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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21043
Pioneer High Income Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: March 31
Date of reporting period: April 1, 2006 through September 30, 2006
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
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PIONEER
-------
HIGH
INCOME
TRUST
Semiannual
Report
9/30/06
[LOGO] PIONEER
Investments(R)
Table of Contents
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Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 9
Prices and Distributions 10
Performance Update 11
Schedule of Investments 12
Financial Statements 27
Notes to Financial Statements 32
Results of Shareowner Meeting 42
Trustees, Officers and Service Providers 43
President's
Dear Shareowner,
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Mature and emerging market economies around the world showed moderate
improvement after a flat second quarter. The U.S. saw some resurgence of
growth, which we expect to continue through the fourth quarter of 2006 and into
2007, although this growth may be slow with housing sector measures down in
recent months. While inflation pressures have risen slightly in recent months,
we believe the United States may now be at the end of the Fed's monetary
tightening cycle. Mature economies, led by Japan, remain firm, as do European
economic prospects, with strong GDP data reflecting the broad-based strength
seen in crucial indicators.
U.S. economic growth was back on track after lackluster market results prior to
Labor Day. Consumer spending rose with receding gas prices, just in time for
the back-to-school season, which retailers now consider the second most
lucrative period after the Christmas season. U.S. economic growth is in line
with our projections; we anticipate U.S. GDP finishing with a level of around
3.0% for 2006.
In our view, the pace of corporate earnings growth should slow amid pressure
from high raw materials costs and moderating economic growth. However, modest
U.S. dollar depreciation and improving growth overseas should offer some
support to U.S. earnings.
The European economy continues to improve and appears to be at its healthiest
in six years, with business confidence showing improvement across sectors and
consumers becoming more optimistic. While business sentiment indicators have
had a tendency to over-estimate growth in recent years, their broad-based
improvement across countries since 2005 is a clear sign that European economic
growth should continue through 2006.
The positive long-term drivers of emerging markets remain in place: improving
domestic growth and inflation stability; structural reform; debt
sustainability; and favorable demographics. Together, the emerging markets'
current account surplus is at record highs while external debt as a percentage
of GDP is at its lowest since 1991.
2
Letter
In summary, we think that despite the existence of some inflation pressures
seen by the Federal Reserve and its counterparts in developed economies, it
seems as if interest rates will remain mostly unchanged. U.S. economic growth
is expected to remain positive, as it should among the developed nations for
the remainder of 2006. Any further geopolitical issues and rising energy prices
could lead to deceleration, but not a derailment from the current healthy pace
of economic growth, as investment is expected to remain robust, benefiting from
sustained internal and international demand worldwide.
Our cautiously optimistic outlook reinforces the importance of Pioneer's
message that investors should remain diversified, take a long-term view, and
base investment decisions on economic and market fundamentals rather than on
emotion. Our investment philosophy and approach continue to be based on the use
of fundamental research to identify a range of opportunities that offer an
attractive balance of risk and reward to help Trust shareowners work toward
their long-term goals.
Respectfully,
/s/ Osbert M. Hood
Osbert M. Hood, President
Pioneer Investment Management, Inc.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of the report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
3
Pioneer High Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 9/30/06
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The domestic high-yield bond market recovered during the second half of the
six-month period ending September 30, 2006, erasing the effects of a slump that
had pulled down high-yield bond prices early in the period. Lower-quality,
higher-yielding bonds had declined early in the six-month period over concerns
about inflation, high energy prices and rising interest rates. The following is
an interview with Kenneth J. Taubes and Andrew Feltus, who discuss the
performance of Pioneer High Income Trust during the six months. Mr. Taubes is
director of Pioneer's Fixed Income Group, and Mr. Feltus is a member of the
team responsible for the daily management of the Trust.
Q: How did the Trust perform?
A: Pioneer High Income Trust performed well based on returns at net asset value
and even better based on an increase in the market price. For the six
months ended September 30, 2006, the Trust had a total return of 5.11% at
net asset value, outperforming the benchmark Merrill Lynch High Yield
Master II Index, which returned 4.24%. At market price, the total return
was 11.18% as the Trust's market price rose from a premium of 4.2% over
net asset value to a premium of 10.2%. The Trust's current SEC 30-day
yield, based on its market price on September 30, 2006, was 10.67%.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most
recent month-end performance results. Current performance may be lower or
higher than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: How would you describe the investment environment for high-yield bonds
during the six months?
A: The first half of the six-month period was dominated by the combination of
worries about the Federal Reserve Board's ("Fed") interest-rate hikes,
rising inflationary pressures and higher energy prices. While lower-rated
bonds, including domestic high-yield corporates and emerging market debt,
produced modest, positive results very early in this period, they fell
hard in May and June as concerns grew about risks that inflationary
threats were
4
Pioneer High Income Trust
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increasing. Emerging-market debt performed particularly poorly, although
domestic high-yield corporate bonds also declined during this period when
investors grew increasingly risk-averse. Equity prices also tended to fall
during these two months. This trend reversed itself in July, however, as
investors saw early evidence that economic growth was moderating and that
inflationary pressures were receding. Investors began anticipating that
the Fed might be ready to pause in its cycle of interest-rate hikes.
Spurred on by the news in early August that the Fed indeed was leaving
short-term interest rates level, emerging market and high-yield debt - as
well as higher-quality issues - began to rally and they continued to
perform well through the end of the period on September 30, 2006. The
rally was enough to generate positive performance for high-yield bonds
over the six months, with the market generally producing total returns in
line with bond coupon (stated rate of interest) rates.
Q: How did you position the Trust's portfolio in this environment?
A: We started the six-month period in a relatively defensive posture, with a
healthy cash position and a short duration. (Duration is a measure of a
bond's price sensitivity to changes in interest rates.) We maintained this
cautious posture because longer-maturity bonds tend to decline in value
more than shorter-maturities when interest rates are rising, and
Treasuries and other high-grade bonds were falling in price. Although we
believed the economy was basically sound, we reduced our investments in
the bonds of more cyclical corporations - companies whose earnings are
closely tied to the ebb and flow of the economic cycle. In particular, we
cut back our holdings in industries where we saw higher risk - notably
homebuilders, where there was clear evidence of a major slowdown. We also
pared back our holdings in industries such as chemicals and media, as well
as in utilities, where values looked less appealing. We did, however, find
opportunities in recovering areas, such as airlines.
At the end of the six months, the Trust's average credit quality was B,
with 66.5% of assets invested in U.S. high-yield bonds, and 22.9% invested
in emerging market debt and international high-yield. On September 30,
2006, approximately 24% of Trust assets were leveraged. The Trust has the
ability to use leverage, borrowing
5
Pioneer High Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 9/30/06 (continued)
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up to 33% of assets at short-term rates to invest in high-yield bonds.
This flexibility helped contribute to performance.
Q: What types of investments had the greatest impact on performance?
A: Our positions in airline and airline-related bonds gave some significant
support to performance. As the airlines recovered from their downturn, our
investments in bonds such as those of AMR, parent of American Airlines,
and of Continental Airlines, did very well. We also have investments in
municipal bonds backed by airport properties, and they also did well.
These holdings included investments in securities backed by revenues from
British Air, Northwest Airlines and U.S. Air. Late in the period, we took
profits and reduced our positions in these securities when we believed
they had reached full value.
Other holdings that helped support results included bonds of companies
that re-structured themselves and were able to buy back their outstanding
debt, including: Hanger Orthopedic Group, Inc., a producer of prosthetics
and other orthopedic devices; and J. Ray McDermott, an oil services
company specializing in marine operations. Other positions that helped
performance included securities of several companies that bought back debt
after issuing new equity, including Dollar Financial Group, a company
specializing in providing services to low- and middle-income customers;
Warner Chilcott Corp., a pharmaceutical corporation; and Altra Industrial
Motion, a manufacturer of logistics support systems. Individual
investments that supported performance included bonds of Duane Reade,
Inc., a company operating pharmaceutical and convenience stores in the New
York metropolitan area. The Duane Reade bonds, which earlier had been a
detractor from Trust performance, recovered in value as the company was
able to report progress in its turnaround program.
We did have some disappointing investments, including bonds of several
companies vulnerable to the housing industry slump. They included
securities of home builders William Lyon Homes, Inc. and WCI Communities,
Inc. as well as bonds of Builders FirstSource, Inc. and of U.S. Concrete,
Inc., both of which supply materials to the building construction
industry.
6
Pioneer High Income Trust
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Q: What is your investment outlook?
A: We believe the economy is fundamentally healthy. While recent weakness in
the housing industry may lead to a slowing of economic growth, the economy
should receive some stimulus as a weaker dollar increases the
competitiveness of companies exporting to other countries. We think
corporations are likely to continue to invest to expand and improve their
efficiency, while the consumer-sensitive industries should benefit from
low unemployment levels. As long as the economic expansion is maintained,
high-yield issuers should be able to grow and pay their debt obligations,
and default rates should remain low. Although the difference between the
yields of high-yield and high-grade bonds are relatively narrow, we think
these narrow ranges can be justified by the strong fundamentals of
high-yield issuers. We believe high-yield investors have a reasonable
opportunity to realize returns consistent with coupon levels, with some
opportunity for price appreciation.
Investors in the Trust should remain mindful that if short-term interest
rates were to rise further and add to the Trust's borrowing costs, the
ability to sustain present dividend levels could be affected.
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.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
When interest rates rise, the prices of fixed-income securities in the Trust
will generally fall. Conversely, when interest rates fall the prices of
fixed-income securities in the Trust will generally rise. Investments in the
Trust are subject to possible loss due to the financial failure of underlying
securities and their inability to meet their debt obligations.
The Trust may invest up to 50% of its total assets in illiquid securities.
Illiquid securities may be difficult to dispose of at a fair price at the times
when the Trust believes it is desirable to do so and their market price is
generally more volatile than that of more liquid securities. Illiquid
securities are also more difficult to value and
7
Pioneer High Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 9/30/06 (continued)
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investment of the Trust's assets in illiquid securities may restrict the
Trust's ability to take advantage of market opportunities.
The Trust may use leverage through the issuance of preferred shares with an
aggregate liquidation preference of up to 331/3% of the Trust's total assets
after such issuance. Leverage creates significant risks, including the risk
that the Trust's income or capital appreciation will not be sufficient to cover
the cost of leverage, which may adversely affect the return for the holders of
common shares.
Risks of investing in the Trust are discussed in greater detail in the Trust's
registration statement on Form N-2 relating to its common shares.
Any information in this shareowner report regarding market or economic trends
or the factors influencing the Trust's historical or future performance are
statements of the opinion of Trust management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
8
Pioneer High Income Trust
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PORTFOLIO SUMMARY 9/30/06
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Corporate Bonds & Notes 84.3%
Temporary Cash Investments 7.1%
Municipal Bonds 6.0%
Sovereign Debt Obligations 1.5%
Convertible Bonds 0.9%
Collateralized Mortgage Obligations 0.1%
Common Stock 0.1%
Portfolio Maturity
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(As a percentage of long-term holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
0-1 Year 14.0%
1-3 Years 21.6%
3-4 Years 13.9%
4-6 Years 39.9%
6-8 Years 7.9%
8+ Years 2.7%
The portfolio is actively managed, and current holdings may be different.
9
Pioneer High Income Trust
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PRICES AND DISTRIBUTIONS 9/30/06
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Share Prices and Distributions
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Market Value
per Common Share 9/30/06 3/31/06
$17.77 $16.80
Net Asset Value
per Common Share 9/30/06 3/31/06
$16.13 $16.13
Distributions per Net
Common Share Investment Short-Term Long-Term
(4/1/06 - 9/30/06) Income Capital Gains Capital Gains
$ 0.825 $ - $ -
10 Largest Holdings
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(As a percentage of long-term holdings)*
1. Xerox Capital Trust I, 8.0%, 2/1/27 2.13%
2. Huntsman International LLC, 10.125%, 7/1/09 1.79
3. Seabulk International, Inc., 9.5%, 8/15/13 1.54
4. GATX Financial Corp., 8.875%, 6/1/09 1.52
5. Kvaerner ASA, 0.0%, 10/30/11 1.52
6. Baytex Energy, Ltd., 9.625%, 7/15/10 1.33
7. Cia Brasileira de Bebida, 10.5%, 12/15/11 1.25
8. Warner Chilcott Corp., 8.75%, 2/1/15 1.21
9. Eschelon Operating Co., 8.375%, 3/15/10 1.21
10. Ormat Funding Corp., 8.25%, 12/30/20 1.11
* This list excludes temporary cash and derivative investments. 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.
10
Pioneer High Income Trust
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PERFORMANCE UPDATE 9/30/06
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Investment Returns
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The mountain chart on the right shows the change in market value, plus
reinvested dividends and distributions, of a $10,000 investment made in
common shares of Pioneer High Income Trust, compared to that of the Merrill
Lynch High Yield Master II Index.
Cumulative Total Returns
(As of September 30, 2006)
Net Asset Market
Period Value (NAV) Price
Life-of-Trust
(4/26/02) 83.71% 93.34%
1 Year 11.52 20.92
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Merrill Lynch
High Yield Pioneer High
Master II Index Income Trust
--------------- ------------
4/02 10000.00 10013.00
9/02 8879.00 9072.00
9/03 11481.00 11973.00
9/04 12899.00 14398.00
9/05 13763.00 15990.00
9/06 14855.00 19334.00
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 market price.
The performance table and graph do not reflect the deduction of fees and
taxes that a shareowner would pay on Trust distributions or the redemption
of Trust shares.
Index comparison begins April 30, 2002. The Merrill Lynch High Yield Master
II Index is a commonly accepted measure of the performance of high yield
securities. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Trust returns, do not reflect any fees, expenses or
sales charges. You cannot invest directly in an Index.
11
Pioneer High Income Trust
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SCHEDULE OF INVESTMENTS 9/30/06 (unaudited)
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Principal S&P/Moody's
Amount Ratings
USD($) (unaudited) Value
COLLATERIZED MORTGAGE OBLIGATIONS - 0.1% of Net Assets
Diversified Financials - 0.1%
425,000 BB/Ba3 DB Master Finance LLC, 8.285%, 6/20/31 (144A) $ 434,304
-----------
TOTAL COLLATERIZED MORTGAGE OBLIGATIONS
(Cost $424,991) $ 434,304
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CORPORATE BONDS & NOTES - 118.0% of Net Assets
Energy - 10.9%
Oil & Gas Drilling - 1.0%
4,400,000 NR/NR DDI Holding AS, 9.3%, 1/19/12 (144A) $ 4,576,000
-----------
Oil & Gas Equipment & Services - 1.5%
2,100,000(a) CCC+/B3 Pipe Acquisition Finance Plc, 11.67%,
12/15/10 (144A) $ 2,121,000
2,380,000 NR/B1 SemGroup L.P., 8.75%, 11/15/15 (144A) 2,400,825
2,000,000 NR/NR Sevan Marine ASA, 9.75%, 1/31/11 (144A) 1,980,000
-----------
$ 6,501,825
-----------
Oil & Gas Exploration & Production - 8.2%
7,234,000 B-/B3 Baytex Energy, Ltd., 9.625%, 7/15/10 $ 7,541,445
4,080,000 B-/B3 Clayton William Energy, 7.75%, 8/1/13 3,672,000
5,000,000 B+/B3 Energy Partners, Ltd., 8.75%, 8/1/10 5,137,500
1,250,000 B/B3 Hilcorp Energy I, LP, 9.0%, 6/1/16 (144A) 1,290,625
4,500,000 BBB-/Ba1 Methanex Corp., 8.75%, 8/15/12 4,848,750
5,300,000 CCC+/Caa2 PetroQuest Energy, Inc., 10.375%, 5/15/12 5,498,750
3,135,000 B-/Caa1 Stone Energy Corp., 6.75%, 12/15/14 3,135,000
4,280,000 B+/B2 VeraSun Energy Corp., 9.875%, 12/15/12 4,472,600
-----------
$35,596,670
-----------
Oil & Gas Storage & Transportation - 0.2%
820,000 B-/B3 Targa Resources, Inc., 8.5%, 11/1/13 (144A) $ 817,950
-----------
Total Energy $47,492,445
-----------
Materials - 27.2%
Commodity Chemicals - 3.3%
4,635,000 B+/B1 ARCO Chemical Co., 9.8%, 2/1/20 $ 5,237,550
1,210,000 B+/B1 Georgia Gulf Corp., 9.5%, 10/15/14 (144A) 1,201,578
2,650,000 B/B2 Georgia Gulf Corp., 10.75%, 10/15/16 (144A) 2,610,091
5,000,000 B+/Ba3 Invista, 9.25%, 5/1/12 (144A) 5,287,500
-----------
$14,336,719
-----------
12 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
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Principal S&P/Moody's
Amount Ratings
USD($) (unaudited) Value
Diversified Chemicals - 7.8%
3,200,000 B-/B2 Basell Finance Co., 8.1%, 3/15/27 (144A) $ 2,960,000
2,200,000 BB/NR Braskem SA, 11.75%, 1/22/14 2,678,500
6,060,000(b) B/B3 Crystal U.S. Holdings, 0.0.%, 10/1/14 4,916,175
EURO 7,870,000 B/B3 Huntsman International LLC, 10.125%, 7/1/09 10,168,731
2,000,000 B-/B2 Ineos Group Holdings Plc., 8.5%, 2/15/16 (144A) 1,905,000
EURO 1,190,000 B-/B2 Nell AF S.a.r.l., 8.375%, 8/15/15 (144A) 1,545,122
500,000 B-/B2 Nell AF S.a.r.l., 8.375%, 8/15/15 (144A) 496,250
2,000,000(i) B-/B2 Phibro Animal Health Corp., 10.0%,
8/1/13 (144A) 2,030,000
2,000,000 CCC+/Caa1 Phibro Animal Health Corp., 13.0%,
8/1/14 (144A) 2,020,000
EURO 3,904,000 B-/B3 Rhodia SA, 9.25%, 6/1/11 5,297,763
-----------
$34,017,541
-----------
Specialty Chemicals - 2.2%
5,970,000(i) B+/B2 PolyOne Corp., 8.875%, 5/1/12 $ 6,029,700
3,300,000 B+/B1 Tronox Worldwide LLC, 9.5%, 12/1/12 3,386,625
-----------
$ 9,416,325
-----------
Construction Materials - 1.8%
1,500,000 CCC+/Caa1 Panolam Industries International, Inc.,
10.75%, 10/1/13 (144A) $ 1,515,000
2,225,000 CCC+/B2 RMCC Acquisition Co., 10.0%, 11/1/12 (144A) 2,302,875
4,185,000 B-/B2 U.S. Concrete, Inc., 8.375%, 4/1/14 4,022,831
-----------
$ 7,840,706
-----------
Metal & Glass Containers - 1.7%
3,020,000 BB-/Ba3 Greif Bros. Corp., 8.875%, 8/1/12 $ 3,155,900
3,985,000 B-/B2 Vitro Envases, 10.75%, 7/23/11 (144A) 4,244,025
-----------
$ 7,399,925
-----------
Paper Packaging - 2.4%
2,085,000(i) CCC+/Caa1 Graham Packaging Co., L.P., 9.875%, 10/15/14 $ 2,048,512
5,540,000(i) B-/B3 Graphic Packaging International, Inc.,
9.5%, 8/15/13 5,664,650
EURO 2,000,000 B-/B3 MDP Acquisitions Plc, 10.125%, 10/1/12 2,767,855
-----------
$10,481,017
-----------
Aluminum - 1.0%
1,200,000 BB-/B1 Asia Aluminum Holdings, Ltd., 8.0%,
12/23/11 (144A) $ 1,146,000
3,180,000 B-/Caa1 Indalex Holding Corp., 11.5%, 2/1/14 (144A) 3,370,800
-----------
$ 4,516,800
-----------
The accompanying notes are an integral part of these financial statements. 13
Pioneer High Income Trust
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SCHEDULE OF INVESTMENTS 9/30/06 (unaudited) (continued)
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Principal S&P/Moody's
Amount Ratings
USD($) (unaudited) Value
Diversified Metals & Mining - 3.9%
3,300,000 B-/Caa1 American Rock Salt Co., LLC, 9.5%, 3/15/14 $ 3,407,250
3,000,000 BB-/Ba3 FMG Finance Pty., Ltd., 10.625%, 9/1/16 (144A) 2,880,000
4,600,000 B+/B1 Freeport-McMoRan Copper & Gold, Inc.,
10.125%, 2/1/10 4,876,000
2,599,000 B-/B3 OM Group, Inc., 9.25%, 12/15/11 2,702,960
3,050,000 B-/B3 PNA Group, Inc., 10.75%, 9/1/16 (144A) 3,133,875
------------
$ 17,000,085
------------
Steel - 1.5%
2,900,000 BB/Ba2 CSN Islands VIII Corp., 9.75%, 12/16/13 (144A) $ 3,313,250
630,000 BB/Ba2 CSN Islands IX Corp., 10.5%, 1/15/15 (144A) 730,800
2,485,000 B-/B3 Edgen Acquisition Corp., 9.875%, 2/1/11 2,460,150
------------
$ 6,504,200
------------
Forest Products - 0.3%
1,645,000 B-/B3 Mandra Forestry Holdings, Ltd., 12.0%,
5/15/13 (144A) $ 1,332,450
------------
Paper Products - 1.3%
5,450,000 B-/B3 Exopack Holding Corp., 11.25%, 2/1/14 (144A) $ 5,586,250
------------
Total Materials $118,432,018
------------
Capital Goods - 11.1%
Building Products - 1.6%
3,885,000(a) B/B2 Builders FirstSource, Inc., 9.655%, 2/15/12 $ 3,807,300
2,845,000 B/B3 Interline Brands, Inc., 8.125%, 6/15/14 2,880,563
------------
$ 6,687,863
------------
Construction & Engineering - 3.2%
1,250,000 B+/Ba3 Dycom Industries, Inc., 8.125%, 10/15/15 $ 1,262,500
NOK 27,300,000(b) NR/NR Kvaerner ASA, 0.0%, 10/30/11 4,104,224
8,897,000(b) NR/NR Kvaerner ASA, 0.0%, 10/30/11 8,590,053
------------
$ 13,956,777
------------
Heavy Electrical Equipment - 2.0%
4,790,000 CCC+/B1 Altra Industrial Motion, 9.0%, 12/1/11 $ 4,885,800
3,975,000 B/B3 Hawk Corp., 8.75%, 11/1/14 3,935,250
------------
$ 8,821,050
------------
14 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD($) (unaudited) Value
Construction & Farm Machinery & Heavy Truck - 3.2%
2,000,000 B-/B3 Accuride Corp., 8.5%, 2/1/15 $ 1,860,000
5,250,000 B+/B1 Commercial Vehicle Group, Inc., 8.0%, 7/1/13 5,026,875
1,750,000 B+/B1 Greenbrier Companies, Inc., 8.375%, 5/15/15 1,776,250
1,000,000(b) CCC+/Caa2 Stanadyne Corp., 0.0%, 2/15/15 660,000
4,690,000 CCC+/Caa1 Stanadyne Corp., 10.0%, 8/15/14 4,736,900
-----------
$14,060,025
-----------
Industrial Machinery - 0.3%
1,217,000 B+/B2 Manitowac Co., Inc., 10.5%, 8/1/12 $ 1,308,275
-----------
Trading Companies & Distributors - 0.8%
EURO 2,500,000 CCC+/Caa1 Ray Acquisition SCA, 9.375%, 3/16/15 (144A) $ 3,546,908
-----------
Total Capital Goods $48,380,898
-----------
Commercial Services & Supplies - 6.9%
Diversified Commercial & Professional Services - 3.3%
3,500,000 CCC+/Caa1 Allied Security Escrow, 11.375%, 7/15/11 $ 3,500,000
1,850,000 B/Ba3 Brickman Group, Ltd., Series B,
11.75%, 12/15/09 1,974,875
EURO 1,500,000(a) B-/Caa1 FS Funding AS, 9.842%, 5/15/16 (144A) 1,855,001
1,050,000 B-/B3 Mobile Services Group, Inc., 9.75%,
8/1/14 (144A) 1,076,250
2,945,000 CCC+/B3 Park-Ohio Industries, Inc., 8.375%, 11/15/14 2,679,950
3,470,000(i) B/B3 United Rentals North America, Inc.,
7.75%, 11/15/13 3,417,950
-----------
$14,504,026
-----------
Environmental & Facilities Services - 3.6%
4,088,000 B+/Ba3 Clean Harbors, Inc., 11.25%, 7/15/12 $ 4,599,000
5,020,000 CCC+/B3 Hydrochem Industrial Services, Inc., 9.25%,
2/15/13 (144A) 4,969,800
5,800,000 CCC/Caa1 Waste Services, Inc., 9.5%, 4/15/14 5,945,000
-----------
$15,513,800
-----------
Total Commercial Services & Supplies $30,017,826
-----------
The accompanying notes are an integral part of these financial statements. 15
Pioneer High Income Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD($) (unaudited) Value
Transportation - 9.1%
Airlines - 3.2%
1,063,394 CCC+/B3 American Airlines, Inc., 7.379%, 11/23/17 $ 957,055
2,065,000(i) CCC+/Caa2 AMR Corp., 9.0%, 8/1/12 2,075,325
2,440,000 CCC+/Caa2 AMR Corp., 9.8%, 10/1/21 2,348,500
3,200,000 CCC+/Caa2 AMR Corp., 10.2%, 3/15/20 3,088,000
1,127,990 B+/B2 Continental Airlines, Inc., Series B,
8.499%, 11/1/12 1,054,670
3,250,000 B/B3 Continental Airlines, Inc., Series D,
7.568%, 12/1/06 3,250,000
1,000,000 NR/Ba2 GOL Finance, 8.75%, 4/29/49 (144A) 970,000
-----------
$13,743,550
-----------
Marine - 5.3%
860,000 BB+/NR CMA CGM SA, 7.25%, 2/1/13 (144A) $ 838,500
3,899,000(b) CCC+/Caa1 H-Lines Finance Holding, 0.0%, 4/1/13 3,431,120
8,000,000 BBB-/Ba1 Seabulk International, Inc., 9.5%, 8/15/13 8,720,000
6,470,000 B/B1 Ship Finance International, Ltd., 8.5%, 12/15/13 6,243,550
1,060,000 BB-/Ba3 Stena AB, 7.0%, 12/1/16 999,050
2,900,000 B-/B3 Trailer Bridge, Inc., 9.25%, 11/15/11 2,943,500
-----------
$23,175,720
-----------
Railroads - 0.6%
2,250,000 B-/B3 Grupo Transportacion Ferroviaria Mexicana,
SA de CV, 9.375%, 5/1/12 $ 2,385,000
400,000 B-/B3 Grupo Transportacion Ferroviaria Mexicana,
SA de CV, 10.25%, 6/15/07 409,000
-----------
$ 2,794,000
-----------
Total Transportation $39,713,270
-----------
Automobiles & Components - 3.2%
Auto Parts & Equipment - 2.0%
5,965,000(i) B-/Caa1 Cooper-Standard Automotive, Inc.,
8.375%, 12/15/14 $ 4,384,275
2,000,000 B-/B3 UGS Corp., 10.0%, 6/1/12 2,160,000
2,350,000(i) B-/Caa1 Visteon Corp., 7.0%, 3/10/14 2,103,250
-----------
$ 8,647,525
-----------
16 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD($) (unaudited) Value
Tires & Rubber - 1.0%
4,510,000 B-/B2 Goodyear Tire & Rubber Co., 9.0%, 7/1/15 $ 4,577,650
-----------
Automobile Manufacturers - 0.2%
900,000 B/B3 Ashtead Capital, Inc., 9.0%, 8/15/16 (144A) $ 936,000
-----------
Total Automobiles & Components $14,161,175
-----------
Consumer Durable & Apparel - 1.2%
Homebuilding - 1.2%
2,000,000 BB-/Ba2 Meritage Homes Corp., 6.25%, 3/15/15 $ 1,700,000
1,100,000(i) B+/Ba3 WCI Communities, Inc., 6.625%, 3/15/15 877,250
3,070,000 B/B3 William Lyon Homes, Inc., 7.5%, 2/15/14 2,456,000
405,000(i) B/B3 William Lyon Homes, Inc., 7.625%, 12/15/12 327,038
-----------
Total Consumer Durable & Apparel $ 5,360,288
-----------
Consumer Services - 3.2%
Casinos & Gaming - 2.7%
2,435,000 B+/B1 Galaxy Entertainment Finance Co., Ltd., 9.875%,
12/15/12 (144A) $ 2,547,619
4,500,000 B/B2 Little Traverse Bay Bands of Odawa Indians,
10.25%, 2/15/14 (144A) 4,488,750
1,700,000 B/B3 Pokagon Gaming Authority, 10.375%,
6/15/14 (144A) 1,812,625
3,050,000 B-/Caa1 Trump Entertainment Resorts, Inc., 8.5%, 6/1/15 2,916,563
-----------
$11,765,557
-----------
Hotels, Resorts & Cruise Lines - 0.5%
1,980,000(a) B/B2 HRP Myrtle Beach Operations LLC, 9.818%,
4/1/12 (144A) $ 1,975,050
-----------
Total Consumer Services $13,740,607
-----------
Media - 5.7%
Broadcasting & Cable TV - 2.8%
2,170,000 BB-/B1 Cablemas SA de CV, 9.375%, 11/15/15 (144A) $ 2,256,800
3,200,000 CCC-/Caa2 CCH I Holdings LLC, 11.0%, 10/1/15 2,912,000
1,500,000(i) CCC-/Caa2 CCH II Holdings LLC, 10.25%, 9/15/10 1,522,500
EURO 3,750,000 B-/B2 Kabel Deutschland GMBH, 10.75%,
7/1/14 (144A) 5,326,300
-----------
$12,017,600
-----------
The accompanying notes are an integral part of these financial statements. 17
Pioneer High Income Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD($) (unaudited) Value
Movies & Entertainment - 0.7%
3,000,000 B-/B2 LodgeNet Entertainment Corp., 9.5%, 6/15/13 $ 3,210,000
-----------
Publishing - 2.2%
1,545,000(c) CCC+/Caa1 AAC Group Holding Corp., 12.75%,
10/1/12 (144A) $ 1,614,525
4,835,000 B/B2 Sheridan Acquisition Corp., 10.25%, 8/15/11 4,895,438
3,700,000(b) B-/B3 Visant Holding Corp., 0.0%, 12/1/13 3,052,500
-----------
$ 9,562,463
-----------
Total Media $24,790,063
-----------
Retailing - 2.0%
Distributors - 1.1%
4,735,000 B-/B3 Intcomex, Inc., 11.75%, 1/15/11 (144A) $ 4,663,975
-----------
Department Stores - 0.9%
3,800,000 BBB-/Baa3 J.C. Penney Co., Inc., 8.125%, 4/1/27 $ 3,925,985
-----------
Total Retailing $ 8,589,960
-----------
Food & Staples Retailing - 2.3%
Drug Retail - 0.8%
3,350,000 CC/Caa3 Duane Reade, Inc., 9.75%, 8/1/11 $ 2,889,375
550,000(a) CCC/B3 Duane Reade, Inc., 9.89% 12/15/10 556,875
-----------
$ 3,446,250
-----------
Food Distributors - 0.7%
3,380,000 B/B2 Wornick Co., 10.875%, 7/15/11 $ 3,363,100
-----------
Food Retail - 0.8%
3,180,000 CCC/Caa1 Nutro Products, Inc., 10.75%, 4/15/14 (144A) $ 3,402,600
-----------
Total Food & Staples Retailing $10,211,950
-----------
Food, Beverage & Tobacco - 2.1%
Brewers - 1.6%
5,885,000 BBB/Baa3 Cia Brasileira de Bebida, 10.5%, 12/15/11 $ 7,091,425
-----------
Agricultural Products - 0.5%
2,000,000 BB/Ba2 Cosan SA Industria e Comercio, 8.25%,
2/28/49 (144A) $ 1,895,000
-----------
Total Food, Beverage & Tobacco $ 8,986,425
-----------
Health Care Equipment & Services - 5.2%
Health Care Equipment & Services - 0.7%
2,875,000 B-/Caa1 Accellent, Inc., 10.5%, 12/1/13 $ 2,990,000
-----------
Health Care Supplies - 0.6%
2,900,000(a) CCC+/B3 Medical Services Co., 13.007%, 10/15/11 $ 2,769,500
-----------
18 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD($) (unaudited) Value
Health Care Services - 1.5%
2,160,000 B-/B3 AMR HoldCo/Emcare HoldCo, 10.0%, 2/15/15 $ 2,300,400
4,055,000 CCC+/B3 Rural/Metro Corp., 9.875%, 3/15/15 4,191,856
-----------
$ 6,492,256
-----------
Health Care Facilities - 1.4%
3,800,000 CCC+/Caa2 Hanger Orthopedic Group, Inc., 10.25%, 6/1/14 $ 3,857,000
2,130,000 B-/B3 Psychiatric Solutions, Inc., 7.75%, 7/15/15 2,076,750
-----------
$ 5,933,750
-----------
Managed Health Care - 1.0%
4,400,000 B-/Caa1 Multiplan, Inc., 10.375%, 4/15/16 (144A) $ 4,422,000
-----------
Total Health Care Equipment & Services $22,607,506
-----------
Pharmaceuticals & Biotechnology & Life Sciences - 1.6%
Pharmaceuticals - 1.6%
6,650,000 B-/Caa1 Warner Chilcott Corp., 8.75%, 2/1/15 $ 6,882,750
-----------
Total Pharmaceuticals & Biotechnology &
Life Sciences $ 6,882,750
-----------
Diversified Financials - 5.0%
Specialized Finance - 3.1%
4,542,000 B+/B3 Dollar Financial Group, 9.75%, 11/15/11 $ 4,955,059
7,950,000 BBB/Baa3 GATX Financial Corp., 8.875%, 6/1/09 8,615,057
-----------
$13,570,116
-----------
Consumer Finance - 1.9%
1,945,000 B-/Caa1 ACE Cash Express, Inc., 10.25%, 10/1/14 (144A) $ 1,969,312
3,000,000 B/B1 Ford Motor Credit Co., 7.875%, 6/15/10 2,921,634
3,000,000(a) B/B1 Ford Motor Credit Co., 9.957%, 4/15/12 3,139,206
-----------
$ 8,030,152
-----------
Total Diversified Financials $21,600,268
-----------
Insurance - 2.6%
Life & Health Insurance - 1.3%
5,725,000 B-/B2 Presidential Life Corp., 7.875%, 2/15/09 $ 5,496,000
-----------
Multi-Line Insurance - 1.3%
5,300,000 BB+/Ba1 Allmerica Financial Corp., 7.625%, 10/15/25 $ 5,630,232
-----------
Total Insurance $11,126,232
-----------
Software & Services - 0.2%
Data Processing & Outsourced Services - 0.1%
640,000 CCC+/Caa1 iPayment, Inc., 9.75%, 5/15/14 (144A) $ 652,800
-----------
The accompanying notes are an integral part of these financial statements. 19
Pioneer High Income Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD($) (unaudited) Value
Application Software - 0.1%
500,000 CCC+/Caa1 Serena Software, Inc., 10.375%, 3/15/16 $ 523,750
-----------
Total Software & Services $ 1,176,550
-----------
Technology Hardware & Equipment - 2.8%
Electronic Equipment Manufacturers - 0.0%
215,000 B/B2 General Cable Corp., 9.5%, 11/15/10 $ 230,050
-----------
Office Electronics - 2.8%
11,830,000 B+/Ba2 Xerox Capital Trust I, 8.0%, 2/1/27 $12,066,600
-----------
Total Technology Hardware & Equipment $12,296,650
-----------
Telecommunication Services - 12.8%
Integrated Telecommunication Services - 2.6%
7,149,000 B-/B3 Eschelon Operating Co., 8.375%, 3/15/10 $ 6,880,912
4,025,000 B+/B1 GCI, Inc., 7.25%, 2/15/14 3,884,125
691,000 NR/Baa3 Tele Norte Leste Participacoes SA,
8.0%, 12/18/13 729,005
-----------
$11,494,042
-----------
Wireless Telecommunication Services - 10.2%
2,600,000 B-/B3 Broadview Networks Holdings, Inc., 11.375%,
9/1/12 (144A) $ 2,645,500
1,625,000 CCC+/Caa2 Cell C Property, Ltd., 11.0%, 7/1/15 (144A) 1,434,062
2,855,000(a) CCC+/Caa1 Cleveland Unlimited, Inc., 13.64%,
12/15/10 (144A) 3,083,400
1,500,000 NR/B3 Digicel, Ltd., 9.25%, 9/1/12 (144A) 1,556,250
3,900,000 B-/B3 Horizon PCS, Inc., 11.375%, 7/15/12 4,377,750
3,950,000 B-/B1 Hughes Network Systems, LLC, 9.5%,
4/15/14 (144A) 4,068,500
2,200,000(b) B+/B1 Inmarsat Finance II Plc, 0.0%, 11/15/12 1,947,000
3,200,000(b) B/B3 Intelsat Intermediate Holding Co., Ltd.,
0.0%, 2/1/15 2,320,000
5,150,000 B+/B1 Mobifon Holdings BV, 12.5%, 7/31/10 5,774,438
1,975,000(b) NR/NR Mobile Satellite Venture, 0.0%, 4/1/13 (144A) 1,239,312
3,230,000 BB-/Ba3 Mobile Telesystems, 9.75%, 1/30/08 (144A) 3,355,163
3,000,000(a) CCC/Caa2 Rural Cellular Corp., 11.239%, 11/1/12 3,093,750
4,200,000 B-/B3 Stratos Global Corp., 9.875%, 2/15/13 (144A) 3,570,000
5,525,000 BBB+/B3 UbiquiTel Operating Co., 9.875%, 3/1/11 5,994,625
-----------
$44,459,750
-----------
Total Telecommunication Services $55,953,792
-----------
20 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD($) (unaudited) Value
Utilities - 2.9%
Electric Utilities - 2.7%
2,000,000 B+/Ba3 Aes Chivor SA ESP, 9.75%, 12/30/14 (144A) $ 2,200,000
1,777,500 BBB-/Baa3 Empresa Electrica Guacolda SA, 8.625%,
4/30/13 (144A) 1,945,715
1,500,000 NR/NR Mirant JPSCo. Finance, Ltd., 11.0%,
7/6/16 (144A) 1,507,500
6,207,183 NR/NR Ormat Funding Corp., 8.25%, 12/30/20 6,300,291
------------
$ 11,953,506
------------
Multi-Utilities - 0.2%
700,000 B/B2 Reliant Energy, Inc., 6.75%, 12/15/14 $ 665,875
------------
Total Utilities $ 12,619,381
------------
TOTAL CORPORATE BONDS & NOTES
(Cost $483,984,957) $514,140,054
------------
CONVERTIBLE BONDS & NOTES - 1.3% of Net Assets
Capital Goods - 0.9%
Electrical Components & Equipment - 0.9%
4,000,000 B/B1 SCI Systems, Inc., 3.0%, 3/15/07 $ 3,920,000
------------
Total Capital Goods $ 3,920,000
------------
Software & Services - 0.4%
Systems Software - 0.4%
1,400,000 NR/NR Macrovision Corp., 2.625%, 8/15/11 (144A) $ 1,538,250
------------
Total Software & Services $ 1,538,250
------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $5,284,228) $ 5,458,250
------------
MUNICIPAL BONDS - 8.4% of Net Assets
Indiana - 2.1%
1,650,000 BBB-/Ba1 East Chicago Industrial Pollution Ctl. Rev.,
7.0%, 1/1/14 $ 1,747,696
3,000,000 BBB-/Ba1 East Chicago Industrial Pollution Ctl. Rev.,
7.125%, 6/1/07 3,042,330
4,250,000 BBB-/Ba1 Indiana Dev. Fin. Auth. Rev., 5.75%, 10/1/11 4,411,500
------------
$ 9,201,526
------------
Massachusetts - 0.3%
1,000,000(e) AAA/NR Massachusetts Health & Edl. Facs. Rev., RIB,
6.075%, 1/15/10 $ 1,081,040
------------
The accompanying notes are an integral part of these financial statements. 21
Pioneer High Income Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Ratings
USD($) (unaudited) Value
Michigan - 0.4%
3,000,000(d) NR/NR Wayne Charter County, Spl. Arpt. Facs. Rev.,
6.75%, 12/1/15 $ 1,872,390
-----------
New Jersey - 2.1%
4,525,000 B/Caa1 New Jersey Economic Dev. Auth. Rev.,
7.0%, 11/15/30 $ 4,771,567
4,000,000 BBB/Baa3 Tobacco Settlement Financing Corp.,
7.0%, 6/1/41 4,590,400
-----------
$ 9,361,967
-----------
New York - 0.9%
3,475,000 BB-/Ba2 New York City Ind. Dev. Agcy., British Airways
Plc Proj., 7.625%, 12/1/32 $ 3,890,228
-----------
North Carolina - 1.6%
4,800,000 NR/NR Charlotte, Spl. Facs. Rev., Charlotte/Douglas
Int'l Airport, 5.60%, 7/1/27 $ 4,801,152
2,000,000 NR/NR Charlotte, Spl. Facs. Rev., Charlotte/Douglas
Int'l Airport, 7.75%, 2/1/28 2,142,740
-----------
$ 6,943,892
-----------
Texas - 1.0%
3,200,000(e) AAA/Aa1 San Antonio, Texas, Electric. & Gas, RIB,
7.902%, 2/1/19 (144A) $ 4,277,280
-----------
TOTAL MUNICIPAL BONDS
(Cost $28,762,930) $36,628,323
-----------
SOVEREIGN DEBT OBLIGATIONS - 2.1% of Net Assets
Brazil - 0.8%
ITL 4,800,000,000(b) BB/Ba1 Banco Nacional de Desenvolimento Bndes,
8.0%, 4/28/10 $ 3,462,142
-----------
Ecuador - 0.7%
3,515,000(b) CCC+/Caa1 Federal Republic of Ecuador, 9.0%,
8/15/30 (144A) $ 3,216,225
-----------
Russia - 0.6%
2,320,000(b) BBB+/Baa2 Russian Federation, 5.0%, 3/31/30 $ 2,589,352
-----------
TOTAL SOVEREIGN DEBT OBLIGATIONS
(Cost $6,074,852) $ 9,267,719
-----------
22 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shares Value
COMMON STOCKS - 0.1% of Net Assets
Pharmaceuticals & Biotechnology & Life Sciences - 0.1%
Pharmaceuticals - 0.1%
17,818(i) Teva Pharmaceutical Industries, Ltd. $ 607,416
-----------
Total Pharmaceuticals & Biotechnology &
Life Sciences $ 607,416
-----------
TOTAL COMMON STOCKS
(Cost $752,276) $ 607,416
-----------
WARRANTS - 0.0% of Net Assets (f)
Materials - 0.0%
Forest Products - 0.0%
1,645 Mandra Forestry Holdings, Ltd. - CW13,
Expires 5/15/13 $ -
-----------
Total Materials $ -
-----------
Transportation - 0.0%
Railroads - 0.0%
4,525 Atlantic Express Transportation Corp.,
Expires 4/15/08 $ -
-----------
Total Transportation $ -
-----------
TOTAL WARRANTS
(Cost $0) $ -
-----------
Principal
Amount
USD ($)
TEMPORARY CASH INVESTMENTS - 9.9% of Net Assets
Repurchase Agreement - 4.1%
18,000,000 Bear Stearns Cos., Inc., 5.0%, dated 9/29/06, repur-
chase price of $18,000,000 plus accrued interest
on 10/2/06 collateralized by $14,329,000 U.S.
Treasury Notes, 3.375%, 10/15/09 and
$4,021,000 U.S. Treasurey Notes, 6.5%, 2/15/10 $18,000,000
-----------
The accompanying notes are an integral part of these financial statements. 23
Pioneer High Income Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Shares Value
Security Lending Collateral - 5.8%
24,995,455 Securities Lending Investment Fund, 5.372% $ 24,995,455
-------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $42,995,455) $ 42,995,455
-------------
TOTAL INVESTMENTS IN SECURITIES - 139.9%
(Cost $568,279,689) (g) (h) $ 609,531,521
-------------
OTHER ASSETS AND LIABILITIES - (5.2)% $ (22,760,333)
-------------
PREFERRED SHARES AT REDEMPTION VALUE,
INCLUDING DIVIDENDS PAYABLE - (34.7)% $(151,226,970)
-------------
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS - 100.0% $ 435,544,218
=============
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
September 30, 2006, the value of these securities amounted to
$150,088,542 or 34.5% of total net assets applicable to common
shareowners.
(a) Floating rate note. The rate shown is the rate at September 30, 2006.
(b) Debt obligation initially issued at one coupon which converts to a higher
coupon at a specific date. The rate shown is the rate at September 30,
2006.
(c) Represents a pay-in-kind security which may pay interest in additional
principal.
(d) Security is in default and is non-income producing.
(e) The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The rate shown is the rate at September 30,
2006.
(f) Non-income producing.
(g) At September 30, 2006, the net unrealized gain on investments based on
cost for federal income tax purposes of $568,623,733 was as follows:
Aggregate gross unrealized gain for all investments in which there is
an excess of value over tax cost $45,541,443
Aggregate gross unrealized loss for all investments in which there is
an excess of tax cost over value (4,633,655)
-----------
Net unrealized gain $40,907,788
===========
For financial reporting purposes net unrealized gain was $41,251,832 and
cost of investments aggregated $568,279,689.
24 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(h) Distribution of investments by country of issue, as a percentage of total
holdings, is as follows:
United States 77.4%
Norway 4.2
Brazil 2.8
Canada 2.6
France 1.6
Mexico 1.5
Great Britain 1.0
Russia 1.0
Romania 0.9
Germany 0.9
Bermuda 0.8
Cayman Islands 0.7
Ecuador 0.5
Netherlands 0.5
Australia 0.5
Ireland 0.5
India 0.4
Colombia 0.4
Luxembourg 0.3
Chile 0.3
Denmark 0.3
Jamaica 0.2
South Africa 0.2
China 0.2
Sweden 0.2
Israel 0.1
-----
100.0%
=====
(i) At September 30, 2006, the following securities were out on loan:
Principal
Amount Description Market Value
$2,044,300 AMR Corp., 9.0%, 8/1/12 $ 2,054,521
1,291,000 CCH II Holdings LLC, 10.25%, 9/15/10 1,310,365
5,905,350 Cooper-Standard Automotive, Inc.,
8.375%, 12/15/14 4,340,432
2,064,150 Graham Packaging Co., L.P., 9.875%, 10/15/14 2,028,027
5,484,600 Graphic Packaging International, Inc.,
9.5%, 8/15/13 5,608,003
1,980,000 Phibro Animal Health Corp., 10.0%, 8/1/13 (144A) 2,009,700
61,000 PolyOne Corp., 8.875%, 5/1/12 61,610
2,435,300 United Rentals North America, Inc.,
7.75%, 11/15/13 2,398,771
2,326,500 Visteon Corp., 7.0%, 3/10/14 2,082,218
1,089,000 WCI Communities, Inc., 6.625%, 3/15/15 868,478
882,000 William Lyon Homes, Inc., 7.625%, 12/15/12* 712,215
Shares
17,640 Teva Pharmaceutical Industries, Ltd. 601,348
-----------
$24,075,688
===========
* Pending sale at 9/30/06.
The accompanying notes are an integral part of these financial statements. 25
Pioneer High Income Trust
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 9/30/06 (unaudited) (continued)
--------------------------------------------------------------------------------
Note: Principal amounts are denominated in U.S. dollars unless otherwise
denoted.
EURO Euro
ITL Italian Lira
NOK Norwegian Krone
RIB Residual Interest Bonds
Purchases and sales of securities (excluding temporary cash investments)
for the six months ended September 30, 2006, aggregated $109,835,556 and
$66,817,839, respectively.
26 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 9/30/06 (unaudited)
--------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (including securities
loaned of $24,075,688) (cost $568,279,689) $609,531,521
Foreign currencies, at value (cost $262,679) 261,492
Receivables -
Investment securities sold 2,141,908
Interest and foreign tax reclaim 11,759,506
Reinvestment of distributions 250,505
Prepaid expenses 26,287
------------
Total assets $623,971,219
------------
LIABILITIES:
Payables -
Investment securities purchased $ 5,771,269
Upon return of securities loaned 24,995,455
Forward foreign currency portfolio hedge contract - net 213,797
Due to custodian 5,830,108
Due to affiliate 296,932
Accrued expenses 92,470
------------
Total liabilities $ 37,200,031
------------
PREFERRED SHARES AT REDEMPTION VALUE:
$25,000 liquidation value per share applicable to 6,040
shares, including dividends payable of $226,970 $151,226,970
------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $384,577,477
Undistributed net investment income 5,504,399
Accumulated net realized gain on investments and foreign
currency transactions 4,429,285
Net unrealized gain on investments 41,251,832
Net unrealized loss on forward foreign currency
contracts and other assets and liabilities denominated
in foreign currencies (218,775)
------------
Net assets applicable to common shareowners $435,544,218
============
NET ASSET VALUE PER SHARE:
No par value (unlimited number of shares authorized)
Based on $435,544,218/27,000,668 common shares $ 16.13
============
The accompanying notes are an integral part of these financial statements. 27
Pioneer High Income Trust
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
--------------------------------------------------------------------------------
For the Six Months Ended 9/30/06
INVESTMENT INCOME:
Interest $27,563,507
Dividends 2,261
Income from securities loaned, net 120,286
-----------
Total investment income $27,686,054
-----------
EXPENSES:
Management fees $1,756,995
Transfer agent fees and expenses 30,885
Administrative reimbursements 77,864
Auction agent fees 202,560
Custodian fees 30,514
Registration fees 12,158
Professional fees 42,907
Printing expense 11,152
Trustees' fees 7,020
Pricing fees 8,500
Insurance fees 8,859
Miscellaneous 7,805
-----------
Total expenses $ 2,197,219
-----------
Net investment income $25,488,835
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain from:
Investments $1,507,010
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies 1,518,962 $ 3,025,972
----------- -----------
Change in net unrealized gain (loss) from:
Investments $ (219,371)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (2,288,231) $(2,507,602)
----------- -----------
Net gain on investments and foreign currency
transactions $ 518,370
-----------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS
FROM NET INVESTMENT INCOME $(3,797,592)
-----------
Net increase in net assets applicable to common
shareowners resulting from operations $22,209,613
-----------
28 The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
For the Six Months Ended 9/30/06 and the Year Ended 3/31/06
Six Months
Ended
9/30/06 Year Ended
(unaudited) 3/31/06
FROM OPERATIONS:
Net investment income $ 25,488,835 $ 50,500,053
Net realized gain on investments and foreign
currency transactions 3,025,972 3,761,733
Change in net unrealized gain on investments and
foreign currency transactions (2,507,602) (3,712,016)
Dividends and distributions to preferred
shareowners from:
Net investment income (3,797,592) (5,167,771)
Net realized gains - (502,302)
------------- -------------
Net increase in net assets applicable
to common shareowners resulting
from operations $ 22,209,613 $ 44,879,697
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON
SHAREOWNERS:
Net investment income
($0.83 and $1.65 per share, respectively) $ (22,239,996) $ (44,321,228)
Net realized capital gains
($0.00 and $0.23 per share, respectively) - (6,166,115)
------------- -------------
Total distributions to common shareowners $ (22,239,996) $ (50,487,343)
------------- -------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ 1,145,485 $ 1,733,358
------------- -------------
Net increase in net assets applicable to
common shareowners resulting from
Trust share transactions $ 1,145,485 $ 1,733,358
------------- -------------
Net increase (decrease) in net assets applicable
to common shareowners $ 1,115,102 $ (3,874,288)
NET ASSETS APPLICABLE TO COMMON
SHAREOWNERS:
Beginning of period 434,429,116 438,303,404
------------- -------------
End of period $ 435,544,218 $ 434,429,116
------------- -------------
Undistributed net investment income $ 5,504,399 $ 6,053,152
------------- -------------
The accompanying notes are an integral part of these financial statements. 29
Pioneer High Income Trust
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Six Months
Ended Year
9/30/06 Ended
(unaudited) 3/31/06
Per Common Share Operating Performance
Net asset value, beginning of period $ 16.13 $ 16.34
---------- ---------
Increase (decrease) from investment operations:(a)
Net investment income $ 0.95 $ 1.88
Net realized and unrealized gain (loss) on investments and foreign
currency transactions 0.02 0.00(d)
Dividends and distributions to preferred shareowners from:
Net investment income (0.14) (0.19)
Realized gains - (0.02)
---------- ---------
Net increase from investment operations $ 0.83 $ 1.67
Dividends and distributions to common shareowners from:
Net investment income (0.83) (1.65)
Realized gains - (0.23)
Capital charge with respect to issuance of:
Common shares - -
Preferred shares - -
---------- ---------
Net increase (decrease) in net asset value $ - $ (0.21)
---------- ---------
Net asset value, end of period(e) $ 16.13 $ 16.13
---------- ---------
Market value, end of period(e) $ 17.77 $ 16.80
---------- ---------
Total return(f) 11.18% 24.84%
Ratios to average net assets of common shareowners
Net expenses(g) 1.01%(h) 0.99%
Net investment income before preferred share dividends 11.74%(h) 11.68%
Preferred share dividends 1.75%(h) 1.19%
Net investment income available to common shareowners 9.99%(h) 10.49%
Portfolio turnover 12% 20%
Net assets of common shareowners, end of period (in thousands) $ 435,544 $434,429
Preferred shares outstanding (in thousands) $ 151,000 $151,000
Asset coverage per preferred share, end of period $ 97,148 $96,940
FINANCIAL HIGHLIGHTS
Pioneer High Income Trust
Year Year 4/26/02 (b)
Ended Ended to
3/31/05 3/31/04 3/31/03
Per Common Share Operating Performance
Net asset value, beginning of period $ 16.20 $ 13.43 $ 14.33(c)
-------- -------- ---------
Increase (decrease) from investment operations:(a)
Net investment income $ 1.87 $ 1.77 $ 1.41
Net realized and unrealized gain (loss) on investments and foreign
currency transactions 0.15 2.73 (0.81)
Dividends and distributions to preferred shareowners from:
Net investment income (0.10) (0.06) (0.04)
Realized gains -(d) - -
-------- -------- ---------
Net increase from investment operations $ 1.92 $ 4.44 $ 0.56
Dividends and distributions to common shareowners from:
Net investment income (1.65) (1.65) (1.38)
Realized gains (0.13) - -
Capital charge with respect to issuance of:
Common shares - - (0.03)
Preferred shares - (0.02) (0.05)
-------- -------- ---------
Net increase (decrease) in net asset value $ 0.14 $ 2.77 $ (0.90)
-------- -------- ---------
Net asset value, end of period(e) $ 16.34 $ 16.20 $ 13.43
-------- -------- ---------
Market value, end of period(e) $ 15.12 $ 16.57 $ 14.49
-------- -------- ---------
Total return(f) 1.97% 27.33% 7.29%
Ratios to average net assets of common shareowners
Net expenses(g) 1.00% 0.96% 0.87%(h)
Net investment income before preferred share dividends 11.60% 11.64% 11.62%(h)
Preferred share dividends 0.63% 0.39% 0.37%(h)
Net investment income available to common shareowners 10.97% 11.25% 11.25%(h)
Portfolio turnover 54% 66% 49%
Net assets of common shareowners, end of period (in thousands) $438,303 $433,556 $358,123
Preferred shares outstanding (in thousands) $151,000 $151,000 $101,000
Asset coverage per preferred share, end of period $97,569 $ 96,781 $113,647
The accompanying notes are an integral part of these financial statements.
30
Pioneer High Income Trust
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
--------------------------------------------------------------------------------
Six Months
Ended Year
9/30/06 Ended
(unaudited) 3/31/06
Per Common Share Operating Performance
Average market value per preferred share $ 25,000 $ 25,000
Liquidation value, including dividends payable, per preferred share $ 25,038 $ 25,015
Ratios to average net assets of common shareowners before reimbursement
of organization expenses
Net expenses(g) 1.01%(h) 0.99%
Net investment income before preferred share dividends 11.74%(h) 11.68%
Preferred share dividends 1.75%(h) 1.19%
Net investment income available to common shareowners 9.99%(h) 10.49%
Year Year 4/26/02 (b)
Ended Ended to
3/31/05 3/31/04 3/31/03
Per Common Share Operating Performance
Average market value per preferred share $ 25,000 $ 25,000 $ 25,000
Liquidation value, including dividends payable, per preferred share $ 25,003 $ 25,000 $ 25,003
Ratios to average net assets of common shareowners before reimbursement
of organization expenses
Net expenses(g) 1.00% 0.96% 0.88%(h)
Net investment income before preferred share dividends 11.60% 11.64% 11.61%(h)
Preferred share dividends 0.63% 0.39% 0.37%(h)
Net investment income available to common shareowners 10.97% 11.25% 11.24%(h)
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) Trust shares were first publicly offered on April 26, 2002.
(c) Net asset value immediately after the closing of the first public offering
was $14.30.
(d) Amount is less than $0.01 per common share.
(e) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and
Saturday.
(f) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment returns less than a full period are not annualized. Past
performance is not a guarantee of future results.
(g) Ratios do not reflect the effect of dividend payments to preferred
shareowners.
(h) Annualized.
The information above represents the operating performance data for a share of
common stock outstanding, total investment return, ratios to average net assets
of common shareowners and other supplemental data for the periods indicated.
This information has been determined based upon financial information provided
in the financial statements and market value data for the Trust's common
shares.
The accompanying notes are an integral part of these financial statements.
31
Pioneer High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/06 (unaudited)
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer High Income Trust (the "Trust") was organized as a Delaware statutory
trust on January 30, 2002. Prior to commencing operations on April 26, 2002,
the Trust had no operations other than matters relating to its organization and
registration as a diversified, closed-end management investment company under
the Investment Company Act of 1940, as amended.
The Trust invests in below investment grade (high-yield) debt securities, loans
and preferred stocks. Certain high-yield securities held by the Trust may be
convertible into equity securities of the issuer. Debt securities rated below
investment grade are commonly referred to as "junk bonds" and are considered
speculative. These securities involve greater risk of loss, are subject to
greater price volatility, and are less liquid, especially during periods of
economic uncertainty or change, than higher rated debt securities.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, and the reported amounts of income,
expenses and gains and losses on investments during the reporting 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. Fixed-income
securities are valued at prices supplied by independent pricing services,
which consider such factors as Treasury spreads, yields, maturities and
ratings. Valuations may be supplemented by dealers and other sources, as
required. Equity securities are valued at the last sale price on the
principal exchanges where they are traded. Securities for which market
quotations are not readily available are valued at their fair values as
determined by, or under the direction of, the Board of Trustees. Trading
in foreign securities is substantially completed each day at various times
prior to the close of the NYSE. The values of such securities used in
computing the net
32
Pioneer High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
asset value of the Trust's shares are determined as of such times. The
Trust may also use the fair value of a security, including a non-U.S.
security, when the closing market price on the primary exchange where the
security is traded no longer accurately reflects the value of the security
as of the close of the exchange. As of September 30, 2006, the Trust had
no fair valued securities. Temporary cash investments are valued at
amortized cost.
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. Discount and premium on debt
securities are accreted or amortized, respectively, daily, on an effective
yield to maturity basis and are included in interest income. Premiums and
discounts related to certain mortgage-backed securities are amortized or
accreted in proportion to the underlying monthly paydowns. Interest
income, including income on interest bearing cash accounts, is recorded on
an accrual basis.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
The Trust's investments in foreign markets or countries with limited
developing markets may subject the Trust to a greater degree of risk than
in a developed market. These risks include disruptive political or
economic conditions and the possible imposition of adverse governmental
laws or currency exchange restrictions.
Information regarding the Trust's principal risks is contained in the
Trust's 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. 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 or
sectors. Under normal market conditions, the Trust invests at least 80% of
its assets in below investment grade (high-yield) debt securities, loans
and preferred stocks. Because the Trust's investments will be concentrated
in the high-yield securities, it will be subject to risks of such
securities. Below investment grade securities are commonly
33
Pioneer High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/06 (unaudited) (continued)
--------------------------------------------------------------------------------
referred to as "junk bonds" and are considered speculative with respect to
the issuer's capacity to pay interest and repay principal.
B. Foreign Currency Translation
The books and records of the Trust are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between
the amount of income accrued and the U.S. dollars actually received.
Further, the effects of changes in foreign currency exchange rates on
investments are not segregated in the Statement of Operations from the
effects of changes in market price of those securities but are included
with the net realized and unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Trust enters into forward foreign currency contracts (contracts) for
the purchase or sale of a specific foreign currency at a fixed price on a
future date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio
hedges). All contracts are marked to market daily at the applicable
exchange rates, and any resulting unrealized gains or losses are recorded
in the Trust's financial statements. The Trust records realized gains and
losses at the time a portfolio hedge is offset by entry into a closing
transaction or extinguished by delivery of the currency. Risks may arise
upon entering into these contracts from the potential inability of
counterparties to meet the terms of the contract and from unanticipated
movements in the value of foreign currencies relative to the U.S. dollar
(see Note 4).
D. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income and net realized capital gains, if
any, to its shareowners. Therefore, no federal income tax provision is
required.
34
Pioneer High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the source of the Trust's distributions may
be shown in the accompanying financial statements as either from or in
excess of net investment income or net realized gain on investment and
foreign currency transactions, or from paid-in capital, depending on the
type of book/tax differences that may exist.
The tax character of current year distributions paid to common and
preferred shareowners will be determined at the end of the fiscal year.
The distribution during the year ended March 31, 2006 was as follows:
--------------------------------------------------------------------------------
2006
--------------------------------------------------------------------------------
Distributions paid from:
Ordinary Income $50,434,525
Net long-term capital gains 5,722,891
-----------
Total taxable distribution $56,157,416
===========
--------------------------------------------------------------------------------
The following shows components of distributable earnings on a
federal income tax basis at March 31, 2006.
--------------------------------------------------------------------------------
Undistributed ordinary income $ 11,104,072
Long-term capital gain 1,430,792
Dividends payable (91,490)
Unrealized appreciation 38,553,750
------------
Total $ 50,997,124
============
--------------------------------------------------------------------------------
The difference between book basis and tax basis unrealized appreciation is
primarily attributable to the tax deferral of losses on straddles and wash
sales, the realization for tax purposes of unrealized gains on certain
foreign currency contracts, the difference between book and tax
amortization methods for premiums and discounts on fixed income securities
and difference between book and tax in the accrual of income on securities
in default.
35
Pioneer High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/06 (unaudited) (continued)
--------------------------------------------------------------------------------
E. Repurchase Agreements
With respect to repurchase agreements entered into by the Trust, the value
of the underlying securities (collateral), including accrued interest
received from counterparties, is required to be at least equal to or in
excess of the repurchase agreement at the time of purchase. The collateral
for all repurchase agreements is held in safekeeping in the customer-only
account of the Trust's custodian, or subcustodians. Pioneer Investment
Management, Inc. ("PIM"), the Trust's investment adviser is responsible
for determining that the value of the collateral remains at least equal to
the repurchase price.
F. Securities Lending
The Trust lends securities in its portfolio to certain broker-dealers or
other institutional investors, with the Trust's custodian acting as the
lending agent. When entering into a loan, the Trust receives collateral
which is maintained by the custodian and earns income in the form of
negotiated lenders' fees. The Trust also continues to receive interest or
payments in lieu of dividends on the securities loaned. Unrealized gain or
loss on the fair value of the loaned securities that may occur during the
term of the loan will be for the account of the Trust. The loans are
secured by collateral of at least 102%, at all times, of the fair value of
the securities loaned. The amount of the collateral will be adjusted daily
to reflect any price fluctuation in the value of the loaned securities.
The Trust has the right under the securities lending arrangement to
recover the securities on loan from the borrower on demand. The Trust
invests cash collateral in the Securities Lending Investment Fund which is
sponsored by Brown Brothers Harriman & Co., the Trust's custodian.
G. Automatic Dividend Reinvestment Plan
All common shareowners automatically participate in the Automatic Dividend
Reinvestment Plan (the "Plan"), under which participants receive all
dividends and capital gain distributions (collectively, "dividends") in
full and fractional common shares of the Trust in lieu of cash.
Shareowners may elect not to participate in the Plan. Shareowners not
participating in the Plan receive all dividends and capital gain
distributions in cash. Participation in the Plan is completely voluntary
and may be terminated or resumed at any time without penalty by notifying
American Stock Transfer & Trust
36
Pioneer High Income 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. Whenever the Trust
declares a dividend on common shares payable in cash, participants in the
Plan will receive the equivalent in common shares acquired by the Plan
Agent either (i) through receipt of additional unissued but authorized
common shares from the Trust or (ii) by purchase of outstanding common
shares on the New York Stock Exchange or elsewhere. If, on the payment
date for any dividend, the net asset value per common share is equal to or
less than the market price per share plus estimated brokerage trading fees
("market premium"), the Plan Agent will invest the dividend amount in
newly issued common shares. The number of newly issued common shares to be
credited to each account will be determined by dividing the dollar amount
of the dividend by the net asset value per common share on the date the
shares are issued, provided that the maximum discount from the then
current market price per share on the date of issuance does not exceed 5%.
If, on the payment date for any dividend, the net asset value per common
share is greater than the market value ("market discount"), the Plan Agent
will invest the dividend amount in common shares acquired in open-market
purchases. There are no brokerage charges with respect to newly issued
common shares. However, each participant will pay a pro rata share of
brokerage trading fees incurred with respect to the Plan Agent's
open-market purchases. Participating in the Plan does not relieve
shareowners from any federal, state or local taxes which may be due on
dividends paid in any taxable year. Shareowners holding Plan shares in a
brokerage account may not be able to transfer the shares to another broker
and continue to participate in the Plan.
2. Management Agreement
Pioneer Investment Management, Inc. ("PIM"), a wholly owned indirect subsidiary
of Unicredito Italiano S.p.A. ("Unicredito Italiano") manages the Trust's
portfolio. Management fees are calculated weekly at the annual rate of 0.60% of
the Trust's average weekly managed assets. "Managed assets" is the average
weekly value of the Trust's total assets minus the sum of the Trust's
liabilities, which liabilities exclude debt related to leverage, short-term
debt and the aggregate liquidation
37
Pioneer High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/06 (unaudited) (continued)
--------------------------------------------------------------------------------
preference of any outstanding preferred shares. At September 30, 2006, $288,516
was payable to PIM related to management fees.
In addition, under PIM's management and administration agreements, certain
other services and costs are paid by PIM and reimbursed by the Trust. For the
six months ended September 30, 2006, the Trust recorded $77,864 as
"Administrative reimbursements" on the Statement of Operations.
PIM has retained Princeton Administrators, LLC., to provide certain
administrative services to the Trust on its behalf. PIM pays Princeton
Administrators, LLC., a monthly fee at an annual rate of 0.07% of the average
weekly value of the Trust's managed assets, subject to a minimum monthly fee of
$10,000. Princeton Administrators, LLC receives no compensation directly from
the Trust.
3. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. ("PIMSS"), a wholly
owned indirect subsidiary of UniCredito Italiano, through a sub-transfer agency
agreement with American Stock Transfer & Trust Company, provides substantially
all transfer agent and shareowner services related to the Trust's common shares
at negotiated rates. Deutsche Bank Trust Company Americas is the transfer
agent, registrar, dividend paying agent and redemption agent with respect to
the Trust's Auction Market Preferred Shares ("AMPS"). The Trust pays Deutsche
Bank Trust Company Americas an annual fee, as is agreed to from time to time by
the Trust and Deutsche Bank Trust Company Americas, for providing such
services.
4. Forward Foreign Currency Contracts
During the six months ended September 30, 2006, the Trust had entered into
contracts that obligate the Trust to deliver currencies at specified future
dates. At the maturity of a contract, the Trust must make delivery of the
foreign currency. Alternatively, prior to the settlement date of contracts, the
Trust may close out such contracts by entering into an offsetting hedge
contract.
38
Pioneer High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Open portfolio hedges at September 30, 2006 were as follows:
------------------------------------------------------------------------------------------
Net
Contracts Net
to (Deliver)/ In Exchange Settlement Unrealized
Currency Receive For US$ Date US$ Value Loss
------------------------------------------------------------------------------------------
EURO (16,800,000) $ (21,230,160) 4/26/07 $ (21,491,749) $ (261,589)
EURO 16,800,000 21,836,304 4/26/07 21,491,749 (344,555)
EURO (16,800,000) (21,851,088) 5/11/07 (21,502,896) 348,192
EURO (1,936,399) (2,529,983) 8/3/07 (2,485,828) 44,155
----------
Total $ (213,797)
==========
------------------------------------------------------------------------------------------
As of September 30, 2006, the Trust had no outstanding forward cur
rency settlement hedges.
5. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized. Of the 27,000,668 common shares of beneficial interest outstanding
at September 30, 2006 PIM owned 6,981 shares.
Transactions in common shares of beneficial interest for the six months ended
September 30, 2006 and the year ended March 31, 2006 were as follows:
--------------------------------------------------------------------------------
9/2006 3/2006
------------ -----------
Shares outstanding at
beginning of period 26,931,420 26,823,948
Reinvestment of distributions 69,248 107,472
---------- ----------
Shares outstanding at
end of period 27,000,668 26,931,420
---------- ----------
--------------------------------------------------------------------------------
The Trust may classify or reclassify any unissued common shares of beneficial
interest into one or more series of preferred shares of beneficial interest. As
of September 30, 2006, there were 6,040 AMPS as follows: Series M7-2,020,
Series W28-2,020 and Series TH7-2,000.
Dividends on Series M7 and Series TH7 are cumulative at a rate, which is reset
every seven days based on the results of an auction. Dividends on Series W28
are also cumulative at a rate reset every 28 days based on the results of an
auction. Dividend rates ranged from 4.58% to 5.36% during the six months ended
September 30, 2006.
39
Pioneer High Income Trust
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 9/30/06 (unaudited) (continued)
--------------------------------------------------------------------------------
The Trust may not declare dividends or make other distributions on its common
shares or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
preferred shares would be less than 200%.
The AMPS are redeemable at the option of the Trust, in whole or in part, on any
dividend payment date at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared. The AMPS are also subject to mandatory
redemption at $25,000 per share plus any accumulated or unpaid dividends,
whether or not declared, if certain requirements relating to the composition of
the assets and liabilities of the Trust as set forth in the Agreement and
Declaration of Trust are not satisfied.
The holders of AMPS have voting rights equal to the holders of the Trust's
common shares (one vote per share) and will vote together with holders of the
common shares as a single class. However, holders of AMPS are also entitled to
elect two of the Trust's Trustees. In addition, the Investment Company Act of
1940, as amended, requires that along with approval by shareowners that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
shares and (b) take any action requiring a vote of security holders, including,
among other things, changes in the Trust's subclassification as a closed-end
management investment company or changes in its fundamental investment
restrictions.
6. New Pronouncements
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in
the course of preparing the Trust's tax returns to determine whether the tax
positions will "more-likely-than-not" be sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not threshold
would be recorded as a tax benefit or expense in the reporting period. Adoption
of FIN 48 is required for fiscal years beginning after December 15, 2006 and is
to be applied to all open tax years as of the effective date.
40
Pioneer High Income Trust
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
At this time, management is evaluating the implications of FIN 48 and any
impact in the financial statements has not yet been determined.
In addition, in September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements ("SFAS 157"), was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Trust's financial statement disclosures.
7. Subsequent Events
Subsequent to September 30, 2006, the Board of Trustees of the Trust declared a
dividend from undistributed net investment income of $0.1375 per common share
payable October 31, 2006, to shareowners of record on October 17, 2006.
For the period October 1, 2006 to October 31, 2006, dividends declared on
preferred shares totaled $653,967 in aggregate for the three outstanding
preferred share series.
ADDITIONAL INFORMATION (unaudited)
During the period, there have been no material changes in the Trust's
investment objective or fundamental policies that have not been approved by the
shareowners. There have been no changes in the Trust's charter or By-Laws that
would delay or prevent a change in control of the Trust which have not been
approved by the shareowners. There have been no changes in the principal risk
factors associated with investment in the Trust. There have been no changes in
the persons who are primarily responsible for the day-to-day management of the
Trust's portfolio.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its common
shares in the open market.
41
Pioneer High Income Trust
--------------------------------------------------------------------------------
RESULTS OF SHAREOWNER MEETING (unaudited)
--------------------------------------------------------------------------------
On September 21, 2006, Pioneer High Income Trust held its annual meeting of
shareowners to elect Class I Trustees. All Class I Trustees were elected. Here
are the detailed results of the votes.
Proposal 1 - To elect Class I Trustees.
--------------------------------------------------------------------------------
Nominee Affirmative Withheld
--------------------------------------------------------------------------------
Mary K. Bush 25,367,675 214,585
Thomas J. Perna 25,388,181 194,079
Marguerite A. Piret+ 3,894 1
--------------------------------------------------------------------------------
+ Elected by Preferred Shares only
42
Pioneer High Income Trust
--------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
--------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr., Chairman John F. Cogan, Jr., President
David R. Bock Osbert M. Hood, Executive
Mary K. Bush Vice President
Margaret B.W. Graham Vincent Nave, Treasurer
Osbert M. Hood Dorothy E. Bourassa, Secretary
Thomas J. Perna
Marguerite A. Piret
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Shareowner Services and Sub-Transfer Agent
American Stock Transfer & Trust Company
Preferred Share Auction/Transfer Agent and Registrar
Deutsche Bank Trust Company Americas
Sub-Administrator
Princeton Administrators, LLC
Proxy Voting Policies and Procedures of the Trust are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Trust voted proxies relating to portfolio securities during
the most recent 12 months ended June 30, is publicly available to shareowners
at www.pioneerinvestments.com. This information is also available on the
Securities and Exchange Commission's web site at http://www.sec.gov.
43
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This page for your notes.
44
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HOW TO CONTACT PIONEER
--------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call American Stock Transfer & Trust Company (AST) for:
Account Information 1-800-710-0935
Or write to AST:
For Write to
General inquiries, lost dividend 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
Website www.amstock.com
For additional information, please contact your investment advisor or visit our
web site www.pioneerinvestments.com.
The Trust files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
The Trust's Chief Executive Officer is required by the New York Stock Exchange's
Listing Standards to file annually with the Exchange a certification that he is
not aware of any violation by the Trust of the Exchange's Corporate Governance
Standards applicable to the Trust. The Trust has filed such certification.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
N/A
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
N/A
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
N/A
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
N/A
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
--------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
N/A
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
N/A
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
N/A
Item 5. Audit Committee of Listed Registrants
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
N/A
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
Information not required in semi annual reports on form NCSR.
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
During the period covered by this report, there were no purchases
made by or on behalf of the registrant or any affiliated purchaser
as defined in Rule 10b-18(a)(3) under the Securities Exchange Act
of 1934 (the Exchange Act), of shares of the registrants equity
securities that are registered by the registrant pursuant to
Section 12 of the Exchange Act.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on their evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the
registrant's internal control over financial
reporting that occurred during the second
fiscal quarter of the period covered by this
report that have materially affected, or are
reasonably likely to materially affect, the
registrant's internal control over financial
reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer High Income Trust
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date November 29, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date November 29, 2006
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date November 29, 2006
* Print the name and title of each signing officer under his or her signature.