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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, 2006 through October 31, 2006
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.
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PIONEER
--------------
MUNICIPAL
HIGH
INCOME
TRUST
Semiannual
Report
10/31/06
[Logo] PIONEER
Investments(R)
Table of Contents
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Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 8
Prices and Distributions 9
Performance Update 10
Schedule of Investments 11
Financial Statements 19
Notes to Financial Statements 23
Results of Shareowner Meeting 32
Trustees, Officers and Service Providers 33
President's
Dear Shareowner,
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Mature and emerging market economies around the world showed moderate
improvement after a flat second quarter. The U.S. saw some resurgence of
growth, which we expect to continue through the fourth quarter of 2006 and into
2007, although this growth may be slow with housing sector measures down in
recent months. While inflation pressures have risen slightly in recent months,
we believe the United States may now be at the end of the Fed's monetary
tightening cycle. Mature economies, led by Japan, remain firm, as do European
economic prospects, with strong GDP data reflecting the broad-based strength
seen in crucial indicators.
U.S. economic growth was back on track after lackluster market results prior to
Labor Day. Consumer spending rose with receding gas prices, just in time for
the back-to-school season, which retailers now consider the second most
lucrative period after the Christmas season. U.S. economic growth is in line
with our projections; we anticipate U.S. GDP finishing with a level of around
3.0% for 2006.
In our view, the pace of corporate earnings growth should slow amid pressure
from high raw materials costs and moderating economic growth. However, modest
U.S. dollar depreciation and improving growth overseas should offer some
support to U.S. earnings.
The European economy continues to improve and appears to be at its healthiest
in six years, with business confidence showing improvement across sectors and
consumers becoming more optimistic. While business sentiment indicators have
had a tendency to over-estimate growth in recent years, broad-based
improvements across countries since 2005 is a sign that European economic
growth should continue through 2006.
The positive long-term drivers of emerging markets remain in place: improving
domestic growth and inflation stability; structural reform; debt
sustainability; and favorable demographics. Together, the emerging markets'
current account surplus is at record highs while external debt as a percentage
of GDP is at its lowest since 1991.
2
Letter
In summary, we think that despite the existence of some inflation pressures
seen by the Federal Reserve and its counterparts in developed economies, it
seems as if interest rates will remain mostly unchanged. U.S. economic growth
is expected to remain positive, as it should among the developed nations for
the remainder of 2006. Any further geopolitical issues and rising energy prices
could lead to deceleration, but not a derailment from the current healthy pace
of economic growth, as investment is expected to remain robust, benefiting from
sustained internal and international demand worldwide.
Our cautiously optimistic outlook reinforces the importance of Pioneer's
message that investors should remain diversified, take a long-term view, and
base investment decisions on economic and market fundamentals rather than on
emotion. Our investment philosophy and approach continue to be based on the use
of fundamental research to identify a range of opportunities that offer an
attractive balance of risk and reward to help Trust shareowners work toward
their long-term goals.
Respectfully,
/S/ Osbert M. Hood
Osbert M. Hood, President
Pioneer Investment Management, Inc.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
3
Pioneer Municipal High Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 10/31/06
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Investors in municipal bonds were rewarded during the six-month period ending
October 31, 2006, as relatively strong economic growth, declining interest
rates and robust demand for tax-free income increased the value of municipal
securities. In the following interview, David Eurkus, a member of the
management team for Pioneer Municipal High Income Trust, discusses some of the
factors that had an impact on the municipal bond market and the Trust.
Q: What was the investment environment like for municipal bonds during the
six-month period ended October 31, 2006?
A: The investment environment over the six months can be separated into two
distinct periods. In the first three months, record-high oil and other
commodity prices continued to raise concerns about the potential for
accelerating inflation. As a result, the Federal Reserve Board ("Fed")
maintained its two-year policy of boosting short-term interest rates. On
June 29, 2006, the central bank raised the federal funds rate, the rate
banks charge for overnight loans, to 5.25%. In the second half of the
period, the Fed took a breather from raising interest rates, as the pace of
economic growth appeared to moderate in the wake of declining commodity
prices and a softening real estate market. Against this backdrop, municipal
bond yields declined across the maturity spectrum, with yields on
longer-maturity bonds falling farther than those on shorter-maturity bonds.
Because bond yields move in the opposition direction of bond prices, the
value of municipal securities generally rose during the period.
Q: How did the Trust perform in this environment?
A: For the six-month period ended October 31, 2006, Pioneer Municipal High
Income Trust earned a total return of 8.27% at net asset value and 12.42%
at market price. As of October 31, 2006, the Trust was selling at a
discount of market price to net asset value of 9.40%. The Lehman Brothers
Municipal Bond Index, which tracks the performance of investment-grade
bonds, returned 4.12%. The Lehman Brothers Non-Investment Grade Municipal
Bond Index returned 6.31% for the same period. While the Trust invested in
municipal securities with a broad range of maturities and credit ratings,
it maintained a dollar-weighted average portfolio credit quality of BBB+.
The Trust held 107 issues in various states and the District of Columbia.
On October 31, 2006, the Trust's
4
Pioneer Municipal High Income Trust
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current yield was 5.31%, and its 30-day SEC yield based on market price was
6.93%.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: How did you manage the Trust during the period?
A: We maintained the Trust's investments in sectors that are vital components
of the U.S. economy - a strategy that has benefited the portfolio for
several years as the economy has expanded. The biggest portfolio positions
were in health care (22.4% of net assets) and transportation (13.9% of net
assets). We also had investments in public power (3.9% of net assets) and
education (2.6% of net assets). About 10.5% of the portfolio was in tobacco
bonds, which are backed by tobacco companies' payments to states, and 26.5%
was in various other revenue bonds. Over the six months, we created a new
position in bonds issued by correctional institutions that have been
privatized by the Federal government and are now being built and managed by
private corporations.
Q: What contributed to performance?
A: While all of the bonds in the portfolio benefited from the capital
appreciation that occurred as yields declined, the high-yield bonds were
the biggest contributors to performance. The best performing portfolio
positions were hospital/health care (+5.20%), transportation (+13.30%),
power and energy (+8.05%), and tobacco (+6.20%).
On October 31, 2006, 23% of the Trust was leveraged, which means that we
borrowed funds at low rates and invested those funds in high-yielding
bonds. This leveraging strategy has aided returns for several years. Over
the six-months, short-term interest rates stabilized and then started to
decline. Should rates continue to decline, the cost of borrowing would also
go down, benefiting the Trust. If short-term interest rates were to rise,
the Trust's
5
Pioneer Municipal High Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 10/31/06 (continued)
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borrowing costs would go up, and the ability to sustain the present
dividend level could be affected.
Q: What detracted from performance?
A: Because of the relatively strong economy, many issuers have a surplus of
cash, which they are using to pay down their bond debt earlier than
expected. As some of our bonds have been called, or redeemed, before their
maturity dates, we have invested the proceeds in new securities that have
slightly lower yields than the redeemed bonds. Having bonds called sooner
than expected is a normal part of the fixed-income process, and we expect
to find attractive investment opportunities.
Q: What is your outlook?
A: As we move into 2007, we believe the municipal bond market and the Trust
should benefit from a favorable supply/demand situation. Over the past
year, we have seen the supply of municipal bonds contract and demand for
municipal debt rise, as more investors seek tax-free income. We expect this
supply/demand dynamic to continue, increasing the value of the bonds in the
portfolio. As has been the case in the past, we intend to keep the
portfolio fully invested and diversified among economic sectors and will
continue to hold a combination of high-yield and below investment-grade
bonds.
Investments in high-yield or lower-rated securities are subject to
greater-than-average risk. The Trust may invest in securities of issuers that
are in default or that are in bankruptcy.
A portion of income may be subject to state, federal, and/or alternative
minimum tax. Capital gains, if any, are subject to a capital gains tax. When
interest rates rise, the prices of fixed-income securities in the Trust will
generally fall. Conversely, when interest rates fall the prices of fixed-income
securities in the Trust will generally rise. By concentrating in municipal
securities, the portfolio is more susceptible to adverse economic, political or
regulatory developments than is a portfolio that invests more broadly.
Investments in the Trust are subject to possible loss due to the financial
failure of underlying securities and their inability to meet their debt
obligations.
6
Pioneer Municipal High Income Trust
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The Trust may use leverage through the issuance of preferred shares with an
aggregate liquidation preference of up to 25% of the Trust's total assets after
such issuance. Leverage creates significant risks, including the risk that the
Trust's income or capital appreciation will not be sufficient to cover the cost
of leverage, which may adversely affect the return for the holders of common
shares.
Risks of investing in the Trust are discussed in greater detail in the Trust's
registration statement on Form N-2 relating to its common shares.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
7
Pioneer Municipal High Income Trust
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PORTFOLIO SUMMARY 10/31/06
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Portfolio Diversification
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(As a percentage of total investment portfolio)
Health Revenue 25.7%
Airport Revenue 16.9%
Insured 14.5%
Tobacco Revenue 10.6%
Education Revenue 5.8%
Development Revenue 4.6%
Pollution Control Revenue 4.5%
General Obligation 3.7%
Transportation Revenue 3.0%
Power Revenue 2.9%
Other Revenue 2.4%
Facilities Revenue 2.4%
Gaming Revenue 1.2%
Housing Revenue 1.0%
School District Revenue 0.6%
Utilities Revenue 0.2%
Portfolio Maturity
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(Effective duration as a percentage of long-term holdings)
0-1 years 11.1%
1-3 years 15.2%
3-6 years 43.0%
6-8 years 7.5%
8-10 years 2.8%
10+ years 20.4%
Quality Distribution
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(As a dollar-weighted percentage of holdings; based on S&P ratings)
AAA 18.2%
AA 1.5%
A 3.8%
BBB 22.6%
BB 3.7%
B 15.8%
CCC 4.5%
Not Rated 28.4%
Cash Equivalents 1.5%
The portfolio is actively managed and current holdings may be different.
8
Pioneer Municipal High Income Trust
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PRICES AND DISTRIBUTIONS
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Share Prices and Distributions
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Market Value
per Common Share 10/31/06 4/30/06
$14.46 $13.22
Net Asset Value
per Common Share 10/31/06 4/30/06
$15.96 $15.15
Distributions Net
per Common Share Investment Short-Term Long-Term
(5/1/06 - 10/31/06) Income Capital Gains Capital Gains
$0.3840 $ - $ -
10 Largest Holdings
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(As a percentage of long-term holdings)
1. Allegheny County Hospital Development Authority Revenue,
9.25%, 11/15/30 3.39%
2. New Jersey Economic Development Authority Revenue,
6.25%, 9/15/29 3.18
3. Massachusetts State Development Finance Agency, RIB,
6.48%, 10/1/39 (144A) 2.66
4. Tobacco Settlement Financing Corp., 6.75%, 6/1/39 2.63
5. Metropolitan Pier & Exposition Authority Dedicated State Tax
Revenue, 0.0%, 6/15/22 2.58
6. New York State Dormitory Authority Revenue, RIB,
6.633%, 7/1/24 (144A) 2.06
7. Golden State Tobacco Securitization Corp., 7.875%, 6/1/42 1.99
8. Oklahoma Development Finance Authority Revenue,
5.625%, 8/15/29 1.96
9. Texas State, RIB, 6.304%, 4/1/30 (144A) 1.92
10. Johnson City Health & Educational Facilities Board Hospital
Revenue, 7.5%, 7/1/33 1.90
This list excludes temporary cash and derivative instruments. The portfolio is
actively managed, and current holdings may be different. The holdings listed
should not be considered recommendations to buy or sell any security listed.
9
Pioneer Municipal High Income Trust
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PERFORMANCE UPDATE 10/31/06
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Investment Returns
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The mountain chart on the right shows the change in market value, including
reinvestment of dividends and distributions, of a $10,000 investment made
in common shares of Pioneer Municipal High Income Trust, compared to that
of the Lehman Brothers Municipal Bond Index and Lehman Brothers
Non-Investment Grade Municipal Bond Index.
Cumulative Annual Total Returns
(As of October 31, 2006)
Net Asset Market
Period Value (NAV) Price
Life-of-Trust
(7/21/03) 38.54% 19.91%
1 Year 14.03 6.48
[THE FOLLOWING DATA IS A REPRESENTATION OF A MOUNTAIN CHART IN THE PRINTED
MATERIAL]
Pioneer Municipal Lehman Brothers Lehman Brothers Non-Investment
High Income Trust Municipal Bond Index Grade Municipal Bond Index
7/03 $10,000 $10,000 $10,000
10/03 $10,097 $10,319 $10,535
10/04 $10,504 $10,941 $11,574
10/05 $11,261 $11,219 $12,663
10/06 $11,991 $11,863 $14,165
Call 1-800-225-6292 or visit pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
Performance data shown represents past performance. Past performance is no
guarantee of future results. Investment return and market price will
fluctuate, and your shares may trade below net asset value ("NAV"), due to
such factors as interest rate changes, and the perceived credit quality of
borrowers.
Total investment return does not reflect broker sales charges or
commissions. All performance is for common shares of the Trust.
Closed-end funds, unlike open-end funds, are not continuously offered.
There is a one-time public offering and once issued, shares of closed-end
funds are sold in the open market through a stock exchange and frequently
trade at prices lower than their NAV. NAV is total assets less total
liabilities, which includes preferred shares, divided by the number of
common shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested
at the greater of NAV or 95% of the market price. When NAV is higher,
dividends are assumed to be reinvested at market price.
The performance table and graph do not reflect the deduction of fees and
taxes that a shareowner would pay on Trust distributions or the redemption
of Trust shares.
Index comparison begins July 31, 2003. The Lehman Brothers Municipal Bond
Index is a broad measure of the municipal bond market. Lehman Brothers
Non-Investment Grade Municipal Bond Index totals over $26 billion in market
value and maintains over 1300 securities. Municipal bonds in this index
have the following requirements: maturities of one year or greater, sub
investment grade (below Baa or non-rated), fixed coupon rate, issued after
12/31/90, deal size over $20 million, maturity size of at least $3 million.
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 an Index.
10
Pioneer Municipal High Income Trust
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SCHEDULE OF INVESTMENTS 10/31/06 (unaudited)
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
TAX EXEMPT OBLIGATIONS - 122.7% of Net Assets
Alabama - 0.5%
$ 1,500,000 BBB/NR Camden Alabama Industrial Development Board,
6.125%, 12/1/24 $ 1,654,020
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Arizona - 6.4%
5,000,000 B+/Baa3 Apache County Industrial Development Authority,
5.85%, 3/1/28 $ 5,002,700
5,000,000 B+/Baa3 Apache County Industrial Development Authority,
5.875%, 3/1/33 5,002,850
7,000,000(a) NR/Aaa Downtown Phoenix Hotel Corp., RIB,
6.322%, 7/1/40 (144A) 8,005,550
3,000,000+ NR/NR Maricopa County Industrial Development Authority,
7.875%, 4/1/27 3,107,430
1,000,000 NR/Baa3 Pima County Industrial Development Authority,
7.25%, 7/1/31 1,096,320
500,000 NR/Baa2 Yavapai County Industrial Development Authority,
6.0%, 8/1/33 542,900
------------
$ 22,757,750
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California - 10.7%
7,270,000 A+/A1 California State General Obligation,
5.25%, 2/1/28 $ 7,771,412
5,000,000 A+/A1 California Statewide Communities Development
Authority Revenue, 5.0%, 8/15/34 5,223,250
5,150,000 BBB/Baa3 Golden State Tobacco Securitization Corp.,
7.8%, 6/1/42 6,306,020
7,000,000 BBB/Baa3 Golden State Tobacco Securitization Corp.,
7.875%, 6/1/42 8,601,530
2,000,000 AAA/Aaa San Diego Unified School District, 5.0%, 7/1/25 2,096,680
2,500,000 AAA/Aaa University of California Revenue, 5.0%, 5/15/25 2,655,850
5,000,000 B+/NR Valley Health System Hospital Revenue,
6.5%, 5/15/25 5,021,500
------------
$ 37,676,242
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Connecticut - 3.5%
2,205,000 BB+/Ba1 Connecticut State Health & Educational Facilities
Authority Revenue, 5.375%, 7/1/17 $ 2,239,530
4,800,000 BB+/Ba1 Connecticut State Health & Educational Facilities
Authority Revenue, 5.5%, 7/1/27 4,844,544
5,000,000 BB+/NR Mohegan Tribe Indians Gaming Authority,
6.25%, 1/1/31 5,336,850
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$ 12,420,924
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The accompanying notes are an integral part of these financial statements. 11
Pioneer Municipal High Income Trust
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SCHEDULE OF INVESTMENTS 10/31/06 (unaudited) (continued)
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Delaware - 0.3%
$ 500,000 NR/NR Sussex County Delaware Revenue, 5.9%, 1/1/26 $ 521,000
600,000 NR/NR Sussex County Delaware Revenue, 6.0%, 1/1/35 627,474
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$ 1,148,474
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District of Columbia - 3.6%
5,000,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.5%, 5/15/33 $ 5,974,650
6,000,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.75%, 5/15/40 6,600,120
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$ 12,574,770
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Florida - 3.6%
2,000,000 NR/NR Beacon Lakes Community Development,
6.9%, 5/1/35 $ 2,190,580
1,650,000 BBB-/Baa2 Polk County Industrial Development Revenue,
5.85%, 12/1/30 1,684,171
1,000,000 NR/NR Saint Johns County Industrial Development
Revenue, 5.25%, 1/1/26 1,012,990
2,000,000 NR/NR Saint Johns County Industrial Development
Revenue, 5.375%, 1/1/40 2,038,260
5,500,000 NR/Baa2 Tallahassee Health Facilities Revenue,
6.375%, 12/1/30 5,920,860
------------
$ 12,846,861
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Georgia - 1.4%
4,240,000(a) NR/Aaa Atlanta Georgia Water & Waste Revenue, RIB,
6.428%, 11/1/43 (144A) $ 4,921,792
------------
Idaho - 1.5%
5,000,000 BBB-/Baa3 Power County Industrial Development Corp.,
6.45%, 8/1/32 $ 5,331,550
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Illinois - 7.5%
1,000,000 NR/NR Centerpoint Intermodal Center,
8.0%, 6/15/23 (144A) $ 1,027,440
5,000,000 AAA/Aaa Chicago Illinois O'Hare International Airport
Revenue, 5.0%, 1/1/33 5,274,200
5,000,000 NR/Baa3 Illinois Finance Authority Revenue,
5.0%, 5/1/30 5,134,650
1,000,000 NR/Baa Illinois Finance Authority Revenue,
6.0%, 11/15/27 1,047,580
1,000,000 NR/NR Illinois Finance Authority Revenue,
6.0%, 11/15/39 1,042,850
12 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Illinois - (continued)
$ 1,500,000 NR/NR Illinois Health Facilities Authority Revenue,
6.9%, 11/15/33 $ 1,648,890
16,880,000(b) AAA/Aaa Metropolitan Pier & Exposition Authority Dedicated
State Tax Revenue, 0.0%, 6/15/22 11,174,898
------------
$ 26,350,508
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Indiana - 1.6%
1,000,000 BBB+/Baa1 Indiana State Development Finance Authority
Revenue, 5.6%, 12/1/32 $ 1,035,360
4,300,000 BBB-/Ba1 Indiana State Development Finance Authority
Revenue, 5.75%, 10/1/11 4,464,432
------------
$ 5,499,792
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Massachusetts - 11.2%
5,000,000 AAA/Aa2 Massachusetts Bay Transportation Authority,
5.0%, 7/1/31 $ 5,668,750
2,335,000 AAA/Aaa Massachusetts Health & Educational Facilities
Authority Revenue, 5.0%, 7/15/35 2,437,180
7,050,000 AAA/Aaa Massachusetts Health & Educational Facilities
Authority Revenue, 5.125%, 7/15/37 7,450,581
3,500,000 BBB/Baa3 Massachusetts Health & Educational Facilities
Authority Revenue, 6.25%, 7/1/22 3,806,495
5,000,000 BBB-/NR Massachusetts Health & Educational Facilities
Authority Revenue, 6.75%, 10/1/33 5,543,050
75,000 BB/NR Massachusetts State Development Finance
Agency, 5.25%, 10/1/18 73,630
9,810,000(a) NR/Aaa Massachusetts State Development Finance
Agency, RIB, 6.48%, 10/1/39 (144A) 11,519,883
3,055,000 AA-/Aa3 Massachusetts State Housing Finance Agency,
5.25%, 12/1/33 3,159,542
------------
$ 39,659,111
------------
Michigan - 3.7%
1,500,000 BBB-/NR John Tolfree Health System Corp., 6.0%, 9/15/23 $ 1,546,260
2,000,000 BB-/Ba3 Michigan State Hospital Finance Authority
Revenue, 5.5%, 8/15/23 1,973,960
4,010,000 BBB-/Ba1 Michigan State Hospital Finance Authority
Revenue, 6.0%, 2/1/24 4,011,564
7,720,000(c) NR/NR Wayne Charter County Michigan Special Airport
Facilities Revenue, 6.75%, 12/1/15 5,558,323
------------
$ 13,090,107
------------
The accompanying notes are an integral part of these financial statements. 13
Pioneer Municipal High Income Trust
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SCHEDULE OF INVESTMENTS 10/31/06 (unaudited) (continued)
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Minnesota - 2.5%
$ 1,675,000 BB/NR Duluth Economic Development Authority Health
Care Facilities Revenue, 7.25%, 6/15/32 $ 1,798,431
8,760,000(c) NR/NR Minneapolis/St. Paul Metropolitan Airports,
7.0%, 4/1/25 6,920,400
------------
$ 8,718,831
------------
Mississippi - 0.8%
3,000,000 BBB-/Ba1 Mississippi Business Finance Corp. Pollution
Control Revenue, 5.9%, 5/1/22 $ 3,009,720
------------
Montana - 0.4%
1,600,000 NR/NR Two Rivers Authority, Inc. Correctional Facility
Improvement Revenue, 7.375%, 11/1/27 $ 1,581,184
------------
Nevada - 1.4%
1,000,000 BBB-/Baa3 Clark County Industrial Development Revenue,
5.45%, 3/1/38 $ 1,058,560
1,850,000 B/NR Clark County Industrial Development Revenue,
5.5%, 10/1/30 1,849,833
2,000,000 NR/NR Nevada State Department of Business & Industry,
7.25%, 1/1/23 2,076,200
------------
$ 4,984,593
------------
New Hampshire - 0.9%
3,000,000 AAA/Aaa Manchester School Facilities Revenue,
5.125%, 6/1/28 $ 3,181,440
------------
New Jersey - 9.9%
2,000,000 B/Caa1 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/19 $ 2,070,840
13,350,000 B/Caa1 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/29 13,797,625
1,000,000 B/Caa1 New Jersey Economic Development Authority
Revenue, 6.4%, 9/15/23 1,038,830
6,150,000 B/Caa1 New Jersey Economic Development Authority
Revenue, 7.0%, 11/15/30 6,552,210
10,000,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
6.75%, 6/1/39 11,403,600
------------
$ 34,863,105
------------
New Mexico - 0.4%
1,350,000+ BBB-/NR Santa Fe Educational Facilities Revenue,
5.75%, 10/1/28 $ 1,536,395
------------
14 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
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S&P/Moody's
Principal Ratings
Amount (unaudited) Value
New York - 8.8%
$ 2,000,000 A/NR New York City Industrial Development Agency,
5.375%, 6/1/23 $ 2,101,920
6,225,000 CCC+/Caa2 New York City Industrial Development Agency,
6.9%, 8/1/24 6,259,237
5,000,000 AAA/Aaa New York City Trust Cultural Resources Revenue,
5.125%, 7/1/31 5,282,400
7,040,000(a) NR/Aaa New York State Dormitory Authority Revenue, RIB,
6.633%, 7/1/24 (144A) 8,944,461
2,000,000 NR/NR Suffolk County Industrial Development Agency,
7.25%, 1/1/30 2,057,820
6,000,000 AAA/Aaa Triborough Bridge & Tunnel Authority Revenue,
5.25%, 11/15/30 6,437,040
------------
$ 31,082,878
------------
North Carolina - 2.5%
4,030,000 NR/NR Charlotte North Carolina Special Facilities
Revenue, 5.6%, 7/1/27 $ 4,035,078
4,600,000 NR/NR Charlotte North Carolina Special Facilities
Revenue, 7.75%, 2/1/28 4,924,208
------------
$ 8,959,286
------------
Oklahoma - 6.1%
3,000,000+ AAA/Aaa Oklahoma Development Finance Authority
Revenue, 5.625%, 8/15/19 $ 3,185,160
8,000,000+ AAA/Aaa Oklahoma Development Finance Authority
Revenue, 5.625%, 8/15/29 8,493,760
4,100,000 B/Caa2 Tulsa Municipal Airport Revenue, 5.65%, 12/1/35 4,131,775
1,225,000 B/Caa2 Tulsa Municipal Airport Revenue, 6.25%, 6/1/20 1,230,990
4,350,000 B/Caa2 Tulsa Municipal Airport Revenue, 7.35%, 12/1/11 4,371,663
------------
$ 21,413,348
------------
Pennsylvania - 5.6%
1,550,000 NR/Baa1 Allegheny County Hospital Development Authority
Revenue, 5.125%, 5/1/25 $ 1,556,541
12,300,000 B+/Ba3 Allegheny County Hospital Development Authority
Revenue, 9.25%, 11/15/30 14,671,194
1,000,000 B/NR Columbia County Hospital Authority Health Care
Revenue, 5.9%, 6/1/29 905,550
1,000,000 BBB/Ba2 Hazleton Health Services Authority Hospital
Revenue, 5.625%, 7/1/17 995,560
The accompanying notes are an integral part of these financial statements. 15
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 10/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Pennsylvania - (continued)
$ 1,280,000 NR/B2 Langhorne Manor Borough Higher Education &
Health Authority Revenue, 7.35%, 7/1/22 $ 1,280,346
500,000 BBB+/NR Pennsylvania Higher Educational Facilities Authority
Revenue, 5.4%, 7/15/36 527,775
------------
$ 19,936,966
------------
Rhode Island - 1.3%
4,000,000 NR/NR Central Falls Detention Facilities Revenue,
7.25%, 7/15/35 $ 4,501,320
------------
South Carolina - 2.9%
3,000,000+ AA-/Aaa Greenville County School District, 5.5%, 12/1/28 $ 3,319,110
5,185,000+ BBB+/Baa1 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 6,005,423
665,000 BBB+/Baa1 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 750,446
------------
$ 10,074,979
------------
Tennessee - 3.7%
7,000,000 BBB+/Baa2 Johnson City Health & Educational Facilities Board
Hospital Revenue, 7.5%, 7/1/33 $ 8,218,140
4,480,000 NR/Baa3 Knox County Health Educational & Housing
Facilities Board Hospital Revenue,
6.375%, 4/15/22 4,910,573
------------
$ 13,128,713
------------
Texas - 12.2%
7,500,000 CCC+/Caa2 Alliance Airport Authority Special Facilities
Revenue, 7.5%, 12/1/29 $ 7,650,000
1,345,000 NR/Ba1 Bexar County Housing Finance Corp.,
8.0%, 12/1/36 1,434,806
1,000,000 CCC+/Caa2 Dallas-Fort Worth International Airport Revenue,
6.0%, 11/1/14 1,001,250
5,000,000 CCC+/Caa2 Dallas-Fort Worth International Airport Revenue,
6.15%, 5/1/29 5,036,500
4,000,000 NR/NR Decatur Hospital Authority Revenue, 7.0%, 9/1/25 4,377,280
1,000,000+ NR/NR Georgetown Health Facilities Development Corp.,
6.25%, 8/15/29 1,081,500
3,750,000 B-/Caa1 Houston Airport System Special Facilities Revenue,
5.7%, 7/15/29 3,679,425
5,340,000 NR/NR Lubbock Health Facilities Development Corp.,
6.625%, 7/1/36 5,560,702
2,450,000(a) NR/NR Northside Independent School District, RIB,
6.84%, 6/15/33 (144A) 2,910,232
16 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
Texas - (continued)
$ 500,000 BBB-/Baa2 Sabine River Authority Pollution Control Revenue,
6.15%, 8/1/22 $ 542,835
7,040,000(a) NR/Aa1 Texas State, RIB, 6.304%, 4/1/30 (144A) 8,322,266
1,365,000 NR/NR Willacy County Local Government Corp. Revenue,
6.0%, 3/1/09 1,393,692
------------
$ 42,990,488
------------
Vermont - 0.5%
1,500,000 A-/A3 Vermont Educational & Health Buildings Financing
Agency Revenue, 6.0%, 10/1/28 $ 1,679,655
------------
Virginia - 1.5%
1,000,000 BBB+/Baa2 Peninsula Ports Authority, 6.0%, 4/1/33 $ 1,087,360
4,000,000+ AAA/NR Pocahontas Parkway Association of Virginia Toll
Road Revenue, 5.5%, 8/15/28 4,211,080
------------
$ 5,298,440
------------
Washington - 5.8%
4,710,000 AAA/Aaa Spokane Public Facilities District Hotel/Motel Tax
& Sales, 5.75%, 12/1/27 $ 5,244,585
7,025,000 BBB/Baa3 Tobacco Settlement Authority Revenue,
6.625%, 6/1/32 7,850,156
14,315,000 AAA/Aaa Washington State General Obligation,
0.0%, 6/1/22 7,309,525
------------
$ 20,404,266
------------
TOTAL TAX-EXEMPT OBLIGATIONS
(Cost $380,805,424) $433,277,508
------------
Shares
TAX-EXEMPT MONEY MARKET MUTUAL
FUND - 1.9% of Net Assets
6,608,148 BlackRock Provident Institutional Municipal Fund $ 6,608,148
--------------
TOTAL TAX-EXEMPT MONEY MARKET
MUTUAL FUND
(Cost $6,608,148) $ 6,608,148
--------------
TOTAL INVESTMENTS IN SECURITIES - 124.6%
(Cost $387,413,572)(d)(e) $ 439,885,656
--------------
OTHER ASSETS AND LIABILITIES - 4.0% $ 14,311,665
--------------
PREFERRED SHARES AT REDEMPTION VALUE,
INCLUDING DIVIDENDS PAYABLE - (28.6)% $ (101,062,814)
--------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS - 100.0% $ 353,134,507
==============
The accompanying notes are an integral part of these financial statements. 17
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 10/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
NR Security not rated by S&P or Moody's.
(144A) Security is exempt from registration under Rule 144A of the Securities
Act of 1933. Such securities may be resold normally to qualified
institutional buyers in a transaction exempt from registration. At
October 31, 2006 the value of these securities amounted to $45,651,624 or
12.9% of net assets applicable to common shareowners.
+ Prerefunded bonds have been collateralized by U.S. Treasury securities
which are held in escrow to pay interest and principal on the tax exempt
issue and to retire the bonds in full at the earliest refunding date.
(a) The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The interest rate shown is the rate at
October 31, 2006.
(b) Debt obligation initially issued at one coupon which converts to a higher
coupon at a specific date. The rate shown is the rate at period end.
(c) Security is in default and is non-income producing.
(d) The concentration of investments by type of obligation/market sector is
as follows:
Insured 14.5%
General Obligation 3.7
Revenue Bonds:
Health Revenue 25.7
Airport Revenue 16.9
Tobacco Revenue 10.6
Education Revenue 5.8
Development Revenue 4.6
Pollution Control Revenue 4.5
Transportation Revenue 3.0
Power Revenue 2.9
Other Revenue 2.4
Facilities Revenue 2.4
Gaming Revenue 1.2
Housing Revenue 1.0
School District Revenue 0.6
Utilities Revenue 0.2
-----
100.0%
=====
(e) At October 31, 2006, the net unrealized gain on investments based on cost
for federal income tax purposes of $385,762,822 was as follows:
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $55,712,672
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (1,589,838)
-----------
Net unrealized gain $54,122,834
===========
For financial reporting purposes net unrealized gain on investments was
$52,472,084 and cost of investments aggregated $387,413,572
RIB Residual Interest Bonds
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended
October 31, 2006, aggregated $26,994,399 and $41,158,557, respectively.
18 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 10/31/06 (unaudited)
--------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $387,413,572) $439,885,656
Receivables -
Investment securities sold 7,716,364
Interest 7,476,587
Unrealized appreciation on interest rate swaps 855,978
Prepaid expenses 30,402
-------------
Total assets $455,964,987
-------------
LIABILITIES:
Due to custodian $ 1,415,737
Due to affiliate 235,888
Administration fee payable 26,732
Accrued expenses 89,309
-------------
Total liabilities $ 1,767,666
-------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to 4,040
shares, including dividends payable of $62,814 $101,062,814
-------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $315,162,552
Undistributed net investment income 1,076,946
Accumulated net realized loss on investments and interest
rate swaps (16,433,053)
Net unrealized gain on investments 52,472,084
Net unrealized gain on interest rate swaps 855,978
-------------
Net assets applicable to common shareowners $353,134,507
-------------
NET ASSET VALUE PER SHARE:
No par value, (unlimited number of shares authorized)
Based on $353,134,507/22,120,893 common shares $ 15.96
============
The accompanying notes are an integral part of these financial statements. 19
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
--------------------------------------------------------------------------------
For the Six Months Ended 10/31/06
INVESTMENT INCOME:
Interest $ 13,163,934
------------
EXPENSES:
Management fees $ 1,340,508
Administration fees and reimbursement 221,889
Transfer agent fees and expenses 23,619
Auction agent fees 135,079
Custodian fees 11,167
Registration fees 12,106
Professional fees 34,475
Printing expense 10,097
Trustees' fees 5,790
Pricing fees 8,184
Insurance fees 7,342
Miscellaneous 7,767
------------
Total expenses $ 1,818,023
Less management fees waived and
expenses reimbursed by Pioneer
Investment Management, Inc. (6,974)
------------
Net expenses $ 1,811,049
------------
Net investment income $ 11,352,885
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND INTEREST RATE SWAPS:
Net realized gain (loss) from:
Investments $ (1,823,202)
Interest rate swaps 227,380 $ (1,595,822)
------------ ------------
Change in net unrealized gain from:
Investments $ 18,999,406
Interest rate swaps (505,167) $ 18,494,239
------------ ------------
Net gain on investments and interest
rate swaps $ 16,898,417
------------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS
FROM NET INVESTMENT INCOME $ (1,743,573)
------------
Net increase in net assets applicable
to common shareowners resulting
from operations $ 26,507,729
============
20 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
For the Six Months Ended 10/31/06 and the Year Ended 4/30/06
Six Months
Ended
10/31/06 Year Ended
(unaudited) 4/30/06
FROM OPERATIONS:
Net investment income $ 11,352,885 $ 22,503,967
Net realized loss on investments and interest
rate swaps (1,595,822) (12,990,275)
Change in net unrealized gain on investments and
interest rate swaps 18,494,239 2,489,681
Distributions to preferred shareowners from net
investment income (1,743,573) (2,704,921)
------------ -------------
Net increase in net assets applicable to
common shareowners $ 26,507,729 $ 9,298,452
------------ -------------
DISTRIBUTIONS TO COMMON SHAREOWNERS FROM:
Net investment income
($0.38 and $0.89 per share, respectively) $ (8,494,423) $ (19,731,837)
------------ -------------
Total distributions to common shareowners $ (8,494,423) $ (19,731,837)
------------ -------------
Net increase (decrease) in net assets applicable
to common shareowners $ 18,013,306 $ (10,433,385)
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS:
Beginning of period 335,121,201 345,554,586
------------ -------------
End of period $353,134,507 $ 335,121,201
============ =============
Undistributed (distributions in excess of) net
investment income $ 1,076,946 $ (37,943)
============ =============
The accompanying notes are an integral part of these financial statements. 21
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Six Months
Ended Year Year 7/21/03 (b)
10/31/06 Ended Ended to
(unaudited) 4/30/06 4/30/05 4/30/04
Per Common Share Operating Performance
Net asset value, beginning of period $ 15.15 $ 15.62 $ 14.76 $ 14.33(c)
--------- ------- --------- ---------
Increase (decrease) from investment operations:(a)
Net investment income $ 0.51 $ 1.02 $ 1.14 $ 0.80
Net realized and unrealized gain (loss) on investments
and interest rate swaps 0.76 (0.48) 0.95 0.46
Dividends and distributions to preferred shareowners from:
Net investment income (0.08) (0.12) (0.07) (0.02)
Net realized gains - - -(d) -
--------- ------- --------- ---------
Net increase from investment operations $ 1.19 $ 0.42 $ 2.02 $ 1.24
Dividends and distributions to common shareowners from:
Net investment income (0.38) (0.89) (1.07) (0.72)
Net realized gains - - (0.09) -
Changes in (estimated) with respect to issuance of:
Common shares - - -(d) (0.03)
Preferred shares - - - (0.06)
--------- ------- --------- ---------
Net increase (decrease) in net asset value $ 0.81 $ (0.47) $ 0.86 $ 0.43
--------- ------- --------- ---------
Net asset value, end of period(e) $ 15.96 $ 15.15 $ 15.62 $ 14.76
========= ======= ========= =========
Market value, end of period(e) $ 14.46 $ 13.22 $ 14.33 $ 13.70
--------- ------- --------- ---------
Total return(f) 12.42% (1.85)% 13.34% (4.11)%
Ratios to average net assets of common shareowners
Net expenses(g) 1.05% (h) 1.03% 1.04% 0.95% (h)
Net investment income before preferred share dividends 6.59% (h) 6.64% 7.60% 6.91% (h)
Preferred share dividends 1.01% (h) 0.80% 0.43% 0.21% (h)
Net investment income available to common shareowners 5.58% (h) 5.84% 7.17% 6.70% (h)
Portfolio turnover 6% 20% 25% 54%
Net assets of common shareowners, end of period
(in thousands) $353,135 $335,121 $345,555 $326,590
Preferred shares outstanding (in thousands) $101,000 $101,000 $101,000 $101,000
Asset coverage per preferred share, end of period $112,425 $107,962 $110,533 $105,839
Average market value per preferred share $ 25,000 $25,000 $25,000 $ 25,000
Liquidation value, including dividends payable,
per preferred share $ 25,016 $25,011 $25,000 $ 25,000
Ratios to average net assets of common shareowners before
reimbursement waivers and reimbursement of expenses
Net expenses(g) 1.06% (h) 1.03% 1.04% 0.96% (h)
Net investment income before preferred share dividends 6.60% (h) 6.64% 7.60% 6.90% (h)
Preferred share dividends 1.01% (h) 0.80% 0.43% 0.21% (h)
Net investment income available to common shareowners 5.59% (h) 5.84% 7.17% 6.69% (h)
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) Trust shares were first publicly offered on July 18, 2003.
(c) Net asset value immediately after the closing of the first public offering
was $14.30.
(d) Amount is less than $0.01 per share.
(e) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and
Saturday.
(f) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect shareowner brokerage commissions.
Total investment return less than a full period is not annualized. Past
performance is not a guarantee of future results.
(g) Expense ratios do not reflect the effect of dividend payments to preferred
shareowners.
(h) Annualized.
The information above represents the operating performance data for a share
of common stock outstanding, total investment return, ratios to average net
assets of common shareowners and other supplemental data for the periods
indicated. This information has been determined based upon financial
information provided in the financial statements and market value data for
the Trust's common shares.
22 The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/06 (unaudited)
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Municipal High Income Trust (the "Trust") was organized as a Delaware
statutory 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.
The Trust may invest in municipal securities with a broad range of maturities
and credit ratings, including both investment grade and below investment grade
municipal securities.
The Trust invests in below investment grade (high-yield) municipal securities.
Debt securities rated below investment grade are commonly referred to as "junk
bonds" and are considered speculative. These securities involve greater risk of
loss, are subject to greater price volatility, and are less liquid, especially
during periods of economic uncertainty or change, than higher rated debt
securities.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, and the reported amounts of income,
expenses and gains and losses on investments during the reporting period.
Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements, which are consistent with
those policies generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. Securities are valued
at prices supplied by independent pricing services, which consider such
factors as Treasury spreads, yields, maturities and ratings. Valuations may
be supplemented by dealers and other sources, as required. The values of
interest rate swaps are determined by obtaining dealer quotations.
Securities for which market quotations are not readily available are valued
at their fair values as determined by, or under the direction of, the Board
of Trustees.
23
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
At October 31, 2006, there were no securities fair valued. Temporary cash
investments are valued at amortized cost.
Discount and premium on debt securities are accreted or amortized,
respectively, daily on an effective yield to maturity basis and are
included in interest income. Interest income, including interest bearing
cash accounts, is recorded on an accrual basis.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
Information regarding the Trust's principal risks is contained in the
Trust's original offering prospectus with additional information included
in the Trust's Shareowner reports from time to time. Please refer to those
documents when considering the Trust's investment risks. At times, the
Trust's investments may represent industries or industry sectors that are
interrelated or have common risks, making it more susceptible to any
economic, political, or regulatory developments or other risks affecting
those industries and sectors.
B. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the source of the Trust's distributions may be
shown in the accompanying financial statements as either from or in excess
of net investment income or net realized gain on investment transactions,
or from paid in-capital, depending on the type of book/tax differences that
may exist.
At April 30, 2006, the Trust had a capital loss carryforward of $9,706,870
which will expire in 2014 if not utilized.
The tax character of current year distributions paid to common and
preferred shareowners will be determined at the end of the fiscal year. The
distribution during the year ended April 30, 2006 was as follows:
24
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2006
--------------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $22,436,758
-----------
Total $22,436,758
===========
--------------------------------------------------------------------------------
The following shows the components of distributable earnings on a federal
income tax basis at April 30, 2006.
--------------------------------------------------------------------------------
Undistributed tax-exempt income $ 491,874
Undistributed ordinary income 149,127
Capital loss carryforward (9,706,870)
Dividend payable (1,461,760)
Unrealized appreciation 35,616,623
Post-October loss deferred (5,130,345)
------------
Total $ 19,958,649
============
--------------------------------------------------------------------------------
The difference between book-basis and tax-basis unrealized appreciation is
primarily attributable to the difference between book and tax amortization
methods for premiums and discounts on fixed income securities, tax deferral
of losses on wash sales and accrual of income on defaulted bond interest.
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 without penalty by notifying American Stock Transfer &
Trust Company, the agent for shareowners in administering the Plan (the
"Plan Agent"), in writing prior to any dividend record date; otherwise such
termination or resumption will be effective with respect to any
subsequently declared dividend or other distribution.
25
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
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 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
Pioneer Investment Management, Inc. ("PIM"), a wholly owned indirect subsidiary
of Unicredito Italiano S.p.A. ("Unicredito Italiano"), manages the Trust's
portfolio. Management fees are calculated daily at the annual rate of 0.60% of
the Trust's average daily managed assets. "Managed assets" is the average daily
value of the Trust's total assets minus the sum of the Trust's liabilities,
which liabilities exclude debt related to leverage, short-term debt and the
aggregate liquidation preference of any outstanding preferred shares. At
October 31, 2006, $229,203 was payable to PIM related to management fees.
In addition, under PIM's management and administration agreements, certain
other services and costs are paid by PIM and reimbursed by
26
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
the Trust. For the six months ended October 31, 2006, the Trust recorded
$65,582 in reimbursements, which is included in "Administration fees and
reimbursement" on the Statement of Operations.
The Trust has retained Princeton Administrators, LLC ("Princeton") to provide
certain administrative services to the Trust on its behalf. The Trust pays
Princeton a monthly fee at an annual rate of 0.07% of the average weekly value
of the Trust's managed assets, subject to a minimum monthly fee of $10,000.
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 expense, the cost
of defending or prosecuting any claim or litigation to which the Trust is a
party, (together with any amount in judgment or settlement), indemnification
expenses 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 Trust's average daily managed assets.
The dividend on any preferred shares is not an expense for this purpose. For
the six months ended October 31, 2006, the expense reduction under such
arrangements was $6,974.
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 American Stock Transfer & Trust Company provides substantially
all transfer agent and shareowner services related to the Trust's common shares
at negotiated rates. Deutsche Bank Trust Company Americas is the transfer
agent, registrar, dividend paying agent and redemption agent with respect to
the Trust's Auction Preferred Shares ("APS"). The Trust pays Deutsche Bank
Trust Company Americas an annual fee, as is agreed to from time to time by the
Trust and Deutsche Bank Trust Company Americas, for providing such services.
4. Interest Rate Swaps
The Trust may enter into interest rate swap transactions to attempt to protect
itself from increasing dividend or interest expense on its leverage resulting
from increasing short-term interest rates. The cost of leverage may rise with
an increase in interest rates, generally having the effect of lower yields and
potentially lower dividends to common
27
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
shareowners. Interest rate swaps can be used to "lock in" the cost of leverage
and reduce the negative impact that rising short-term interest rates would have
on the Trust's leveraging costs.
An interest rate swap is an agreement between two parties, which involves
exchanging a floating rate and fixed rate interest payments for a specified
period of time. Interest rate swaps involve the accrual of the net interest
payments between the parties on a daily basis, with the net amount recorded
within the unrealized appreciation/ depreciation of interest rate swaps on the
Statement of Assets and Liabilities. Once the interim payments are settled in
cash, at the pre-determined dates specified in the agreement, the net amount is
recorded as realized gain or loss from interest rate swaps on the Statement of
Operations. During the term of the swap, changes in the value of the swap are
recognized as unrealized gains and losses by "marking-to-market" the value of
the swap based on values obtained from dealer quotations. When the swap is
terminated, the Trust will record a realized gain or loss equal to the
difference, if any, between the proceeds from (or cost of) closing the contract
and the cost basis of the contract. The Trust is exposed to credit risk in the
event of non-performance by the other party to the interest rate swap. However,
at October 31, 2006 the Trust does not anticipate non-performance by any
counterparty. Risk may also arise with regard to market movements in the value
of the swap arrangement that do not exactly offset the changes in the related
dividend requirement or interest expense on the Trust's leverage.
Under the terms of the agreement entered into by the Trust, the Trust receives
a floating rate of interest and pays a fixed rate of interest for the term.
Details of the swap agreement outstanding as of October 31, 2006 were as
follows:
----------------------------------------------------------------------------------------
Notional
Termination Amount Fixed Floating Unrealized
Counterparty Date (000) Rate Rate Appreciation
----------------------------------------------------------------------------------------
UBS AG April 5, 2009 $50,000 2.665% 1 month BMA $855,978
----------------------------------------------------------------------------------------
5. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized. Of the 22,120,893 common shares of beneficial interest outstanding
at October 31, 2006, PIM owned 6,981 shares.
28
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
During the six months ended October 31, 2006 and the year ended April 30, 2006,
there were no share transactions by the Trust. All reinvested distributions
were satisfied with previously issued shares purchased in the open market by
the Plan Agent and credited to shareowner accounts.
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 October 31, 2006, there were 4,040 APS as follows: Series A-2,000 and Series
B-2,040.
Dividends on Series A and Series B are cumulative at a rate which is reset
every seven days based on the results of an auction. Dividend rates ranged from
2.90% to 4.00% during the six months ended October 31, 2006.
The Trust may not declare dividends or make other distributions on its common
shares or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
preferred shares would be less than 200%.
The APS are redeemable at the option of the Trust, in whole or in part, on any
dividend payment date at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared. The APS are also subject to mandatory
redemption at $25,000 per share plus any accumulated or unpaid dividends,
whether or not declared, if certain requirements relating to the composition of
the assets and liabilities of the Trust as set forth in the Agreement and
Declaration of Trust are not satisfied.
The holders of APS have voting rights equal to the holders of the Trust's
common shares (one vote per share) and will vote together with holders of the
common shares as a single class. However, holders of APS are also entitled to
elect two of the Trust's Trustees. In addition, the Investment Company Act of
1940, as amended, requires that along with approval by shareowners that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class, would be required
to (a) adopt any plan of reorganization that would adversely affect the
preferred shares and (b) take any action requiring a vote of security holders,
including, among other things, changes in the Trust's subclassification as a
closed-end management investment company or changes in its fundamental
investment restrictions.
29
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 10/31/06 (unaudited) (continued)
--------------------------------------------------------------------------------
6. New Pronouncements
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in
the course of preparing the Trust's tax returns to determine whether the tax
positions have a "more-likely-than-not" probability of being sustained by the
applicable tax authority. Tax positions deemed to not meet the
more-likely-than-not threshold would be recorded as a tax benefit or expense in
the reporting period in which they are realized. Adoption of FIN 48 is required
for fiscal years beginning after December 15, 2006 and is to be applied to all
open tax years as of the effective date. At this time, management is evaluating
the implications of FIN 48 and any impact in the financial statements has not
been determined.
In addition, in September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements ("SFAS 157"), was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Trust's financial statement disclosures.
7. Subsequent Events
Subsequent to October 31, 2006, the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.064 per common share
payable November 30, 2006, to shareowners of record on November 15, 2006.
For the period November 1, 2006 to November 30, 2006, dividends declared on
preferred stock totaled $299,854 in aggregate for the two outstanding preferred
share series.
ADDITIONAL INFORMATION (unaudited)
During the period, there were no material changes in the Trust's investment
objective or fundamental policies that were not approved by the shareowners.
There were 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 were no
30
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
changes in the principal risk factors associated with investment in the Trust.
There were 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.
31
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
RESULTS OF SHAREOWNER MEETING (unaudited)
--------------------------------------------------------------------------------
On September 21, 2006, Pioneer Municipal High Income Trust held its annual
meeting of shareowners to elect Class III Trustees. All Class III Trustees were
elected. Here are the detailed results of the votes.
Proposal 1 - To elect Class III Trustees.
-----------------------------------------------------------------------------
Nominee Affirmative Withheld
--------------------------------------------------------------------------------
Mary K. Bush 20,875,944 599,481
Thomas J. Perna 20,881,546 593,879
Marguerite A. Piret+ 3,563 4
--------------------------------------------------------------------------------
+ Elected by Preferred Shares only
32
Pioneer Municipal High Income Trust
--------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
--------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
David R. Bock Osbert M. Hood, Executive
Mary K. Bush Vice President
Margaret B.W. Graham Vincent Nave, Treasurer
Osbert M. Hood Dorothy E. Bourassa, Secretary
Thomas J. Perna
Marguerite A. Piret
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
American Stock Transfer & Trust Company
Preferred Share Auction/Transfer Agent and Registrar
Deutsche Bank Trust Company Americas
Sub-Administrator
Princeton Administrators, LLC
Proxy Voting Policies and Procedures of the Trust are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Trust voted proxies relating to portfolio securities during
the most recent 12 months ended June 30, is publicly available to shareowners
at www.pioneerinvestments.com. This information is also available on our web
site and on the Securities and Exchange Commission's web site at
http://www.sec.gov.
33
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HOW TO CONTACT PIONEER
--------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call American Stock Transfer & Trust Company (AST) for:
Account Information 1-800-710-0935
Or write to AST:
For Write to
General inquiries, lost dividend American Stock
checks, change of address, lost Transfer & Trust
stock certificates, stock transfer Operations Center
6201 15th Ave.
Brooklyn, NY 11219
Dividend reinvestment plan (DRIP) American Stock
Transfer & Trust
Wall Street Station
P.O. Box 922
New York, NY 10269-0560
Website www.amstock.com
For additional information, please contact your investment advisor or visit our
web site www.pioneerinvestments.com.
The Trust files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
The Trust's Chief Executive Officer - Finance and Administrations is required by
the New York Stock Exchange's Listing Standards to file annually with the
Exchange a certification that he is not aware of any violation by the Trust of
the Exchange's Corporate Governance Standards applicable to the Trust. The Trust
has filed such certification.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
N/A
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
N/A
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
N/A
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
N/A
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
--------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
N/A
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
N/A
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
N/A
Item 5. Audit Committee of Listed Registrants
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
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.
N/A
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
Information not required in semi annual reports on form NCSR.
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
During the period covered by this report, there were no purchases
made by or on behalf of the registrant or any affiliated purchaser
as defined in Rule 10b-18(a)(3) under the Securities Exchange Act
of 1934 (the Exchange Act), of shares of the registrants equity
securities that are registered by the registrant pursuant to
Section 12 of the Exchange Act
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on their evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the
registrant's internal control over financial
reporting that occurred during the second
fiscal quarter of the period covered by this
report that have materially affected, or are
reasonably likely to materially affect, the
registrant's internal control over financial
reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Municipal High Income Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date December 29, 2006
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 29, 2006
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date December 29, 2006
* Print the name and title of each signing officer under his or her signature.