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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)
Terrence J. Cullen, 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, 2009 through April 30, 2010
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
Pioneer Municipal High Income Trust
Annual Report | April 30, 2010
--------------------------------------------------------------------------------
Ticker Symbol: MHI
--------------------------------------------------------------------------------
[LOGO] PIONEER
Investments(R)
visit us: pioneerinvestments.com
Table of Contents
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 8
Prices and Distributions 9
Performance Update 10
Schedule of Investments 11
Financial Statements 21
Financial Highlights 24
Notes to Financial Statements 26
Report of Independent Registered Public Accounting Firm 34
Additional Information 35
Approval of Investment Advisory Agreement 37
Trustees, Officers and Service Providers 41
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 1
President's Letter
Dear Shareowner,
Stock and bond markets around the globe have begun to recover over the past
year from one of their most tumultuous periods in history. This is a welcome
relief, and we are generally optimistic about the prospects for the economy
going forward. Still, challenges remain. Unemployment is high; consumer demand
and loan growth are weak; and housing has not returned to normal.
At Pioneer, we have long advocated the benefits of investing for the long term.
This strategy has generally performed well for many investors. Those who
remained invested in the market during the downturn have most likely seen their
portfolios start to recover over the past year, as the Dow Jones Industrial
Average climbed back from the depressed levels we saw in early 2009. Many bond
investors have similarly seen a strong rebound, with a broad-based recovery
occurring across many different fixed-income asset classes. The riskiest asset
classes, such as high-yield bonds, outperformed other fixed-income asset
classes during most of 2009.
At Pioneer, we are not changing the approach to investing that we have used for
more than 80 years. We remain focused on company fundamentals and risk
management. Our investment process is based on careful research into individual
companies, quantitative analysis, and active portfolio management. This
three-pillared process, which we apply to each of our portfolios, is supported
by an integrated team approach and is designed to carefully balance risk and
reward. While we see potential opportunities for making money in many corners
of the markets around the globe, it takes research and experience to separate
solid investment opportunities from speculation.
Following this difficult period, many investors are rethinking their approach
to investing and risk management. Some are questioning whether the basic
investment principles they were taught in the past are still useful in today's
markets. Complicating matters is that financial markets remain unpredictable.
Our advice, as always, is to work closely with a trusted financial advisor to
discuss your goals and work together to develop an investment strategy that
meets your individual needs. There is no single best strategy that works for
every investor.
2 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
We invite you to learn more about Pioneer and our time-tested approach to
investing by consulting with your financial advisor or visiting us online at
www.pioneerinvestments.com. We greatly appreciate your trust in us and we thank
you for investing with Pioneer.
Sincerely,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA, 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 Fund 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.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 3
Portfolio Management Discussion | 4/30/10
Municipal bonds made solid gains during the 12 months ended April 30, 2010, as
investors flooded back into the market in pursuit of relatively high tax-free
yields. In the following interview, David Eurkus, who is responsible for the
daily management of Pioneer Municipal High Income Trust, discusses some of the
factors that had an impact on the municipal bond market and the Trust during
the 12-month period.
Q How did the Trust perform over the 12 months ended April 30, 2010?
A For the 12-month period ended April 30, 2010, Pioneer Municipal High Income
Trust produced a total return of 33.69% at net asset value and 48.69% at
market price, while the Trust's benchmarks, the Barclays Capital High Yield
Municipal Bond Index and the Barclays Capital Municipal Bond Index,
returned 27.56% and 8.85%, respectively. As of April 30, 2010, the Trust
was selling at a premium of market price to net asset value of 3.5%. On
April 30, 2010, the Trust held 121 issues in 34 states, territories and the
District of Columbia.
During the 12-month period, investors earned a relatively high level of
dividend income. The Trust's 30-day SEC yield was 8.11%, and its current
dividend yield based on market close was 7.11%. This translates into a
taxable equivalent yield of 10.94%, based on the maximum Federal income tax
rate of 35%. Approximately 12% of the Trust's investments were subject to
the Federal Alternative Minimum Tax (AMT).
Q What was the investment environment like during the 12 months ended April 30,
2010?
A Over the past 12 months, a constructive supply/demand dynamic was at the
center of the rally in municipal bonds. At a time when money market funds
were yielding virtually nothing, investors sought the relatively high tax-
exempt yields that municipal bonds can provide. The increase in investor
demand coincided with a sharp reduction in newly issued tax-exempt bonds,
as roughly one-third of new municipal bonds issued were taxable "Build
America Bonds" subsidized by the U.S. Treasury. The robust demand and
substantial reduction in supply benefited both the investment-grade and
high-yield tax-exempt areas of the municipal market.
Q How did you manage the Trust in that environment?
A As has been the case in the past, the Trust favored sectors that underpin the
economy. Health care was the biggest sector weight, at 30.4% of the Trust's
total investment portfolio at April 30, 2010. The transportation sector,
which includes airline bonds, accounted for 16.6% of the Trust's total
4 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
investment portfolio, and tobacco bonds represented 12.1% of the Trust's
total investment portfolio. Education and pollution control bonds accounted
for 4.4% and 3.9% of the Trust's total investment portfolio, respectively.
The Trust's portfolio was comprised mostly of revenue bonds, which, in
order to pay interest and principal, depend upon revenues generated by the
particular asset the bond was issued to finance. For example, a bond issued
to finance a health care facility is backed by the revenue that accrues
from users of that facility. As of April 30, 2010, the Trust's portfolio
had a mix of investment-grade (based on S&P ratings 42.5% of the Trust's
total investment portfolio) and below investment-grade, or high-yield,
securities (57.5% of the Trust's total investment portfolio).
Both investment-grade and below investment-grade securities contributed to
the Trust's return during the 12-month period; however, high-yield bonds
made the strongest positive impact on performance, with health care and
transportation issues registering particularly noteworthy results. In
health care, Sullivan County Health Educational & Housing Facility Board
Hospital in Tennessee was a top contributor to the Trust's performance due
to a substantial price appreciation related to market activity; in
transportation, Dallas Fort Worth for American Airlines gave the Trust's
performance a substantial boost. The price appreciation was a result of an
increase in air traffic as well as continued improvement in airline
earnings.
While most of the positions in the Trust's portfolio fared well, there were
some disappointments. Notable examples of securities which underperformed
during the period are Grand Island Solid Waste Disposal Facilities in
Nebraska, and Gulf Coast Industrial Development Authority in Texas. Both
positions underperformed because of project delays, but we have maintained
them as holdings in the Trust's portfolio.
Q What is your outlook?
A We believe economic growth will be modest relative to past economic
recoveries, largely due to the lingering effects of the housing crash and
continued deleveraging, but we would not be surprised to see the economy
produce higher growth than is generally expected. We think inflation is
likely to be contained and that the Federal Reserve Board will keep
short-term rates near zero, at least for the remainder of 2010.
State and municipal governments are under budget pressure. We continue to
monitor this situation closely and we are aware of the differences between
revenue bonds and general obligation bonds. Many municipal bonds,
particularly longer-maturity bonds, continue to be priced cheaply relative
to Treasuries. We believe high-yield municipal issues are particularly
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 5
compelling; and at current levels, they offer tax-equivalent yields
significantly above Treasuries. We expect that the supply of new tax-exempt
bonds may continue to contract, as municipalities favor issuing taxable
"Build America Bonds," which are subsidized by the U.S. government. The
potential for higher tax rates is likely to boost demand for tax-exempt
municipal securities, and the supply/demand imbalance should be positive
for the Trust. While the municipal bond market price appreciation may
moderate after the dramatic run-up of the past 12 months, we believe that
municipal bonds have the potential to provide appropriate investors with a
relatively high level of tax-free income and competitive returns.
Please refer to the Schedule of Investments on pages 11-20 for a full listing
of Trust securities.
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 debt securities held by the Trust will
generally fall. Conversely, when interest rates fall the prices of debt
securities held by the Trust generally will rise. By concentrating in municipal
securities, the Trust 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 the issuers of the underlying securities and their issuer's
inability to meet their debt obligations.
The Trust uses leverage through the issuance of preferred shares. 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. Since
February of 2008, regularly scheduled auctions for the Trust's preferred shares
have failed and preferred shareowners have not been able to sell their shares
at auction. The Board of Trustees of the Trust has considered, and continues to
consider, this issue.
The Trust is required to maintain certain regulatory and rating agency asset
coverage requirements in connection with its outstanding preferred shares. In
order to maintain required asset coverage levels, the Trust may be required to
alter the composition of its investment portfolio or take other actions, such
as redeeming preferred shares with the proceeds from portfolio transactions, at
what might be inopportune times in the market. Such actions could reduce the
net earnings or returns to holders of the Trust's common shares over time.
Risks of investing in the Trust are discussed in greater detail in the Trust's
original offering prospectus and in shareowner reports issued from time to
time.
6 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
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.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 7
Portfolio Summary | 4/30/10
Portfolio Diversification
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[THE FOLLOWING DATA IS A REPRESENTATION OF A PIE CHART IN THE PRINTED MATERIAL]
Health Revenue 30.4%
Airport Revenue 13.2%
Insured 12.4%
Tobacco Revenue 12.1%
Other Revenue 11.0%
Education Revenue 4.4%
Development Revenue 4.0%
Facilities Revenue 3.9%
Pollution Control Revenue 3.9%
Transportation Revenue 2.7%
Gaming Revenue 1.0%
Airline Revenue 0.7%
Housing Revenue 0.3%
Utilities Revenue 0.0%*
*Amount is less than 0.1%.
Portfolio Quality
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio; based on S&P ratings)
[THE FOLLOWING DATA IS A REPRESENTATION OF A PIE CHART IN THE PRINTED MATERIAL]
AAA 13.2%
AA 4.3%
A 5.4%
BBB 19.6%
BB 3.7%
B 8.8%
CCC 1.6%
C 0.1%
Not Rated 43.3%
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of long-term holdings)*
1. Metropolitan Pier & Exposition Authority Dedicated State Tax Revenue, 0.0%, 6/15/22 3.39%
2. Allegheny County Hospital Development Authority Revenue, 9.25%, 11/15/30 3.26
3. New Jersey Economic Development Authority Revenue, 6.25%, 9/15/29 3.11
4. Connecticut Health & Educational Facilities Authority Revenue, RIB, 13.281%,
7/1/42 (144A) 2.95
5. Tobacco Settlement Financing Corp., 6.75%, 6/1/39 2.90
6. North Texas Tollway Authority Revenue, 5.75%, 1/1/33 2.62
7. New York State Dormitory Authority Revenue, RIB, 15.003%, 7/1/26 (144A) 2.32
8. Chicago O'Hare International Airport Special Facility Revenue Refunding Bonds,
5.5%, 12/1/30 2.22
9. Washington State General Obligation, 0.0%, 6/1/22 2.18
10. Golden State Tobacco Securitization Corp., 7.875%, 6/1/42 2.09
* This list excludes temporary cash. 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.
8 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
Prices and Distributions | 4/30/10
Market Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4/30/10 4/30/09
--------------------------------------------------------------------------------
$ 14.34 $ 10.40
--------------------------------------------------------------------------------
Net Asset Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4/30/10 4/30/09
--------------------------------------------------------------------------------
$ 13.86 $ 11.18
--------------------------------------------------------------------------------
Distributions per Common Share: 5/1/09-4/30/10
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net
Investment Short-Term Long-Term
Income Capital Gains Capital Gains
--------------------------------------------------------------------------------
$ 0.9700 $ -- $ --
--------------------------------------------------------------------------------
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 9
Performance Update | 4/30/10
Investment Returns
--------------------------------------------------------------------------------
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
Barclays Capital Municipal Bond Index and Barclays Capital High Yield Municipal
Bond Index.
Cumulative Total Returns
(As of April 30, 2010)
--------------------------------------------------------------------------------
Net Asset Market
Period Value Price
--------------------------------------------------------------------------------
Life-of-Class
(7/17/2003) 52.74% 50.97%
5 Years 23.18 38.92
1 Year 33.69 48.69
--------------------------------------------------------------------------------
[THE FOLLOWING DATA IS A REPRESENTATION OF A MOUNTAIN CHART IN THE PRINTED
MATERIAL]
Value of $10,000 Investment
Barclays
Pioneer Capital High Barclays
Municipal High Yield Municipal Capital Municipal
Income Trust Bond Index Bond Index
--------------------------------------------------------------------------------
7/03 10000 10000 10000
4/04 9589 10892 10441
4/05 10868 12262 11153
4/06 10666 13177 11394
4/07 12804 14487 12052
4/08 12511 13523 12388
4/09 10153 11127 12773
4/10 15097 14194 13904
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.
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 prices obtained under the Trust's dividend
reinvestment plan.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the sale of Trust shares.
The Barclays Capital Municipal Bond Index is a broad measure of the municipal
bond market. The Barclays Capital High Yield 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, and 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. The indices are not leveraged. You cannot invest directly in the
indices.
10 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
Schedule of Investments | 4/30/10
------------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
------------------------------------------------------------------------------------------------------
TAX EXEMPT OBLIGATIONS -- 127.1% of Net Assets
Alabama -- 1.4%
$ 1,000,000 NR/NR Huntsville-Redstone Village Special Care Facilities
Financing Authority, 5.5%, 1/1/28 $ 813,390
4,500,000 NR/NR Huntsville-Redstone Village Special Care Facilities
Financing Authority, 5.5%, 1/1/43 3,390,480
-------------
$ 4,203,870
------------------------------------------------------------------------------------------------------
Arizona -- 2.1%
5,000,000 BBB-/Baa3 Apache County Industrial Development Authority,
5.85%, 3/1/28 $ 4,999,750
970,000 NR/Baa3 Pima County Industrial Development Authority,
7.25%, 7/1/31 973,608
500,000 NR/Baa2 Yavapai County Industrial Development Authority,
6.0%, 8/1/33 502,870
-------------
$ 6,476,228
------------------------------------------------------------------------------------------------------
California -- 8.2%
7,885,000(a) AAA/NR California State University Revenue, RIB, 12.659%,
11/1/39 (144A) $ 8,199,690
602,382(b) NR/NR California Statewide Communities Development
Authority Environmental Facilities Revenue,
9.0%, 12/1/38 60,238
1,000,000 BB+/NR California Statewide Communities Development
Authority Revenue, 7.25%, 10/1/38 1,035,200
5,150,000+ AAA/Aaa Golden State Tobacco Securitization Corp.,
7.8%, 6/1/42 6,166,455
7,000,000+ AAA/Aaa Golden State Tobacco Securitization Corp.,
7.875%, 6/1/42 8,396,710
1,000,000 AA/Aa1 University of California Revenue, 5.0%, 5/15/25 1,054,200
655,000(b) C/NR Valley Health System Hospital Revenue,
6.5%, 5/15/25 359,530
-------------
$ 25,272,023
------------------------------------------------------------------------------------------------------
Connecticut -- 5.1%
10,335,000(a) NR/Aaa Connecticut Health & Educational Facilities Authority
Revenue, RIB, 13.281%, 7/1/42 (144A) $ 11,875,328
5,000,000 B+/NR Mohegan Tribe Indians Gaming Authority,
6.25%, 1/1/31 4,019,300
-------------
$ 15,894,628
------------------------------------------------------------------------------------------------------
District of Columbia -- 3.5%
5,000,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.5%, 5/15/33 $ 4,906,200
6,000,000 BBB/Baa3 District of Columbia Tobacco Settlement Financing
Corp., 6.75%, 5/15/40 6,009,900
-------------
$ 10,916,100
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 11
Schedule of Investments | 4/30/10 (continued)
------------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
------------------------------------------------------------------------------------------------------
Florida -- 4.7%
$ 1,700,000 NR/NR Beacon Lakes Community Development,
6.9%, 5/1/35 $ 1,670,216
1,000,000 BBB/Aaa Hillsborough County Industrial Development Authority
Revenue, 8.0%, 8/15/32 1,138,070
2,445,000 NR/NR Liberty County Subordinate Revenue,
8.25%, 7/1/28 2,099,179
2,500,000 A-/A2 Miami-Dade County Aviation Revenue,
5.5%, 10/1/41 2,536,575
1,000,000 NR/NR St. Johns County Industrial Development Authority
Revenue, 5.25%, 1/1/26 778,340
2,000,000 NR/NR St. Johns County Industrial Development Authority
Revenue, 5.375%, 1/1/40 1,438,320
5,000,000 NR/Baa2 Tallahassee Health Facilities Revenue,
6.375%, 12/1/30 5,004,050
-------------
$ 14,664,750
------------------------------------------------------------------------------------------------------
Georgia -- 2.7%
4,240,000(a) NR/Aa3 Atlanta Georgia Water & Waste Revenue, RIB,
12.604%, 11/1/43 (144A) $ 4,288,336
500,000 CCC+/NR Clayton County Development Authority Revenue,
9.0%, 6/1/35 520,920
2,400,000 NR/NR Fulton County Residential Care Facilities Revenue,
5.0%, 7/1/27 1,788,168
1,100,000 NR/NR Fulton County Residential Care Facilities Revenue,
5.125%, 7/1/42 693,363
1,000,000 NR/NR Rockdale County Development Authority Revenue,
6.125%, 1/1/34 922,220
-------------
$ 8,213,007
------------------------------------------------------------------------------------------------------
Idaho -- 1.6%
5,000,000 BBB+/Baa1 Power County Industrial Development Corp.,
6.45%, 8/1/32 $ 5,029,150
------------------------------------------------------------------------------------------------------
Illinois -- 12.5%
2,000,000(c) NR/NR Centerpoint Intermodal Center, 7.5%,
6/15/23 (144A) $ 2,010,860
12,000,000 NR/Caa2 Chicago O'Hare International Airport Special Facility
Revenue Refunding Bonds, 5.5%, 12/1/30 8,914,800
1,000,000 NR/NR Illinois Finance Authority Revenue, 6.0%, 11/15/27 779,160
3,865,000 BBB+/NR Illinois Finance Authority Revenue, 6.0%, 8/15/38 3,870,256
2,000,000 AA+/Aa2 Illinois Finance Authority Revenue, 6.0%, 8/15/39 2,181,180
4,000,000 NR/NR Illinois Finance Authority Revenue, 6.0%, 11/15/39 2,789,640
2,500,000 NR/Baa2 Illinois Finance Authority Revenue, 6.5%, 4/1/39 2,632,525
1,500,000(b) NR/NR Illinois Health Facilities Authority Revenue,
6.9%, 11/15/33 571,350
16,880,000(d) AAA/A1 Metropolitan Pier & Exposition Authority Dedicated
State Tax Revenue, 0.0%, 6/15/22 13,636,846
The accompanying notes are an integral part of these financial statements.
12 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
-------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
-------------------------------------------------------------------------------------------------
Illinois -- (continued)
$ 1,685,000 NR/NR Southwestern Illinois Development Authority
Revenue, 5.625%, 11/1/26 $ 1,191,935
-------------
$ 38,578,552
-------------------------------------------------------------------------------------------------
Indiana -- 4.0%
5,000,000 A+/A2 Indiana Health & Educational Facility Financing
Authority Hospital Revenue, 5.0%, 2/15/39 $ 4,633,550
1,000,000 BBB+/Baa1 Indiana State Development Finance Authority
Revenue, 5.6%, 12/1/32 995,120
4,300,000 BBB/NR Indiana State Development Finance Authority
Revenue, 5.75%, 10/1/11 4,389,354
2,570,000 NR/NR Vigo County Hospital Authority Revenue,
5.8%, 9/1/47 (144A) 2,186,582
-------------
$ 12,204,606
-------------------------------------------------------------------------------------------------
Louisiana -- 2.0%
1,500,000 BB/Ba3 Louisiana Local Government Environmental Facilities
Revenue, 6.75%, 11/1/32 $ 1,542,480
5,000,000 NR/Baa1 Louisiana Public Facilities Authority Revenue,
5.5%, 5/15/47 4,509,400
-------------
$ 6,051,880
-------------------------------------------------------------------------------------------------
Massachusetts -- 6.2%
5,000,000 NR/NR Massachusetts Development Finance Agency
Revenue, 5.75%, 1/1/42 $ 5,375,400
2,385,000 NR/NR Massachusetts Development Finance Agency
Revenue, 7.1%, 7/1/32 2,183,539
1,000,000 AA/NR Massachusetts Educational Financing Authority
Revenue, 6.0%, 1/1/28 1,061,670
3,500,000 BBB/Baa2 Massachusetts Health & Educational Facilities
Authority Revenue, 6.25%, 7/1/22 3,532,585
2,500,000 NR/NR Massachusetts Health & Educational Facilities
Authority Revenue, 6.5%, 1/15/38 2,199,175
5,000,000 BB-/NR Massachusetts Health & Educational Facilities
Authority Revenue, 6.75%, 10/1/33 4,898,900
-------------
$ 19,251,269
-------------------------------------------------------------------------------------------------
Michigan -- 3.6%
935,000 NR/NR Doctor Charles Drew Academy, 5.7%, 11/1/36 $ 577,765
1,525,000 NR/Ba1 Flint Michigan Hospital Building Authority Revenue,
5.25%, 7/1/16 1,487,668
1,500,000 BB/NR John Tolfree Health System Corp., 6.0%, 9/15/23 1,350,480
2,000,000 BB-/Ba3 Michigan State Hospital Finance Authority Revenue,
5.5%, 8/15/23 1,746,060
5,830,000 BBB/NR Michigan Tobacco Settlement Finance Authority,
6.0%, 6/1/48 4,450,972
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 13
Schedule of Investments | 4/30/10 (continued)
------------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
------------------------------------------------------------------------------------------------------
Michigan -- (continued)
$ 1,450,000 BBB/NR Star International Academy Certificates of
Participation, 6.125%, 3/1/37 $ 1,351,734
7,720,000(e) NR/NR Wayne Charter Escrow, 0.0%, 12/1/15 --
-------------
$ 10,964,679
------------------------------------------------------------------------------------------------------
Minnesota -- 0.9%
1,675,000 BB-/NR Duluth Economic Development Authority Health Care
Facilities Revenue, 7.25%, 6/15/32 $ 1,710,074
1,000,000 A+/NR Minneapolis & Saint Paul Housing & Redevelopment
Authority Revenue, 5.25%, 8/15/35 1,008,630
-------------
$ 2,718,704
------------------------------------------------------------------------------------------------------
Mississippi -- 1.0%
3,000,000 BBB/Ba1 Mississippi Business Finance Corp. Pollution Control
Revenue, 5.9%, 5/1/22 $ 2,994,900
------------------------------------------------------------------------------------------------------
Montana -- 0.1%
1,600,000(b) NR/NR Two Rivers Authority, Inc. Correctional Facility
Improvement Revenue, 7.375%, 11/1/27 $ 281,136
------------------------------------------------------------------------------------------------------
Nebraska -- 0.2%
2,000,000 NR/NR Grand Island Solid Waste Disposal Facilities
Revenue, 7.0%, 6/1/23 $ 600,420
------------------------------------------------------------------------------------------------------
Nevada -- 0.0%
2,000,000(b) NR/NR Nevada State Department of Business & Industry,
7.25%, 1/1/23 $ 80,000
------------------------------------------------------------------------------------------------------
New Jersey -- 12.2%
2,000,000 B/B3 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/19 $ 1,921,780
13,350,000 B/B3 New Jersey Economic Development Authority
Revenue, 6.25%, 9/15/29 12,523,635
1,000,000 B/B3 New Jersey Economic Development Authority
Revenue, 6.4%, 9/15/23 959,630
6,150,000(c) B/B3 New Jersey Economic Development Authority
Revenue, 7.0%, 11/15/30 6,147,724
10,370,000 AA+/Aa1 New Jersey Transportation Trust Fund Authority,
0.0%, 12/15/27 4,268,707
10,000,000+ AAA/Aaa Tobacco Settlement Financing Corp.,
6.75%, 6/1/39 11,687,300
-------------
$ 37,508,776
------------------------------------------------------------------------------------------------------
New Mexico -- 1.1%
1,500,000 NR/NR Otero County New Mexico Project Revenue,
6.0%, 4/1/23 $ 1,238,895
2,960,000 NR/NR Otero County New Mexico Project Revenue,
6.0%, 4/1/28 2,313,773
-------------
$ 3,552,668
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
14 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
-----------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
-----------------------------------------------------------------------------------------------------
New York -- 8.4%
$ 2,500,000 BBB+/Baa2 Albany New York Industrial Development Agency
Civic Facilities Revenue, 5.25%, 11/15/27 $ 2,424,700
3,000,000 NR/NR Dutchess County Industrial Development Agency
Revenue, 7.5%, 3/1/29 2,981,610
2,000,000 BBB+/NR Hempstead Local Development Corp. Revenue
Bonds, 5.75%, 7/1/39 2,038,340
2,250,000 NR/NR Nassau County New York Industrial Development
Agency Revenue, 6.7%, 1/1/43 2,093,040
990,000 CCC+/Caa2 New York City Industrial Development Agency,
6.9%, 8/1/24 855,023
1,000,000 NR/Ba1 New York State Dormitory Authority Revenue,
6.125%, 12/1/29 991,490
7,040,000(a) NR/Aaa New York State Dormitory Authority Revenue, RIB,
15.003%, 7/1/26 (144A) 9,332,928
2,000,000 NR/NR Suffolk County Industrial Development Agency,
7.25%, 1/1/30 2,011,700
3,000,000 A+/Aa3 Triborough Bridge & Tunnel Authority Revenue,
5.25%, 11/15/30 3,116,610
-------------
$ 25,845,441
-----------------------------------------------------------------------------------------------------
North Carolina -- 3.1%
4,935,000 NR/NR Charlotte North Carolina Special Facilities Revenue,
5.6%, 7/1/27 $ 3,832,817
5,740,000 NR/NR Charlotte North Carolina Special Facilities Revenue,
7.75%, 2/1/28 5,742,583
-------------
$ 9,575,400
-----------------------------------------------------------------------------------------------------
Oklahoma -- 1.8%
1,225,000 B-/Caa2 Tulsa Municipal Airport Revenue, 6.25%, 6/1/20 $ 1,117,886
4,350,000 B-/Caa2 Tulsa Municipal Airport Revenue, 7.35%, 12/1/11 4,349,652
-------------
$ 5,467,538
-----------------------------------------------------------------------------------------------------
Pennsylvania -- 7.9%
3,000,000 BB/Ba3 Allegheny County Hospital Development Authority
Revenue, 5.0%, 11/15/28 $ 2,529,030
1,550,000 NR/Baa2 Allegheny County Hospital Development Authority
Revenue, 5.125%, 5/1/25 1,396,194
12,300,000+ AAA/NR Allegheny County Hospital Development Authority
Revenue, 9.25%, 11/15/30 13,134,924
1,000,000 CCC/NR Columbia County Hospital Authority Health Care
Revenue, 5.9%, 6/1/29 847,780
845,000 BBB/Ba2 Hazleton Health Services Authority Hospital Revenue,
5.625%, 7/1/17 808,665
1,280,000 NR/Caa3 Langhorne Manor Borough Higher Education &
Health Authority Revenue, 7.35%, 7/1/22 648,090
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 15
Schedule of Investments | 4/30/10 (continued)
-----------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
-----------------------------------------------------------------------------------------------------
Pennsylvania -- (continued)
$ 5,000,000 B+/Caa1 Pennsylvania Economic Development Financing
Authority Solid Waste Disposal Revenue,
6.0%, 6/1/31 $ 4,442,700
500,000 BBB+/NR Pennsylvania Higher Educational Facilities Authority
Revenue, 5.4%, 7/15/36 498,565
-------------
$ 24,305,948
-----------------------------------------------------------------------------------------------------
Rhode Island -- 1.7%
6,000,000 NR/NR Central Falls Detention Facilities Revenue,
7.25%, 7/15/35 $ 5,148,060
-----------------------------------------------------------------------------------------------------
South Carolina -- 2.2%
5,185,000+ BBB+/Baa1 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 $ 5,995,675
665,000+ BBB+/Baa1 South Carolina Jobs Economic Development
Authority Revenue, 6.375%, 8/1/34 771,739
-------------
$ 6,767,414
-----------------------------------------------------------------------------------------------------
Tennessee -- 4.7%
7,000,000+ NR/A2 Johnson City Health & Educational Facilities Board
Hospital Revenue, 7.5%, 7/1/33 $ 7,835,800
2,480,000 NR/A1 Knox County Health, Educational & Housing Facilities
Board Hospital Revenue, 6.375%, 4/15/22 2,623,369
4,600,000 BBB+/NR Sullivan County Health, Educational & Housing
Facilities Board Hospital Revenue, 5.25%, 9/1/36 4,202,422
-------------
$ 14,661,591
-----------------------------------------------------------------------------------------------------
Texas -- 13.9%
1,345,000 NR/Ba2 Bexar County Housing Finance Corp.,
8.0%, 12/1/36 $ 1,013,700
1,000,000 CCC+/Caa2 Dallas-Fort Worth International Airport Revenue,
6.0%, 11/1/14 926,670
4,000,000 NR/NR Decatur Hospital Authority Revenue, 7.0%, 9/1/25 4,002,440
769,709(b) NR/NR Gulf Coast Industrial Development Authority
Revenue, 7.0%, 12/1/36 76,971
3,750,000 CCC+/B3 Houston Airport System Special Facilities Revenue,
5.7%, 7/15/29 3,204,037
5,340,000 NR/NR Lubbock Health Facilities Development Corp.,
6.625%, 7/1/36 4,786,349
10,000,000 BBB+/A3 North Texas Tollway Authority Revenue,
5.75%, 1/1/33 10,543,800
2,810,000(a) NR/Aaa Northside Independent School District, RIB,
13.05%, 6/15/33 (144A) 3,121,938
1,000,000 NR/NR Tarrant County Cultural Education Facilities Finance
Corp., 8.125%, 11/15/39 988,680
1,500,000 NR/NR Tarrant County Cultural Education Facilities Finance
Corp., 8.25%, 11/15/44 1,488,885
The accompanying notes are an integral part of these financial statements.
16 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
-----------------------------------------------------------------------------------------------------------
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
-----------------------------------------------------------------------------------------------------------
Texas -- (continued)
$ 7,040,000(a) NR/Aaa Texas State, RIB, 14.084%, 4/1/30 (144A) $ 8,087,552
5,130,000 NR/NR Willacy County Local Government Corp. Revenue,
6.875%, 9/1/28 4,540,512
-------------
$ 42,781,534
-----------------------------------------------------------------------------------------------------------
Utah -- 0.2%
800,000 NR/NR Spanish Fork City Charter School Revenue,
5.55%, 11/15/26 (144A) $ 674,896
-----------------------------------------------------------------------------------------------------------
Vermont -- 0.5%
1,500,000 A-/Baa1 Vermont Educational & Health Buildings Financing
Agency Revenue, 6.0%, 10/1/28 $ 1,555,125
-----------------------------------------------------------------------------------------------------------
Virginia -- 0.3%
1,000,000 BBB/Baa2 Peninsula Ports Authority, 6.0%, 4/1/33 $ 1,025,140
-----------------------------------------------------------------------------------------------------------
Washington -- 9.2%
4,710,000 A+/Aa3 Spokane Public Facilities District Hotel/Motel Tax &
Sales, 5.75%, 12/1/27 $ 4,912,294
7,025,000 BBB/Baa3 Tobacco Settlement Authority Revenue,
6.625%, 6/1/32 7,054,505
14,315,000 AA+/Aa1 Washington State General Obligation, 0.0%, 6/1/22 8,788,122
3,795,000 A/A2 Washington State Health Care Facilities Authority
Revenue, 6.0%, 1/1/33 3,905,093
5,000,000 NR/NR Washington State Housing Finance Committee
Nonprofit Revenue, 5.625%, 1/1/27 3,763,700
-------------
$ 28,423,714
-----------------------------------------------------------------------------------------------------------
Wisconsin -- 0.1%
2,320,000(b)(f) NR/NR Aztalan Wisconsin Exempt Facilities Revenue,
7.5%, 5/1/18 $ 317,840
-----------------------------------------------------------------------------------------------------------
TOTAL TAX-EXEMPT OBLIGATIONS
(Cost $381,354,517) $ 392,006,987
-----------------------------------------------------------------------------------------------------------
MUNICIPAL COLLATERALIZED DEBT OBLIGATION -- 2.4%
of Net Assets
10,000,000(c)(f) NR/NR Non-Profit Preferred Funding Trust I,12.0%,
9/15/37 (144A) $ 7,378,000
-----------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL COLLATERALIZED DEBT
OBLIGATION
(Cost $10,000,000) $ 7,378,000
-----------------------------------------------------------------------------------------------------------
Shares
-----------------------------------------------------------------------------------------------------------
COMMON STOCK -- 1.0% of Net Assets
249,158(g) Delta Air Lines, Inc. $ 3,009,829
-----------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost $6,612,756) $ 3,009,829
-----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 17
Schedule of Investments | 4/30/10 (continued)
--------------------------------------------------------------------------------
Value
--------------------------------------------------------------------------------
TOTAL INVESTMENT IN SECURITIES -- 130.5%
(Cost $397,967,273)(h)(i) $ 402,394,816
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES 2.3% $ 7,064,425
--------------------------------------------------------------------------------
PREFERRED SHARES AT REDEMPTION VALUE,
INCLUDING DIVIDENDS PAYABLE -- (32.8)% $(101,003,254)
--------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS -- 100.0% $ 308,455,987
================================================================================
RIB Residual Interest Bonds
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 April
30, 2010 the fair value of these securities amounted to $57,156,110, or
18.5% of net assets applicable to common shareowners.
+ Prerefunded bonds have been collateralized by U.S. Treasury securities or
U.S. Government Agencies 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 coupon rate
at April 30, 2010.
(b) Security is in default and is non-income producing.
(c) The interest rate is subject to change periodically. The interest rate
shown is the coupon rate at April 30, 2010.
(d) Debt obligation initially issued at one coupon rate which converts to a
higher coupon rate at a specific date. The rate shown is the coupon rate
at April 30, 2010.
(e) Security is valued using fair value methods (other than prices supplied
by independent pricing services) (see Note 1A).
(f) Indicates a security that has been deemed illiquid. The aggregate cost of
illiquid securities is $12,320,000. The aggregate fair value is
$7,695,840, or 2.5% of the total net assets applicable to common
shareowners.
(g) Non-income producing security.
(h) The concentration of investments by type of obligation/market sector is
as follows (unaudited):
Insured:
NATL-RE 7.6%
AMBAC 1.6
FSA 1.1
MBIA 1.1
PSF 0.8
ACA 0.4
The accompanying notes are an integral part of these financial statements.
18 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
Revenue Bonds:
Health Revenue 30.6%
Airport Revenue 13.3
Tobacco Revenue 12.2
Other Revenue 11.1
Education Revenue 4.4
Development Revenue 4.1
Facilities Revenue 3.9
Pollution Control Revenue 3.9
Transportation Revenue 2.7
Gaming Revenue 1.0
Housing Revenue 0.2
Utilities Revenue* 0.0
-----
100.0%
=====
* Amount is less than 0.1%
(i) At April 30, 2010, the net unrealized gain on investments based on cost
for federal income tax purposes of $396,046,221 was as follows:
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $34,639,375
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (28,290,780)
-----------
Net unrealized gain $ 6,348,595
===========
For financial reporting purposes net unrealized gain on investments was
$4,427,543 and cost of investments aggregated $397,967,273.
Purchases and sales of securities (excluding temporary cash investments) for
the year ended April 30, 2010, aggregated $48,354,029 and $42,719,410,
respectively.
Various inputs are used in determining the value of the Trust's investments.
These inputs are summarized in the three broad levels listed below.
Highest priority is given to Level 1 inputs and lowest priority is given to
Level 3.
Level 1 -- quoted prices in active markets for identical securities
Level 2 -- other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit
risk, etc.)
Level 3 -- significant unobservable inputs (including the Trust's own
assumptions in determining fair value of investments)
The following is a summary of the inputs used as of April 30, 2010, in valuing
the Trust's investments:
------------------------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
------------------------------------------------------------------------------------------------------------
Tax exempt obligations $ -- $ 392,006,987 $ -- $ 392,006,987
Municipal collateralized debt obligation -- 7,378,000 -- 7,378,000
Common stock 3,009,829 -- -- 3,009,829
------------------------------------------------------------------------------------------------------------
Total $ 3,009,829 $ 399,384,987 $ -- $ 402,394,816
============================================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 19
Schedule of Investments | 4/30/10 (continued)
Following is a reconciliation of assets using significant unobservable inputs
(Level 3):
-----------------------------------------------------------------------------------------------------
Change in Transfers
Balance Realized unrealized Net in and Balance
as of gain appreciation purchases out of as of
4/30/09 (loss) (depreciation)(1) (sales) Level 3* 4/30/10
-----------------------------------------------------------------------------------------------------
Tax exempt obligations--
Michigan $-- $-- $-- $-- $-- $ --
-----------------------------------------------------------------------------------------------------
Ending balance $-- $-- $-- $-- $-- $ --
=====================================================================================================
(1) Unrealized appreciation (depreciation) on these securities is included in
the change in unrealized gain (loss) from investments in the Statement of
Operations.
* Transfers are calculated beginning of period.
The accompanying notes are an integral part of these financial statements.
20 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
Statement of Assets and Liabilities | 4/30/10
ASSETS:
Investments in securities, at value (cost $397,967,273) $ 402,394,816
Receivables --
Investment securities sold 60,000
Interest 8,879,428
Reinvestment of distributions 160,249
Prepaid expenses 38,238
-----------------------------------------------------------------------------------
Total assets $ 411,532,731
-----------------------------------------------------------------------------------
LIABILITIES:
Due to custodian $ 1,741,560
Due to affiliates 209,418
Administration fee payable 23,399
Accrued expenses 99,113
-----------------------------------------------------------------------------------
Total liabilities $ 2,073,490
-----------------------------------------------------------------------------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to 4,040 shares,
including dividends payable of $3,254 $ 101,003,254
-----------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $ 316,888,110
Undistributed net investment income 11,320,757
Accumulated net realized loss on investments (24,180,423)
Net unrealized gain on investments 4,427,543
-----------------------------------------------------------------------------------
Net assets applicable to common shareowners $ 308,455,987
-----------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE:
No par value, (unlimited number of shares authorized)
Based on $308,455,987/22,251,232 common shares $ 13.86
===================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 21
Statement of Operations
For the Year Ended 4/30/10
INVESTMENT INCOME:
Interest $ 29,195,354
--------------------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 2,322,361
Administration fees 386,602
Transfer agent fees and expenses 12,350
Shareowner communication expenses 39,740
Auction agent fees 267,789
Custodian fees 12,242
Registration fees 23,969
Professional fees 93,407
Printing expense 30,200
Trustees' fees 12,894
Pricing fees 15,441
Miscellaneous 36,236
--------------------------------------------------------------------------------------------------
Total expenses $ 3,253,231
--------------------------------------------------------------------------------------------------
Net investment income $ 25,942,123
--------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss from investments $ (1,491,778)
Change in net unrealized gain (loss) from investments 56,977,837
--------------------------------------------------------------------------------------------------
Net gain on investments $ 55,486,059
--------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS FROM NET
INVESTMENT INCOME: $ (468,476)
--------------------------------------------------------------------------------------------------
Net increase in net assets applicable to common shareowners
resulting from operations $ 80,959,706
--------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
22 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
Statement of Changes in Net Assets
For the Years Ended 4/30/10 and 4/30/09, respectively
---------------------------------------------------------------------------------------------------
Year Year
Ended Ended
4/30/10 4/30/09
---------------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 25,942,123 $ 24,807,728
Net realized loss on investments and interest rate swaps (1,491,778) (6,389,854)
Change in net unrealized gain (loss) on investments 56,977,837 (60,921,177)
Distributions to preferred shareowners from net
investment income (468,476) (2,525,210)
---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to
common shareowners resulting from operations $ 80,959,706 $ (45,028,513)
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREOWNERS:
Net investment income
($0.97 and $0.85 per share, respectively) $ (21,516,929) $ (18,817,657)
---------------------------------------------------------------------------------------------------
Total distributions to common shareowners $ (21,516,929) $ (18,817,657)
---------------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ 1,453,202 $ 175,511
---------------------------------------------------------------------------------------------------
Net increase in net assets applicable to common
shareowners resulting from Trust share transactions $ 1,453,202 $ 175,511
---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to
common shareowners $ 60,895,979 $ (63,670,659)
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Beginning of year 247,560,008 311,230,667
---------------------------------------------------------------------------------------------------
End of year $ 308,455,987 $ 247,560,008
---------------------------------------------------------------------------------------------------
Undistributed net investment income $ 11,320,757 $ 7,400,424
---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 23
Financial Highlights
------------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
4/30/10 4/30/09 4/30/08 4/30/07 4/30/06
------------------------------------------------------------------------------------------------------------------------------------
Per Common Share Operating Performance
Net asset value, beginning of period $ 11.18 $ 14.07 $ 16.02 $ 15.15 $ 15.62
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:(a)
Net investment income $ 1.17 $ 1.12 $ 1.08 $ 1.02 $ 1.02
Net realized and unrealized gain (loss) on investments and
interest rate swaps 2.50 (3.05) (2.03) 0.78 (0.48)
Dividends and distributions to preferred shareowners from:
Net investment income ( 0.02) (0.11) (0.17) (0.16) (0.12)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from investment operations $ 3.65 $ (2.04) $ (1.12) $ 1.64 $ 0.42
Distributions to common shareowners from:
Net investment income (0.97) (0.85) (0.83) (0.77) (0.89)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ 2.68 $ (2.89) $ (1.95) $ 0.87 $ (0.47)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period(b) $ 13.86 $ 11.18 $ 14.07 $ 16.02 $ 15.15
====================================================================================================================================
Market value, end of period(b) $ 14.34 $ 10.40 $ 13.88 $ 15.05 $ 13.22
====================================================================================================================================
Total return at market value(c) 48.69% (18.85)% (2.28) % 20.04% (1.85)%
Ratios to average net assets of common shareowners
Net expenses(d) 1.14% 1.19% 1.03% 1.06% 1.03%
Net investment income before preferred share dividends 9.07% 9.36% 7.17% 6.49% 6.64%
Preferred share dividends 0.16% 0.95% 1.13% 1.01% 0.80%
Net investment income available to common shareowners 8.91% 8.41% 6.04% 5.48% 5.84%
The accompanying notes are an integral part of these financial statements.
24 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
------------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
4/30/10 4/30/09 4/30/08 4/30/07 4/30/06
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 11% 16% 17% 18% 20%
Net assets of common shareowners, end of period
(in thousands) $ 308,456 $ 247,560 $ 311,231 $ 354,486 $ 335,121
Preferred shares outstanding (in thousands) $ 101,000 $ 101,000 $ 101,000 $ 101,000 $ 101,000
Asset coverage per preferred share, end of period $ 101,351 $ 86,278 $ 102,047 $ 112,759 $ 107,962
Average market value per preferred share(e) $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000
Liquidation value, including dividends payable,
per preferred share $ 25,001 $ 25,001 $ 25,010 $ 25,014 $ 25,011
Ratios to average net assets of common shareowners
before waivers and reimbursement of expenses
Net expenses(d) 1.14% 1.19% 1.03% 1.06% 1.03%
Net investment income before preferred share dividends 9.07% 9.36% 7.17% 6.49% 6.64%
Preferred share dividends 0.16% 0.95% 1.13% 1.01% 0.80%
Net investment income available to common shareowners 8.91% 8.41% 6.04% 5.48% 5.84%
====================================================================================================================================
(a) The per common share data presented above is based upon the average
common shares outstanding for the periods presented.
(b) 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.
(c) Total investment return is calculated assuming a purchase of common
shares at the current market value on the first day and a sale at the
current market value on the last day of the periods reported. Dividends
and distributions, if any, are assumed for purposes of this calculation
to be reinvested at prices obtained under the Trust's dividend
reinvestment plan. Total investment return does not reflect brokerage
commissions. Past performance is not a guarantee of future results.
(d) Expense ratios do not reflect the effect of dividend payments to
preferred shareowners.
(e) Market value is redemption value without an active market.
The information above represents the audited operating performance data
for a common share outstanding, total investment return, ratios to
average net assets 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.
The accompanying notes are an integral part of these financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 25
Notes to Financial Statements | 4/30/10
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
primary investment objective of the Trust is to seek a high level of current
income exempt from regular federal income tax and, as a secondary investment
objective, the Trust may seek capital appreciation to the extent consistent
with its primary investment objective.
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. 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 risks.
The Trust may invest in both investment and below investment grade (high-yield)
municipal securities with a broad range of maturities and credit ratings. Debt
securities rated below investment grade are commonly referred to as "junk
bonds" and are considered speculative. These securities involve greater risk of
loss, are subject to greater price volatility, and are less liquid, especially
during periods of economic uncertainty or change, than higher rated debt
securities.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses and gains or losses on investments during the
reporting year. 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. The net asset value of
the Trust is computed once daily, on each day the New York Stock Exchange
26 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
(NYSE) is open, as of the close of regular trading on the NYSE. Fixed income
securities with remaining maturity of more than sixty days are valued at
prices supplied by independent pricing services, which consider such factors
as market prices, market events, quotations from one or more brokers,
Treasury spreads, yields, maturities and ratings. Valuations may be
supplemented by dealers and other sources, as required. Equity securities are
valued at the last sale price on the principal exchange where they are
traded. The values of interest rate swaps are determined by obtaining dealer
quotations. Securities for which independent pricing services are unable to
supply prices or for which market prices and/or quotations are not readily
available or are considered to be unreliable are valued using fair value
methods pursuant to procedures adopted by the Board of Trustees.
The Trust may use fair value methods if it is determined that a significant
event has occurred after the close of the exchange or market on which the
security trades and prior to the determination of the Trust's net asset
value. Thus, the valuation of the Trust's securities may differ from exchange
prices. At April 30, 2010, one security was valued using fair value methods
(other than securities valued using prices supplied by independent pricing
services) which had no fair value. Inputs used in the valuation of a security
using fair value methods include credit ratings, the financial condition of
the company, current market conditions and comparable securities. Short-term
fixed income securities with remaining maturities of sixty days or less are
generally valued at amortized cost.
Discount and premium on debt securities are accreted or amortized,
respectively, daily into interest income on a yield-to-maturity basis with a
corresponding increase or decrease in the cost basis of the security.
Interest income, including interest-bearing cash accounts, is recorded on an
accrual basis.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have passed
are recorded as soon as the Trust becomes aware of the ex-dividend data in
the exercise of reasonable diligence.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required. Tax
years for the prior three fiscal years remain subject to examination by tax
authorities.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 27
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal income
tax rules. Therefore, the sources 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 (loss) on investment transactions, or
as from paid in-capital, depending on the type of book/tax differences that
may exist.
At April 30, 2010, the Trust reclassified $36,385 to decrease undistributed
net investment income and to decrease net realized loss on investments to
reflect permanent book/tax differences. The reclassification has no impact on
the net assets of the Trust and presents the Trust's capital accounts on a
tax basis.
At April 30, 2010, the Trust had a net capital loss carryforward of
$24,059,892, of which the following amounts will expire between 2014 and 2018
if not utilized: $6,354,842 in 2014, $4,138,757 in 2015, $4,586,154 in 2017
and $8,980,139 in 2018.
The Trust has elected to defer approximately $37,016 of capital losses
recognized between November 1, 2009 and April 30, 2010 to its fiscal year
ending April 30, 2011.
The tax character of distributions paid to common and preferred shareowners
during the years ended April 30, 2010 and April 30, 2009 was as follows:
-------------------------------------------------------------------------------
2010 2009
--------------------------------------------------------------------------------
Distributions paid from:
Tax exempt income $21,528,535 $21,171,440
Ordinary income 456,870 171,427
--------------------------------------------------------------------------------
Total $21,985,405 $21,342,867
================================================================================
The following shows the components of distributable earnings (losses) on a
federal income tax basis at April 30, 2010.
--------------------------------------------------------------------------------
2010
--------------------------------------------------------------------------------
Distributable earnings:
Undistributed tax-exempt income $ 9,313,854
Undistributed ordinary income 5,590
Capital loss carryforward (24,059,892)
Post-October loss deferred (37,016)
Dividend payable (3,254)
Unrealized appreciation 6,348,595
--------------------------------------------------------------------------------
Total $ (8,432,123)
================================================================================
The difference between book-basis and tax-basis unrealized appreciation is
primarily attributable to the difference between book and tax amortization
28 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
methods for premiums and discounts on fixed income securities, book/tax
difference in the accrual of income on securities in default, the deferral
of post-October capital losses for tax purposes and other temporary
differences.
C. Automatic Dividend Reinvestment Plan
All common shareowners, whose shares are registered in their own names,
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.
If a shareowner's shares are held in the name of a brokerage firm, bank or
other nominee, the shareowner can ask the firm or nominee to participate in
the Plan on the shareowner's behalf. If the firm or nominee does not offer
the Plan, dividends will be paid in cash to the shareowner of record. A firm
or nominee may reinvest a shareowner's cash dividends in common shares of the
Trust on terms that differ from the terms of the Plan.
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
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 29
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), the Trust's investment adviser, a
wholly owned indirect subsidiary of UniCredit S.p.A. (UniCredit), manages the
Trust's portfolio. Management fees payable under the Trust's Advisory Agreement
with PIM are calculated daily at the annual rate of 0.60% of the Trust's
average daily managed assets. "Managed assets" means (a) the total assets of
the Trust, including any form of investment leverage, minus (b) all accrued
liabilities incurred in the normal course of operations, which shall not
include any liabilities or obligations attributable to investment leverage
obtained through (i) indebtedness of any type (including, without limitation,
borrowing through a credit facility or the issuance of debt securities), (ii)
the issuance of preferred stock or other similar preference securities, and/or
(iii) any other means. For the year ended April 30, 2010, the net management
fee was equivalent to 0.60% of the Trust's average daily managed assets, which
was equivalent to 0.81% of the Trust's average daily net assets attributable to
the common shareowners.
In addition, under PIM's management and administration agreements, certain
other services and costs are paid by PIM and reimbursed by the Trust. At April
30, 2010, $209,418 was payable to PIM related to management costs,
administrative costs and certain other services and is included in "Due to
affiliates" on the Statement of Assets and Liabilities.
PIM has retained Princeton Administrators, LLC (Princeton) to provide certain
administrative and accounting services to the Trust on its behalf. The Trust
pays Princeton a monthly fee equal to 0.07% of the Trust's average daily
managed assets up to $500 million and 0.03% for average daily managed assets in
excess of $500 million, subject to a minimum monthly fee of $10,000. Effective
September 30, 2010, Princeton has notified the Trust that it will resign as
administrators of the Trust.
3. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. (PIMSS), a wholly
owned indirect subsidiary of UniCredit, 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 (Deutsche Bank) is the
transfer agent, registrar, dividend paying agent and auction agent with respect
to the Trust's Auction Preferred Shares (APS). The Trust pays Deutsche Bank an
annual fee, as is agreed to from time to time by the Trust and Deutsche Bank,
for providing such services.
30 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
In addition, the Trust reimburses PIMSS for out-of-pocket expenses incurred by
PIMSS related to shareholder communications activities such as proxy and
statement mailings and outgoing phone calls.
4. Interest Rate Swaps
The Trust may enter into interest rate swap transactions to attempt to protect
itself from increasing dividend or interest expense on its leverage resulting
from increasing short-term interest rates. The cost of leverage may rise with
an increase in interest rates, generally having the effect of lower yields and
potentially lower dividends to common shareowners. Interest rate swaps can be
used to "lock in" the cost of leverage and reduce the negative impact that
rising short-term interest rates would have on the Trust's leveraging costs.
An interest rate swap is an agreement between two parties, which involves
exchanging a floating rate and fixed rate interest payments for a specified
period of time. Interest rate swaps involve the accrual of the net interest
payments between the parties on a daily basis, with the net amount recorded
within the unrealized appreciation/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. 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.
There were no interest rate swap contracts outstanding for the year ended April
30, 2010.
5. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized.
Transactions in common shares of beneficial interest for the years ended April
30, 2010 and April 30, 2009 were as follows:
--------------------------------------------------------------------------------
2010 2009
--------------------------------------------------------------------------------
Shares outstanding at beginning of year 22,140,525 22,127,742
Reinvestment of distributions 110,707 12,783
--------------------------------------------------------------------------------
Shares outstanding at end of year 22,251,232 22,140,525
================================================================================
Pioneer Municipal High Income Trust | Annual Report | 4/30/10
31
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 April 30, 2010, 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. An auction fails if there
are more APS offered for sale than there are buyers. When an auction fails, the
dividend rate for the period will be the maximum rate on the auction dates
described in the prospectus for the APS. Preferred shareowners will not be able
to sell their APS at an auction if the auction fails. Since February 2008, the
Trust's auctions related to the APS have failed. The maximum rate for the 7-Day
Series is 110% of the 7 day commercial rate or Kenny rate. Dividend rates
ranged from 0.259% to 0.744% during the year ended April 30, 2010.
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, the Trust does not comply with the asset coverage
ratios described in the prospectus for the APS.
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 Statement of
Preferences 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. Holders of APS are also entitled to elect two
of the Trust's Trustees. In addition, the Investment Company Act of 1940, as
amended, requires that along with approval by shareowners that might otherwise
be required, the approval of the holders of a majority of any outstanding
preferred shares, voting separately as a class, would be required to (a) adopt
any plan of reorganization that would adversely affect the preferred shares and
(b) take any action requiring a vote of security holders, including, among
other things, changes in the Trust's subclassification as a closed-end
management investment company or changes in its fundamental investment
restrictions.
6. Subsequent Events
Subsequent to April 30, 2010 the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.085 per common share
payable May 28, 2010 to shareowners of record on May 14, 2010.
32 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
Subsequent to April 30, 2010, dividends declared and paid on preferred shares
totaled $50,620 in aggregate for the two outstanding preferred share series
through June 22, 2010.
In preparing these financial statements, PIM has evaluated the impact of all
events and transactions for potential recognition or disclosure and has
determined that other than disclosed above, there were no subsequent events
requiring recognition or disclosure in the financial statements.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 33
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and the Shareowners of
Pioneer Municipal High Income Trust:
--------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities of Pioneer
Municipal High Income Trust (the "Trust"), including the schedule of
investments, as of April 30, 2010, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of
the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Trust's internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Trust's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of April 30, 2010, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Municipal High Income Trust at April 30, 2010, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the five years in the period then ended, in conformity with U.S. generally
accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
June 22, 2010
34 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
ADDITIONAL INFORMATION (unaudited)
During the period, there have been no material changes in the Trust's
investment objective or fundamental policies that have not been approved by the
shareowners. There have been no changes in the Trust's charter or By-Laws that
would delay or prevent a change in control of the Trust which has not been
approved by the shareowners. There have been no changes in the principal risk
factors associated with investment in the Trust. Day-to-day management of the
Trust's portfolio is the responsibility of David Eurkus. Mr. Eurkus is
supported by the fixed income team. Members of this team manage other Pioneer
funds investing primarily in fixed income securities. The portfolio manager and
the team also may draw upon the research and investment management expertise of
Pioneer's affiliate, Pioneer Investment Management Limited. Mr. Eurkus joined
Pioneer as a senior vice president in January 2000 and has been an investment
professional since 1969.
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.
CEO CERTIFICATION DISCLOSURE (unaudited)
The Trust's Chief Executive Officer has submitted to the New York Stock
Exchange the annual CEO certification as required by Section 303A.12(a) of the
NYSE Listed Company Manual. In addition, the Trust has filed with the
Securities and Exchange Commission the certification of its Chief Executive
Officer and Chief Financial Officer required by Section 302 of the Sarbanes-
Oxley Act.
Results of Shareholder Meeting (unaudited)
At the annual meeting of shareowners held on September 22, 2009 shareowners of
Pioneer Municipal High Income Trust were asked to consider the proposals
described below. A report of the total votes cast by the Trust's shareholders
follows:
Proposal 1 -- To elect Class III Trustees.
--------------------------------------------------------------------------------
Nominee For Withheld
--------------------------------------------------------------------------------
Mary K. Bush 12,553,020 512,979
--------------------------------------------------------------------------------
Thomas J. Perna 12,560,266 505,733
--------------------------------------------------------------------------------
Marguerite A. Piret+ 3,023 74
--------------------------------------------------------------------------------
+ Elected by Preferred Shares only
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 35
Proposal 2 -- To approve an Amended and Restated Management Agreement with
Pioneer Investment Management, Inc.
--------------------------------------------------------------------------------
Broker
For Against Abstain Non-Votes
--------------------------------------------------------------------------------
9,277,054 364,593 260,525 3,163,827
IMPORTANT TAX INFORMATION (unaudited)
The following summarizes the taxable per share distributions paid by Pioneer
Municipal High Income Trust during the taxable year ended April 30, 2010:
--------------------------------------------------------------------------------
Payable Ordinary
Date Income
--------------------------------------------------------------------------------
Common Shareowners 12/18/2009 $ 0.019739
Preferred Shareowners
Series A 11/18/2009 $ 1.92
Series A 11/25/2009 $ 2.49
Series A 12/02/2009 $ 0.08
Series B 11/19/2009 $ 2.24
Series B 11/27/2009 $ 2.60
All of the other net investment income distributions paid by the Trust qualify
as tax-exempt interest dividends for Federal income tax purposes.
36 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
Approval of Investment Advisory Agreement (unaudited)
Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to
Pioneer Municipal High Income Trust (the Trust) pursuant to an investment
advisory agreement between PIM and the Trust. In order for PIM to remain the
investment adviser of the Trust, the Trustees of the Trust must determine
annually whether to renew the investment advisory agreement for the Trust.
The contract review process began in March 2009 as the Trustees of the Trust
agreed on, among other things, an overall approach and timeline for the
process. In July 2009, the Trustees approved the format of the contract review
materials and submitted their formal request to PIM to furnish information
necessary to evaluate the terms of the investment advisory agreement. The
contract review materials were provided to the Trustees in August 2009. After
reviewing and discussing the materials, the Trustees submitted a request for
additional information to PIM in September 2009, and materials were provided in
response to this request. Meetings of the independent Trustees of the Trust
were held in July, September, October, and November, 2009 to review and discuss
the contract review materials. In addition, the Trustees took into account the
information related to the Trust provided to the Trustees at each regularly
scheduled meeting.
At a meeting held on November 10, 2009, based on their evaluation of the
information provided by PIM and third parties, the Trustees of the Trust,
including the independent Trustees voting separately, unanimously approved the
renewal of the investment advisory agreement for another year. In considering
the renewal of the investment advisory agreement, the Trustees considered
various factors that they determined were relevant, including the factors
described below. The Trustees did not identify any single factor as the
controlling factor in determining to approve the renewal of the agreement.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services that had
been provided by PIM to the Trust, taking into account the investment objective
and strategy of the Trust. The Trustees reviewed the terms of the investment
advisory agreement. The Trustees also reviewed PIM's investment approach for
the Trust, its research process and its process for trade execution. The
Trustees considered the resources of PIM and the personnel of PIM who provide
investment management services to the Trust. The Trustees considered the
non-investment resources and personnel of PIM involved in PIM's services to the
Trust, including PIM's compliance and legal resources and personnel. The
Trustees also considered the substantial attention and high priority given by
PIM's senior management to the Pioneer fund complex.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 37
The Trustees considered that PIM supervises and monitors the performance of the
Trust's service providers and provides the Trust with personnel (including
Trust officers) and other resources that are necessary for the Trust's business
management and operations. The Trustees also considered that, as administrator,
PIM is responsible for the administration of the Trust's business and other
affairs. The Trustees considered the fees paid to PIM for the provision of
administration services.
Based on these considerations, the Trustees concluded that the nature, extent
and quality of services that had been provided by PIM to the Trust were
satisfactory and consistent with the terms of the investment advisory
agreement.
Performance of the Trust
The Trustees considered the performance results of the Trust over various time
periods. They reviewed information comparing the Trust's performance with the
performance of its peer group of funds as classified by Morningstar, Inc.
(Morningstar), an independent provider of investment company data, and with the
performance of the Trust's benchmark index. The Trustees considered that the
Trust's annualized total return was in the first quintile of its Morningstar
category for the one year period ended June 30, 2009, and in the second
quintile of its Morningstar category for the three and five year periods ended
June 30 2009. (In all quintile rankings referred to throughout this disclosure,
first quintile is most favorable to the Trust's shareowners. Thus, highest
relative performance would be first quintile and lowest relative expenses would
also be first quintile.) The Trustees considered that the Trust's yield (at
market value) was comparable to the average yield (at market value) of the
funds in its peer group as of June 30, 2009. The Trustees noted that the yield
of the Trust also compared favorably to the yield of the Trust's primary and
secondary benchmarks as of June 30, 2009. The Trustees reviewed data provided
by Pioneer showing how leverage had benefited the Trust's common shareholders.
The Trustees concluded that the investment performance of the Trust was
satisfactory.
Management Fee and Expenses
The Trustees considered information on the fees and expenses of the Trust in
comparison to the management fees and the expense ratios of a peer group of
funds selected on the basis of criteria determined by the independent Trustees
for this purpose using data provided by Strategic Insight Mutual Fund Research
and Consulting, LLC (Strategic Insight), an independent third party.
The Trustees considered that the Trust's management fee rate based on net
assets attributable to common shares for the twelve months ended June 30, 2009
was in the third quintile relative to the management fees paid by other funds
in its Strategic Insight peer group for the comparable period. The Trustees
also considered that the Trust's expense ratio for the twelve months ended
38 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
June 30, 2009 was in the third quintile relative to its Strategic Insight peer
group for the comparable period.
The Trustees also reviewed management fees charged by PIM to its institutional
and other clients. In evaluating the fees associated with PIM's client
accounts, the Trustees took into account the respective demands, resources and
complexity associated with the Trust and client accounts. The Trustees noted
that in some instances the fee rates for those clients were lower than the
management fee for the Trust and considered that, under the investment advisory
agreement with the Trust, PIM performs additional services for the Trust that
it does not provide to those other clients or services that are broader in
scope, including oversight of the Trust's other service providers and
activities related to compliance and the extensive regulatory and tax regimes
to which the Trust is subject.
The Trustees concluded that the management fee payable by the Trust to PIM was
reasonable in relation to the nature and quality of the services provided by
PIM. The Trustees also concluded that the Trust's expense ratio was reasonable
taking into account the nature and quality of services provided by PIM.
Profitability
The Trustees considered information provided by PIM regarding the profitability
of PIM with respect to the advisory services provided by PIM to the Trust,
including the methodology used by PIM in allocating certain of its costs to the
management of the Trust. The Trustees also considered PIM's profit margin in
connection with the overall operation of the Trust. They further reviewed the
financial results realized by PIM and its affiliates from non-fund businesses.
The Trustees considered PIM's profit margins with respect to the Trust in
comparison to the limited industry data available and noted that the
profitability of any adviser was affected by numerous factors, including its
organizational structure and method for allocating expenses. The Trustees
concluded that PIM's profitability with respect to the management of the Trust
was not unreasonable.
Economies of Scale
The Trustees considered the extent to which PIM may realize economies of scale
or other efficiencies in managing and supporting the Trust. Since the Trust is
a closed-end fund that has not raised additional capital, the Trustees
concluded that economies of scale were not a relevant consideration in the
renewal of the investment advisory agreement.
Other Benefits
The Trustees considered the other benefits to PIM from its relationship with
the Trust. The Trustees considered the character and amount of fees paid by the
Trust, other than under the investment advisory agreement, for services
provided by PIM and its affiliates. The Trustees further considered the
revenues
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 39
and profitability of PIM's businesses other than the fund business. The
Trustees considered the intangible benefits to PIM by virtue of its
relationship with the Trust and the other Pioneer funds. The Trustees concluded
that the receipt of these benefits was reasonable in the context of the overall
relationship between PIM and the Trust.
Conclusion
After consideration of the factors described above as well as other factors,
the Trustees, including all of the independent Trustees, concluded that the
investment advisory agreement between PIM and the Trust, including the fees
payable thereunder, was fair and reasonable and voted to approve the proposed
renewal of the investment advisory agreement for the Trust.
40 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
Trustees, Officers and Service Providers
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Legal Counsel
Bingham McCutchen 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-month period ended June 30 is publicly available to
shareowners at www.pioneerinvestments.com. This information is also available
on the Securities and Exchange Commission's web site at http://www.sec.gov.
Trustees and Officers
The Board of Trustees provides broad supervision over the Trust's affairs. The
officers of the Trust are responsible for the Trust's operations. The Trustees
and officers are listed below, together with their principal occupations during
the past five years. Trustees who are interested persons of the Trust within
the meaning of the 1940 Act are referred to as Interested Trustees. Trustees
who are not interested persons of the Trust are referred to as Independent
Trustees. Each of the Trustees, except Mr. West, serves as a Trustee of each of
the 57 U.S. registered investment portfolios for which Pioneer serves as
investment adviser (the "Pioneer Funds"). Mr. West serves as a Trustee of 44
U.S. registered investment portfolios for which Pioneer serves as investment
adviser. The address for all Trustees and all officers of the Trust is 60 State
Street, Boston, Massachusetts 02109.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 41
Interested Trustees
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Other Directorships
Name and Age With the Trust and Term of Office Principal Occupation During Past Five Years Held by this Trustee
------------------------------------------------------------------------------------------------------------------------------------
John F. Cogan, Jr. Chairman of the Class I Trustee since Non-Executive Chairman and a Director of None
(83)* Board, Trustee 2003. Term expires in Pioneer Investment Management USA Inc.
and President 2010. Elected by Pre- ("PIM-USA"); Chairman and a Director of
ferred Shares only. Pioneer; Chairman and Director of Pioneer
Institutional Asset Management, Inc. (since
2006); Director of Pioneer Alternative
Investment Management Limited (Dublin);
President and a Director of Pioneer
Alternative Investment Management (Bermuda)
Limited and affiliated funds; Deputy Chairman
and a Director of Pioneer Global Asset
Management S.p.A. ("PGAM") (until April
2010); Director of PIOGLOBAL Real Estate
Investment Fund (Russia) (until June 2006);
Director of Nano-C, Inc. (since 2003);
Director of Cole Management Inc. (since
2004); Director of Fiduciary Counseling,
Inc.; President and Director of Pioneer Funds
Distributor, Inc. ("PFD") (until May 2006);
President of all of the Pioneer Funds; and Of
Counsel, Wilmer Cutler Pickering Hale and
Dorr LLP
------------------------------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury Trustee and Class II Trustee since Director, CEO and President of PIM USA (since None
(51)* Executive 2007. Term expires in February 2007); Director and President of
Vice President 2011. Pioneer and Pioneer Institutional Asset
Management, Inc. (since February 2007);
Executive Vice President of all of the
Pioneer Funds (since March 2007); Director of
PGAM (2007 - 2010); Head of New Europe
Division, PGAM (2000 - 2005); Head of New
Markets Division, PGAM (2005 - 2007)
------------------------------------------------------------------------------------------------------------------------------------
* Mr. Cogan and Mr. Kingsbury are Interested Trustees because each is an
officer or director of the Trust's investment adviser and certzain of its
affiliates.
42 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
Independent Trustees
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Other Directorships
Name and Age With the Trust and Term of Office Principal Occupation During Past Five Years Held by this Trustee
------------------------------------------------------------------------------------------------------------------------------------
David R. Bock (66) Trustee Class I Trustee since Interim Chief Executive Officer, Oxford Director of
2005. Term expires in Analytica, Inc. (privately-held research and Enterprise Community
2010. consulting company) (2010 - present); Investment, Inc.
Managing Partner, Federal City Capital (privately-held
Advisors (corporate advisory services affordable housing
company) (1997 to 2004 and 2008 - present); finance company)
Executive Vice President and Chief Financial (1985 - present);
Officer, I-trax, Inc. (pub- licly traded Director of Oxford
health care services company) (2004 - 2007); Analytica, Inc.
and Executive Vice President and Chief (2008 - present);
Financial Officer, Pedestal Inc. Director of New York
(internet-based mortgage trading company Mortgage Trust
(2000 - 2002) (publicly-traded
mortgage REIT) (2004
- 2009)
------------------------------------------------------------------------------------------------------------------------------------
Pioneer Municipal High Income Trust | Annual Report | 4/30/10
43
Independent Trustees (continued)
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Other Directorships
Name and Age With the Trust and Term of Office Principal Occupation During Past Five Years Held by this Trustee
------------------------------------------------------------------------------------------------------------------------------------
Mary K. Bush (62) Trustee Class III Trustee since President, Bush International, LLC Director of Marriott
2003. Term expires in (international financial advisory firm) (1991 International, Inc.
2012. - present); Managing Director, Federal (2008 - present);
Housing Finance Board (oversight of Federal Director of Discover
Home Loan Bank system) (1989 - 1991); Vice Financial Services
President and Head of International Finance, (credit card issuer
Federal National Mortgage Association (1988 - and electronic
1989); U.S. Alternate Executive Director, payment services)
International Monetary Fund (1984 - 1988); (2007 - present);
Executive Assistant to Deputy Secretary of Former Director of
the U.S. Treasury, U.S. Treasury Department Briggs & Stratton
(1982 - 1984); Vice President and Team Leader Co. (engine
in Corporate Banking, Bankers Trust manufacturer) (2004
Co. (1976 - 1982) - 2009); Director of
UAL Corporation
(airline holding
company) (2006 -
present); Director
of ManTech
International
Corporation
(national security,
defense, and
intelligence
technology firm)
(2006 - present);
and Member, Board of
Governors,
Investment Company
Institute (2007 -
present); Former
Director of Brady
Corporation (2000 -
2007); Former
Director of Mortgage
Guaranty Insurance
Corporation (1991 -
2006); Former
Director of
Millennium
Chemicals, Inc.
(commodity
chemicals) (2002 -
2005); Former
Director, R.J.
Reynolds Tobacco
Holdings, Inc.
(tobacco) (1999 -
2005); Former
Director of Texaco,
Inc. (1997 - 2001)
------------------------------------------------------------------------------------------------------------------------------------
44 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Other Directorships
Name and Age With the Trust and Term of Office Principal Occupation During Past Five Years Held by this Trustee
------------------------------------------------------------------------------------------------------------------------------------
Benjamin M. Friedman Trustee Class II Trustee since William Joseph Maier Professor of Political Trustee, Mellon
(65) 2008. Term expires in Economy, Harvard University (1972 - present) Institutional Funds
2011. Investment Trust and
Mellon Institutional
Funds Master
Portfolio (oversaw
17 portfolios in
fund complex)
(1989 - 2008)
------------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham Trustee Class II Trustee since Founding Director, Vice-President and None
(62) 2003. Term expires in Corporate Secretary, The Winthrop Group, Inc.
2011. (consulting firm); and Desautels Faculty of
Management, McGill University (1999 -
present); and Manager of Research Operations
and Organizational Learning, Xerox PARC,
Xerox's Advance Research Center (1990 - 1994)
------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Perna (59) Trustee Class III Trustee since Chairman and Chief Executive Officer, Director, Broadridge
2006. Term expires in Quadriserv, Inc. (technol- ogy products for Financial Solutions,
2012. securities lending industry) (2008 - Inc. (2009 -
present); Private investor (2004 - 2008); and present); Director,
Senior Executive Vice President, The Bank Quadriserv, Inc.
of New York (financial and securities (2005 - present)
services) (1986 - 2004)
------------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret Trustee Class III Trustee since President and Chief Executive Officer, Director of New
(61) 2003. Term expires in Newbury, Piret & Company, Inc. (investment America High Income
2012. Elected by Pre- banking firm) (1981 - present) Fund, Inc.
ferred Shares only. (closed-end
investment company)
(2004 - present);
Member, Board of
Governors,
Investment Company
Institute (2000 -
2006)
------------------------------------------------------------------------------------------------------------------------------------
Pioneer Municipal High Income Trust | Annual Report | 4/30/10
45
Independent Trustees (continued)
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Other Directorships
Name and Age With the Trust and Term of Office Principal Occupation During Past Five Years Held by this Trustee
------------------------------------------------------------------------------------------------------------------------------------
Stephen K. West (81) Trustee Class I Trustee since Senior Counsel, Sullivan & Cromwell LLP (law Director, The Swiss
2003. Term expires in firm) (1998 - present); Partner, Sullivan & Helvetia Fund, Inc.
2010. Cromwell LLP (prior to 1998) (closed-end
investment company);
Director, AMVESCAP,
PLC (investment
manager) (1997 -
2005)
------------------------------------------------------------------------------------------------------------------------------------
46 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
Trust Officers
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Other Directorships
Name and Age with the Trust and Term of Office Principal Occupation During Past Five Years Held by this Officer
------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Assistant Since 2003. Serves at Vice President and Associate General Counsel None
Kelley (45) Secretary the discretion of the of Pioneer since January 2008 and Assistant
Board. Secretary of all of the Pioneer Funds since
September 2003; Vice President and Senior
Counsel of Pioneer from July 2002 to December
2007
------------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (50) Treasurer Since 2008. Serves at Vice President - Fund Accounting, None
the discretion of the Administration and Controllership Services
Board. of Pioneer; and Treasurer of all of the
Pioneer Funds since March 2008; Deputy
Treasurer of Pioneer from March 2004 to
February 2008; Assistant Treasurer of all of
the Pioneer Funds from March 2004 to February
2008
------------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti Assistant Since 2003. Serves at Assistant Vice President - Fund Accounting, None
(45) Treasurer the discretion of the Administration and Controllership Services of
Board. Pioneer; and Assistant Treasurer of all of
the Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (52) Assistant Since 2003. Serves at Fund Accounting Manager - Fund Accounting, None
Treasurer the discretion of the Administration and Controllership Services of
Board. Pioneer; and Assistant Treasurer of all of
the Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------------
David F. Johnson Assistant Since 2009. Serves at Fund Administration Manager - Fund None
(30) Treasurer the discretion of the Accounting, Administration and Controllership
Board. Services since November 2008 and Assistant
Treasurer of all of the Pioneer Funds since
January 2009; Client Service Manager -
Institutional Investor Services at State
Street Bank from March 2003 to March 2007
------------------------------------------------------------------------------------------------------------------------------------
Pioneer Municipal High Income Trust | Annual Report | 4/30/10
47
Trust Officers (continued)
------------------------------------------------------------------------------------------------------------------------------------
Position Held Length of Service Other Directorships
Name and Age with the Trust and Term of Office Principal Occupation During Past Five Years Held by this Officer
------------------------------------------------------------------------------------------------------------------------------------
Jean M. Bradley (57) Chief Compliance Since 2010. Serves at Chief Compliance Officer of Pioneer and of None
Officer the discretion of the all the Pioneer Funds since March 2010;
Board. Director of Adviser and Portfolio Compliance
at Pioneer since October 2005; Senior
Compliance Officer for Columbia Management
Advisers, Inc. from October 2003 to October
2005
------------------------------------------------------------------------------------------------------------------------------------
The outstanding capital stock of PFD, Pioneer and Pioneer Investment Management
Shareholder Services, Inc. ("PIMSS") is indirectly wholly owned by UniCredit
S.p.A. ("UniCredit"), one of the largest banking groups in Italy. Pioneer, the
Trust's investment adviser, provides investment management and financial
services to mutual funds, institutional and other clients.
48 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
This page for your notes.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 49
This page for your notes.
50 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
This page for your notes.
Pioneer Municipal High Income Trust | Annual Report | 4/30/10 51
This page for your notes.
52 Pioneer Municipal High Income Trust | Annual Report | 4/30/10
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 checks, American Stock
change of address, lost stock certificates, Transfer & Trust
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
Visit our web site: 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 also may 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 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.
Audit Fees
Fees for audit services provided to the Trust, including fees
associated with the filings to update its Form N-2 and issuance
of comfort letters, totaled approximately $41,600 in 2010 and
$41,300 in 2009.
(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.
Audit-Related Fees
Audit related fees for the Trust's audit related services
totaled approximately $9,652 and $9,652 in 2010 and
2009, respectively.
(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.
Tax Fees
Fees for tax compliance services, primarily for tax returns,
totaled approximately $8,290 and $8,290 for 2010 and 2009,
respectively.
(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.
All Other Fees
There were no other fees for 2010 and
2009.
(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.
Non-Audit Services
Beginning with non-audit service contracts entered into on or
after May 6, 2003, the effective date of the new SEC pre-
approval rules, the Trust's audit committee is required to pre-
approve services to affiliates defined by SEC rules to the
extent that the services are determined to have a direct impact
on the operations or financial reporting of the Trust. For the
years ended April 30, 2010 and 2009, there were no services
provided to an affiliate that required the Trust's audit
committee pre-approval.
(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.
The aggregate non-audit fees for the Trust and affiliates, as
previously defined, totaled approximately $17,942 in 2010 and
$17,942 in 2009.
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's audit committee of the Board of Trustees has considered
whether the provision of non-audit services that were rendered to the
Affiliates (as defined) 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.
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.
The registrant has a separately-designated standing audit
committe eestablished in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(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.
Proxy Voting Policies and Procedures of
Pioneer Investment Management, Inc.
VERSION DATED July, 2004
Overview
Pioneer Investment Management, Inc. ("Pioneer") is a fiduciary that owes
each of its client's duties of care and loyalty with respect to all
services undertaken on the client's behalf, including proxy voting. When
Pioneer has been delegated proxy-voting authority for a client, the duty of
care requires Pioneer to monitor corporate events and to vote the proxies.
To satisfy its duty of loyalty, Pioneer must place its client's interests
ahead of its own and must cast proxy votes in a manner consistent with the
best interest of its clients. Pioneer will vote all proxies presented in a
timely manner.
The Proxy Voting Policies and Procedures are designed to complement
Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of
companies that are issuers of securities held in accounts managed by
Pioneer. Pioneer's Proxy Voting Policies summarize Pioneer's position on a
number of issues solicited by companies held by Pioneer's clients. The
policies are guidelines that provide a general indication on how Pioneer
would vote but do not include all potential voting scenarios.
Pioneer's Proxy Voting Procedures detail monitoring of voting, exception
votes, and review of conflicts of interest and ensure that case-by-case
votes are handled within the context of the overall guidelines (i.e. best
interest of client). The overriding goal is that all proxies for US and
non-US companies that are received promptly will be voted in accordance
with Pioneer's policies or specific client instructions. All shares in a
company held by Pioneer-managed accounts will be voted alike, unless a
client has given us specific voting instructions on an issue or has not
delegated authority to us or the Proxy Voting Oversight Group determines
that the circumstances justify a different approach.
Pioneer does not delegate the authority to vote proxies relating to its
clients to any of its affiliates, which include other subsidiaries of
UniCredito.
Any questions about these policies and procedures should be directed to the
Proxy Coordinator.
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Proxy Voting Procedures
Proxy Voting Service
Pioneer has engaged an independent proxy voting service to assist in the
voting of proxies. The proxy voting service works with custodians to ensure
that all proxy materials are received by the custodians and are processed
in a timely fashion. To the extent applicable, the proxy voting service
votes all proxies in accordance with the proxy voting policies established
by Pioneer. The proxy voting service will refer proxy questions to the
Proxy Coordinator (described below) for instructions under circumstances
where: (1) the application of the proxy voting guidelines is unclear; (2) a
particular proxy question is not covered by the guidelines; or (3) the
guidelines call for specific instructions on a case-by-case basis. The
proxy voting service is also requested to call to the Proxy Coordinator's
attention specific proxy questions that, while governed by a guideline,
appear to involve unusual or controversial issues. Pioneer reserves the
right to attend a meeting in person and may do so when it determines that
the company or the matters to be voted on at the meeting are strategically
important to its clients.
Proxy Coordinator
Pioneer's Director of Investment Operations (the "Proxy Coordinator")
coordinates the voting, procedures and reporting of proxies on behalf of
Pioneer's clients. The Proxy Coordinator will deal directly with the proxy
voting service and, in the case of proxy questions referred by the proxy
voting service, will solicit voting recommendations and instructions from
the Director of Portfolio Management US or, to the extent applicable,
investment sub-advisers. The Proxy Coordinator is responsible for ensuring
that these questions and referrals are responded to in a timely fashion and
for transmitting appropriate voting instructions to the proxy voting
service. The Proxy Coordinator is responsible for verifying with the
Compliance Department whether Pioneer's voting power is subject to any
limitations or guidelines issued by the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries).
Referral Items
From time to time, the proxy voting service will refer proxy questions to
the Proxy Coordinator that are described by Pioneer's policy as to be voted
on a case-by-case basis, that are not covered by Pioneer's guidelines or
where Pioneer's guidelines may be unclear with respect to the matter to be
voted on. Under such certain circumstances, the Proxy Coordinator will seek
a written voting recommendation from the Director of Portfolio Management
US. Any such recommendation will include: (i) the manner in which the
proxies should be voted; (ii) the rationale underlying any such decision;
and (iii) the disclosure of any contacts or communications made between
Pioneer and any outside parties concerning the proxy proposal prior to the
time that the voting instructions are provided. In addition, the Proxy
Coordinator will ask the Compliance Department to review the question for
any actual or apparent conflicts of interest as described below under
"Conflicts of
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Interest." The Compliance Department will provide a "Conflicts of Interest
Report," applying the criteria set forth below under "Conflicts of
Interest," to the Proxy Coordinator summarizing the results of its review.
In the absence of a conflict of interest, the Proxy Coordinator will vote
in accordance with the recommendation of the Director of Portfolio
Management US.
If the matter presents a conflict of interest for Pioneer, then the Proxy
Coordinator will refer the matter to the Proxy Voting Oversight Group for a
decision. In general, when a conflict of interest is present, Pioneer will
vote according to the recommendation of the Director of Portfolio
Management US where such recommendation would go against Pioneer's interest
or where the conflict is deemed to be immaterial. Pioneer will vote
according to the recommendation of its proxy voting service when the
conflict is deemed to be material and the Pioneer's internal vote
recommendation would favor Pioneer's interest, unless a client specifically
requests Pioneer to do otherwise. When making the final determination as to
how to vote a proxy, the Proxy Voting Oversight Group will review the
report from the Director of Portfolio Management US and the Conflicts of
Interest Report issued by the Compliance Department.
Conflicts of Interest
A conflict of interest occurs when Pioneer's interests interfere, or appear
to interfere with the interests of Pioneer's clients. Occasionally, Pioneer
may have a conflict that can affect how its votes proxies. The conflict may
be actual or perceived and may exist when the matter to be voted on
concerns:
o An affiliate of Pioneer, such as another company belonging to
the UniCredito Italiano S.p.A. banking group (a "UniCredito
Affiliate");
o An issuer of a security for which Pioneer acts as a sponsor,
advisor, manager, custodian, distributor, underwriter, broker, or
other similar capacity (including those securities specifically
declared by PGAM to present a conflict of interest for Pioneer);
o An issuer of a security for which UniCredito has informed Pioneer
that a UniCredito Affiliate acts as a sponsor, advisor, manager,
custodian, distributor, underwriter, broker, or other similar
capacity; or
o A person with whom Pioneer (or any of its affiliates) has an
existing, material contract or business relationship that was not
entered into in the ordinary course of Pioneer's business.
o Pioneer will abstain from voting with respect to companies
directly or indirectly owned by UniCredito Italiano Group, unless
otherwise directed by a client. In addition, Pioneer will inform
PGAM Global Compliance and the PGAM Independent Directors before
exercising such rights.
Any associate involved in the proxy voting process with knowledge of any
apparent or actual conflict of interest must disclose such conflict to the
Proxy Coordinator and the Compliance Department. The Compliance Department
will review each item referred to Pioneer to determine whether an actual or
potential conflict of interest with Pioneer exists in connection with the
proposal(s) to be voted upon. The review will be conducted by comparing the
apparent parties affected by the proxy proposal being
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voted upon against the Compliance Department's internal list of interested
persons and, for any matches found, evaluating the anticipated magnitude
and possible probability of any conflict of interest being present. For
each referral item, the determination regarding the presence or absence of
any actual or potential conflict of interest will be documented in a
Conflicts of Interest Report to the Proxy Coordinator.
Securities Lending
In conjunction with industry standards Proxies are not available to be
voted when the shares are out on loan through either Pioneer's lending
program or a client's managed security lending program. However, Pioneer
will reserve the right to recall lent securities so that they may be voted
according to the Pioneer's instructions. If a portfolio manager would like
to vote a block of previously lent shares, the Proxy Coordinator will work
with the portfolio manager and Investment Operations to recall the
security, to the extent possible, to facilitate the vote on the entire
block of shares.
Share-Blocking
"Share-blocking" is a market practice whereby shares are sent to a
custodian (which may be different than the account custodian) for record
keeping and voting at the general meeting. The shares are unavailable for
sale or delivery until the end of the blocking period (typically the day
after general meeting date).
Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and Investment Operations
Department to recall the shares (as allowable within the market time-frame
and practices) and/or communicate with executing brokerage firm. A list of
countries with "share-blocking" is available from the Investment Operations
Department upon request.
Record Keeping
The Proxy Coordinator shall ensure that Pioneer's proxy voting service:
o Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);
o Retains a record of the vote cast;
o Prepares Form N-PX for filing on behalf of each client that is a
registered investment company; and
o Is able to promptly provide Pioneer with a copy of the voting
record upon its request.
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The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:
o A record memorializing the basis for each referral vote cast;
o A copy of any document created by Pioneer that was material in
making the decision on how to vote the subject proxy; and
o A copy of any conflict notice, conflict consent or any other
written communication (including emails or other electronic
communications) to or from the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries)
regarding the subject proxy vote cast by, or the vote
recommendation of, Pioneer.
o Pioneer shall maintain the above records in the client's file for a
period not less than ten (10) years.
Disclosure
Pioneer shall take reasonable measures to inform its clients of the process
or procedures clients must follow to obtain information regarding how
Pioneer voted with respect to assets held in their accounts. In addition,
Pioneer shall describe to clients its proxy voting policies and procedures
and will furnish a copy of its proxy voting policies and procedures upon
request. This information may be provided to clients through Pioneer's Form
ADV (Part II) disclosure, by separate notice to the client, or through
Pioneer's website.
Proxy Voting Oversight Group
The members of the Proxy Voting Oversight Group are Pioneer's: Director of
Portfolio Management US, Head of Investment Operations, and Director of
Compliance. Other members of Pioneer will be invited to attend meetings and
otherwise participate as necessary. The Head of Investment Operations will
chair the Proxy Voting Oversight Group.
The Proxy Voting Oversight Group is responsible for developing, evaluating,
and changing (when necessary) Pioneer's Proxy Voting Policies and
Procedures. The group meets at least annually to evaluate and review these
policies and procedures and the services of its third-party proxy voting
service. In addition, the Proxy Voting Oversight Group will meet as
necessary to vote on referral items and address other business as
necessary.
Amendments
Pioneer may not amend its Proxy Voting Policies And Procedures without the
prior approval of the Proxy Voting Oversight Group and its corporate
parent, Pioneer Global Asset Management S.p.A
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Proxy Voting Policies
Pioneer's sole concern in voting proxies is the economic effect of the
proposal on the value of portfolio holdings, considering both the short-
and long-term impact. In many instances, Pioneer believes that supporting
the company's strategy and voting "for" management's proposals builds
portfolio value. In other cases, however, proposals set forth by management
may have a negative effect on that value, while some shareholder proposals
may hold the best prospects for enhancing it. Pioneer monitors developments
in the proxy-voting arena and will revise this policy as needed.
All proxies that are received promptly will be voted in accordance with the
specific policies listed below. All shares in a company held by
Pioneer-managed accounts will be voted alike, unless a client has given us
specific voting instructions on an issue or has not delegated authority to
us. Proxy voting issues will be reviewed by Pioneer's Proxy Voting
Oversight Group, which consists of the Director of Portfolio Management US,
the Director of Investment Operations (the Proxy Coordinator), and the
Director of Compliance.
Pioneer has established Proxy Voting Procedures for identifying and
reviewing conflicts of interest that may arise in the voting of proxies.
Clients may request, at any time, a report on proxy votes for securities
held in their portfolios and Pioneer is happy to discuss our proxy votes
with company management. Pioneer retains a proxy voting service to provide
research on proxy issues and to process proxy votes.
Administrative
While administrative items appear infrequently in U.S. issuer proxies, they
are quite common in non-U.S. proxies.
We will generally support these and similar management proposals:
o Corporate name change.
o A change of corporate headquarters.
o Stock exchange listing.
o Establishment of time and place of annual meeting.
o Adjournment or postponement of annual meeting.
o Acceptance/approval of financial statements.
o Approval of dividend payments, dividend reinvestment plans and other
dividend-related proposals.
o Approval of minutes and other formalities.
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o Authorization of the transferring of reserves and allocation of
income.
o Amendments to authorized signatories.
o Approval of accounting method changes or change in fiscal year-end.
o Acceptance of labor agreements.
o Appointment of internal auditors.
Pioneer will vote on a case-by-case basis on other routine business;
however, Pioneer will oppose any routine business proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of
the proposal. Pioneer has also instructed its proxy voting service to
inform Pioneer of its analysis of any administrative items inconsistent, in
its view, with supporting the value of Pioneer portfolio holdings so that
Pioneer may consider and vote on those items on a case-by-case basis.
Auditors
We normally vote for proposals to:
o Ratify the auditors. We will consider a vote against if we are
concerned about the auditors' independence or their past work for
the company. Specifically, we will oppose the ratification of
auditors and withhold votes from audit committee members if
non-audit fees paid by the company to the auditing firm exceed the
sum of audit fees plus audit-related fees plus permissible tax
fees according to the disclosure categories proposed by the
Securities and Exchange Commission.
o Restore shareholder rights to ratify the auditors.
We will normally oppose proposals that require companies to:
o Seek bids from other auditors.
o Rotate auditing firms, except where the rotation is statutorily
required or where rotation would demonstrably strengthen financial
disclosure.
o Indemnify auditors.
o Prohibit auditors from engaging in non-audit services for the
company.
Board of Directors
On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in
instances where corporate performance has been very poor or where the board
appears to lack independence.
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General Board Issues
Pioneer will vote for:
o Audit, compensation and nominating committees composed of
independent directors exclusively.
o Indemnification for directors for actions taken in good faith in
accordance with the business judgment rule. We will vote against
proposals for broader indemnification.
o Changes in board size that appear to have a legitimate business
purpose and are not primarily for anti-takeover reasons.
o Election of an honorary director.
We will vote against:
o Minimum stock ownership by directors.
o Term limits for directors. Companies benefit from experienced
directors, and shareholder control is better achieved through
annual votes.
o Requirements for union or special interest representation on the
board.
o Requirements to provide two candidates for each board seat.
We will vote on a case-by case basis on these issues:
o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate
performance.
Elections of Directors
In uncontested elections of directors we will vote against:
o Individual directors with absenteeism above 25% without valid
reason. We support proposals that require disclosure of director
attendance.
o Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the
purposes of our policy, we accept the definition of affiliated
directors provided by our proxy voting service.
We will also vote against:
o Directors who have failed to act on a takeover offer where the
majority of shareholders have tendered their shares.
o Directors who appear to lack independence or are associated with
very poor corporate performance.
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We will vote on a case-by case basis on these issues:
o Re-election of directors who have implemented or renewed a
dead-hand or modified dead-hand poison pill (a "dead-hand poison
pill" is a shareholder rights plan that may be altered only by
incumbent or "dead " directors. These plans prevent a potential
acquirer from disabling a poison pill by obtaining control of the
board through a proxy vote).
o Contested election of directors.
o Prior to phase-in required by SEC, we would consider supporting
election of a majority of independent directors in cases of poor
performance.
o Mandatory retirement policies.
o Directors who have ignored a shareholder proposal that has been
approved by shareholders for two consecutive years.
Takeover-Related Measures
Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high.
Pioneer will vote for:
o Cumulative voting.
o Increase ability for shareholders to call special meetings.
o Increase ability for shareholders to act by written consent.
o Restrictions on the ability to make greenmail payments.
o Submitting rights plans to shareholder vote.
o Rescinding shareholder rights plans ("poison pills").
o Opting out of the following state takeover statutes:
o Control share acquisition statutes, which deny large holders voting
rights on holdings over a specified threshold.
o Control share cash-out provisions, which require large holders to
acquire shares from other holders.
o Freeze-out provisions, which impose a waiting period on large
holders before they can attempt to gain control.
o Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.
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o Disgorgement provisions, which require acquirers to disgorge profits
on purchases made before gaining control.
o Fair price provisions.
o Authorization of shareholder rights plans.
o Labor protection provisions.
o Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider
voting against proposals that require a supermajority vote to
repeal or amend the provision. Finally, we will consider the
mechanism used to determine the fair price; we are generally
opposed to complicated formulas or requirements to pay a premium.
o Opting out of state takeover statutes regarding fair price
provisions. We will use the criteria used for fair price
provisions in general to determine our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end mutual funds.
o Limiting shareholder ability to remove or appoint directors. We
will support proposals to restore shareholder authority in this
area. We will review on a case-by-case basis proposals that
authorize the board to make interim appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support
proposals to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we
believe that management should have full control over corporate
funds.
o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g.,
amend charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally
allow shareholders to buy additional shares at a below-market
price in the event of a change in control and may deter some bids.
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Capital Structure
Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals
in this area. We will, however, reject proposals that impose high barriers
to potential takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Share repurchase programs, if all shareholders may participate on
equal terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank-check common stock placements (other than
shares issued in the normal course of business) submitted for
shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination
considering, among other factors:
o Number of shares currently available for issuance;
o Size of requested increase (we would normally approve increases of up to
100% of current authorization);
o Proposed use of the additional shares; and
o Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).
o Blank-check preferred. We will normally oppose issuance of a new
class of blank-check preferred, but may approve an increase in a
class already outstanding if the company has demonstrated that it
uses this flexibility appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's
financing flexibility.
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Compensation
Pioneer supports compensation plans that link pay to shareholder returns
and believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same
time, stock-related compensation plans have a significant economic impact
and a direct effect on the balance sheet. Therefore, while we do not want
to micromanage a company's compensation programs, we will place limits on
the potential dilution these plans may impose.
Pioneer will vote for:
o 401(k) benefit plans.
o Employee stock ownership plans (ESOPs), as long as shares
allocated to ESOPs are less than 5% of outstanding shares. Larger
blocks of stock in ESOPs can serve as a takeover defense. We will
support proposals to submit ESOPs to shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act
of 1993 (OBRA), including:
o Amendments to performance plans to conform with OBRA;
o Caps on annual grants or amendments of administrative features;
o Adding performance goals; and
o Cash or cash-and-stock bonus plans.
o Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.
o Require that option repricings be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension
benefits).
o Employee stock purchase plans where the purchase price is equal to
at least 85% of the market price, where the offering period is no
greater than 27 months and where potential dilution (as defined
below) is no greater than 10%.
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We will vote on a case-by-case basis on the following issues:
o Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:
o The program must be of a reasonable size. We will approve plans
where the combined employee and director plans together would
generate less than 15% dilution. We will reject plans with 15% or
more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.
o The plan must not:
o Explicitly permit unlimited option repricing authority or that
have repriced in the past without shareholder approval.
o Be a self-replenishing "evergreen" plan, plans that grant
discount options and tax offset payments.
o We are generally in favor of proposals that increase participation beyond
executives.
o We generally support proposals asking companies to adopt rigorous
vesting provisions for stock option plans such as those that vest
incrementally over, at least, a three- or four-year period with a pro
rata portion of the shares becoming exercisable on an annual basis
following grant date.
o We generally support proposals asking companies to disclose their
window period policies for stock transactions. Window period policies
ensure that employees do not exercise options based on insider
information contemporaneous with quarterly earnings releases and other
material corporate announcements.
o We generally support proposals asking companies to adopt stock holding
periods for their executives.
o All other employee stock purchase plans.
o All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee programs
and retirement plans.
o All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions,
repricing options, lengthening exercise periods or accelerating
distribution of awards and pyramiding and cashless exercise
programs.
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We will vote against:
o Pensions for non-employee directors. We believe these retirement
plans reduce director objectivity.
o Elimination of stock option plans.
We will vote on a case-by case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
Corporate Governance
Pioneer will vote for:
o Confidential Voting.
o Equal access provisions, which allow shareholders to contribute
their opinion to proxy materials.
o Proposals requiring directors to disclose their ownership of shares
in the company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support
reincorporations supported by valid business reasons. We will
oppose those that appear to be solely for the purpose of
strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the
proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
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Mergers and Restructurings
Pioneer will vote on the following and similar issues on a case-by-case
basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset
sales, joint ventures, conversions to holding company and
conversions to self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger
opportunities.
We will normally vote against shareholder proposals requiring that the
company be put up for sale.
Mutual Funds
Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments
raises several unique proxy voting issues.
Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes
that do not affect the investment objective or overall risk level
of the fund. We will examine more fundamental changes on a
case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end mutual funds, but will typically
support such proposals.
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Social Issues
Pioneer will abstain on stockholder proposals calling for greater
disclosure of corporate activities with regard to social issues. "Social
Issues" may generally be described as shareholder proposals for a company
to:
o Conduct studies regarding certain issues of public concern and
interest;
o Study the feasibility of the company taking certain actions with
regard to such issues; or
o Take specific action, including ceasing certain behavior and
adopting company standards and principles, in relation to issues
of public concern and interest.
We believe these issues are important and should receive management
attention.
Pioneer will vote against proposals calling for substantial changes in the
company's business or activities. We will also normally vote against
proposals with regard to contributions, believing that management should
control the routine disbursement of funds.
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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.
Additional Information About the Portfolio Managers
Other Accounts Managed by the Portfolio Managers. The table below indicates, for
each portfolio manager of the fund, information about the accounts other than
the fund over which the portfolio manager has day-to-day investment
responsibility. All information on the number of accounts and total assets in
the table is as of April 30, 2010. For purposes of the table, "Other Pooled
Investment Vehicles" may include investment partnerships, undertakings for
collective investments in transferable securities ("UCITS") and other non-U.S.
investment funds and group trusts, and "Other Accounts" may include separate
accounts for institutions or individuals, insurance company general or separate
accounts, pension funds and other similar institutional accounts but generally
do not include the portfolio manager's personal investment accounts or those
which the manager may be deemed to own beneficially under the code of ethics.
Certain funds and other accounts managed by the portfolio manager may have
substantially similar investment strategies
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Name of Portfolio Type of Account Number of Total Assets Number of Assets Managed
Manager Accounts Managed Managed Accounts Managed for which
for which Advisory Fee is
Advisory Fee is Performance-Based
Performance-Based
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
David Eurkus Other Registered 3 $1,664,533,000 N/A N/A
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 0 $0 N/A N/A
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 1 $10,612,000 N/A N/A
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Name of Portfolio Type of Account Number of Total Assets Number of Assets Managed
Manager Accounts Managed Managed Accounts Managed for which
for which Advisory Fee is
Advisory Fee is Performance-Based
Performance-Based
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Timothy Pynchon Other Registered 3 $1,664,533,000 N/A N/A
Investment
Companies
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Pooled 0 $0 N/A N/A
Investment Vehicles
-------------------- ----------------- ------------------- ------------------ -------------------
-------------------- ----------------- ------------------- ------------------ -------------------
Other Accounts 0 $0 N/A N/A
--------------------- -------------------- ----------------- ------------------- ------------------ -------------------
Potential Conflicts of Interest. When a portfolio manager is responsible for the
management of more than one account, the potential arises for the portfolio
manager to favor one account over another. The principal types of potential
conflicts of interest that may arise are discussed below. For the reasons
outlined below, Pioneer does not believe that any material conflicts are likely
to arise out of a portfolio manager's responsibility for the management of the
fund as well as one or more other accounts. Although Pioneer has adopted
procedures that it believes are reasonably designed to detect and prevent
violations of the federal securities laws and to mitigate the potential for
conflicts of interest to affect its portfolio management decisions, there can be
no assurance that all conflicts will be identified or that all procedures will
be effective in mitigating the potential for such risks. Generally, the risks of
such conflicts of interest are increased to the extent that a portfolio manager
has a financial incentive to favor one account over another. Pioneer has
structured its compensation arrangements in a manner that is intended to limit
such potential for conflicts of interest. See "Compensation of Portfolio
Managers" below.
o A portfolio manager could favor one account over another in allocating
new investment opportunities that have limited supply, such as initial
public offerings and private placements. If, for example, an initial
public offering that was expected to appreciate in value significantly
shortly after the offering was allocated to a single account, that
account may be expected to have better investment performance than
other accounts that did not receive an allocation of the initial public
offering. Generally, investments for which there is limited
availability are allocated based upon a range of factors including
available cash and consistency with the accounts' investment objectives
and policies. This allocation methodology necessarily involves some
subjective elements but is intended over time to treat each client in
an equitable and fair manner. Generally, the investment opportunity is
allocated among participating accounts on a pro rata basis. Although
Pioneer believes that its practices are reasonably designed to treat
each client in an equitable and fair manner, there may be instances
where a fund may not participate, or may participate to a lesser degree
than other clients, in the allocation of an investment opportunity.
o A portfolio manager could favor one account over another in the order
in which trades for the accounts are placed. If a portfolio manager
determines to purchase a security for more than one account in an
aggregate amount that may influence the market price of the security,
accounts that purchased or sold the security first may receive a more
favorable price than accounts that made subsequent transactions. The
less liquid the market for the security or the greater the percentage
that the proposed aggregate purchases or sales represent of average
daily trading volume, the greater the potential for accounts that make
subsequent purchases or sales to receive a less favorable price. When a
portfolio manager intends to trade the same security on the same day
for more than one account, the trades typically are "bunched," which
means that the trades for the individual accounts are aggregated and
each account receives the same price. There are some types of accounts
as to which bunching may not be possible for contractual reasons (such
as directed brokerage arrangements). Circumstances may also arise where
the trader believes that bunching the orders may not result in the best
possible price. Where those accounts or circumstances are involved,
Pioneer will place the order in a manner intended to result in as
favorable a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater
degree than other accounts managed by the portfolio manager. If, for
example, the portfolio manager receives a bonus based upon the
performance of certain accounts relative to a benchmark while other
accounts are disregarded for this purpose, the portfolio manager will
have a financial incentive to seek to have the accounts that determine
the portfolio manager's bonus achieve the best possible performance to
the possible detriment of other accounts. Similarly, if Pioneer receives
a performance-based advisory fee, the portfolio manager may favor that
account, whether or not the performance of that account directly
determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager has
a beneficial interest in the account, in order to benefit a large client
or to compensate a client that had poor returns. For example, if the
portfolio manager held an interest in an investment partnership that was
one of the accounts managed by the portfolio manager, the portfolio
manager would have an economic incentive to favor the account in which
the portfolio manager held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could arise.
For example, if a portfolio manager purchases a security for one account
and sells the same security for another account, such trading pattern
may disadvantage either the account that is long or short. In making
portfolio manager assignments, Pioneer seeks to avoid such potentially
conflicting situations. However, where a portfolio manager is
responsible for accounts with differing investment objectives and
policies, it is possible that the portfolio manager will conclude that
it is in the best interest of one account to sell a portfolio security
while another account continues to hold or increase the holding in such
security.
Compensation of Portfolio Managers. Pioneer has adopted a system of compensation
for portfolio managers that seeks to align the financial interests of the
portfolio managers with those of shareholders of the accounts (including Pioneer
funds) the portfolio managers manage, as well as with the financial performance
of Pioneer. The compensation program for all Pioneer portfolio managers includes
a base salary (determined by the rank and tenure of the employee) and an annual
bonus program, as well as customary benefits that are offered generally to all
full-time employees. Base compensation is fixed and normally reevaluated on an
annual basis. Pioneer seeks to set base compensation at market rates, taking
into account the experience and responsibilities of the portfolio manager. The
bonus plan is intended to provide a competitive level of annual bonus
compensation that is tied to the portfolio manager achieving superior investment
performance and align the interests of the investment professional with those of
shareholders, as well as with the financial performance of Pioneer. Any bonus
under the plan is completely discretionary, with a maximum annual bonus that may
be in excess of base salary. The annual bonus is based upon a combination of the
following factors:
Quantitative Investment Performance. The quantitative investment
performance calculation is based on pre-tax investment performance of
all of the accounts managed by the portfolio manager (which includes
the fund and any other accounts managed by the portfolio manager) over
a one-year period (20% weighting) and four-year period (80% weighting),
measured for periods ending on December 31. The accounts, which include
the fund, are ranked against a group of mutual funds with similar
investment objectives and investment focus (60%) and a broad-based
securities market index measuring the performance of the same type of
securities in which the accounts invest (40%), which, in the case of
the fund, is the Merrill Lynch Global High Yield and Emerging Markets
Index and the CSFB Leveraged Loan Index. As a result of these two
benchmarks, the performance of the portfolio manager for compensation
purposes is measured against the criteria that are relevant to the
portfolio manager's competitive universe.
o Qualitative Performance. The qualitative performance component with
respect to all of the accounts managed by the portfolio manager
includes objectives, such as effectiveness in the areas of teamwork,
leadership, communications and marketing, that are mutually established
and evaluated by each portfolio manager and management.
o Pioneer Results and Business Line Results. Pioneer's financial
performance, as well as the investment performance of its investment
management group, affect a portfolio manager's actual bonus by a
leverage factor of plus or minus (+/-) a predetermined percentage.
The quantitative and qualitative performance components comprise 80% and 20%,
respectively, of the overall bonus calculation (on a pre-adjustment basis). A
portion of the annual bonus is deferred for a specified period and may be
invested in one or more Pioneer funds.
Certain portfolio managers may participate in other programs designed to reward
and retain key contributors. Senior executives or other key employees may be
granted performance units based on the stock price performance of UniCredit and
the financial performance of Pioneer Global Asset Management S.p.A., which are
affiliates of Pioneer. Portfolio managers also may participate in a deferred
compensation program, whereby deferred amounts are invested in one or more
Pioneer funds.
Share Ownership by Portfolio Managers. The following table indicates as of April
30, 2010 the value, within the indicated range, of shares beneficially owned by
the portfolio managers of the fund.
--------------------------------------- ----------------------------------------
Name of Portfolio Manager Beneficial Ownership of the Fund*
--------------------------------------- ----------------------------------------
--------------------------------------- ----------------------------------------
David Eurkus A
--------------------------------------- ----------------------------------------
--------------------------------------- ----------------------------------------
Timothy Pynchon C
--------------------------------------- ----------------------------------------
*Key to Dollar Ranges
A. None B. $1 - $10,000 C. $10,001 - $50,000 D. $50,001 - $100,000
E. $100,001 - $500,000 F. $500,001 - $1,000,000 G. Over $1,000,000
--------------------------------------------------------------------------------------------------------------------------
Interested Trustees:
--------------------------------------------------------------------------------------------------------------------------
------------------- ------------------ ------------------ ---------------------------------- -----------------------------
John F. Cogan, Chairman of the Class I Trustee Deputy Chairman and a Director None
Jr. (81)* Board, Trustee since 2003. Term of Pioneer Global Asset
and President expires in 2010. Management S.p.A. ("PGAM");
Elected by Non-Executive Chairman and a
Preferred Shares Director of Pioneer Investment
only. Management USA Inc. ("PIM-USA");
Chairman and a Director of
Pioneer; Chairman and Director
of Pioneer Institutional Asset
Management, Inc. (since 2006);
Director of Pioneer Alternative
Investment Management Limited
(Dublin); President and a
Director of Pioneer Alternative
Investment Management (Bermuda)
Limited and affiliated funds;
Director of PIOGLOBAL Real
Estate Investment Fund (Russia)
(until June 2006); Director of
Nano-C, Inc. (since 2003);
Director of Cole Management Inc.
(since 2004); Director of
Fiduciary Counseling, Inc.;
President and Director of
Pioneer Funds Distributor, Inc.
("PFD") (until May 2006);
President of all of the Pioneer
Funds; and Of Counsel, Wilmer
Cutler Pickering Hale and Dorr
LLP
------------------- ------------------ ------------------ ---------------------------------- -----------------------------
------------------- ------------------ ------------------ ---------------------------------- -----------------------------
Daniel K. Trustee and Class II Trustee Director, CEO and President of None
Kingsbury (49)* Executive Vice since 2007. Term Pioneer Investment Management
President expires in 2011. USA Inc., Pioneer Investment
Management, Inc. and Pioneer
Institutional Asset Management,
Inc. (since March 2007);
Executive Vice President of all
of the Pioneer Funds (since
March 2007); Director of Pioneer
Global Asset Management S.p.A.
(since March 2007); Head of New
Markets Division, Pioneer Global
Asset Management S.p.A.
(2000-2007)
------------------- ------------------ ------------------ ---------------------------------- -----------------------------
--------------------------------------------------------------------------------------------------------------------------
Independent Trustees:
--------------------------------------------------------------------------------------------------------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
David R. Bock (63) Trustee Class I Trustee Executive Vice President and Director of The Enterprise
since 2005. Term Chief Financial Officer, I-trax, Social Investment Company
expires in 2010. Inc. (publicly traded health (privately-held affordable
care services company)
(2004 - housing
finance company);
present); Partner,
Federal City and
Director of New York
Capital Advisors
(boutique Mortgage
Trust (publicly
merchant bank)(1997 to
2004); traded mortgage
REIT) and Executive
Vice President and
Chief Financial Officer,
Pedestal Inc. (internet-based
mortgage trading company)
(2000-2002)
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Mary K. Bush (59) Trustee Class III President, Bush International, Director of Brady
Trustee since LLC (international financial Corporation (industrial
2003. Term advisory firm) identification and
expires in 2009. specialty coated material
products manufacturer);
Director of Briggs &
Stratton Co. (engine
manufacturer); Director of
UAL Corporation (airline
holding company); Director
of Mantech International
Corporation (national
security, defense, and
intelligence technology
firm): and Member, Board of
Governors, Investment
Company Institute
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Benjamin M. Friedman Trustee Class II Trustee Professor, Trustee, Mellon
(64) since 2008. Term Harvard Institutional Funds
expires in 2011. University Investment Trust and Mellon
Institutional Funds Master
Portfolio (oversees 17
portfolios in fund complex)
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Margaret B.W. Graham Trustee Class II Trustee Founding Director, None
(60) since 2003. Term Vice-President and Corporate
expires in 2011. Secretary, The Winthrop Group,
Inc. (consulting firm); and
Desautels Faculty of Management,
McGill
University
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Thomas J. Perna (57) Trustee Class III Private investor (2004 - Director of Quadriserv Inc.
Trustee since present); and Senior Executive (technology products for
2006. Term Vice President, The Bank of New securities lending
expires in 2009. York (financial and securities industry)
services) (1986 -
2004)
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Marguerite A. Piret Trustee Class III President and Chief Executive Director of New America
(59) Trustee since Officer, Newbury, Piret & High Income Fund, Inc.
2003. Term Company, Inc. (investment (closed-end investment
expires in 2009. banking firm) company)
Elected by
Preferred Shares
only.
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
Stephen K. West (79) Trustee Class I Trustee Senior Counsel, Sullivan & Director, The Swiss
since 2003. Term Cromwell (law firm) Helvetia Fund, Inc.
expires in 2010. (closed-end investment
company)
------------------------ ------------- ------------------ ---------------------------------- -----------------------------
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 June 28, 2010
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 June 28, 2010
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer
Date June 28, 2010
* Print the name and title of each signing officer under his or her signature.