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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21321
Pioneer Municipal High Income Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
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: April 30
Date of reporting period: May 1, 2003 through October 31, 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
-----------
MUNICIPAL
HIGH
INCOME
TRUST
Semiannual
Report
10/31/03
[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 15
Notes to Financial Statements 19
Trustees, Officers and Service Providers 25
Pioneer Municipal High Income Trust
================================================================================
LETTER TO SHAREOWNERS 10/31/03
================================================================================
Dear Shareowner,
- --------------------------------------------------------------------------------
Welcome to Pioneer. We thank you for your investment in Pioneer Municipal High
Income Trust and are pleased to provide you with the Trust's first shareholder
report since its inception on July 21, 2003.
Over the past several months, investors have been buoyed by encouraging factors
that bode well for a better economy. 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.
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.
As professional investors, we seek the best values in the high income
marketplace by taking advantage of lower prices to purchase attractive
securities. For over 75 years, that strategy has helped Pioneer fund managers
and shareowners reach their financial goals. In an interview on page 4 of this
report, David Eurkus, the portfolio manager for Pioneer Municipal High Income
Trust, discusses the Trust's strategy since its inception in July.
Since the founding of Pioneer Fund, our flagship fund, in 1928, our only purpose
has been to help investors achieve their objectives. Over the months and years
ahead, we will continue to offer you the high caliber of investment management
that our shareowners have enjoyed for more than seven decades.
For the latest information about Pioneer funds, as well as timely informative
articles on investing, I invite you to visit us at www.pioneerfunds.com. To
review how your portfolio now stands in light of your personal objectives,
please contact your financial advisor. The value of an advisor is never more
evident than when economic and market conditions are changing.
All of us at Pioneer thank you for the confidence and trust you have placed in
us.
Sincerely,
/s/ OSBERT M. HOOD
Osbert M. Hood
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 Trust
================================================================================
PORTFOLIO SUMMARY 10/31/03
================================================================================
Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[DATA BELOW IS REPRESENTED BY A PIE CHART IN THE ORIGINAL REPORT]
Health 24.9%
Airport 19.0%
Insured 16.9%
Education 8.3%
Other 7.1%
Pollution Control 7.0%
Tobacco 6.9%
Power 4.9%
Development 3.2%
General Obligation 1.8%
Portfolio Maturity Quality Distribution
- ------------------------------------ -----------------------------------------
(Effective life as a percentage of (As a percentage of total investment
long-term holdings) portfolio)
[DATA BELOW IS REPRESENTED BY A PIE CHART IN THE ORIGINAL REPORT]
0-1 YEARS 1.4% AAA 19.6%
1-3 YEARS 3.1% AA 6.9%
3-6 YEARS 8.9% A 0.4%
6-8 YEARS 33.1% BBB 33.1%
8-10 YEARS 9.7% BB & lOWER 38.5%
10+ YEARS 43.8% Cash Equivalents 1.5%
10 Largest Holdings*
- --------------------------------------------------------------------------------
(As a percentage of long-term holdings)
- --------------------------------------------------------------------------------
1. Greenville County School District, 5.5%, 12/1/28 3.82%
- --------------------------------------------------------------------------------
2. Allegheny County Hospital Development Authority Revenue,
9.25%, 11/15/30 3.07
- --------------------------------------------------------------------------------
3. Minneapolis/St. Paul Metropolitan Airports, 7.0%, 4/1/25 2.94
- --------------------------------------------------------------------------------
4. Birmingham Alabama General Obligation, 5.0%, 12/1/32 2.45
- --------------------------------------------------------------------------------
5. Tobacco Settlement Financing Corp., 6.75%, 6/1/39 2.38
- --------------------------------------------------------------------------------
6. Texas State Turnpike Authority Revenue, 0.0%, 8/15/16 2.12
- --------------------------------------------------------------------------------
7. New Jersey Economic Development Authority Revenue,
5.25%, 6/15/19 2.09
- --------------------------------------------------------------------------------
8. Metropolitan Pier & Exposition Authority Dedicated State Tax
Revenue, 0.0%, 6/15/22 2.01
- --------------------------------------------------------------------------------
9. Western Generation Agency Cogeneration Project Revenue,
7.125%, 1/1/21 1.86
- --------------------------------------------------------------------------------
10. Johnson City Health & Educational Facilities Board Hospital
Revenue, 7.5%, 7/1/33 1.83
- --------------------------------------------------------------------------------
*This list excludes temporary cash and derivative investments. Trust holdings
will vary for other periods.
2
Pioneer Municipal High Income Trust
================================================================================
PERFORMANCE UPDATE 10/31/03
================================================================================
Share Prices and Distributions
- --------------------------------------------------------------------------------
Market Value
per Common Share 10/31/03 7/21/03
$14.96 $15.00
Net Asset Value
per Common Share 10/31/03 7/21/03
$14.67 $14.33
Distributions per Share Income Short-Term Long-Term
(7/21/03 - 10/31/03) Dividends Capital Gains Capital Gains
$0.18 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in common shares of Pioneer Municipal High Income Trust at
public offering price, compared to that of the Lehman Brothers Municipal Bond
Index and Lehman Brothers Non-Investment Grade Municipal Bond Index.
- ----------------------------------
Cumulative Total Returns
(As of October 31, 2003)
Net Asset Market
Period Value Price*
Life-of-Trust
(7/21/03) 3.64% 0.97%
- ----------------------------------
[BEGINNING MOUNTAIN CHART]
Lehman Brothers Lehman Brothers
Pioneer Municipal Non-Investment Grade Municipal
High Income Trust* Municipal Bond Index Bond Index
04/03 $10,000 $10,000 $10,000
10/03 $10,570 $10,535 $10,319
[END MOUNTAIN CHART]
* 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.
+ Index comparison begins July 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.
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
or the redemption of Trust shares.
3
Pioneer Municipal High Income Trust
================================================================================
PORTFOLIO MANAGEMENT DISCUSSION 10/31/03
================================================================================
The first shareholder report for Pioneer Municipal High Income Trust covers the
Trust's abbreviated semiannual period from inception through October 31, 2003.
In the report, David Eurkus, a member of the Trust's management team, reviews
the Trust's investment process, strategy and outlook.
Q: How has the Trust performed since its inception on July 21, 2003?
A: Since inception, Pioneer Municipal High Income Trust returned 3.64% at net
asset value and 0.97% at market price. As of October 31, 2003, the Trust was
selling at a premium of market price to net asset value of 2.0%. From July
31, 2003 through October 31, 2003, the Lehman Brothers Municipal Bond Index
returned 3.19%, and the Lehman Brothers High Yield Municipal Bond Index
returned 5.28%. The Trust's performance was aided by positive security
selection. At the end of the period, the Trust held 106 issues. On October
31, 2003, the Trust's 30-day SEC yield was 7.00%.
Q: What is the Trust's investment approach?
A: In keeping with Pioneer's traditions, we are value investors, looking for
securities selling at attractive valuations. When selecting securities for
the Trust, we use a top-down/bottom-up approach. We consider fundamental
indicators such as the rates of economic growth, inflation and Federal
Reserve monetary policy. When analyzing individual securities, we take into
account yields compared to U.S. Treasuries or comparable issuers, liquidity,
credit ratings, sectors and issuer diversification.
Under normal market conditions, the Trust will invest at least 50% of its
assets in investment-grade municipal securities, with no more than 50% in
municipal bonds that are below investment grade. The Trust will invest no
more than 25% of total assets in any one industry and will generally focus on
bonds that derive their revenue from essential services such as airport/
transportation, hospitals, education, housing and power/energy.
In the past, high yield municipal bonds have offered greater after-tax income
with significantly lower default rates than high yield corporate bonds.
Average default rates on municipal bonds have historically been low relative
to corporate securities. Based on data compiled by Moody's Investors
Services, Inc., of the
4
Pioneer Municipal High Income Trust
================================================================================
================================================================================
375,818 municipal issuers between 1970 and 2000, only 18 defaulted. In
particular, essential service revenue bonds, like the ones in which the Trust
has invested, have offered safe havens, with no defaults recorded for
Moody's-rated issuers during the same 30-year period.
Q: How did you manage the Trust during the period?
A: We focused on some of the sectors that are crucial to the vitality of the
U.S. economy, including health care (about 24.9% of portfolio assets), energy
(about 4.9% of portfolio assets) and transportation (about 20.2% of portfolio
assets). These sectors were hit hard by the general economic slowdown, but
they were also hurt by problems that were specific to their industries. In
the health care sector, many hospitals saw their revenues plummet when the
government reduced Medicare and Medicaid reimbursements. Companies in the
energy sector were negatively affected by the Enron scandal, accounting
problems and the power shortage in California. The terrorist attacks of
September 11 had a significant negative impact on the airline and airport
industry.
The problems in the health care, energy and air transportation areas
generally led to decreased revenues and resulted in credit downgrades on
corporate debt. Even companies with healthy businesses saw their bond ratings
lowered. As credit quality declined, yields rose and bond prices fell,
creating a large pool of lower-quality securities. We took advantage of the
growing lower-quality market by investing in companies whose businesses were
fundamentally sound but whose debt ratings had deteriorated. We believe the
companies in which we have invested have the potential to provide a
relatively high level of income as well as some capital appreciation if
interest rates remain in the current range. At the end of the period, nearly
60% of the Trust's assets were invested in investment-grade securities and
about 39% were in securities rated below investment grade. Slightly more than
1% of the Trust's assets were in cash. Overall, the average quality of the
Trust was BBB+.
Q: What is your outlook over the next six months?
A: We are optimistic about the future course of the economy and the Trust. In
the third quarter of 2003, we saw relatively strong corporate earnings and a
pick-up in consumer and business spending. This is a positive backdrop for
the Trust, as high income
5
Pioneer Municipal High Income Trust
================================================================================
PORTFOLIO MANAGEMENT DISCUSSION 10/31/03 (continued)
================================================================================
municipal bonds tend to perform well in an improving economy. Should the
economy expand, market interest rates could move up, boosting bond yields and
providing a potentially higher level of income to the Trust. (However, it's
important to remember that rising interest rates tend to lower bond prices.)
A better economy is positive for the Trust in another way. As the economy
gets stronger, the Trust's underlying companies may see their revenues rise
and credit quality upgraded by rating agencies. Better credit quality ratings
could increase bond prices, providing the opportunity for more capital
appreciation to the Trust.
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 Municipal High Income Trust
================================================================================
SCHEDULE OF INVESTMENTS 10/31/03 (unaudited)
================================================================================
S&P/
Principal Moody's
Amount Ratings Value
TAX EXEMPT OBLIGATIONS - 126.7%
Alabama - 3.6%
$10,000,000 AAA/Aaa Birmingham Alabama General Obligation,
5.0%, 12/1/32 $10,058,300
1,500,000 BBB/NR Camden Alabama Industrial Development Board,
6.125%, 12/1/24 1,570,560
-----------
$11,628,860
-----------
Arizona - 5.8%
5,000,000 B+/Ba3 Apache County Industrial Development Authority,
5.85%, 3/1/28 $ 4,639,400
5,000,000 B+/Ba3 Apache County Industrial Development Authority,
5.875%, 3/1/33 4,598,450
3,000,000 NR/NR Maricopa County Industrial Development Authority,
7.875%, 4/1/27 3,087,870
5,880,000 AA/Aa2 Salt River Project Agriculture Improvement and
Power District Electric System Revenue,
5.0%, 1/1/31 5,926,922
500,000 NR/Baa2 Yavapai County Industrial Development Authority,
6.0%, 8/1/33 506,200
-----------
$18,758,842
-----------
California - 11.6%
7,270,000 BBB/A3 California State General Obligation,
5.25%, 2/1/28 $ 7,204,425
5,150,000 BBB/Baa2 Golden State Tobacco Securitization Corp.,
7.8%, 6/1/42 5,264,330
7,000,000 BBB/Baa2 Golden State Tobacco Securitization Corp.,
7.875%, 6/1/42 7,190,890
6,500,000 B-/Caa2 Los Angeles Regional Airports Improvement Corp.
Lease Revenue, 7.5%, 12/1/24 6,321,380
6,000,000 AAA/NR Palm Desert Financing Authority Tax Allocation
Revenue, 5.0%, 4/1/30 6,036,360
3,000,000 AAA/Aaa San Diego Unified School District, 5.0%, 7/1/25 3,026,880
2,500,000 AAA/Aaa University of California Revenue, 5.0%, 5/15/25 2,530,225
-----------
$37,574,490
-----------
Colorado - 0.9%
2,850,000 BBB/Baa3 Denver Health & Hospital Authority Healthcare
Revenue, 6.0%, 12/1/31 $ 2,807,991
-----------
The accompanying notes are an integral part of these financial statements. 7
Pioneer Municipal High Income Trust
================================================================================
SCHEDULE OF INVESTMENTS 10/31/03 (unaudited) (continued)
================================================================================
S&P/
Principal Moody's
Amount Ratings Value
Connecticut - 1.5%
$ 2,205,000 BB/Ba1 Connecticut State Health & Educational Facilities
Authority Revenue, 5.375%, 7/1/17 $ 1,731,983
4,400,000 BB/Ba1 Connecticut State Health & Educational Facilities
Authority Revenue, 5.5%, 7/1/27 3,210,064
-------------
$ 4,942,047
-------------
District of Columbia - 3.4%
5,000,000 BBB/Baa2 District of Columbia Tobacco Settlement Financing
Corp., 6.5%, 5/15/33 $ 4,382,300
7,325,000 BBB/Baa2 District of Columbia Tobacco Settlement Financing
Corp., 6.75%, 5/15/40 6,600,265
-------------
$ 10,982,565
-------------
Florida - 4.8%
2,000,000 NR/NR Beacon Lakes Community Development,
6.9%, 5/1/35 $ 2,007,400
2,300,000 B/Caa2 Hillsborough County Aviation Authority Revenue,
6.8%, 1/1/24 1,927,400
1,200,000 NR/B3 Jacksonville Health Facilities Authority,
7.0%, 12/1/14 738,000
1,650,000 BBB-/Baa1 Polk County Industrial Development Revenue,
5.85%, 12/1/30 1,619,129
2,000,000 NR/NR Seminole Tribe Convention-A, 8.95%, 10/1/33 2,217,700
1,900,000 NR/NR Seminole Tribe Convention-A, 10.0%, 10/1/33 2,248,992
5,000,000 NR/Baa2 Tallahassee Health Facilities Revenue,
6.375%, 12/1/30 4,770,850
-------------
$ 15,529,471
-------------
Idaho - 1.4%
5,000,000 BB+/Ba3 Power County Industrial Development Corp.,
6.45%, 8/1/32 $ 4,666,600
-------------
Illinois - 3.3%
2,790,000 B/Caa2 Chicago Illinois O'Hare International Airport,
6.45%, 5/1/18 $ 2,320,387
16,880,000 AAA/Aaa Metropolitan Pier & Exposition Authority Dedicated
State Tax Revenue, 0.0%, 6/15/22 (a) 8,259,215
-------------
$ 10,579,602
-------------
Indiana - 0.5%
2,000,000 CCC/Caa3 East Chicago Industrial Pollution Control Revenue,
7.125%, 6/1/07 $ 1,157,220
1,000,000 CCC/Caa3 Indiana State Development Finance Authority
Revenue, 5.75%, 10/1/11 575,290
-------------
$ 1,732,510
-------------
8 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
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================================================================================
S&P/
Principal Moody's
Amount Ratings Value
Kentucky - 2.8%
$7,050,000 B/B3 Kenton County Airport Revenue, 7.5%, 2/1/12 $ 7,036,817
1,965,000 B/B3 Kenton County Airport Revenue, 7.5%, 2/1/20 1,942,167
-------------
$ 8,978,984
-------------
Massachusetts - 7.2%
3,350,000 AAA/Aaa Massachusetts Health & Educational Facilities
Authority Revenue, 5.0%, 7/1/18 $ 3,637,229
5,000,000 AAA/Aaa Massachusetts Health & Educational Facilities
Authority Revenue, 5.5%, 7/1/22 5,606,300
3,500,000 BBB/Baa3 Massachusetts Health & Educational Facilities
Authority Revenue, 6.25%, 7/1/22 3,332,525
2,640,000 BBB/Baa3 Massachusetts Health & Educational Facilities
Authority Revenue, 5.75%, 7/1/28 2,293,447
5,000,000 BBB-/NR Massachusetts Health & Educational Facilities
Authority Revenue, 6.75%, 10/1/33 4,906,450
1,000,000 AA/NR Massachusetts Health & Educational Facilities
Authority Revenue, 5.25%, 10/15/33 1,014,120
2,435,000 AAA/Aaa Massachusetts Health & Educational Facilities
Authority Revenue, 5.0%, 7/15/35 2,463,538
75,000 BB/NR Massachusetts State Development Finance
Agency, 5.25%, 10/1/18 61,161
-------------
$ 23,314,770
-------------
Michigan - 4.8%
2,000,000 NR/Ba2 Garden City Hospital Finance Authority,
5.75%, 9/1/17 $ 1,546,420
1,500,000 BBB-/NR John Tolfree Health System Corp., 6.0%, 9/15/23 1,389,465
2,000,000 NR/NR Michigan State Hospital Finance Authority
Revenue, 6.4%, 1/1/15 1,890,680
4,010,000 BBB-/Baa3 Michigan State Hospital Finance Authority
Revenue, 6.0%, 2/1/24 3,749,190
7,705,000 NR/NR Wayne Charter County Special Airport Facilities
Revenue, 6.75%, 12/1/15 6,814,687
-------------
$ 15,390,442
-------------
Minnesota - 4.2%
13,260,000 NR/NR Minneapolis/St. Paul Metropolitan Airports,
7.0%, 4/1/25 $ 12,060,898
1,500,000 BB-/Ba2 St. Paul Housing & Redevelopment Authority,
6.625%, 11/1/17 1,500,420
-------------
$ 13,561,318
-------------
The accompanying notes are an integral part of these financial statements. 9
Pioneer Municipal High Income Trust
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SCHEDULE OF INVESTMENTS 10/31/03 (unaudited) (continued)
================================================================================
S&P/
Principal Moody's
Amount Ratings Value
Mississippi - 0.9%
$3,000,000 BBB-/Ba1 Mississippi Business Finance Corp. Pollution
Control Revenue, 5.9%, 5/1/22 $ 2,989,980
-------------
Missouri - 1.7%
5,500,000 NR/Baa3 St. Louis Industrial Development Authority
Revenue, 7.25%, 12/15/35 $ 5,472,170
-------------
Nevada - 1.0%
1,000,000 BBB-/Baa2 Clark County Industrial Development Revenue,
5.45%, 3/1/38 $ 1,044,540
2,000,000 NR/NR Nevada State Department of Business & Industry,
7.25%, 1/1/23 1,986,620
-------------
$ 3,031,160
-------------
New Jersey - 9.5%
7,980,000 AAA/Aaa New Jersey Economic Development Authority
Revenue, 5.25%, 6/15/19 $ 8,584,884
2,000,000 B/Caa2 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/19 1,764,980
1,000,000 B/Caa2 New Jersey Economic Development Authority
Revenue, 6.4%, 9/15/23 865,940
5,100,000 B/Caa2 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/29 4,335,153
6,150,000 B/Caa2 New Jersey Economic Development Authority
Revenue, 7.0%, 11/15/30 5,611,444
10,750,000 BBB/Baa2 Tobacco Settlement Financing Corp.,
6.75%, 6/1/39 9,752,292
-------------
$ 30,914,693
-------------
New Mexico - 1.0%
3,700,000 NR/B1 New Mexico Hospital Equipment Loan Council,
6.4%, 6/1/16 $ 3,329,889
-------------
New York - 4.3%
5,625,000 CCC/Caa2 New York City Industrial Development Agency,
6.9%, 8/1/24 $ 3,895,481
5,000,000 AAA/Aaa New York City Trust Cultural Resources Revenue,
5.125%, 7/1/31 5,110,200
2,715,000 AAA/NR New York State Urban Development Corp.
Revenue, 5.25%, 3/15/16 2,973,522
2,000,000 NR/NR Suffolk County Industrial Development Agency,
7.25%, 1/1/30 1,884,060
-------------
$ 13,863,263
-------------
10 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
================================================================================
================================================================================
S&P/
Principal Moody's
Amount Ratings Value
North Carolina - 1.9%
$2,000,000 AA+/Aa2 Charlotte North Carolina Certificates of
Participation, 5.0%, 6/1/33 $ 2,007,480
4,600,000 AA+/Aa2 Charlotte North Carolina Special Facilities
Revenue, 7.75%, 2/1/28 4,151,500
-------------
$ 6,158,980
-------------
Oklahoma - 3.7%
3,000,000 B-/B1 Oklahoma Development Finance Authority
Revenue, 5.625%, 8/15/19 $ 2,180,850
8,000,000 B-/B1 Oklahoma Development Finance Authority
Revenue, 5.625%, 8/15/29 5,354,960
1,225,000 B-/Caa2 Tulsa Municipal Airport Revenue, 6.25%, 6/1/20 1,018,245
4,100,000 B-/Caa2 Tulsa Municipal Airport Revenue, 5.65%, 12/1/35 3,448,633
-------------
$ 12,002,688
-------------
Oregon - 4.1%
1,000,000 NR/NR Klamath Falls Electric Revenue, 5.75%, 1/1/13 $ 996,950
5,000,000 NR/NR Klamath Falls Electric Revenue, 6.0%, 1/1/25 4,686,900
7,500,000 NR/NR Western Generation Agency Cogeneration Project
Revenue, 7.125%, 1/1/21 7,630,425
-------------
$ 13,314,275
-------------
Pennsylvania - 9.7%
1,550,000 NR/Baa1 Allegheny County Hospital Development Authority
Revenue, 5.125%, 5/1/25 $ 1,295,583
12,300,000 B/B2 Allegheny County Hospital Development Authority
Revenue, 9.25%, 11/15/30 12,615,495
2,500,000 BBB/Baa2 Beaver County Industrial Development Authority,
7.625%, 5/1/25 2,678,925
1,000,000 BBB-/NR Columbia County Hospital Authority Health Care
Revenue, 5.9%, 6/1/29 793,490
5,000,000 BBB/Baa3 Delaware County Industrial Development Authority
Revenue, 6.1%, 7/1/13 5,305,200
1,280,000 NR/B2 Langhorne Manor Borough Higher Education &
Health Authority Revenue, 7.35%, 7/1/22 1,240,730
2,500,000 BBB+/NR Pennsylvania Higher Educational Facilities Authority
Revenue, 5.4%, 7/15/36 2,462,775
5,000,000 BBB-/Baa2 Philadelphia Hospitals & Higher Education
Facilities Authority Revenue, 6.5%, 11/15/22 4,948,750
-------------
$ 31,340,948
-------------
The accompanying notes are an integral part of these financial statements. 11
Pioneer Municipal High Income Trust
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SCHEDULE OF INVESTMENTS 10/31/03 (unaudited) (continued)
================================================================================
S&P/
Principal Moody's
Amount Ratings Value
South Carolina - 8.6%
$15,000,000 AA-/A1 Greenville County School District, 5.5%, 12/1/28 $ 15,657,600
1,900,000 BBB/Baa2 South Carolina Jobs Economic Development
Authority Revenue, 6.25%, 8/1/31 1,930,267
5,850,000 BBB/Baa2 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 5,999,526
4,445,000 BBB-/NR South Carolina Jobs Economic Development
Authority Revenue, 6.625%, 4/1/36 4,272,712
-------------
$ 27,860,105
-------------
Tennessee - 3.7%
7,000,000 NR/Baa2 Johnson City Health & Educational Facilities Board
Hospital Revenue, 7.5%, 7/1/33 $ 7,499,030
4,480,000 NR/Baa2 Knox County Health Educational & Housing Facilities
Board Hospital Revenue, 6.375%, 4/15/22 4,609,472
-------------
$ 12,108,502
-------------
Texas - 8.9%
4,000,000 CCC/Caa2 Alliance Airport Authority Special Facilities
Revenue, 7.0%, 12/1/11 $ 3,424,280
2,800,000 B/B3 Dallas-Fort Worth International Airport Revenue,
7.6%, 11/1/11 2,606,408
750,000 B/B3 Dallas-Fort Worth International Airport Revenue,
7.625%, 11/1/21 697,523
5,500,000 B/B3 Dallas-Fort Worth International Airport Revenue,
7.125%, 11/1/26 4,812,555
1,000,000 BB+/NR Georgetown Health Facilities Development Corp.,
6.25%, 8/15/29 933,290
3,750,000 B-/Caa2 Houston Airport System Special Facilities Revenue,
5.7%, 7/15/29 2,773,125
5,000,000 BBB-/NR Lufkin Health Facilities Development Corp.
5.7%, 2/15/28 4,302,450
500,000 BBB/Baa2 Sabine River Authority Pollution Control Revenue,
6.15%, 8/1/22 519,475
15,865,000 AAA/Aaa Texas State Turnpike Authority Revenue,
0.0%, 8/15/16 8,714,486
-------------
$ 28,783,592
-------------
Vermont - 0.5%
1,500,000 A-/A3 Vermont Educational & Health Buildings Financing
Agency Revenue, 6.0%, 10/1/28 $ 1,651,965
-------------
12 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
================================================================================
================================================================================
S&P/
Principal Moody's
Amount Ratings Value
Virginia - 2.5%
$ 1,000,000 BBB/Baa3 Peninsula Ports Authority, 6.0%, 4/1/33 $ 1,016,980
4,000,000 BB/NR Pocahontas Parkway Association of Virginia Toll
Road Revenue, 5.5%, 8/15/28 3,090,080
3,940,000 AAA/Aaa University of Virginia Revenue, 5.0%, 6/1/33 3,987,713
-------------
$ 8,094,773
-------------
Washington - 5.2%
4,710,000 AAA/Aaa Spokane Public Facilities District Hotel/Motel
Tax & Sales, 5.75%, 12/1/27 $ 5,148,878
7,025,000 BBB/Baa2 Tobacco Settlement Authority Washington,
6.625%, 6/1/32 6,274,660
14,315,000 AAA/Aaa Washington State General Obligation,
0.0%, 6/1/22 5,376,141
-------------
$ 16,799,679
-------------
Wisconsin - 2.2%
3,500,000 BBB+/NR Wisconsin State Health & Educational Facilities
Authority Revenue, 5.6%, 2/15/29 $ 3,327,345
3,750,000 BBB+/NR Wisconsin State Health & Educational Facilities
Authority Revenue, 6.4%, 4/15/33 3,871,125
-------------
$ 7,198,470
-------------
Wyoming - 1.5%
5,000,000 BB+/Ba3 Sweetwater County Solid Waste Disposal Revenue,
6.9%, 9/1/24 $ 4,950,350
-------------
TOTAL TAX-EXEMPT OBLIGATIONS
(Cost $399,578,719) $ 410,313,974
-------------
Shares TAX-EXEMPT MONEY MARKET MUTUAL FUND - 1.8%
6,030,150 Provident Institutional Municipal Fund $ 6,030,150
-------------
TOTAL TAX-EXEMPT MONEY MARKET MUTUAL FUND
(Cost $6,030,150) $ 6,030,150
-------------
TOTAL INVESTMENTS IN SECURITIES - 128.5%
(Cost $405,608,869 (b) (c) $ 416,344,124
-------------
Other Assets In Excess Of Liabilities - 2.7% $ 8,587,356
-------------
Preferred Shares at Redemption Value - (31.2)% $(101,000,000)
-------------
Net Assets Applicable to Common
Shareowners - 100.0% $ 323,931,480
-------------
The accompanying notes are an integral part of these financial statements. 13
Pioneer Municipal High Income Trust
================================================================================
SCHEDULE OF INVESTMENTS 10/31/03 (unaudited) (continued)
================================================================================
NR Not rated.
(a) 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.
(b) The concentration of investments by type of obligation/market sector is as
follows:
Insured 16.9%
General Obligation 1.8
Revenue Bonds:
Health 24.9
Airport Revenue 19.0
Education Revenue 8.3
Pollution Control Revenue 7.0
Tobacco 6.9
Power Revenue 4.9
Other Revenue 3.8
Development Revenue 3.2
Facilities Revenue 1.8
Transportation Revenue 1.2
Utilities Revenue 0.3
----
100.0%
-----
(c) At October 31, 2003, the net unrealized gain on investments based on cost
for federal income tax purposes of $405,352,638 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 11,776,989
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (785,503)
-------------
Net unrealized gain $ 10,991,486
-------------
Purchases and sales of securities (excluding temporary cash investments) for
the period ended October 31, 2003, aggregated $584,816,277 and $183,199,847,
respectively.
14 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
================================================================================
STATEMENT OF ASSETS AND LIABILITIES 10/31/03 (unaudited)
================================================================================
ASSETS:
Investments in securities, at value (cost $405,608,869) $416,344,124
Cash 637,902
Receivables -
Interest 8,281,225
Organization costs reimbursement 40,000
------------
Total assets $425,303,251
------------
LIABILITIES:
Payables -
Offering costs payable - preferred $ 170,788
Offering and organization costs payable - common 147,249
Accrued expenses 53,734
------------
Total liabilities $ 371,771
------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to
4,040 shares $101,000,000
------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $314,533,806
Accumulated undistributed net investment income 948,311
Accumulated net realized loss on investments (2,285,892)
Net unrealized gain on investments 10,735,255
------------
Net assets applicable to common shareowners $323,931,480
------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Based on $323,931,480/22,086,232 common shares $ 14.67
------------
The accompanying notes are an integral part of these financial statements. 15
Pioneer Municipal High Income Trust
================================================================================
STATEMENT OF OPERATIONS (unaudited)
================================================================================
For the period 7/21/03 (commencement of operations) to 10/31/03
INVESTMENT INCOME:
Interest $ 5,695,723
------------
EXPENSES:
Management fees $ 563,844
Administration fees 65,572
Transfer agent fees 17,946
Auction agent 19,344
Custodian fees 6,589
Registration fees 9,721
Organization fees 40,000
Professional fees 20,059
Printing fees 3,167
Trustees' fees 3,519
Miscellaneous 9,086
---------
Total expenses $ 758,847
------------
Reimbursement of organization fees (40,000)
------------
Net expenses $ 718,847
------------
Net investment income $ 4,976,876
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments $ (2,285,892)
Change in net unrealized gain on investments 10,735,255
------------
Net gain on investments $ 8,449,363
------------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS FROM NET
INVESTMENT INCOME $ (63,234)
------------
Net increase in net assets applicable to common
shareowners resulting from operations $ 13,363,005
------------
16 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
================================================================================
STATEMENT OF CHANGES IN NET ASSETS (unaudited)
================================================================================
For the period 7/21/03 (commencement of operations) to 10/31/03
7/21/03
to
10/31/03
FROM OPERATIONS:
Net investment income $ 4,976,876
Net realized loss on investments (2,285,892)
Net unrealized gain on investments 10,735,255
Distributions to preferred shareowners from net investment income (63,234)
------------
Net increase in net assets applicable to common shareowners $ 13,363,005
------------
DISTRIBUTIONS TO COMMON SHAREOWNERS:
Net investment income ($0.18 per share) $ (3,965,331)
------------
Total distributions to common shareowners $ (3,965,331)
------------
FROM TRUST SHARE TRANSACTIONS:
Net proceeds from the issuance of common shares $293,662,500
Net proceeds from underwriters' over-allotment option exercised 21,487,500
Reinvestment of distributions 1,155,803
Common share offering expenses charged to paid-in capital (660,000)
Preferred share offering expenses charged to paid-in capital (1,212,000)
------------
Net increase in net assets applicable to common shareowners
resulting from Trust share transactions $314,433,803
------------
Net increase in net assets applicable to common shareowners $323,831,477
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Beginning of period 100,003
------------
End of period (including undistributed net investment
income of $948,311) $323,931,480
------------
'03 Shares '03 Amount
Reinvestment of distributions 79,251 $1,155,803
------ ----------
Net Increase 79,251 $1,155,803
------ ----------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Municipal High Income Trust
================================================================================
FINANCIAL HIGHLIGHTS 10/31/03 (unaudited)
================================================================================
July 21, 2003 to
October 31, 2003 (b)
Per Common Share Operating Performance (a)
Net asset value, beginning of period $ 14.33+
--------
Increase (decrease) from investment operations:
Net investment income $ 0.23
Net realized and unrealized gain (loss) on investments 0.38
Distributions to preferred shareowners from net investment income 0.00*
--------
Net increase from investment operations $ 0.61
Distributions to common shareowners:
Net investment income (0.18)
Capital charge with respect to issuance of:
Common shares (0.03)
Preferred shares (0.06)
--------
Net increase in net asset value $ 0.34
--------
Net asset value, end of period** $ 14.67
--------
Market value, end of period** $ 14.96
--------
Total return++ 0.97%
Ratios to average net assets of common shareowners
Net Expenses+++ 0.83%***
Net investment income before preferred share dividends+++ 5.77%***
Preferred share dividends 0.07%***
Net investment income available to common shareowners 5.70%***
Portfolio turnover 54%
Net assets of common shareowners, end of period (in thousands) $323,931
Preferred shares outstanding (in thousands) $101,000
Asset coverage per preferred share, end of period $105,181
Average market value per preferred share $ 25,000
Liquidation value per preferred share $ 25,000
Ratios to average net assets of common shareowners before
reimbursement of organization expenses
Net Expenses+++ 0.88%***
Net investment income before preferred share dividends+++ 5.72%***
Preferred share dividends 0.07%***
Net investment income available to common shareowners 5.65%***
(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 July 18, 2003.
* Actual amount paid to preferred shareowners was $0.00292 per common share
for the period ended October 31, 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 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 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 shares 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.
18 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
================================================================================
NOTES TO FINANCIAL STATEMENTS 10/31/03 (unaudited)
================================================================================
1. Organization and Significant Accounting Policies
Pioneer Municipal High Income Trust (the "Trust") was organized as a Delaware
business trust on March 13, 2003. Prior to commencing operations on July 21,
2003 the Trust had no operations other than matters relating to its organization
and registration as a diversified, closed-end management investment company
under the Investment Company Act of 1940, as amended, 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 reimburse the amount by which the aggregate of
all the Trust's organizational expenses and offering costs for common shares
(other than the sales load) exceeds $0.03 per share of common shares of the
initial 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 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'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 consider such factors
as Treasury spreads, yields, maturities and
19
Pioneer Municipal High Income Trust
================================================================================
NOTES TO FINANCIAL STATEMENTS 10/31/03 (unaudited) (continued)
================================================================================
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. All discounts/ premiums on fixed income securities are
accreted/amortized and included in interest income for financial reporting
purposes on an effective yield to maturity basis. Interest income, including
income on interest bearing cash accounts, 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 (the 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.
C. Automatic Dividend Reinvestment Plan
All common shareowners automatically participate in the Automatic Dividend
Reinvestment Plan (the "Plan"), under which participants receive all
dividends and capital gain distributions (collectively, "dividends") in full
and fractional common shares of the Trust in lieu of cash. Shareowners may
elect not to participate in the Plan. Shareowners not participating in the
Plan receive all dividends and capital gain distributions in cash.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time by notifying Mellon Investor Services LLC, the agent for
shareowners in administering the Plan (the "Plan Agent"), prior to any
dividend record date; otherwise such termination or resumption will be
effective with respect to any subsequently declared dividend or other
distribution. Whenever the Trust declares a dividend on common shares payable
in cash, participants in the Plan will receive the equivalent in common
shares acquired by the Plan Agent either (i) through receipt of additional
unissued but authorized common shares from the Trust or (ii) by purchase of
outstanding common shares on the New York Stock Exchange or elsewhere. If, on
the
20
Pioneer Municipal High Income Trust
================================================================================
================================================================================
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., an affiliate of Merrill Lynch, Pierce, Fenner & Smith
Incorporated, to provide certain administrative services to the Trust on its
behalf. The Trust pays Princeton Administrators, L.P. a monthly fee at an annual
rate of 0.07% of the average weekly value of the Trust's managed assets, subject
to a minimum monthly fee of $10,000.
21
Pioneer Municipal High Income Trust
================================================================================
NOTES TO FINANCIAL STATEMENTS 10/31/03 (unaudited) (continued)
================================================================================
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. Expense Offsets
The Trust may enter into certain expense offset arrangements resulting in a
reduction in the Trust's total expenses. Also, PIM has agreed for the first
three years of the Trust's investment operations to limit the Trust's total
annual expenses (excluding organizational and offering costs for common and
preferred shares, interest expenses, 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 October 31, 2003, the Trust's expenses were not reduced under
such arrangements.
5. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized. Of the 22,086,232 common shares of beneficial interest outstanding
at October 31, 2003, PIM owned 6,981 shares.
Transactions in common shares of beneficial interest for the period July 21,
2003 (commencement of investment operations) to October 31, 2003 were as
follows:
22
Pioneer Municipal High Income Trust
================================================================================
================================================================================
----------------------------------------------------------------------
Shares issued in connection with initial public offering 20,500,000
Shares issued from underwriters' over-allotment
option exercised 1,500,000
Reinvestment of distributions 79,251
----------
Net increase in shares outstanding 22,079,251
Shares outstanding at beginning of period 6,981
----------
Shares outstanding at end of period 22,086,232
----------
----------------------------------------------------------------------
Offering costs of $660,000 incurred in connection with the Trust's offering of
common shares have been charged to paid-in capital.
The Trust may classify or reclassify any unissued common shares of beneficial
interest into one or more series of preferred shares of beneficial interest. On
October 2, 2003, the Trust reclassified and issued 4,040 shares of common shares
into two series of APS ("preferred shares") as follows: Series A-2,000 and
Series B-2,040. Offering costs of $202,000 and underwriting discounts of
$1,010,000 have been charged to paid-in capital.
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
0.45% to 0.95% during the period ended October 31, 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 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
23
Pioneer Municipal High Income Trust
================================================================================
NOTES TO FINANCIAL STATEMENTS 10/31/03 (unaudited) (continued)
================================================================================
addition, the Investment Company Act of 1940 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.
6. Subsequent Events
Subsequent to October 31, 2003 the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.09 per common share
payable November 28, 2003, to shareowners of record on November 17, 2003.
For the period November 1, 2003 to November 30, 2003, dividends declared on
preferred stock totaled $74,058 in aggregate for the two outstanding preferred
stock series.
ADDITIONAL INFORMATION
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
24
Pioneer Municipal High Income 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 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 the Securities and Exchange Commission's web site at
http://www.sec.gov.
25
================================================================================
HOW TO CONTACT PIONEER
================================================================================
We are pleased to offer a variety of convenient ways for you to contact Mellon
for assistance or information.
You can call Mellon Investor Services LLC for:
Account Information 1-800-288-9541
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 14632-00-1203
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 Municipal High Income Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date December XX, 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 December XX, 2003
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date December XX, 2003
* Print the name and title of each signing officer under his or her signature.