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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 811-21043
Pioneer High Income Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: March 31
Date of reporting period: April 1, 2003 through September 30, 2003
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
-----------------------
HIGH
INCOME
TRUST
Semiannual
Report
9/30/03
[LOGO] PIONEER
Investments(R)
Table of Contents
- --------------------------------------------------------------------------------
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
Results of Shareowner Meeting 30
Trustees, Officers and Service Providers 31
Programs and Services for Pioneer Shareowners 32
Retirement Plans from Pioneer 34
The Pioneer Family of Mutual Funds 36
Pioneer High Income Trust
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LETTER TO SHAREOWNERS 9/30/03
- --------------------------------------------------------------------------------
Dear Shareowner,
- --------------------------------------------------------------------------------
The stock market rally that began last spring extended into late summer as signs
of an economic recovery accumulated. Gross domestic product, a tally of all
goods and services produced in the United States, expanded, thanks to increased
personal consumption, housing and business spending, low short-term interest
rates and lower taxes on individuals. While broader market indicators managed
small gains, the NASDAQ Composite rose sharply in the third quarter as investors
sensed that companies might soon boost technology outlays. September's dip in
consumer expectations linked to slow job creation, plus cutbacks in OPEC oil
production, drove markets off their highest levels. Investors also kept an eye
on the news, as U.S. troops came under daily fire in Iraq and tensions elsewhere
remained.
As the economy appeared to strengthen, investors who had sought safety in U.S.
Treasury issues grew less risk-averse. As a result, corporate bonds moved
broadly higher and the Treasury bond rally stalled. Some of the biggest gains
were recorded among lower-rated, high-yield bonds whose issuers often depend
on a strong economy to boost earnings. Bonds in emerging and developed markets
also did well, as economies stabilized and currencies rose against the slumping
U.S. dollar.
Stocks and bonds, bonds and stocks
Over the past few years, investor sentiment has swung from stocks to bonds and
back again, from U.S. government securities to corporate and international
issues. Each sector has spent time in the spotlight or back stage, delivering
periods of stronger or weaker performance relative to one another.
With sectors constantly moving in and out of favor, how can you increase your
chances of holding investments that are performing well? By owning several
kinds of securities, not just one or two. Through a process called asset
allocation, you can create an investment mix that reflects your needs, taking
into account such factors as your age, your financial goals and their timing,
and, of course, your comfort level where risk is concerned.
Asset allocation is only one area in which a qualified investment professional
can serve you well. Ask your advisor to review how shifting markets may have
affected your asset allocation recently. And if you've never thought about
asset allocation before, now is the best time to start.
Like everyone at Pioneer, I appreciate your continued confidence in our
products and services.
Respectfully,
/s/ Osbert Hood
Osbert Hood, President and Chief Executive Officer
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.
[SIDEBAR TEXT]
- --------------------------------------
Pioneer's new
president
Osbert Hood was recently
named Chief Executive
Officer and President of
Pioneer Investments U.S.A.
Mr. Hood, formerly Pioneer's
Chief Operating Officer and
a key member of the senior
management committee,
joined Pioneer in 2000 from
John Hancock Financial
Services, where he had held
senior financial positions.
"I am excited and honored
to have the opportunity to
lead Pioneer as it continues
to grow," Mr. Hood said.
"As CEO I look forward to
furthering Pioneer's
strategic goals, including
developing new products that
can meet the wider needs of
investors and the advisers
who serve them."
- --------------------------------------
[END SIDEBAR TEXT]
1
Pioneer High Income Trust
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PORTFOLIO SUMMARY 9/30/03
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Corporate Bonds & Notes 80.9%
Convertible Bonds 6.3%
Temporary Cash Investments 5.7%
Municipal Bonds 4.7%
Sovereign Debt Obligations 1.9%
Trust Preferred Shares 0.5%
Portfolio Maturity
- --------------------------------------------------------------------------------
(Effective life as a percentage of long-term holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
0-1 Year 2.3%
1-3 Years 13.8%
3-4 Years 20.3%
4-6 Years 49.5%
6-8 Years 9.7%
8+ Years 4.4%
10 Largest Holdings
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(As a percentage of long-term holdings)*
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1. Xerox Capital Trust I, 8.0%, 2/1/27 1.98%
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2. Baytex Energy Ltd., 9.625%, 7/15/10 1.96
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3. Huntsman International LLC, 10.125%, 7/1/09 1.92
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4. IVAX Corp., 4.5%, 5/15/08 1.85
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5. Burns, Philp Capital Property Ltd., 9.75%, 7/15/12 (144A) 1.69
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6. NMHG Holding Co., 10.0%, 5/15/09 1.69
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7. Juniper Networks, Inc., 4.75%, 3/15/07 1.65
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8. GATX Financial Corp., 8.875%, 6/1/09 1.63
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9. Asbury Automotive Group Inc., 9.0%, 6/15/12 1.55
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10. Phelps Dodge Corp., 9.5%, 6/1/31 1.54
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*This list excludes money market and derivative instruments. Trust holdings
will vary for other periods.
2
Pioneer High Income Trust
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PERFORMANCE UPDATE 9/30/03
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Market Value
per Common Share 9/30/03 3/31/03
$15.29 $14.49
Net Asset Value
per Common Share 9/30/03 3/31/03
$15.10 $13.43
Net
Distributions per Share Investment Short-Term Long-Term
(4/1/03 - 9/30/03) Income Capital Gains Capital Gains
$0.825 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in common shares of Pioneer High Income Trust at public
offering price, compared to that of the Merrill Lynch High Yield Master II
Index.
Average Annual Total Returns
(As of September 30, 2003)
Net Asset Market
Period Value Price*
Life-of-Trust
(4/25/02) 23.77% 19.73%
1 Year 39.42% 31.97%
* When net asset value (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 FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10,000 Investment+
Merrill Lynch
Pioneer High Yield
High Income Master II
Trust Index
4/02 10000 10000
3/03 10457 10171
9/03 11973 11481
+ Index comparison begins April 30, 2002. The Merrill Lynch High Yield Master
II Index is a broad-based measure of the performance of the non-investment
grade U.S. domestic bond market. 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. Past performance does not guarantee future results. Return and
principal value fluctuate, and your shares, when redeemed, may be worth
more or less than their original cost. The performance table and graph do
not reflect the deduction of taxes and fees that a shareowner would pay on
Trust distributions of the redemption of Trust shares.
3
Pioneer High Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 9/30/03
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As evidence steadily accumulated that the domestic economy finally was
strengthening and growth was beginning to accelerate, high-yield bonds and
other corporate-backed fixed-income securities rebounded robustly during the
six months ended September 30, 2003. The following is an interview with Kenneth
J. Taubes, who discusses the Trust's performance during the period. Mr. Taubes,
head of Pioneer's Fixed Income Group, oversees the team responsible for the
daily management of the Trust.
Q: How has the portfolio performed?
A: During a period of rising expectations for both economic growth and corporate
profitability, the portfolio delivered excellent performance. For the six
months ended September 30, 2003, Pioneer High Income Trust had a total return
of 18.90% at net asset value and 11.59% at market price, with a premium of
market price to net asset value of 1.26% on September 30. The benchmark
Merrill Lynch High Yield Master II Index returned 12.90% during the same
period. We also continued to meet our goal of providing superior income. On
September 30, the Trust's 30-day SEC yield was 11.49%.
Q: What factors contributed to the strong performance?
A: The Trust benefited from both a favorable environment and superior security
selection. The rally in virtually all corporate securities had begun in late
2002 when the Federal Reserve lowered short-term interest rates once again.
That rebound picked up steam in early 2003, at the start of the fiscal
period, when evidence grew that corporate earnings finally were starting to
accelerate. Other factors also raised expectations about the economy and
supported the high-yield bond market. Leading economic indicators became more
positive and Congress approved President Bush's tax-cut proposals, giving
further immediate stimulus to the economy. Meanwhile, the weakening U.S.
dollar helped U.S. manufacturers by making their products more competitive
overseas and imports less competitive within the United States.
With the improvement in performance of corporate securities, high-yield bonds
outperformed investment-grade corporates as well as Treasury and government
agency bonds, which began to suffer some price erosion as interest rates on
Treasures with maturities
4
Pioneer High Income Trust
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of five years or longer started to rise. As interest rates rise, bond prices
tend to decline.
Q: What were your principal strategies?
A: The principal emphasis was in U.S. corporate bonds. These bonds accounted for
75% of Trust assets at the start of the fiscal period, on April 1, and
comprised 79% of Trust assets on September 30. Of that amount, 71% were
invested in below-investment grade bonds and 8% in investment grade
securities. The balance of the assets was invested in high-yielding
securities issued by foreign companies and governments. These latter
investments, in addition to any gains realized in local currencies, also
benefited from the rising value of the foreign currencies against the
weakening U.S. dollar.
Within the high-yield corporate sector, we tended to emphasize bonds of
cyclical companies that had the greatest potential to do well in an expanding
economy. These investments included industries such as commodities, basic
materials and transportation.
Q: What types of investments most affected Trust performance?
A: Among our investments in commodities and basic materials, we had particularly
strong performance from two mining companies, Phelps-Dodge and
Freeport-McMoRan. Within the transportation sector, we had good results from
bonds issued by some of the stronger airlines, such as Continental and
Northwest. Performance also benefited from investments in high-yield
municipal bonds backed by revenues from airport facilities. These issues
included securities backed by revenues from Continental Airline gates and
maintenance facility in New Jersey, Northwest Air gates in Detroit, British
Airways gates in New York, and U.S. Airways gates in Charlotte, N.C.
We had disappointing results, however, from some chemical industry bonds
that, despite positive returns, underperformed the high-yield market. Among
the disappointments were bonds issued by Huntsman ICI and Lyondell Chemical.
Also detracting from performance were bonds issued by Constar, the
manufacturer of plastic containers commonly used by the soft drink industry.
Cool weather during the spring months resulted in weak soft drink sales and
poor sales for Constar.
5
Pioneer High Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 9/30/03 (continued)
- --------------------------------------------------------------------------------
Q: What is your investment outlook?
A: We believe that the economy and corporate profits should continue to grow,
improving corporate balance sheets and supporting the performance of
high-yield corporate bonds. Corporate bonds in general have the potential to
continue to outperform U.S. Treasury and government agency bonds as the
economic expansion continues and higher-quality securities become vulnerable
to potential price loss as interest rates rise.
While the outlook for high-yield bonds appears to be favorable, investors
should have realistic expectations and not anticipate that returns will be as
high as they have been for the past six months.
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.
6
Pioneer High Income Trust
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SCHEDULE OF INVESTMENTS 9/30/03 (unaudited)
- --------------------------------------------------------------------------------
Principal
Amount S&P/Moody's
USD ($) Ratings Value
CORPORATE BONDS & NOTES - 113.3%
Energy - 7.3%
Energy Equipment & Services - 0.5%
1,938,000 B+/B3 Transmontaigne, Inc., 9.125%, 6/1/10 (144A) $ 2,063,970
------------
Oil & Gas - 6.8%
9,984,000 B-/B3 Baytex Energy Ltd., 9.625%, 7/15/10 $ 10,445,760
6,000,000 B/B2 Compton Petroleum Corp., 9.9%, 5/15/09 6,480,000
5,000,000 B/B2 Dresser, Inc., 9.375%, 4/15/11 5,250,000
4,985,000 B+/B2 Energy Partners, Ltd., 8.75%, 8/1/10 (144A) 5,109,625
------------
$ 27,285,385
------------
Total Energy $ 29,349,355
------------
Materials - 21.1%
Chemicals - 11.6%
8,635,000 BB-/Ba3 ARCO Chemical Co., 9.8%, 2/1/20 $ 6,908,000
1,685,000 B/B2 Ethyl Corp., 8.875%, 5/1/10 1,727,125
7,800,000 BBB-/Baa3 Ferro Corp., 7.125%, 4/1/28 7,002,895
2,000,000 BB-/B2 Geon Co., 6.875%, 12/15/05 1,820,000
EURO 10,000,000 B-/Caa1 Huntsman International LLC, 10.125%, 7/1/09 10,248,037
5,000,000 NR/B2 M.A. Hanna Co., 6.875%, 12/1/04 4,862,500
5,100,000 BBB-/Ba1 Methanex Corp., 8.75%, 8/15/12 5,482,500
5,000,000 B-/Caa1 OM Group, Inc., 9.25%, 12/15/11 4,962,500
EURO 3,485,000 BB-/Ba3 Rhodia SA, 9.25%, 6/1/11 (144A) 3,855,533
------------
$ 46,869,090
------------
Construction Materials - 1.6%
6,000,000 BB-/B1 Texas Industries, Inc., 10.25%, 6/15/11 (144A) $ 6,570,000
------------
Containers & Packaging - 3.7%
5,450,000 B/B3 Constar International Inc., 11.0%, 12/1/12 $ 4,578,000
2,000,000 B+/B1 Crown Euro Holdings SA, 9.5%, 3/1/11 (144A) 2,150,000
EURO 1,950,000 B+/NR Crown Euro Holdings SA, 10.25%, 3/1/11 (144A) 2,407,124
1,500,000 CCC-/Caa2 Fonda Group, Inc., Series B, 9.5%, 3/1/07 1,200,000
4,300,000 B+/B2 Greif Bros. Corp., 8.875%, 8/1/12 4,654,750
------------
$ 14,989,874
------------
Metals & Mining - 3.4%
5,035,000 B-/B2 Freeport-McMoRan Copper & Gold, Inc.,
10.125%, 2/1/10 $ 5,626,613
6,335,000 BBB-/Baa3 Phelps Dodge Corp., 9.5%, 6/1/31 8,230,464
------------
$ 13,857,077
------------
The accompanying notes are an integral part of these financial statements. 7
Pioneer High Income Trust
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SCHEDULE OF INVESTMENTS 9/30/03 (unaudited) (continued)
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Principal
Amount S&P/Moody's
USD ($) Ratings Value
Paper & Forest Products - 0.8%
1,790,000 D/NR Corporacion Durango SA de CV, 13.125%,
8/1/06 (a) $ 966,600
4,000,000 NR/NR Corporacion Durango SA de CV, 13.75%,
7/15/09 (144A) (a) 2,080,000
------------
$ 3,046,600
------------
Total Materials $ 85,332,641
------------
Industrials - 21.8%
Aerospace & Defense - 3.0%
730,000 B/B3 Hexcel Corp., 9.875%, 10/1/08 $ 804,825
7,000,000 CCC+/Caa2 Hexcel Corp., 9.75%, 1/15/09 7,297,500
3,670,000 B/B3 K&F Industries, Inc., Series B, 9.625%, 12/15/10 4,037,000
------------
$ 12,139,325
------------
Construction & Engineering - 0.9%
NOK 18,000,000 NR/NR Kvaerner ASA, 0.0%, 10/30/11 (b) $ 1,329,611
4,700,000 NR/NR Kvaerner ASA, 0.0%, 10/30/11 (b) 2,491,000
------------
$ 3,820,611
------------
Electrical Equipment - 1.4%
5,210,000 B-/Ba3 Vestel Electronics Finance, 11.5%,
5/14/07 (144A) $ 5,522,600
------------
Machinery - 3.8%
1,980,000 B/B3 Hines Nurseries, Inc., 10.25%, 10/1/11 (144A) $ 2,069,100
3,875,000 B/B2 Manitowac Co., Inc., 10.5%, 8/1/12 4,417,500
8,170,000 B+/B3 NMHG Holding Co., 10.0%, 5/15/09 8,987,000
------------
$ 15,473,600
------------
Commercial Services & Supplies - 3.6%
4,000,000 BB-/Ba3 Allied Waste North America, Inc., 7.875%, 1/1/09 $ 4,150,000
1,000,000 BB-/Ba3 Allied Waste North America, Inc., 9.25%, 9/1/12 1,105,000
1,850,000 B/B2 Brickman Group, Ltd., Series B, 11.75%,
12/15/09 2,081,250
6,555,000 B-/B3 IESI Corp., 10.25%, 6/15/12 7,112,175
------------
$ 14,448,425
------------
Air Freight & Couriers - 1.2%
5,235,000 B-/B3 Evergreen International Aviation, Inc., 12.0%,
5/15/10 (144A) $ 4,763,850
------------
8 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
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Principal
Amount S&P/Moody's
USD ($) Ratings Value
Airlines - 3.2%
2,065,000 CCC/Caa2 AMR Corp., 9.0%, 8/1/12 $ 1,574,562
2,000,000 CCC/Caa2 AMR Corp., 10.2%, 3/15/20 1,345,000
2,640,000 CCC/Caa2 AMR Corp., 9.8%, 10/1/21 1,775,400
2,900,000 CCC+/Caa2 Continental Airlines, Inc., 8.0%, 12/15/05 2,660,750
2,376,000 B-/Caa1 Northwest Airlines Inc., 8.875%, 6/1/06 1,823,580
4,885,000 B-/Caa1 Northwest Airlines Inc., 8.7%, 3/15/07 3,761,450
------------
$ 12,940,742
------------
Marine - 2.0%
7,000,000 BB+/Ba3 CP Ships Ltd., 10.375%, 7/15/12 $ 7,980,000
------------
Road & Rail - 0.7%
400,000 B+/B1 Grupo Transportacion Ferroviaria Mexicana,
SA de CV, 10.25%, 6/15/07 $ 412,000
2,550,000 B+/B1 Grupo Transportacion Ferroviaria Mexicana,
SA de CV, 11.75%, 6/15/09 2,613,750
------------
$ 3,025,750
------------
Transportation Infrastructure - 2.0%
8,000,000 B+/B2 Seabulk International Inc., 9.5%, 8/15/13 (144A) $ 8,030,000
------------
Total Industrials $ 88,144,903
------------
Consumer Discretionary - 24.5%
Automobiles & Components - 2.4%
5,350,000 B+/B2 Intermet Corp., 9.75%, 6/15/09 $ 5,269,750
5,000,000 B/Caa1 Metaldyne Corp., 11.0%, 6/15/12 4,475,000
------------
$ 9,744,750
------------
Leisure Equipment & Products - 1.7%
1,985,000 B/B3 American Color Graphics, 10.0%, 6/15/10 (144A) $ 2,099,137
5,000,000 B/B3 Williams Scotsman, Inc., 9.875%, 6/1/07 4,925,000
------------
$ 7,024,137
------------
Hotels, Restaurants & Leisure - 8.3%
4,000,000 CCC+/Caa1 Hollywood Park, Inc., Series B, 9.25%, 2/15/07 $ 4,085,000
7,000,000 B/B2 John Q. Hamons Hotels L.P., Series B,
8.875%, 5/15/12 7,577,500
3,985,000 B/B2 Majestic Star Casino LLC, 9.5%, 10/15/10 (144A) 4,094,588
7,140,000 CCC/Caa1 MeriStar Hospitality Operating Partnership, L.P.,
8.75%, 8/15/07 7,050,750
2,990,000 CCC+/B2 MeriStar Hospitality Operating Partnership, L.P.,
10.5%, 6/15/09 3,229,200
2,485,000 CCC+/Caa1 Pinnacle Entertainment, Inc. 8.75%, 10/1/13 2,460,150
The accompanying notes are an integral part of these financial statements. 9
Pioneer High Income Trust
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SCHEDULE OF INVESTMENTS 9/30/03 (unaudited) (continued)
- --------------------------------------------------------------------------------
Principal
Amount S&P/Moody's
USD ($) Ratings Value
Hotels, Restaurants & Leisure (continued)
1,875,000 B+/B1 Turning Stone Casino Resort Enterprise, 9.125%,
12/15/10 (144A) $ 2,013,281
2,500,000 CCC+/B3 Wynn Las Vegas LLC, 12.0%, 11/1/10 2,850,000
------------
$ 33,360,469
------------
Media - 3.1%
525,000 BB+/Ba1 British Sky Broadcasting Plc, 8.2%, 7/15/09 $ 622,893
2,402,000 BB-/Ba3 EchoStar DBS Corp., 9.125%, 1/15/09 2,720,265
525,000 B/B2 Houghton Mifflin Co., 8.25%, 2/1/11 549,937
275,000 B/B3 Houghton Mifflin Co., 9.875%, 2/1/13 291,500
2,975,000 B-/B3 LodgeNet Entertainment Corp., 9.5%, 6/15/13 3,153,500
1,330,000 B/B2 Quebecor Media Inc., 0.0%, 7/15/11 (b) 1,130,500
4,000,000 B-/B3 Vertis, Inc., 10.875%, 6/15/09 4,110,000
------------
$ 12,578,595
------------
Distributors - 1.4%
1,000,000 B-/B3 Wesco Distribution, Inc., 9.125%, 6/1/08 $ 995,000
4,725,000 B-/B3 Wesco Distribution, Inc., Series B,
9.125%, 6/1/08 4,701,375
------------
$ 5,696,375
------------
Multiline Retail - 3.7%
3,505,000 B+/B2 Central Garden & Pet Co., 9.125%, 2/1/13 $ 3,820,450
824,000 BB+/Ba3 J.C. Penney Co., Inc., 9.75%, 6/15/21 856,960
7,800,000 BB+/Ba3 J.C. Penney Co., Inc., 8.125%, 4/1/27 7,995,000
2,215,000 B-/B2 Vicap SA, 11.375%, 5/15/07 2,165,163
------------
$ 14,837,573
------------
Specialty Retail - 3.9%
8,250,000 B/B3 Asbury Automotive Group Inc., 9.0%, 6/15/12 $ 8,250,000
6,883,000 B+/B3 Grupo Elektra SA de CV, 12.0%, 4/1/08 7,382,018
------------
$ 15,632,018
------------
Total Consumer Discretionary $ 98,873,917
------------
Consumer Staples - 6.2%
Food & Staples Retailing - 3.0%
9,000,000 B-/B3 Burns, Philp Capital Property Ltd., 9.75%,
7/15/12 (144A) $ 9,000,000
2,985,000 B/B2 Merisant Co., 9.5%, 7/15/13 (144A) 3,193,950
------------
$ 12,193,950
------------
10 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
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Principal
Amount S&P/Moody's
USD ($) Ratings Value
Beverages - 2.5%
5,885,000 BBB-/Baa3 Cia Brasileira de Bebida, 10.5%, 12/15/11 $ 6,532,350
3,350,000 BBB-/Baa3 Cia Brasileira de Bebida, 8.75%, 9/15/13 (144A) 3,383,500
------------
$ 9,915,850
------------
Food Products - 0.7%
2,700,000 B-/B2 Chiquita Brands International, Inc.,
10.56%, 3/15/09 $ 2,976,750
------------
Total Consumer Staples $ 25,086,550
------------
Health Care - 5.6%
Health Care Providers & Services - 3.2%
2,985,000 B-/B3 Ardent Health Services, 10.0%, 8/15/13 (144A) $ 3,126,788
3,985,000 B/B2 NDCHealth Corp., 10.5%, 12/1/12 4,323,725
1,265,000 BB+/Ba2 Omnicare, Inc., 6.125%, 6/1/13 1,239,700
3,597,000 BB-/B2 PacifiCare Health Systems, Inc., 10.75%, 6/1/09 4,136,550
------------
$ 12,826,763
------------
Pharmaceuticals - 2.4%
5,700,000 B/B3 Alaris Medical Inc., 7.25%, 7/1/11 $ 5,728,500
3,882,000 B+/B3 Alpharma Inc., 8.625%, 5/1/11 (144A) 3,901,410
------------
$ 9,629,910
------------
Total Health Care $ 22,456,673
------------
Financials - 6.9%
Diversified Financials - 4.7%
7,950,000 BBB-/Baa3 GATX Financial Corp., 8.875%, 6/1/09 $ 8,703,914
EURO 2,000,000 B/B2 MDP Acquisitions Plc, 10.125%, 10/1/12 2,515,427
2,485,000 B/B1 Sheridan Group, 10.25%, 8/15/11 (144A) 2,587,506
SEK 91,115,223 NR/NR Sydsvenska Kemi AB, 0.0%, 6/9/11 5,064,967
------------
$ 18,871,814
------------
Insurance - 2.2%
5,300,000 BB-/Ba3 Allmerica Financial Corp., 7.625%, 10/15/25 $ 4,823,000
4,535,000 B+/B1 Presidential Life Corp., 7.875%, 2/15/09 4,217,550
------------
$ 9,040,550
------------
Total Financials $ 27,912,364
------------
Information Technology - 5.5%
Communications Equipment - 0.7%
2,900,000 B-/Caa1 Lucent Technologies Inc., 7.25%, 7/15/06 $ 2,791,250
------------
Electronic Equipment & Instruments - 1.1%
4,000,000 BB-/Ba2 Sanmina-SCI Corp., 10.375%, 1/15/10 $ 4,690,000
------------
The accompanying notes are an integral part of these financial statements. 11
Pioneer High Income Trust
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/03 (unaudited) (continued)
- --------------------------------------------------------------------------------
Principal
Amount S&P/Moody's
USD ($) Ratings Value
Office Electronics - 3.7%
4,250,000 B+/B1 Xerox Capital (Europe) Plc, 5.875%, 5/15/04 $ 4,271,250
12,500,000 B-/B3 Xerox Capital Trust I, 8.0%, 2/1/27 10,562,500
------------
$ 14,833,750
------------
Total Information Technology $ 22,315,000
------------
Telecommunication Services - 11.6%
Diversified Telecommunication Services - 4.9%
3,000,000 CCC/B3 Crown Castle International Corp., 0.0%, 5/15/11 (b) $ 3,015,000
5,522,000 B+/B2 GCI, Inc., 9.75%, 8/1/07 5,591,025
2,980,000 B+/B2 Innova S de R.L., 9.375%, 9/19/13 (144A) 2,998,625
8,000,000 B-/B3 TSI Telecommunication Services Inc.,
12.75%, 2/1/09 8,020,000
------------
$ 19,624,650
------------
Wireless Telecommunications Services - 6.7%
3,000,000 C/Caa3 Alamosa PCS Holdings, Inc., 0.0%, 2/15/10 (b) $ 2,370,000
4,000,000 CCC+/B3 Dobson Communications Corp., 8.875%,
10/1/13 (144A) 4,045,000
4,855,000 CCC+/B3 MetroPCS, Inc., 10.75%, 10/1/11 (144A) 4,952,100
5,150,000 CCC+/B3 Mobifon Holdings BV, 12.5%, 7/31/10 (144A) 5,613,500
2,025,000 B+/Ba3 Mobile Telesystems, 10.95%, 12/21/04 2,151,562
3,230,000 B+/Ba3 Mobile Telesystems, 9.75%, 1/30/08 (144A) 3,456,100
3,600,000 B+/B2 Nextel Communications, Inc., 7.375%, 8/1/15 3,636,000
EURO 600,000 BB-/Ba3 PTC International Finance II SA, 11.25%, 12/1/09 766,856
------------
$ 26,991,118
------------
Total Telecommunication Services $ 46,615,768
------------
Utilities - 2.8%
Electric Utilities - 1.6%
3,100,000 BBB-/Baa3 Empresa Electrica Guacolda SA, 8.625%,
4/30/13 (144A) $ 3,282,776
2,910,000 NR/NR PG&E Corp., 6.875%, 7/15/08 (144A) 3,055,500
------------
$ 6,338,276
------------
Multi-Utilities - 1.2%
4,500,000 B/Caa1 Coastal Corp., 7.5%, 8/15/06 $ 4,005,000
1,000,000 B/Caa1 El Paso Corp., 7.875%, 6/15/12 840,000
------------
$ 4,845,000
------------
Total Utilities $ 11,183,276
------------
TOTAL CORPORATE BONDS & NOTES
(Cost $430,697,426) $457,270,447
------------
12 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Principal
Amount S&P/Moody's
USD ($) Ratings Value
CONVERTIBLE BONDS & NOTES - 8.9%
Leisure Equipment & Products - 1.4%
5,900,000 BB/NR Aristocrat Leisure Limited, 5.0%, 5/31/06 $ 5,487,000
------------
Total Leisure Equipment & Products $ 5,487,000
------------
Health Care - 3.7%
Biotechnology - 1.3%
4,000,000 CCC/NR Human Genome Sciences, Inc., 3.75%, 3/15/07 $ 3,445,000
2,000,000 NR/NR Vertex Pharmaceuticals Inc., 5.0%, 9/19/07 1,690,000
------------
$ 5,135,000
------------
Pharmaceuticals - 2.4%
10,060,000 NR/NR IVAX Corp., 4.5%, 5/15/08 $ 9,871,375
------------
Total Health Care $ 15,006,375
------------
Information Technology - 3.8%
Communications Equipment - 2.9%
9,000,000 B-/B2 Juniper Networks, Inc., 4.75%, 3/15/07 $ 8,775,000
3,225,000 B/B3 Nortel Networks, 4.25%, 9/1/08 2,846,063
------------
$ 11,621,063
------------
Electronic Equipment & Instruments - 0.9%
4,000,000 B/B1 SCI Systems, Inc., 3.0%, 3/15/07 $ 3,625,000
------------
Total Information Technology $ 15,246,063
------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $31,178,118) $ 35,739,438
------------
MUNICIPAL BONDS - 6.6%
Florida - 1.7%
1,000,000 NR/NR Capital Tribal Agency Rev., Seminole Tribe,
8.95%, 10/1/33 $ 1,106,080
4,800,000 NR/NR Capital Tribal Agency Rev., Seminole Tribe,
10.0%, 10/1/33 5,652,624
------------
$ 6,758,704
------------
Indiana - 0.5%
2,000,000 CCC/Caa3 East Chicago Industrial Pollution Ctl. Rev.,
7.125%, 6/1/07 $ 1,146,540
2,010,000 D/Ca Indianapolis, Arpt. Auth. Rev. Spl. Fac.,
United Airlines, 6.5%, 11/15/31 (a) 804,000
------------
$ 1,950,540
------------
Michigan - 0.6%
3,000,000 NR/NR Wayne Charter County, Spl. Arpt. Facs. Rev.,
6.75%, 12/1/15 $ 2,616,420
------------
The accompanying notes are an integral part of these financial statements. 13
Pioneer High Income Trust
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/03 (unaudited) (continued)
- --------------------------------------------------------------------------------
Principal
Amount S&P/Moody's
USD ($) Ratings Value
New Jersey - 1.0%
4,525,000 B/Caa2 New Jersey Economic Dev. Auth. Rev.,
7.0%, 11/15/30 $ 4,008,064
-----------
New York - 1.6%
7,225,000 BB+/Ba2 New York City Ind. Dev. Agcy., British Airways Plc
Project, 7.625%, 12/1/32 $ 6,668,819
-----------
North Carolina - 1.2%
4,800,000 NR/NR Charlotte, Spl. Facs. Rev., Charlotte/Douglas Int'l
Airport, 5.60%, 7/1/27 $ 3,081,600
2,000,000 NR/NR Charlotte, Spl. Facs. Rev., Charlotte/Douglas Int'l
Airport, 7.75%, 2/1/28 1,647,500
-----------
$ 4,729,100
-----------
TOTAL MUNICIPAL BONDS
(Cost $23,080,593) $26,731,647
-----------
SOVEREIGN DEBT OBLIGATIONS - 2.7%
Brazil - 1.4%
ITL 6,000,000,000 B+/B2 Banco Nacional de Desenvolimento Bndes,
8.0%, 4/28/10 $ 3,076,365
1,000,000 B+/B2 Federal Republic of Brazil, 10.25%, 6/17/13 977,500
1,834,801 B+/B2 Federal Republic of Brazil-C Bonds, 8.0%,
4/15/14 1,675,173
-----------
$ 5,729,038
-----------
Ecuador - 0.7%
4,515,000 CCC+/Caa2 Federal Republic of Ecuador, 7.0%,
8/15/30 (144A) $ 2,837,677
-----------
Russia - 0.6%
2,320,000 BB/Ba2 Russian Federation, 5.0%, 3/31/30 $ 2,198,200
-----------
TOTAL SOVEREIGN DEBT OBLIGATIONS
(Cost $9,642,971) $10,764,915
-----------
Shares
CONVERTIBLE PREFERRED STOCK - 0.6%
Information Technology - 0.6%
Communications Equipment - 0.6%
30,000 Lucent Technologies Capital Trust I, 7.75% $ 2,467,670
-----------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $2,142,021) $ 2,467,670
-----------
14 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Principal
Amount S&P/Moody's
USD ($) Ratings Value
TEMPORARY CASH INVESTMENTS - 8.0%
Repurchase Agreement - 3.2%
12,900,000 UBS Finance Inc., 0.7%, dated 9/30/03, repur-
chase price of $12,900,000, plus accrued interest
on 10/1/03 collaterized by $21,612,000 U.S.
Treasury Notes, 1.625%, 4/30/05 $ 12,900,000
-------------
TOTAL REPURCHASE AGREEMENT $ 12,900,000
-------------
Security Lending Collateral - 4.8%
19,467,203 Securities Lending Investment Fund, 1.04% $ 19,467,203
-------------
TOTAL SECURITY LENDING COLLATERAL $ 19,467,203
-------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $32,367,203) $ 32,367,203
-------------
TOTAL INVESTMENTS IN SECURITIES - 140.1%
(Cost $529,108,332) (c) (d) (e) (f) $ 565,341,320
-------------
Liabilities In Excess of Other Assets - (2.7)% $ (10,701,193)
-------------
Preferred Shares at Redempetion Value - (37.4)% $(151,000,000)
-------------
Net Assets Applicable to Common
Shareowners - 100.0% $ 403,640,127
=============
(144A) Security exempt from registration under Rule 144A of the Securities Act
of 1933. Such securities may be resold normally to qualified
institutional buyers in a transaction exempt from registration. At
September 30, 2003, the value of these securities amounted to
$108,263,240 or 26.8% of total net assets.
(a) Security is in default and is non-income producing.
(b) Indicates a security that has a zero coupon that remains in effect until
a predetermined date at which time the stated coupon rate becomes
effective until final maturity.
(c) At September 30, 2003, the net unrealized gain on investments
based on cost for federal income tax purposes of $529,562,069 was
as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $42,963,176
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (7,183,925)
-----------
Net unrealized gain $35,779,251
===========
(d) As of March 31, 2003, the Trust had a net capital loss carryforward of $3,992,595 which
will expire March 31, 2011 if not utilized.
(e) The Trust elected to defer approximately $17,257,854 of capital losses recognized between
November 1, 2002 to its fiscal year ended March 31, 2003.
The accompanying notes are an integral part of these financial statements. 15
Pioneer High Income Trust
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/03 (unaudited) (continued)
- --------------------------------------------------------------------------------
(f) Distribution of investments by country of issue, as a percentage of
total holdings, is as follows:
United States 76.3%
Canada 6.1
Mexico 3.3
Brazil 2.8
Australia 2.5
France 1.5
Russia 1.4
Netherlands 1.0
Turkey 1.0
Great Britain 0.9
Sweden 0.9
Norway 0.7
Chile 0.6
Ecuador 0.5
Ireland 0.4
Poland 0.1
-----
100.0%
=====
Purchases and sales of securities (excluding temporary cash investments)
for the six months ended September 30, 2003, aggregated $226,895,560 and
$189,501,385, respectively.
Note: Principal amounts are denominated in U.S. dollars unless otherwise
denoted.
EURO Euro
ITL Italian Lira
NOK Norwegian Krone
SEK Swedish Krona
16 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 9/30/03 (unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (including securities loaned
of $19,467,203) (cost $529,108,332) $565,341,320
Cash 2,627,984
Receivables -
Investment securities sold 3,420,037
Interest and foreign tax reclaim 12,042,265
Reinvestment of distributions 106,878
Prepaid expenses 34,265
-------------
Total assets $583,572,749
-------------
LIABILITIES:
Payables -
Investment securities purchased $ 8,688,827
Upon return of securities loaned 19,467,203
Forward foreign currency portfolio hedge contract - net 263,059
Due to custodian - foreign currencies, at value
(cost $184,525) 49,201
Offering costs payable 111,926
Due to affiliates 270,297
Accrued expenses 82,109
-------------
Total liabilities $ 28,932,622
-------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to 6,040 shares $151,000,000
-------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $380,078,179
Distributions in excess of net investment income (1,952,633)
Accumulated net realized loss on investments and foreign
currency transactions (10,241,391)
Net unrealized gain on investments 36,232,988
Net unrealized loss on forward foreign currency contracts and
other assets and liabilities denominated in foreign currencies (477,016)
-------------
Net assets applicable to common shareowners $403,640,127
=============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Based on $403,640,127/26,723,270 common shares $ 15.10
=============
The accompanying notes are an integral part of these financial statements. 17
Pioneer High Income Trust
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended 9/30/03
INVESTMENT INCOME:
Interest $24,309,708
Dividends 62,685
Income from securities loaned, net 50,144
-----------
Total investment income $24,422,537
-----------
EXPENSES:
Management fees $ 1,517,242
Transfer agent fees 42,657
Auction agent fees 146,308
Custodian fees 18,924
Registration fees 17,500
Professional fees 27,996
Printing fees 4,453
Trustees' fees 5,791
Miscellaneous 16,371
-----------
Total expenses $ 1,797,242
-----------
Net investment income $22,625,295
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain from:
Investments $10,660,284
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 699,302 $11,359,586
----------- -----------
Net unrealized gain (loss) from:
Investments $34,764,225
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (581,029) $34,183,196
----------- -----------
Net gain on investments and foreign currencies
transactions $45,542,782
-----------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS FROM NET
INVESTMENT INCOME $ (672,211)
-----------
Net increase in net assets applicable to common
shareowners resulting from operations $67,495,866
===========
18 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 9/30/03 and the Period Ended 3/31/03
4/25/02
Six Months (Commence-
Ended ment of
9/30/03 Operations) to
(unaudited) 3/31/03
FROM OPERATIONS:
Net investment income $ 22,625,295 $ 37,219,346
Net realized gain (loss) on investments and foreign
currency transactions 11,359,586 (22,891,033)
Net unrealized gain on investments and foreign
currency transactions 34,183,196 1,572,776
Distributions to preferred shareowners from net
investment income (672,211) (1,181,983)
------------- -------------
Net increase in net assets applicable to common
shareowners resulting from operations $ 67,495,866 $ 14,719,106
------------- -------------
DISTRIBUTIONS TO COMMON SHAREOWNERS:
Net investment income ($0.83 and $1.38 per
share, respectively) $ (22,026,890) $ (36,626,134)
------------- -------------
Total distributions to common shareowners $ (22,026,890) $ (36,626,134)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from the issuance of common shares $ - $ 343,800,000
Net proceeds from underwriters' over-allotment
option exercised - 37,245,000
Reinvestment of distributions 714,749 869,326
Common share offering expenses charged
to paid-in capital - (741,715)
Preferred share offering expenses charged
to paid-in capital (666,972) (1,242,212)
------------- -------------
Net increase in net assets applicable to
common shareowners resulting from Trust
share transactions $ 47,777 $ 379,930,399
------------- -------------
Net increase in net assets applicable
to common shareowners $ 45,516,753 $ 358,023,371
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Beginning of period 358,123,374 100,003
------------- -------------
End of period (including distributions in excess of
net investment income of $1,952,633 and
$1,878,827, respectively) $ 403,640,127 $ 358,123,374
============= =============
9/03 Shares 9/03 Amount 3/03 3/03
(unaudited) (unaudited) Shares Amount
Reinvestment of distributions 49,195 $714,749 67,094 $869,326
------ -------- ------ --------
Net Increase 49,195 $714,749 67,094 $869,326
====== ======== ====== ========
The accompanying notes are an integral part of these financial statements. 19
Pioneer High Income Trust
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months April 25, 2002
Ended to
9/30/03 March 31, 2003
(unaudited) (b)
Per Common Share Operating Performance (a)
Net asset value, beginning of period $ 13.43 $ 14.33+
-------- --------
Increase (decrease) from investment operations:
Net investment income 0.85 1.41
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 1.70 (0.81)
Distributions to preferred shareowners from net
investment income (0.02) (0.04)
-------- --------
Net increase from investment operations $ 2.53 $ 0.56
Distributions to common shareowners:
Net investment income (0.83) (1.38)
Capital charge with respect to issuance of:
Common shares - (0.03)
Preferred shares (0.03) (0.05)
-------- --------
Net increase (decrease) in net asset value $ 1.67 $ (0.90)
-------- --------
Net asset value, end of period* $ 15.10 $ 13.43
-------- --------
Market value, end of period* $ 15.29 $ 14.49
======== ========
Total return++ 11.59% 7.29%
Ratios to average net assets of common shareowners
Net expenses+++ 0.93%** 0.87%**
Net investment income before preferred share dividends+++ 11.65%** 11.62%**
Preferred share dividends 0.35%** 0.37%**
Net investment income available to common shareowners 11.30%** 11.25%**
Portfolio turnover 38% 49%
Net assets of common shareowners, end of period
(in thousands) $403,640 $358,123
Preferred shares outstanding (in thousands) $151,000 $101,000
Asset coverage per preferred share, end of period $ 91,828 $113,647
Average market value per preferred share $ 25,000 $ 25,000
Liquidation value per preferred share $ 25,000 $ 25,003
Ratios to average net assets of common shareowners before
reimbursement of organization expenses
Net expenses+++ 0.93%** 0.88%**
Net investment income before preferred share dividends+++ 11.65%** 11.61%**
Preferred share dividends 0.35%** 0.37%**
Net investment income available to common shareowners 11.30%** 11.24%**
(a) The per share data presented above is based upon the average common shares
outstanding for the period presented.
(b) Trust shares were first publicly offered on April 26, 2002.
* 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 period 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.
+++ Ratios in return 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
and other supplemental data for the period 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 High Income Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/03 (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer High Income Trust (the "Trust") was organized as a Delaware business
trust on January 30, 2002. Prior to commencing operations on April 25, 2002,
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 reimbursed the amount by which the aggregate of all
the Trust's organizational expenses and offering costs (other than the sales
load) exceeded $0.03 per share of the common offering. The investment objective
of the Trust is to seek a high level of current income and the Trust may seek
capital appreciation to the extent consistent with its investment objective.
The Trust invests in below investment grade (high yield) debt securities and
preferred stocks. These high yield securities may be convertible into equity
securities of the issuer. 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, and 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 consistently followed by the Trust, which are in conformity with those
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
21
Pioneer High Income Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/03 (unaudited) (continued)
- --------------------------------------------------------------------------------
consider such factors as Treasury spreads, yields, maturities and ratings.
Valuations may be supplemented by dealers and other sources, as required.
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. Trading in foreign securities is substantially
completed each day at various times prior to the close of the New York
Stock Exchange. The values of such securities used in computing the net
asset value of the Trust's shares are determined as of such times.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have
passed are recorded as soon as the Trust becomes aware of the ex-dividend
data in the exercise of reasonable diligence. Market discount and premium
on fixed income securities are accreted or amortized daily on an effective
yield to maturity basis. Premiums and discounts related to certain
mortgage-backed securities are amortized or accreted in proportion to the
underlying monthly paydowns. Interest income, including income on interest
bearing cash accounts, is recorded on an accrual basis. Temporary cash
investments are valued at amortized cost.
The Trust's investments in foreign markets or countries with limited
developing markets may subject the Trust to a greater degree of risk than
in a developed market. These risks include disruptive political or
economic conditions and the possible imposition of adverse governmental
laws or currency exchange restrictions.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Foreign Currency Translation
The books and records of the Trust are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between
the amount of income accrued and the U.S. dollars actually received.
Further, the effects of changes in
22
Pioneer High Income Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
foreign currency exchange rates on investments are not segregated in the
statement of operations from the effects of changes in market price of
those securities but are included with the net realized and unrealized
gain or loss on investments.
C. Forward Foreign Currency Contracts
The Trust enters into forward foreign currency contracts (contracts) for
the purchase or sale of a specific foreign currency at a fixed price on a
future date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio
hedges). All contracts are marked to market daily at the applicable
exchange rates, and any resulting unrealized gains or losses are recorded
in the Trust's financial statements. The Trust records realized gains and
losses at the time a portfolio hedge is offset by entry into a closing
transaction or extinguished by delivery of the currency. Risks may arise
upon entering into these contracts from the potential inability of
counterparties to meet the terms of the contract and from unanticipated
movements in the value of foreign currencies relative to the U.S. dollar
(see Note 5).
D. 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 characterization of distributions to shareowners for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Trust's distributions may be shown in
the accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment and foreign currency
transactions, or from paid-in capital, depending on the type of book/tax
differences that may exist.
23
Pioneer High Income Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/03 (unaudited) (continued)
- --------------------------------------------------------------------------------
The tax character of distributions paid during the period ended March 31, 2003
was as follows:
- --------------------------------------------------------------------------------
2003
Distributions paid from:
Ordinary Income $37,808,117
Net long-term capital gains -
-----------
Total taxable distribution $37,808,117
===========
- --------------------------------------------------------------------------------
The following shows components of distributable earnings on a federal income
tax basis at March 31, 2003. These amounts do not include the capital loss
carryforward.
- --------------------------------------------------------------------------------
Undistributed ordinary income $3,439,995
Undistributed long-term gains -
Unrealized appreciation 1,032,717
----------
Total $4,472,712
==========
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The difference between book/basis and tax-basis unrealized depreciation is
primarily attributable to the tax deferral of losses on wash sales, the
realization for tax purposes of unrealized gains on certain foreign currency
contracts, and differences in the accrual of income on securities in default.
E. Repurchase Agreements
With respect to repurchase agreements entered into by the Trust, the value
of the underlying securities (collateral), including accrued interest
received from counterparties, is required to be at least equal to or in
excess of the repurchase agreement at the time of purchase. The collateral
for all repurchase agreements is held in safekeeping in the customer-only
account of the Trust's custodian, or subcustodians. PIM is responsible for
determining that the value of the collateral remains at least equal to the
repurchase price.
F. Securities Lending
The Trust lends securities in its portfolio to certain broker-dealers or
other institutional investors, with the Trust's custodian acting as the
lending agent. When entering into a loan, the Trust receives
24
Pioneer High Income Trust
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collateral which is maintained by the custodian and earns income in the
form of negotiated lenders' fees. The Trust also continues to receive
interest or dividends on the securities loaned and unrealized gain or loss
on the fair value of the loaned securities that may occur during the term
of the loan will be for account of the Trust. The loans are secured by
collateral of at least 102%, at all times, of the fair value of the
securities loaned. The amount of the collateral will be adjusted daily to
reflect any price fluctuation in the value of the loaned securities. The
Trust has the right under the securities lending arrangement to recover
the securities on loan from the borrower on demand. The Trust invests cash
collateral in the Securities Lending Investment Fund which is managed by
Brown Brothers Harriman & Co., the Trust's custodian.
G. Automatic Dividend Reinvestment Plan
All common shareowners automatically participate in the Automatic Dividend
Reinvestment Plan (the "Plan"), under which participants receive all
dividends and capital gain distributions (collectively, "dividends") in
full and fractional common shares of the Trust in lieu of cash.
Shareowners may elect not to participate in the Plan. Shareowners not
participating in the Plan receive all dividends and capital gain
distributions in cash. Participation in the Plan is completely voluntary
and may be terminated or resumed at any time by notifying Mellon Investor
Services LLC, the agent for shareowners in administering the Plan (the
"Plan Agent"), prior to any dividend record date; otherwise such
termination or resumption will be effective with respect to any
subsequently declared dividend or other distribution. Whenever the Trust
declares a dividend on common shares payable in cash, participants in the
Plan will receive the equivalent in common shares acquired by the Plan
Agent either (i) through receipt of additional unissued but authorized
common shares from the Trust or (ii) by purchase of outstanding common
shares on the New York Stock Exchange or elsewhere. If, on the payment
date for any dividend the net asset value per common share is equal to or
less than the market price per share plus estimated brokerage trading fees
("market premium"), the Plan Agent will invest the dividend amount in
newly issued common shares. The number of newly issued common shares to be
credited to each account will be determined by dividing the dollar amount
of the dividend by the net asset value per common share on the date the
25
Pioneer High Income Trust
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NOTES TO FINANCIAL STATEMENTS 9/30/03 (unaudited) (continued)
- --------------------------------------------------------------------------------
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 weekly at the
annual rate of 0.60% of the Trust's average weekly managed assets. "Managed
assets" is the average weekly 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., an affiliate of Merrill Lynch, Pierce, Fenner & Smith
Incorporated, to provide certain administrative services to the Trust on its
behalf. PIM pays Princeton Administrators, L.P. a monthly fee at an annual rate
of 0.10% of the average weekly value of the Trust's managed assets, subject to
a minimum monthly fee of $10,000. Princeton Administrators, L.P. receives no
compensation directly from the Trust.
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,
26
Pioneer High Income Trust
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dividend paying agent and redemption agent with respect to the Trust's Auction
Market Preferred Shares (AMPS). 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. Expense Offsets
The Trust may enter into certain expense offset arrangements resulting in a
reduction in the Trust's total expenses. As of September 30, 2003, the Trust's
expenses were not reduced under such arrangements.
5. Forward Foreign Currency Contracts
During the six months ended September 30, 2003, the Trust had entered into
contracts that obligate the Trust to deliver currencies at specified future
dates. At the maturity of a contract, the Trust must make delivery of the
foreign currency. Alternatively, prior to the settlement date of the portfolio
hedge, the Trust may close out such contracts by entering into an offsetting
hedge contract. At September 30, 2003, the Trust had no forward currency
settlement contracts. The Trust's gross outstanding portfolio hedge contracts
receivable and payable were $20,682,000 and $20,945,059, respectively,
resulting in a net payable of $263,059.
6. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized. Of the 26,723,270 common shares of beneficial interest outstanding
at September 30, 2003 PIM owned 6,981 shares.
During the six months ended September 30, 2003 and the period ended March 31,
2003, the Trust issued 49,195 and 67,094 shares, respectively, in connection
with the Trust's dividend reinvestment plan.
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, 2003, there were 6,040 AMPS ("preferred shares") as follows:
Series M7-2,020, Series W28-2,020 and Series TH7-2,000. On August 1, 2003, the
Trust reclassified and issued 2,000 shares of common shares into Series TH.
Estimated offering costs of $166,972 and underwriting discounts of $500,000
have been charged to paid-in capital.
27
Pioneer High Income Trust
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NOTES TO FINANCIAL STATEMENTS 9/30/03 (unaudited) (continued)
- --------------------------------------------------------------------------------
Dividends on Series M7 AMPS and Series TH7 AMPS are cumulative at a rate which
is reset every seven days based on the results of an auction. Dividends on
Series W28 AMPS are also cumulative at a rate reset every 28 days based on the
results of an auction. Dividend rates ranged from 1.00% to 1.35% during the six
months ended September 30, 2003.
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 AMPS 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 AMPS 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 AMPS 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 AMPS 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
investment company or changes in its fundamental investment restrictions.
7. Subsequent Events
Subsequent to September 30, 2003 the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.1375 per common share
payable October 31, 2003, to shareowners of record on October 20, 2003.
28
Pioneer High Income Trust
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For the period October 1, 2003 to October 31, 2003, dividends declared on
preferred shares totaled $145,045 in aggregate for the three 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.
29
Pioneer High Income Trust
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RESULTS OF SHAREOWNER MEETING
- --------------------------------------------------------------------------------
On October 28, 2003, the Trust held a special meeting of shareowners to select
two trustees. Over one third of the outstanding common and preferred shares
were represented, in person or by proxy, thereby constituting a quorum. The
Trustees were elected - here are the detailed results of the vote.
Proposal 1 - To elect two Trustees.
Trustee elected by vote of combined common and preferred shareowners.
Shares Voted
Total Shares ------------
Nominee Outstanding* Affirmative Withheld
Mary K. Bush 26,722,232 24,827,810 340,524
Trustee Elected by preferred shareowners only.
Shares Voted
Total Shares ------------
Nominee Outstanding* Affirmative Withheld
Marguerite A. Piret 6,040 4,233 21
* Outstanding shares on record as of September 4, 2003.
30
Pioneer High Income Trust
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TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Officers Trustees
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 and Administrator
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Legal Counsel
Hale and Dorr LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
Mellon Investor Services LLC
Preferred Share Auction/Transfer Agent and Registrar
Deutsche Bank Trust Company Americas
Sub-Administrator
Princeton Administrators, L.P.
*Mr. Hood was elected Trustee and Executive Vice President on June 3, 2003.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). This
information is also available on our web site at www.pioneerfunds.com and on
the Securities and Exchange Commission's web site at http://www.sec.gov.
31
Pioneer High Income Trust
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PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
- --------------------------------------------------------------------------------
Your investment professional can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-8O0-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 10-digit account number, your three-digit fund number and your four-digit
personal identification number at hand.
6-Month Reinstatement Privilege (for Class A and Class B Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 6 months of your
redemption. You have the choice of investing in any Pioneer fund provided the
account has the exact same registration and meets the fund's minimum investment
requirement. Reinstated accounts may only purchase Class A fund shares.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need
to do is authorize a set amount of money to be moved out of your bank account
into the Pioneer fund of your choice. Investomatic also allows you to change
the dollar amount, frequency and investment date right over the phone. By
putting aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing
Pioneer to deduct from participating employees' paychecks. You specify the
dollar amount you want to invest into the Pioneer fund(s) of your choice.
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Pioneer High Income Trust
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Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds
you wish to invest in. You choose the amounts and dates for Pioneer to sell
shares of your original fund and use the proceeds to buy shares of the other
funds you have chosen. Over time, your investment will be shifted out of the
original fund. (Automatic Exchange is available for originating accounts with a
balance of $5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals.
You decide the frequency and the day of the month. Pioneer will send the
proceeds by check to the address you designate, or electronically to your bank
account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available for accounts with a value of $10,000 or
more.)
33
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RETIREMENT PLANS FROM PIONEER
- --------------------------------------------------------------------------------
Pioneer has a long history of helping people work toward their retirement
goals, offering plans suited to the individual investor and businesses of all
sizes. For more information on Pioneer retirement plans, contact your
investment professional, or call Pioneer at 1-800-622-0176.
Individual Retirement Accounts (IRAs)
Traditional IRA*
For anyone under age 70 1/2 earning income. Individuals can contribute up to
$3,000 annually. Earnings are tax-deferred, and contributions may be
tax-deductible.
Roth IRA*
Available to single individuals earning less than $110,000 in income annually,
and married couples with joint income less than $160,000. Contributions of up
to $3,000 a year are not tax-deductible, but all earnings are tax-free for
qualified withdrawals. Distributions are tax and penalty-free if certain
conditions are met.
Employer-Sponsored Plans
Uni-K Plan*
A 401(k) plan designed specifically for any business that employs only owners
and their spouses. Participants can make salary deferral contributions up to
$11,000 per year. In addition, each year the business may contribute up to 25%
of pay.
401(k) Plan*
Allows employees to make pre-tax contributions through payroll deduction, up to
$11,000 per year. Employers' contributions are discretionary. The 401(k) offers
companies maximum flexibility.
SIMPLE IRA Plan*
The Savings Incentive Match PLan for Employees (SIMPLE) is designed for
employers with 100 or fewer eligible employees. Employees can decide whether to
contribute. Employers must contribute.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
34
403(b) Plan*
Also known as a Tax-Sheltered Account (TSA), this plan lets employees of public
schools, non-profit hospitals and other tax-exempt organizations make pre-tax
contributions through payroll deduction.
SEP-IRA
The Simplified Employee Pension (SEP) plan lets self-employed people and
small-business owners make tax-deductible contributions of up to 25% of income,
while maintaining complete contribution flexibility each year.
Profit Sharing Plan
Companies can decide each year whether - and how much - to contribute to
participants, up to 25% of each participant's pay. Can include vesting
schedules that are not available with a SEP-IRA.
Age-Based Profit Sharing Plan
Employer contributions are flexible, but are based on a formula using age and
salary. Each year, a business can contribute up to 25% of the total eligible
payroll.
Money Purchase Pension Plan (MPP)
Allows employer contributions, up to 25% of pay annually. Companies must
contribute a fixed percentage of pay each year.
Defined Benefit Pension Plan
Requires a business to contribute enough each year to fund a specific future
benefit. Most beneficial to older employees who need to accumulate assets
rapidly.
* Special Catch-Up Provisions are available to individuals age 50 and older to
contribute additional amounts to their retirement accounts. For more
information, call our Retirement Plans Information line at 1-800-622-0176.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
35
THE PIONEER FAMILY OF MUTUAL FUNDS
For information about any Pioneer mutual fund, please contact your investment
professional, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest.
U.S. Equity Fixed Income
Pioneer Fund Pioneer America Income Trust
Pioneer Balanced Fund Pioneer Bond Fund
Pioneer Core Equity Fund Pioneer High Yield Fund
Pioneer Equity Income Fund Pioneer Stable Value Fund
Pioneer Growth Shares Pioneer Strategic Income Fund
Pioneer Mid Cap Growth Fund Pioneer Tax Free Income Fund
Pioneer Mid Cap Value Fund
Pioneer Real Estate Shares Money Market
Pioneer Small Cap Value Fund Pioneer Cash Reserves Fund*
Pioneer Small Company Fund
Pioneer Value Fund
International/Global Equity
Pioneer Emerging Markets Fund
Pioneer Europe Select Fund
Pioneer Europe Fund
Pioneer International Equity Fund
Pioneer International Value Fund
* An investment in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund.
36
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This page for your notes.
37
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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
[LOGO] PIONEER
Investments(R)
Pioneer Investment Management, Inc.
60 State Street 14304-00-1003
Boston, Massachusetts 02109 (C) 2003 Pioneer Funds Distributor, Inc.
www.pioneerfunds.com Underwriter of Pioneer mutual funds, Member SIPC
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.
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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
Not applicable; to be answered on annual submissions after December 15, 2003.
ITEMS 5-6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Not applicable to open-end management investment companies.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation of
these controls and procedures as of a date within 90 days prior to 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.
Filed herewith.
(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 High Income Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date November 26, 2003
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 26, 2003
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date November 26, 2003
* Print the name and title of each signing officer under his or her signature.