Obligation 1.1
Revenue Bonds:
Health Revenue 26.4
Airport Revenue 11.6
Development Revenue 9.4
Pollution Control Revenue 8.8
Tobacco Revenue 8.7
Transportation Revenue 5.0
Other 5.0
Power Revenue 3.7
Housing Revenue 2.9
Education Revenue 2.6
Water Revenue 2.3
Facilities Revenue 0.9
Gaming Revenue 0.2
----
100.0%
-----
(c) At September 30, 2004, the net unrealized gain on investments based on
cost for federal income tax purposes of $458,508,050 was as follows:
Aggregate gross unrealized gain for all investments in which there is
an excess of value over tax cost $ 16,385,449
Aggregate gross unrealized loss for all investments in which there is
an excess of tax cost over value (28,367,037)
============
Net unrealized loss $(11,981,588)
============
For financial reporting purposes net unrealized loss on investments was
$12,791,675 and cost of investments aggregated $459,318,137
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended September 30, 2004, aggregated $101,249,601 and
$114,076,874, respectively.
16 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 9/30/04 (unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $459,318,137) $ 446,526,462
Cash 6,003,871
Receivables -
Investment securities sold 4,456
Interest 10,063,308
Reinvestment of distributions 283,757
Unrealized appreciation on interest rate swaps 166,500
Prepaid expenses 29,362
-------------
Total assets $ 463,077,716
-------------
LIABILITIES:
Payables -
Investment securities purchased $ 463,322
Net interest rate swaps payable 63,885
Due to affiliates 224,372
Administration fee payable 26,422
Accrued expenses 94,147
-------------
Total liabilities $ 872,148
-------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to
6,000 shares $(150,000,000)
-------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $ 322,200,685
Undistributed net investment income 1,843,518
Accumulated net realized gain on investments and
interest rate swaps 786,540
Net unrealized loss on investments (12,791,675)
Net unrealized gain on interest rate swaps 166,500
-------------
Net assets applicable to common shareowners $ 312,205,568
=============
NET ASSET VALUE PER SHARE:
No par value, (unlimited number of shares authorized)
Based on $312,205,568/22,639,409 common shares $ 13.79
=============
The accompanying notes are an integral part of these financial statements. 17
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended 9/30/04
INVESTMENT INCOME:
Interest $ 15,988,164
------------
EXPENSES:
Management fees $ 1,377,952
Administration fees 160,761
Transfer agent fees and expenses 29,105
Auction agent fees 195,811
Custodian fees 12,512
Registration fees 12,079
Professional fees 25,425
Printing expense 12,341
Trustees' fees 5,398
Miscellaneous 16,809
------------
Total expenses $ 1,848,193
Less expense reductions by PIM (11,522)
------------
Net expenses $ 1,836,671
------------
Net investment income $ 14,151,493
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND INTEREST RATE SWAPS
Net realized loss from:
Investments $ (556,561)
Interest rate swaps (562,863) $ (1,119,424)
------------ ------------
Change in net unrealized gain (loss) on:
Investments $(16,132,665)
Interest rate swaps 166,500 $(15,966,165)
------------ ------------
Net loss on investments and interest
rate swaps $(17,085,589)
------------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS FROM
NET INVESTMENT INCOME $ (834,660)
------------
Net decrease in net assets applicable to common
shareowners resulting from operations $ (3,768,756)
============
18 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 9/30/04 and the Period Ended 3/31/04
Six Months 10/20/03
Ended (Commencement
9/30/04 of Operations) to
(unaudited) 3/31/04
FROM OPERATIONS:
Net investment income $ 14,151,493 $ 10,059,668
Net realized gain (loss) on investments and
interest rate swaps (1,119,424) 1,905,680
Net unrealized gain (loss) on investments and
interest rate swaps (15,966,165) 3,340,990
Distributions to preferred shareowners from
net investment income (834,660) (381,060)
------------- ------------
Net increase (decrease) in net assets applicable
to common shareowners $ (3,768,756) $ 14,925,278
------------- ------------
DISTRIBUTIONS TO COMMON SHAREOWNERS:
Net investment income ($0.56 and $0.38 per
share, respectively) $ (12,705,100) $ (8,446,539)
------------- ------------
Total dividends to common shareowners $ (12,705,100) $ (8,446,539)
------------- ------------
FROM TRUST SHARE TRANSACTIONS:
Net proceeds from the issuance of common shares $ - $293,662,500
Net proceeds from underwriters' over-allotment
option exercised - 28,427,934
Reinvestment of distributions 864,297 1,237,835
Changes in (estimated) common share
offering expenses 296,168 (674,535)
Changes in (estimated) preferred share
offering expenses 26,483 (1,740,000)
------------- ------------
Net increase in net assets applicable to
common shareowners resulting from Trust
share transactions $ 1,186,948 $320,913,734
------------- ------------
Net increase (decrease) in net assets applicable
to common shareowners $ (15,286,908) $327,392,473
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Beginning of period 327,492,476 100,003
------------- ------------
End of period (including undistributed net
investment income of $1,843,518
and $1,231,785, respectively) $ 312,205,568 $327,492,476
============= ============
The accompanying notes are an integral part of these financial statements. 19
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 9/30/04
- --------------------------------------------------------------------------------
Six Months
Ended 10/20/03
9/30/04 to
(unaudited) 3/31/04 (b)
Per Common Share Operating Performance (a)
Net asset value, beginning of period $ 14.51+ $ 14.33+
------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.63 $ 0.46
Net realized and unrealized gain (loss) on investments and interest
rate swaps (0.76) 0.23
Distributions to preferred shareowners from net investment income (0.04) (0.02)
------- -------
Net increase (decrease) from investment operations $ (0.17) $ 0.67
Distributions to common shareowners:
Net investment income (0.56) (0.38)
Changes in (estimated) capital with respect to issuance of:
Common shares 0.01 (0.03)
Preferred shares - (0.08)
------- -------
Net increase (decrease) in net asset value $ (0.72) $ 0.18
------- -------
Net asset value, end of period* $ 13.79 $ 14.51
------- -------
Market value, end of period* $ 13.98 $ 15.05
------- -------
Total return++ (3.19)% 2.93%
Ratios to average net assets of common shareowners
Net Expenses+++ 1.19%** 1.01%**
Net investment income before preferred share dividends+++ 9.16%** 6.98%**
Preferred share dividends 0.54%** 0.26%**
Net investment income available to common shareowners 8.62%** 6.72%**
Portfolio turnover 23% 62%
Net assets of common shareowners, end of period (in thousands) $312,206 $327,492
Preferred shares outstanding (in thousands) $150,000 $150,000
Asset coverage per preferred share, end of period $ 77,034 $79,582
Average market value per preferred share $ 25,000 $25,000
Liquidation value per preferred share $25,000 $25,000
Ratios to average net assets of common shareowners before
reimbursement of organization expenses and expense reductions
Net Expenses+++ 1.20%** 1.04%**
Net investment income before preferred share dividends+++ 9.15%** 6.95%**
Preferred share dividends 0.54%** 0.26%**
Net investment income available to common shareowners 8.61%** 6.69%**
(a) The per common 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.
* 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.
** Annualized.
+ Net asset value immediately after the closing of the first public offering
was $14.30.
++ 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 returns less than a full period are not annualized. Past
performance is not a guarantee of future results.
+++ Ratios do not reflect the effect of dividend payments to preferred
shareowners.
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.
20 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/04 (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, and
the sale and issuance to Pioneer Investment Management, Inc. ("PIM"), the
Trust's investment adviser, a wholly owned indirect subsidiary of UniCredito
Italiano S.p.A. (UniCredito Italiano), of 6,981 shares of beneficial interest
at an aggregate purchase price of $100,003. PIM has agreed to pay all the
Trust's organizational expenses and to pay the amount by which the aggregate
offering costs (other than the sales load) exceeds $0.03 per share of the
common share offering. The investment objective of the Trust is to seek a high
level of current income exempt from regular federal income tax and the Trust
may seek capital appreciation to the extent that it is consistent with its
primary investment objective.
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
accounting principles generally accepted in the United States of America 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
21
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/04 (unaudited) (continued)
- --------------------------------------------------------------------------------
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, 2004, there were no securities
fair valued.
Discount and premium on fixed income 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. Temporary cash investments are valued at amortized cost.
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.
The tax character of current year distributions paid will be determined at
the end of the current fiscal year. The tax character of
22
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
distributions paid to common and preferred shareowners during the period
ended March 31, 2004 was as follows:
- --------------------------------------------------------------------------------
2004
Distributions paid from:
Tax exempt income $8,827,599
Long-term capital gain -
----------
Total $8,827,599
==========
- --------------------------------------------------------------------------------
The following shows components of distributable earnings on a fed
eral income tax basis at March 31, 2004.
- --------------------------------------------------------------------------------
2004
Undistributed tax-exempt income $ 765,189
Undistributed taxable ordinary income 1,916,081
Unrealized appreciation 3,797,469
----------
Total $6,478,739
==========
- --------------------------------------------------------------------------------
The difference between book basis and tax basis unrealized appreciation is
primarily attributable to the difference between book and tax amortization
methods for premiums and discounts on fixed income securities.
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
23
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/04 (unaudited) (continued)
- --------------------------------------------------------------------------------
(i) through receipt of additional unissued but authorized common shares
from the Trust or (ii) by purchase of outstanding common shares on the New
York Stock Exchange or elsewhere. If, on the payment date for any dividend
the net asset value per common share is equal to or less than the market
price per share plus estimated brokerage trading fees ("market premium"),
the Plan Agent will invest the dividend amount in newly issued common
shares. The number of newly issued common shares to be credited to each
account will be determined by dividing the dollar amount of the dividend
by the net asset value per common share on the date the shares are issued,
provided that the maximum discount from the then current market price per
share on the date of issuance does not exceed 5%. If, on the payment date
for any dividend, the net asset value per common share is greater than the
market value ("market discount"), the Plan Agent will invest the dividend
amount in common shares acquired in open-market purchases. There are no
brokerage charges with respect to newly issued common shares. However,
each participant will pay a pro rata share of brokerage trading fees
incurred with respect to the Plan Agent's open-market purchases.
Participating in the Plan does not relieve shareowners from any federal,
state or local taxes which may be due on dividends paid in any taxable
year. Shareowners holding Plan shares in a brokerage account may not be
able to transfer the shares to another broker and continue to participate
in the Plan.
2. Management Agreement
PIM 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.
In addition, under PIM's management and administration agreements, certain
other services and costs are paid by the Trust. PIM 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.
24
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. As of September 30, 2004, the expense reduction under
such arrangements was $11,522.
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. 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. 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 and exchange of net
interest payments between the parties. For financial reporting purposes, the
Trust records the net receivable or payable for the net interest expected to be
received or paid as net realized gains or losses from Interest Rate Swaps in
the Statement
25
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/04 (unaudited) (continued)
- --------------------------------------------------------------------------------
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" to reflect
the market value of the swap. 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, the Trust does not
anticipate non-performance by any counterparty.
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, 2004 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 $166,500
5. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized. Of the 22,639,409 common shares of beneficial interest outstanding
at September 30, 2004, PIM owned 6,981 shares.
Transactions in common shares of beneficial interest for the six months ended
September 30, 2004 and the period from October 20, 2003 (commencement of
investment operations) to March 31, 2004 were as follows:
- --------------------------------------------------------------------------------
9/04 3/04
Shares issued in connection with initial
public offering - 20,500,000
Shares issued from underwriters'
over-allotment option exercised - 1,984,498
Reinvestment of distributions 63,281 84,649
------ ----------
Net increase in shares outstanding 63,281 22,569,147
Shares outstanding at beginning of period 22,576,128 6,981
---------- ----------
Shares outstanding at end of period 22,639,409 22,576,128
========== ==========
- --------------------------------------------------------------------------------
26
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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, 2004, there were 6,000 Auction Preferred Shares ("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
0.949% to 1.35% during the six months ended September 30, 2004.
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 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, 2004 the Board of Trustees of the Trust declared a
dividend from undistributed net investment income
27
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/04 (unaudited) (continued)
- --------------------------------------------------------------------------------
of $0.09375 per common share payable October 29, 2004, to shareowners of
record on October 15, 2004.
For the period October 1, 2004 to October 31, 2004, dividends declared on
preferred shares totaled $195,840 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.
28
Pioneer Municipal High Income Advantage Trust
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
Mary K. Bush Osbert M. Hood, Executive
Richard H. Egdahl, M.D. 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.
Shareholder 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 6-month period ended September 30, 2004 is publicly available
to shareowners at www.pioneerfunds.com. This information is also available on
the Securities and Exchange Commission's web site at http://www.sec.gov.
29
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HOW TO CONTACT PIONEER
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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 1-800-288-9541
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. Shareholders may view the filed Form N-Q by visiting the Commission's
website at 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 recognizes 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 recognizes 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.
N/A
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.
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, 2004
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, 2004
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date November 29, 2004
* Print the name and title of each signing officer under his or her signature.