<PAGE>
[PIONEER LOGO]
Pioneer
Tax-Free
Income Fund
- ------------------------------
SEMIANNUAL REPORT 6/30/99
- ------------------------------
<PAGE>
T a b l e o f C o n t e n t s
- --------------------------------------------------------------------------------
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 23
Notes to Financial Statements 29
Report of Independent Public Accountants 33
Trustees, Officers and Service Providers 34
The Pioneer Family of Mutual Funds 35
Programs and Services for Pioneer Shareowners 36
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
LETTER FROM THE CHAIRMAN 6/30/99
- --------------------------------------------------------------------------------
D e a r S h a r e o w n e r ,
- --------------------------------------------------------------------------------
I am pleased to introduce this semiannual report for Pioneer Tax-Free Income
Fund, covering the six months ended June 30, 1999. On behalf of your investment
team, I appreciate your confidence in the Fund and Pioneer. I would like to
extend a special welcome to those shareowners who were formerly shareowners of
Pioneer Intermediate Tax-Free Fund.
Interest rates rose throughout the first six months of 1999, as world economies
stabilized and economic news in the United States remained positive, but no
significant inflationary pressures surfaced. Daily speculation by the media and
financial analysts on how long this environment will continue makes it easy for
investors to forget that these conditions will not always exist and that there
are risks inherent to investing.
It is quite tempting to abandon a balanced investment plan when the stock market
shows returns over 20%, as it has for each of the past four years. But longer
term, average annual returns of stocks as measured by the Standard & Poor's 500
Index are closer to 11%. That is why experts recommend that investors hold a mix
of stocks and bonds, including tax-free investments like municipal bonds, to
suit their long-term objectives and to seek to achieve balance. If you think
your investment mix may be out of line, we encourage you to meet with your
investment professional to discuss your asset allocation.
Turning to other matters, for those of you who are interested in new Pioneer
products, we are pleased to introduce Pioneer Strategic Income Fund. The Fund
holds a diverse portfolio of bonds from around the globe, including the United
States. To receive a prospectus for our newest fund - which you should read
carefully before you invest or send any money - or if you have questions
regarding Pioneer Tax-Free Income Fund, please contact your investment
professional, or call Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
1
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
PORTFOLIO SUMMARY 6/30/99
- --------------------------------------------------------------------------------
P o r t f o l i o Q u a l i t y
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[Begin: Description of Pie Chart]
AAA 62%
AA 24%
A 13%
Short-Term Cash Equivalents 1%
[End: Description of Pie Chart]
P o r t f o l i o M a t u r i t y
- --------------------------------------------------------------------------------
(Effective life as a percentage of total investment portfolio)
[Begin: Description of Pie Chart]
0-2 Years 2%
2-5 Years 13%
5-7 Years 15%
7-10 Years 26%
10-20 Years 36%
20+ Years 8%
[End: Description of Pie Chart]
1 0 L a r g e s t H o l d i n g s
- --------------------------------------------------------------------------------
(As a percentage of debt holdings)
- --------------------------------------------------------------------------------
1. South Carolina Public Service Authority Revenue,
6.625%, Prerefunded, 7/1/02 2.57%
- --------------------------------------------------------------------------------
2. Metropolitan Pier & Exposition Authority Dedicated
State Tax Revenue, 8.5%, 6/15/06 2.39
- --------------------------------------------------------------------------------
3. Hastings Electric System Revenue, 6.3%, 1/1/19 1.88
- --------------------------------------------------------------------------------
4. Will County, Illinois Environmental Revenue, 6.4%, 4/1/26 1.83
- --------------------------------------------------------------------------------
5. District of Columbia Water & Sewer Authority, 5.5%, 10/1/23 1.57
- --------------------------------------------------------------------------------
6. South East Public Service Authority, 5.0%, 7/1/15 1.51
- --------------------------------------------------------------------------------
7. Walled Lake School District General Obligation, Series I,
5.5%, 5/1/22 1.35
- --------------------------------------------------------------------------------
8. Oklahoma State Turnpike Authority Revenue, 6.125%, 1/1/20 1.33
- --------------------------------------------------------------------------------
9. Grand Island Sanitation Sewer Revenue, 6.0%, 4/1/14 1.23
- --------------------------------------------------------------------------------
10. Chicago Board of Education, 5.75%, 12/1/27 1.21
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Tax-Free Income Fund
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PERFORMANCE UPDATE 6/30/99 CLASS A SHARES
- --------------------------------------------------------------------------------
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- --------------------------------------------------------------------------------
Net Asset Value
per Share 6/30/99 12/31/98
$11.51 $12.02
Distributions per Share Income Short-Term Long-Term
(12/31/98 - 6/30/99) Dividends Capital Gains Capital Gains
$0.256 - -
I n v e s t m e n t R e t u r n s
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Tax-Free Income Fund at public offering price, compared to the growth of
the Lehman Brothers Municipal Bond Index.
- -----------------------------------
Average Annual Total Returns
(As of June 30, 1999)
Net Asset Public Offering
Period Value Price*
10 Years 6.97% 6.48%
5 Years 6.22 5.25
1 Year 1.41 -3.12
- -----------------------------------
*Reflects deduction of the maximum 4.5% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
[Begin: Description of Mountain Chart]
Growth of $10,000
Pioneer Tax-Free Income Fund* Lehman Brothers Municipal Bond Index
6/89 9550 10000
10107 10682
6/91 10981 11644
12388 13017
6/93 13933 14573
13857 14598
6/95 14970 15886
15790 16940
6/97 17025 18342
18473 19929
6/99 18734 20451
[End: Description of Mountain Chart]
The Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds. Bonds in the Index have a minimum credit
rating of BBB, were part of at least a $50 million issuance made within the past
five years and have a maturity of at least two years. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
A portion of the Fund's income may be subject to the Alternative Minimum Tax
(AMT).
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
3
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 6/30/99 CLASS B SHARES
- --------------------------------------------------------------------------------
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- --------------------------------------------------------------------------------
Net Asset Value
per Share 6/30/99 12/31/98
$11.44 $11.93
Distributions per Share Income Short-Term Long-Term
(12/31/98 - 6/30/99) Dividends Capital Gains Capital Gains
$0.207 - -
I n v e s t m e n t R e t u r n s
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Tax-Free Income Fund, compared to the growth of the Lehman Brothers
Municipal Bond Index.
- -----------------------------------
Average Annual Total Returns
(As of June 30, 1999)
If If
Period Held Redeemed*
Life-of-Fund 5.14% 4.74%
(4/28/95)
1 Year 0.71 -3.07
- -----------------------------------
*Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions. The
maximum CDSC of 4% declines over six years.
[Begin: Description of Mountain Chart]
Growth of $10,000
Pioneer Tax-Free Income Fund* Lehman Brothers Municipal Bond Index
4/95 10000 10000
6/95 10155 10229
10363 10523
10794 10957
10580 10825
6/96 10616 10908
10858 11158
11080 11443
10993 11416
6/97 11367 11811
11682 12167
11984 12497
12077 12641
6/98 12243 12832
12652 13227
12634 13307
12639 13406
6/99 12136 13169
[End: Description of Mountain Chart]
The Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds. Bonds in the Index have a minimum credit
rating of BBB, were part of at least a $50 million issuance made within the past
five years and have a maturity of at least two years. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
A portion of the Fund's income may be subject to the Alternative Minimum Tax
(AMT).
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
4
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 6/30/99 CLASS C SHARES
- --------------------------------------------------------------------------------
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- --------------------------------------------------------------------------------
Net Asset Value
per Share 6/30/99 12/31/98
$11.45 $11.94
Distributions per Share Income Short-Term Long-Term
(12/31/98 - 6/30/99) Dividends Capital Gains Capital Gains
$0.207 - -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Tax-Free Income Fund, compared to the growth of the Lehman Brothers
Municipal Bond Index.
- -----------------------------------
Average Annual Total Returns
(As of June 30, 1999)
If If
Period Held Redeemed*
Life-of-Fund 3.86% 3.86%
(1/31/96)
1 Year 0.71 0.71
- -----------------------------------
*Assumes reinvestment of distributions. The 1% contingent deferred sales charge
(CDSC) applies to redemptions made within one year of purchase.
[Begin: Description of Mountain Chart]
Growth of $10,000
Pioneer Tax-Free Income Fund* Lehman Brothers Municipal Bond Index
1/96 10000 10000
9766 9805
6/96 9791 9880
10006 10107
12/96 10219 10364
10148 10340
6/97 10493 10697
10792 11020
12/97 11070 11319
11137 11449
6/98 11300 11623
11667 11980
12/98 11660 12052
11665 12142
6/99 11379 11928
[End: Description of Mountain Chart]
The Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds. Bonds in the Index have a minimum credit
rating of BBB, were part of at least a $50 million issuance made within the past
five years and have a maturity of at least two years. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
A portion of the Fund's income may be subject to the Alternative Minimum Tax
(AMT).
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
5
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/99
- --------------------------------------------------------------------------------
The first half of Pioneer Tax-Free Income Fund's fiscal year closed on June 30,
1999. Following is a discussion with your Fund's portfolio manager, Sherman B.
Russ, detailing the investment environment and the strategies that affected your
Fund's performance during the reporting period. With over 20 years of experience
as an investment professional, Mr. Russ oversees the team responsible for the
daily management of Pioneer Tax-Free Income Fund.
Q: Interest rates rose in the first half of 1999 - how did the Fund perform?
A: The Fund produced an attractive level of tax-free income, but lagged its peer
group on a total return basis. The Fund's Class A shares provided a tax-free
30-day yield of 4.03% on June 30. That translated into an attractive
taxable-equivalent yield of 6.67% for investors in the 39.6% maximum federal
tax bracket. For the six months, Class A shares had a return of -2.16% at net
asset value; Class B shares, -2.41% and Class C shares, -2.41%. In
comparison, the average return of the 264 general municipal debt funds
followed by Lipper, Inc. was -1.82%. (Lipper is an independent firm that
tracks fund performance.) The performance difference between the Fund and its
peer group primarily resulted from the Fund's high quality standards and our
focus on bonds in the 5-to-10 year maturity range. Unfortunately, high
quality bonds in this maturity range experienced the largest price declines
as interest rates changed. Also, bonds rated lower than "A", the Fund's
minimum quality, outperformed their higher-quality counterparts. (Ratings
apply to underlying securities, not Fund shares.)
Q: How did the economy's strength affect municipal bonds?
A: It was a double-edged sword. On the positive side, the country's economic
vigor provided a steady stream of tax revenues, which strengthened municipal
balance sheets and enabled state and local governments to improve
infrastructures. The trade-off to such healthy economic growth, however, was
a situation that seemed unlikely only six months earlier - that the economy
could overheat,
6
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
rekindle inflation and trigger a series of interest rate hikes. Investors
monitored ongoing reports of strong labor and housing markets, rising stock
prices and high levels of consumer spending and consumer confidence - and
determined that the economy's strength could continue and inflationary
pressures could build. Reflecting their concerns, investors pushed interest
rates higher and bond prices lower. As the country's watchdog against
inflation, the Federal Reserve raised interest rates in June 1999 by 0.25
percentage points. With the increase, however, came an announcement that
after the June action, the Fed's bias would be adjusted to "neutral,"
suggesting that it does not see a need to raise rates in the near future.
The yield of the 30-year U.S. Treasury rose from 5.09% on December 31, 1998
to 5.97% on June 30, 1999. While all fixed-income investments were negatively
affected by rising interest rates, some sectors had greater price declines
than others. For example, shorter-term municipal bond prices experienced
greater losses than their longer-term counterparts. Shorter-term municipal
bonds tend to trade more in tandem with the U.S. Treasury market, while the
performance of longer-term municipal bonds was tied more to the strong credit
conditions in the tax-exempt market.
Q: What strategies do you use to manage the Fund?
A: We emphasize income and total return, while seeking to manage risk
conservatively. In addition, with the sale of all of Pioneer Intermediate
Tax-Free Fund's assets to the Fund on March 31, we consolidated positions to
improve liquidity and management efficiency.
The similar investments and management styles of the two funds made the
consolidation easy; and we made changes thoughtfully and conservatively. We
sold some smaller portfolio positions and directed the money to building
existing holdings. We also emphasized bonds that were issued from
larger-sized offerings. The combination of bigger positions in existing
holdings and investing in larger
7
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/99 (continued)
- --------------------------------------------------------------------------------
bond offerings increased the portfolio's liquidity. Further, as interest
rates rose, we sold older, lower-yielding bonds and replaced them with
higher-yielding counterparts, which boosted the Fund's income stream. To
further enhance the Fund's income and total return potential, we emphasized
bonds with maturities longer than 15 years.
Over the period, the Fund remained heavily weighted in bonds with
intermediate term maturities - those in the 5-to-15 year range. Also, in
accordance with the Fund's high investment standards, we maintained a heavy
weighting in "AAA" rated bonds.
Q: What is your outlook for municipal bonds, as we move into the last half of
the year?
A: We recognize some challenges facing investors, but remain optimistic about
opportunities in the tax-exempt sector. There are many signs that the economy
could begin to slow in the second half of the year, and we expect inflation
to remain low. Slower but stable growth with low inflation would continue to
benefit municipalities from a credit standpoint. Also, we anticipate a
steady, but not overwhelming, supply of new bonds, with sound demand to
bolster prices. In fact, the "wealth effect" from rising stock prices and
recent economic strength has encouraged many tax sensitive investors to buy
municipal bonds. We believe this will remain a positive influence for the
tax-exempt market in the coming months. In this environment, we intend to
focus on adjusting the Fund's maturity structure and seeking opportunities
for greater total return - perhaps increasing investment in bonds with longer
maturities and/or bonds rated "AA" or "A".
8
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
TAX-EXEMPT OBLIGATIONS - 99.1%
Alabama - 0.2%
$ 1,000,000 AAA/Aaa Jefferson County Alabama Sewer Revenue,
5.0%, 2/1/33 $ 917,320
------------
Arizona - 3.4%
1,000,000 AA/Aa Arizona State Transportation Board Highway
Revenue, 6.0%, 7/1/08 $ 1,080,810
1,500,000 AAA/Aaa Kyrene School District, 6.0%, 7/1/14 1,573,095
2,765,000 AAA/Aaa Maricopa County Revenue, 5.5%, 1/1/18 2,872,835
1,000,000 AAA/Aaa Maricopa County School District,
7.0%, 7/1/07 1,132,890
1,000,000 AAA/Aaa Maricopa County School District,
7.0%, 7/1/08 1,132,250
1,000,000 AA-/Aa3 Phoenix Civic Improvement Corporation
Water System Revenue, 6.5%, 7/1/06 1,100,720
1,000,000 AA/Aa2 Salt River Project Agricultural Improvement
and Power District Revenue, 5.75%, 1/1/07 1,059,910
1,000,000 AAA/Aaa Sedona Arizona Wastewater Municipal
Property Corporate Excise Tax Revenue,
5.375%, 7/1/14 1,001,060
2,200,000 AAA/Aaa Tempe School District, 7.0%, 7/1/08 2,526,172
1,000,000 AA/Aa3 Tucson Arizona General Obligation,
5.375%, 7/1/21 1,008,380
------------
$ 14,488,122
------------
California - 0.5%
1,000,000 A+/Aa3 California State General Obligation,
6.0%, 9/1/09 $ 1,094,750
1,000,000 AAA/Aaa California State General Obligation,
4.625%, 4/1/14 937,280
------------
$ 2,032,030
------------
Colorado - 3.9%
500,000 NR/Aa2 Colorado Housing Finance Authority,
Series A-3, 7.0%, 11/1/16 $ 552,700
625,000 NR/Aa2 Colorado Housing Finance Authority,
Series C-2, 7.45%, 6/1/17+ 664,031
3,060,000 NR/Aa2 Colorado Housing Finance Authority,
Series A-1, 7.4%, 11/1/27 3,418,938
1,500,000 NR/Aa2 Colorado Housing Finance Authority,
Series B-2, 7.45%, 11/1/27 1,667,865
500,000 NR/Aa2 Colorado Housing Finance Authority,
Series A-3, 7.55%, 11/1/27 559,415
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Colorado - (continued)
$ 1,000,000 AAA/Aaa Denver Colorado City & County Airport
Revenue, 5.7%, 11/15/25 $ 1,016,560
1,000,000 AAA/Aaa Denver Colorado City & County General
Obligation, 5.0%, 8/1/07 1,014,570
3,500,000 AAA/Aaa Denver Colorado City & County School
District No. 1, 5.25%, 12/1/17 3,463,180
3,575,000 AAA/Aaa Douglas County School District Region 1,
7.0%, 12/15/13 4,243,418
------------
$ 16,600,677
------------
Connecticut - 1.3%
1,000,000 AA/Aa3 Connecticut State General Obligation,
6.0%, 10/1/04 $ 1,075,690
3,200,000 AA/Aa3 Connecticut State General Obligation,
6.0%, 3/15/12 3,485,440
1,000,000 AAA/Aaa Connecticut State Special Tax Obligation,
5.25%, 10/1/09 1,029,490
------------
$ 5,590,620
------------
Delaware - 0.6%
1,000,000 AA/A1 Delaware Transportation Authority System
Revenue, 5.2%, 7/1/01 $ 1,020,940
1,515,000 NR/Aa3 State of Delaware Housing Authority
Revenue, 6.45%, 7/1/13+ 1,595,022
------------
$ 2,615,962
------------
District of Columbia - 1.6%
6,550,000 AAA/Aaa District of Columbia Water & Sewer
Authority, 5.5%, 10/1/23 $ 6,637,377
------------
Florida - 2.7%
1,275,000 A/NR Clearwater Housing Authority,
5.4%, 5/1/13 $ 1,293,551
1,000,000 AA/Aa3 Gainesville Florida Utilities Revenue,
5.75%, 10/1/06 1,068,250
4,370,000 AAA/Aaa Hillsborough County Revenue,
5.5%, 7/1/14 4,510,015
770,000 NR/Aaa Manatee County Housing Revenue,
7.2%, 5/1/28 860,999
1,500,000 NR/Aaa Martin County Florida Utilities Revenue,
5.0%, 10/1/18 1,442,490
1,025,000 AAA/Aaa Northern Palm Beach, 4.8%, 8/1/12 993,953
1,250,000 AAA/Aaa Northern Palm Beach, 4.9%, 8/1/13 1,218,912
------------
$ 11,388,170
------------
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Georgia - 0.9%
$ 1,000,000 AA/Aa3 Clayton County Water & Sewer Authority
Revenue, 5.0%, 5/1/12 $ 992,740
1,000,000 AA/Aa3 Clayton County Water & Sewer Authority
Revenue, 5.1%, 5/1/14 987,820
1,000,000 AA/AAa1 Georgia Private Colleges & Universities
Revenue, 5.5%, 11/1/05 1,048,350
1,000,000 AAA/Aaa Georgia State Tollway Authority Revenue,
5.0%, 7/1/10 1,003,360
------------
$ 4,032,270
------------
Idaho - 0.2%
750,000 AAA/Aaa ADA & Canyon Counties Idaho Joint School
District #2, 4.75%, 7/30/15 $ 708,023
------------
Illinois - 10.4%
5,000,000 AAA/Aaa Chicago Board of Education, 5.75%, 12/1/27 $ 5,089,950
1,750,000 NR/Aaa Chicago Family Mortgage, 6.45%, 9/1/29 1,890,613
1,500,000 AAA/Aaa Chicago Lakefront Millennium Parking
Facilities, 5.125%, 1/1/28 1,413,345
3,830,000 AAA/Aaa Chicago Illinois Board of Education School
Reform Board, 5.25%, 12/1/17 3,798,594
1,500,000 AAA/NR Chicago Illinois Single Family Mortgage,
6.3%, 9/1/29 1,609,080
1,000,000 AA/Aa2 Illinois Educational Facilities Authority,
Northwestern University Revenue,
5.5%, 12/1/13 1,027,140
1,145,000 A+/A1 Illinois Housing Development Authority
Revenue Multi-Family Housing, 7.0%,
Prerefunded, 7/1/21 * 1,394,049
4,015,000 A+/Aaa Illinois Metropolitan Pier & Exposition
Authority State Tax Revenue,
6.5%, 6/15/27+ 4,391,888
5,000,000 AAA/Aaa Illinois State General Obligation,
5.75%, 5/1/21 5,089,650
1,000,000 AAA/Aaa Illinois State Sales Tax Revenue,
5.25%, 6/15/10 1,013,290
8,355,000 AA-/A1 Metropolitan Pier & Exposition Authority
Dedicated State Tax Revenue,
8.5%, 6/15/06 10,077,300
7,185,000 AA/Aa2 Will County, Illinois Environmental
Revenue, 6.4%, 4/1/26 7,728,976
------------
$ 44,523,875
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Indiana - 4.6%
$ 1,000,000 AAA/Aaa Goshen Multi-School Building Corp.,
5.6%, Prerefunded, 7/15/07** $ 1,022,600
750,000 AAA/NR Indiana Bond Bank State Revolving
Fund, 6.75%, 2/1/17 826,943
3,500,000 AA/Aa3 Indiana Health Facilities Authority,
5.5%, 2/15/16 3,458,490
995,000 NR/Aaa Indiana State Housing Finance Authority,
Single Family Mortgage Revenue,
5.95%, 7/1/13 995,070
1,000,000 AAA/Aaa Indiana University Revenue,
5.8%, 11/15/10 1,063,340
1,400,000 AA/NR Indianapolis Local Public Improvement
Board Revenue, 6.75%, 2/1/14 1,596,672
1,000,000 A+/A Lawrence Township Metropolitan School
District Revenue, 6.75%, 7/5/13 1,144,140
2,300,000 A/NR Mishawaka School District,
5.625%, 1/15/23 2,300,828
3,200,000 AA-/AA2 Petersburg Indiana Pollution and Control
Revenue, 5.4%, 8/1/17 3,207,168
1,000,000 AA/Aa2 Purdue University Revenue,
5.75%, 7/1/04 1,048,600
2,740,000 AAA/Aaa Sarah Scott Middle School Revenue,
5.75%, 1/15/19 2,802,499
------------
$ 19,466,350
------------
Iowa - 0.2%
1,000,000 AAA/Aaa Iowa Finance Authority Revenue
Correctional Facility Program,
5.55%, 6/15/10 $ 1,039,700
------------
Kansas - 1.1%
1,500,000 AA+/Aa2 Kansas State Department of Transportation
Highway Revenue, 6.125%, 9/1/09 $ 1,641,885
1,600,000 AA-/A Kansas State Development Financial
Authority Revocable, 4.75%, 4/1/18 1,439,776
1,045,000 AAA/Aaa Sedgwick County Kansas School
District #267, 5.25%, 11/1/12 1,057,937
500,000 AAA/NR Wellington Electric, 5.2%, 5/1/23 487,300
------------
$ 4,626,898
------------
Kentucky - 1.0%
1,095,000 AAA/Aaa Kenton County Water District #1,
5.8%, 2/1/15 $ 1,153,210
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Kentucky - (continued)
$ 2,010,000 AAA/Aaa Kenton County Water District #1,
5.875%, 2/1/19 $ 2,088,129
1,000,000 AAA/Aaa Kentucky State Turnpike Authority,
Economic Development Revenue,
5.25%, 7/1/05 1,035,880
------------
$ 4,277,219
------------
Louisiana - 0.8%
3,000,000 AAA/Aaa New Orleans Home Mortgage Authority,
6.25%, 1/15/11+ $ 3,274,740
------------
Maine - 0.2%
1,000,000 AAA/Aaa Maine State Turnpike Authority
Revenue, 6.0%, 7/1/05 $ 1,070,550
------------
Maryland - 0.5%
1,060,000 AAA/Aaa Baltimore City Parking System Revenue,
5.25%, 7/1/17 $ 1,062,449
1,200,000 AA+/Aa3 University of Maryland System Auxiliary
Facility and Tuition Revenue, 5.4%, 4/1/06 1,251,420
------------
$ 2,313,869
------------
Massachusetts - 4.9%
1,165,000 AAA/Aaa Massachusetts Housing Finance Agency,
5.95%, 7/1/18+ $ 1,212,136
3,000,000 AAA/Aaa Massachusetts State General Obligation,
6.5%, 11/1/07+ 3,311,250
2,000,000 AAA/Aaa Massachusetts State General Obligation,
5.75%, 8/1/10 2,126,380
3,390,000 NR/Aaa Massachusetts State Turnpike Authority
Revenue, 5.0%, 1/1/20+ 3,288,503
1,000,000 AAA/Aaa Massachusetts Water Pollution
Abatement Trust Sewer Revenue,
6.0%, 2/1/07 1,074,840
1,750,000 AAA/Aaa Plymouth County Massachusetts
Correctional Facility, 5.0%, 4/1/22 1,643,530
2,000,000 AAA/Aaa South Essex Massachusetts Sewer
District, Series B, 5.25%, 6/15/18 1,966,960
1,325,000 AAA/Aaa Worcester General Obligation,
6.15%, 5/1/09+ 1,453,591
1,440,000 AAA/Aaa Worcester General Obligation,
6.2%, 5/1/10+ 1,583,410
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Massachusetts - (continued)
$ 1,460,000 AAA/Aaa Worcester General Obligation,
6.25%, 5/1/11+ $ 1,609,110
1,450,000 AAA/Aaa Worcester General Obligation,
6.3%, 5/1/12+ 1,601,757
------------
$ 20,871,467
------------
Michigan - 3.4%
1,000,000 AAA/Aaa Detroit Michigan Water Supply Revenue,
5.75%, 7/1/11 $ 1,054,140
1,250,000 AA/Aa2 Forest Hills Michigan Public Schools,
5.0%, 5/1/13 1,230,313
1,455,000 AAA/Aaa Grand Rapids Community College,
5.375%, 5/1/16 1,457,415
2,175,000 AAA/Aaa Holly Michigan Area School District,
5.625%, 5/1/15+ 2,309,089
2,500,000 AA+/Aa1 Michigan Municipal Bond Authority,
5.625%, 10/1/19 2,571,950
5,715,000 AAA/Aaa Walled Lake School District General
Obligation, Series I, 5.5%, 5/1/22 5,714,543
------------
$ 14,337,450
------------
Minnesota - 1.4%
750,000 NR/A2 Minnesota State Higher Education Facilities
Authority Revenue, 5.625%, 10/1/16 $ 765,353
1,805,000 AA+/Aa2 Minnesota State Housing Finance
Agency, Series H, 6.55%, 7/1/11+ 1,906,441
990,000 AA/Aa2 Minnesota State Housing Finance
Agency, 6.9%, 8/1/12 1,046,034
1,000,000 AA/Aa2 Minnesota University, 5.75%, 7/1/10 1,058,540
1,000,000 AA/Aa2 Minnesota University, 5.75%, 7/1/18 1,058,420
------------
$ 5,834,788
------------
Missouri - 3.2%
1,000,000 AAA/Aaa Bi State Development Agency Missouri &
Illinois Metropolitan Districts,
5.0%, 7/1/18 $ 949,420
1,000,000 AAA/Aaa Kansas City, Missouri Water Revenue,
5.0%, 12/1/08 1,007,430
1,010,000 AA/NR Lexington School District Revenue,
5.55%, 3/1/17 1,031,402
2,100,000 AAA/Aaa Missouri Environmental Improvement
and Energy Resources Authority,
6.05%, 7/1/16 2,206,155
980,000 AAA/NR Missouri Housing Development, Series B-2,
6.4%, 3/1/29+ 1,057,018
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Missouri - (continued)
$ 5,000,000 NR/Aaa Northwest Missouri University,
4.7%, 6/1/18 $ 4,542,900
2,500,000 AAA/Aaa Poplar Bluff School District,
5.8%, 3/1/11 2,610,500
------------
$ 13,404,825
------------
Montana - 0.7%
1,000,000 A2/NR Montana State Higher Education Assistance
Corp. Student Loan Revenue,
5.5%, 12/1/31 $ 974,860
2,200,000 AAA/Aaa University of Montana Revenue, Series C,
5.375%, 11/15/21 2,189,924
------------
$ 3,164,784
------------
Nebraska - 4.5%
2,350,000 AAA/NR Douglas County Hospital Authority
Revenue, 5.1%, 9/1/11 $ 2,328,827
750,000 AAA/NR Douglas County Hospital Authority
Revenue, 5.125%, 9/1/17 716,228
5,000,000 NR/A Grand Island Sanitation Sewer
Revenue, 6.0%, 4/1/14 5,207,800
7,500,000 A/A Hastings Electric System Revenue,
6.3%, 1/1/19 7,943,400
1,325,000 AAA/Aaa Municipal Energy Agency of Nebraska
Revenue, 6.0%, 4/1/08 1,414,014
1,460,000 AA/Aa1 Omaha Tax Allocation, 5.25%, 11/15/17 1,432,916
------------
$ 19,043,185
------------
Nevada - 0.0%
45,000 AA/Aa2 Nevada Housing Division Single Family
Program Revenue, 8.0%, 4/1/09 $ 45,158
------------
New Hampshire - 0.2%
1,000,000 AAA/NR New Hampshire Higher Educational &
Health Facilities, 5.0%, 6/1/28 $ 936,200
------------
New Jersey - 0.3%
1,000,000 AAA/Aaa New Jersey Sales Tax General Obligation,
5.8%, 2/15/07 $ 1,068,430
------------
New Mexico - 2.5%
2,600,000 AA/Aa3 Bernalillo County Gross Receipts
Tax Revenue, 5.75%, 4/1/21+ $ 2,754,648
2,000,000 NR/Aaa Dona Ana County Revenue, 5.5%, 6/1/14 2,061,640
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
New Mexico - (continued)
$ 1,510,000 AA/Aa1 New Mexico Mortgage Finance Authority,
6.85%, 7/1/12+ $ 1,585,802
1,000,000 AA/Aa3 Rio Rancho New Mexico Water &
Wastewater System Revenue,
4.75%, 5/15/16 925,420
2,000,000 AAA/Aaa Santa Fe Gross Receipts, 5.75%, 6/1/21 2,046,080
1,200,000 AAA/Aaa University of New Mexico Revenue,
6.55%, 8/15/25 1,332,252
------------
$ 10,705,842
------------
New York - 0.7%
1,000,000 AAA/Aaa Long Island Power Authority New York
Electric System Revenue, 5.5%, 12/1/10 $ 1,032,510
2,350,000 AA/Aa New York City Transitional Financial
Authority Revenue, 4.75%, 11/15/18 2,146,631
------------
$ 3,179,141
------------
North Carolina - 1.2%
1,510,000 AAA/Aaa Appalachian State University Revenue,
5.0%, 5/15/12 $ 1,497,195
1,250,000 AA/Aa1 Charlotte Law Enforcement Project,
6.1%, 12/1/15 1,337,338
970,000 AA/Aa3 Charlotte-Mecklenburg Hospital Authority
Revenue, 6.25%, 1/1/20 1,019,557
1,000,000 AAA/Aaa Franklin County Certificate Participation,
6.625%, 6/1/14 1,108,860
------------
$ 4,962,950
------------
North Dakota - 1.1%
2,000,000 AAA/Aaa Grand Forks Health Care Systems,
5.6%, 8/15/17 $ 2,014,600
1,660,000 NR/Aa3 North Dakota State Housing Finance
Agency Revenue, 5.8%, 7/1/18+ 1,707,327
1,000,000 AAA/Aaa State Water Community Revenue,
5.75%, 7/1/27 1,016,650
------------
$ 4,738,577
------------
Ohio - 0.9%
1,050,000 AAA/Aaa Bedford, Ohio County School District,
6.25%, 12/1/13 $ 1,121,043
500,000 AA-/Aa3 Ohio State Building Authority Revenue,
6.0%, 10/1/08 538,935
1,000,000 AAA/Aaa Ohio State Turnpike Commision Revenue,
5.5%, 2/15/16 1,031,930
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Ohio - (continued)
$ 1,000,000 AAA/Aaa Ohio State Water Development Authority
Revenue, 6.0%, 12/1/06 $ 1,078,650
------------
$ 3,770,558
------------
Oklahoma - 3.5%
1,500,000 A-/A2 Grand River Dam Authority Revenue,
5.75%, 6/1/06 $ 1,583,895
2,520,000 AAA/Aaa Grand River Dam Authority Revenue,
6.25%, 6/1/11 2,783,466
4,700,000 AAA/Aaa McGee Creek Authority Water Revenue,
6.0%, 1/1/23 5,066,788
5,300,000 A+/A1 Oklahoma State Turnpike Authority Revenue,
6.125%, 1/1/20 5,618,265
------------
$ 15,052,414
------------
Oregon - 0.7%
2,860,000 A/Aaa Washington County Unified Sewer Agency
Revenue, 6.2%, Prerefunded, 10/1/04* $ 3,093,290
------------
Pennsylvania - 4.7%
2,750,000 AAA/Aaa Allegheny County Sanitary Authority
Revenue, 5.375%, 12/1/24 $ 2,706,798
4,190,000 AAA/NR Butler Area School, 4.75%, 10/1/22 3,785,204
2,375,000 AAA/Aaa Cambria County General Obligation,
5.5%, 8/15/16 2,398,703
1,300,000 AAA/Aaa Lycoming County General Obligation,
5.8%, 11/15/22+ 1,394,263
1,000,000 AAA/Aaa New Kensington School District,
5.5%, 5/15/17+ 1,049,410
1,300,000 AAA/Aaa Pennsylvania State Higher Education,
4.5%, 7/15/16 1,164,007
1,650,000 AAA/Aaa Tyrone Pennsylvania Area School District,
4.85%, 9/15/14 1,569,035
2,000,000 A/NR Vancouver Washington Housing Authority
Revenue, 5.5%, 3/1/28 1,979,900
2,095,000 AAA/Aaa Wallenpaupack Area School District,
5.25%, 11/15/13 2,166,983
2,000,000 AAA/NR Wallingford-Swarthmore General Obligation,
5.25%, 5/15/17 1,974,780
------------
$ 20,189,083
------------
Rhode Island - 0.2%
890,000 AA+/Aa Rhode Island Housing & Mortgage
Finance, 6.75%, 10/1/17 $ 939,119
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
South Carolina - 4.6%
$ 1,790,000 AAA/Aaa Beaufort Water & Sewer Revenue,
6.5%, 3/1/13 $ 1,906,547
1,000,000 AA/Aa3 Columbia Waterworks & Sewer System
Revenue, 5.5%, 2/1/09 1,043,080
2,400,000 A/A1 Fairfield County Pollution Control,
6.5%, 9/1/14 2,579,640
1,000,000 AA/Aa1 Greenville Waterworks Revenue,
6.0%, 2/1/08 1,078,470
1,250,000 AAA/Aaa South Carolina Grand Strand Water &
Sewer Authority, 6.375%, 6/1/12 1,400,663
10,000,000 AAA/Aaa South Carolina Public Service Authority
Revenue, 6.625%, Prerefunded, 7/1/02* 10,848,100
750,000 NR/Aa2 South Carolina State Housing Finance
& Development Authority Revenue,
6.2%, 7/1/09 781,057
------------
$ 19,637,557
------------
South Dakota - 0.6%
1,235,000 NR/Aa3 South Dakota Conservancy District
Revenue, 5.625%, 8/1/17 $ 1,248,918
1,255,000 AAA/Aaa South Dakota State Lease Revenue,
8.0%, 9/1/05 1,464,949
------------
$ 2,713,867
------------
Tennessee - 1.4%
3,075,000 AA/NR Chattanooga General Obligation,
5.25%, 9/1/17 $ 3,071,187
1,000,000 AAA/Aaa Metropolitan Government Nashville
& Davidson County Sports Authority,
5.75%, 7/1/17 1,036,230
1,565,000 AAA/Aaa Metropolitan Government Nashville
& Davidson County Water & Sewer
Authority, 6.0%, 1/1/07 1,679,104
------------
$ 5,786,521
------------
Texas - 9.7%
4,000,000 AAA/Aaa Brazos River Authority Texas Revocable,
5.05%, 11/1/18 $ 3,796,160
750,000 AAA/Aaa Caroll Texas Independent School District,
6.75%, 8/15/21 885,173
850,000 AAA/Aaa Caroll Texas Independent School District,
6.75%, 8/15/22 1,005,491
2,145,000 AAA/Aaa Castleberry Independent School District
General Obligation, 5.7%, 8/15/21 2,173,636
</TABLE>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Texas - (continued)
$ 2,310,000 AAA/Aaa Clear Creek Independent School District
General Obligation, 0%, 2/1/10 $ 1,333,240
1,800,000 A/NR Collin County Texas Housing Financial
Corporation, 5.125%, 6/1/18 1,671,192
1,305,000 NR/Aaa Comal Independent School District General
Obligation, 7.0%, 2/1/07 1,456,824
1,720,000 AAA/Aaa Grapevine-Colleyville Independent School
District, 0%, 8/15/12 855,769
2,050,000 NR/Aaa Keller Independent School District General
Obligation, 0%, 8/15/10 1,150,542
2,000,000 NR/Aaa Kingsbridge Utility Systems Revenue,
5.375%, 3/1/15 1,980,020
1,250,000 AAA/Aaa Lamar Texas Conservation Independent
School District, 4.75%, 2/15/20 1,130,850
1,100,000 AAA/Aaa North Forest School, 6.0%, 8/15/11 1,184,501
2,350,000 AAA/Aaa Nueces River Authority Water Supply
Revenue, 5.5%, 3/1/27 2,346,474
3,875,000 AAA/Aaa Pflugerville Texas General Obligation,
5.625%, 8/01/18 3,960,018
1,000,000 AA/Aa2 Port Houston Authority General Obligation,
5.0%, 10/01/05 1,019,820
1,595,000 AAA/Aaa Port Lavaca Utility Systems Revenue,
5.75%, 2/15/22 1,626,612
3,500,000 AAA/Aaa San Antonio Texas Water Revenue,
5.6%, 5/15/21 3,536,295
3,000,000 AAA/Aaa Texas Public Finance Authority Building
Revenue, 0%, 2/1/07 2,061,090
5,500,000 AAA/Aaa Texas Public Finance Authority Building
Revenue, 0%, 2/1/08 3,566,254
2,750,000 AAA/Aaa Texas Public Finance Authority Building
Revenue, 0%, 2/1/10 1,587,190
1,000,000 AAA/Aaa Texas Dallas-Fort Worth Regional Airport
Revenue, 5.5%, 11/1/04 1,045,460
1,500,000 AA/Aa2 Texas State General Obligation,
5.8%, 10/01/04 1,590,210
250,000 AAA/Aaa University of Texas Permanent University
Fund, 8.0%, 7/01/04+ 288,808
------------
$ 41,251,629
------------
Utah - 2.9%
2,500,000 AAA/Aaa St. George Water Revenue, 5.85%, 6/1/20 $ 2,565,100
145,000 A/NR Utah Housing Finance Agency Revenue,
5.95%, 7/1/11+ 146,343
</TABLE>
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Utah - (continued)
$ 1,410,000 AAA/Aaa Utah State University Revenue,
5.0%, 12/01/09 $ 1,400,906
1,630,000 AAA/Aaa Utah State University Revenue,
4.7%, 12/01/12 1,525,550
1,615,000 AAA/Aaa Utah State University Revenue,
4.8%, 12/01/13 1,518,407
3,480,000 AA/NR Weber County Municipal Building
Authority Revenue, 5.75%, 12/15/19 3,517,687
455,000 AAA/Aaa White County General Obligation,
5.9%, 2/1/22 467,845
1,250,000 NR/Aaa White County Water Revenue,
5.85%, 2/1/26 1,279,875
------------
$ 12,421,713
------------
Virginia - 5.8%
1,000,000 NR/Aa1 Arlington County Industrial Development
Revenue, 5.45%, 7/1/27 $ 1,000,760
2,100,000 AAA/AAA Augusta County Virginia Industrial
Development Authority Hospital,
5.25%, 9/1/11 2,096,094
2,000,000 AAA/Aaa Chesapeake Bay Bridge & Tunnel
Commision Revenue, 5.5%, 7/01/25 2,047,540
1,750,000 A+/A1 Chesapeake Water & Sewer System
Revenue, 6.5%, 7/1/12 1,863,138
3,685,000 A+/A1 Chesapeake Water & Sewer System
Revenue, 6.4%, 7/1/17 3,907,721
2,000,000 AAA/Aaa Metro Expressway Authority,
5.25%, 7/15/17 1,999,940
3,000,000 AAA/Aaa Metro Expressway Authority,
5.25%, 7/15/22 2,968,290
2,500,000 AA/Aa2 Norfolk Virginia Industrial Development
Revenue, 5.625%, 9/15/17 2,536,550
6,525,000 AAA/Aaa South East Public Service Authority,
5.0%, 7/1/15 6,356,720
------------
$ 24,776,753
------------
Washington - 3.4%
2,820,000 AAA/Aaa Clark County Public Utility District
#1 Water Revenue, 5.5%, 1/1/15 $ 2,844,110
1,655,000 AA+/AA1 King County General Obligation,
6.625%, 12/1/15 1,835,544
1,000,000 NR/Aaa King & Snohomish Counties, Washington
School District, 5.75%, 12/1/14 1,037,370
1,145,000 AAA/Aaa Northshore Washington School District
General Obligation, 5.0%, 6/15/13 1,114,692
</TABLE>
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Washington - (continued)
$ 3,500,000 A+/Aaa Snohomish County Public Utility District
Revenue, 6.8%, 1/1/20+ $ 4,065,880
2,250,000 AAA/Aaa Snohomish County School District
General Obligation, 5.7%, 12/1/11 2,379,352
1,000,000 A/NR Washington State General Obligation,
6.0%, 5/01/02 1,045,410
------------
$ 14,322,358
------------
West Virginia - 1.0%
3,000,000 AAA/Aaa West Virginia State Building Commission,
5.375%, 7/1/21 $ 3,001,920
1,000,000 A+/Aa1 West Virginia State Housing Development,
7.05%, 11/1/24 1,061,390
------------
$ 4,063,310
------------
Wisconsin - 0.9%
1,430,000 AAA/Aaa Adams-Friendship School District,
6.5%, 4/1/16 $ 1,623,980
1,000,000 AAA/Aaa Southeast Wisconsin Professional
Baseball Park District Sales Tax Revenue,
5.5%, 12/15/15 1,027,300
1,000,000 AA/Aa2 Wisconsin State General Obligation,
5.3%, 11/1/12 1,019,110
------------
$ 3,670,390
------------
Wyoming - 0.6%
2,590,000 AA/NR Wyoming Cheyenne General Obligation,
5.25%, 12/1/11 $ 2,622,919
------------
TOTAL INVESTMENT IN TAX-EXEMPT OBLIGATIONS
(Cost $411,938,168) (a) $422,208,050
------------
Shares
TAX-EXEMPT MONEY MARKET MUTUAL FUND - 0.9%
3,932,687 Provident Institutional Municipal Fund $ 3,932,687
------------
TOTAL TAX-EXEMPT MONEY MARKET MUTUAL FUND
(Cost $3,932,687) $ 3,932,687
------------
TOTAL INVESTMENT IN SECURITIES - 100% $426,140,737
============
(Cost $415,870,855) (b)
</TABLE>
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (continued)
- --------------------------------------------------------------------------------
* Prerefunded bonds have been collaterized by U.S. Treasury securities which
are held in escrow and used to pay principal and interest on the tax exempt
issue and to retire the bonds in full at the earliest refunding date.
** A portion of this bond is partially prerefunded.
NR Not rated.
+ Escrowed to maturity in U.S. government securities.
+ A portion of this bond was called on July 1, 1999.
(a) The concentration of investments by type of obligation/market sector is as
follows:
<TABLE>
<S> <C>
General Obligation 23.4%
Escrowed in U.S. Government Securities 13.5
Revenue Bonds:
Education Revenue 7.5
Water & Sewer Revenue 16.3
Hospital Revenue 2.8
Housing Revenue 8.5
Pollution Control Revenue 3.0
Power Revenue 5.5
Transportation Revenue 5.3
Other 14.2
</TABLE>
(b) At June 30, 1999, the net unrealized gain on investments based on cost for
federal income tax purposes of $415,870,855 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $15,162,123
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (4,892,241)
-----------
Net unrealized gain $10,269,882
===========
</TABLE>
Purchase and sales of securities (excluding temporary cash investments) for the
six months ended June 30, 1999 aggregated $52,045,533 and $66,522,728,
respectively.
22
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
BALANCE SHEET 6/30/99
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $3,932,687) (cost $415,870,855) $426,140,737
Receivables -
Fund shares sold 373,086
Interest 6,902,965
Other 3,503
------------
Total assets $433,420,291
------------
LIABILITIES:
Payables -
Fund shares repurchased $ 263,814
Dividends 449,243
Due to affiliates 359,801
Accrued expenses 54,545
------------
Total liabilities $ 1,127,403
------------
NET ASSETS:
Paid-in capital $420,598,127
Distributions in excess of net investment income (15,578)
Accumulated undistributed net realized gain on investments 1,440,457
Net unrealized gain on investments 10,269,882
------------
Total net assets $432,292,888
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $413,081,293/35,877,459 shares) $ 11.51
============
Class B (based on $14,157,667/1,238,023 shares) $ 11.44
============
Class C (based on $5,053,928/441,432 shares) $ 11.45
============
MAXIMUM OFFERING PRICE:
Class A $ 12.05
============
</TABLE>
The accompanying notes are an integral part of these financial statements. 23
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended 6/30/99
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 11,018,691
------------
EXPENSES:
Management fees $ 1,004,458
Transfer agent fees
Class A 224,102
Class B 8,431
Class C 2,137
Distribution fees
Class A 493,900
Class B 62,049
Class C 22,324
Administrative fees 60,706
Custodian fees 29,460
Registration fees 24,720
Professional fees 42,972
Printing 15,193
Fees and expenses of nonaffiliated trustees 14,817
Miscellaneous 9,813
-------
Total expenses $ 2,015,082
Less fees paid indirectly (34,106)
------------
Net expenses $ 1,980,976
------------
Net investment income $ 9,037,715
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 623,793
Change in net unrealized gain on investments (17,262,876)
------------
Net loss on investments $(16,639,083)
------------
Net decrease in net assets resulting from operations $ (7,601,368)
============
</TABLE>
24 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 6/30/99 and the Year Ended 12/31/98
<TABLE>
<CAPTION>
Six Months Ended Year Ended
FROM OPERATIONS: 6/30/99 12/31/98
<S> <C> <C>
Net investment income $ 9,037,715 $ 18,401,335
Net realized gain on investments 623,793 12,007,205
Change in net unrealized gain on investments (17,262,876) (5,848,257)
------------ ------------
Net increase (decrease) in net assets resulting
from operations $ (7,601,368) $ 24,560,283
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A ($0.26 and $0.55 per share, respectively) $ (8,789,476) $(17,980,683)
Class B ($0.21 and $0.46 per share, respectively) (221,333) (289,800)
Class C ($0.21 and $0.46 per share, respectively) (78,404) (94,932)
Net realized gain
Class A ($0.00 and $0.34 per share, respectively) -- (10,813,748)
Class B ($0.00 and $0.34 per share, respectively) -- (287,687)
Class C ($0.00 and $0.34 per share, respectively) -- (86,889)
------------ ------------
Total distributions to shareholders $ (9,089,213) $(29,553,739)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 76,617,790 $ 36,186,954
Reinvestment of distributions 6,448,713 21,872,591
Cost of shares repurchased (41,525,353) (66,710,982)
------------ ------------
Net increase (decrease) in net assets resulting from
fund share transactions $ 41,541,150 $ (8,651,437)
------------ ------------
Net increase (decrease) in net assets $ 24,850,569 $(13,644,893)
NET ASSETS:
Beginning of period 407,442,319 421,087,212
------------ ------------
End of period (including accumulated undistributed/
(distributions in excess of) net investment income of
$(15,578) and $35,920, respectively) $432,292,888 $407,442,319
============ ============
<CAPTION>
CLASS A '99 Shares '99 Amount '98 Shares '98 Amount
<S> <C> <C> <C> <C>
Shares sold 5,660,483 $ 65,435,468 2,187,317 $ 26,771,233
Reinvestment of distributions 530,189 6,286,528 1,762,278 21,391,471
Less shares repurchased (3,043,661) (36,068,230) (5,221,565) (63,854,984)
---------- ------------ ---------- ------------
Net increase (decrease) 3,147,011 $ 35,653,766 (1,271,970) (15,692,280)
========== ============ ========== ============
CLASS B
Shares sold 476,637 $ 5,579,979 520,467 $ 6,346,574
Reinvestment of distributions 11,826 139,070 34,208 411,417
Less shares repurchased (154,542) (1,824,561) (112,747) (1,381,673)
---------- ------------ ---------- ------------
Net increase 333,921 $ 3,894,488 441,928 $ 5,376,318
========== ============ ========== ============
CLASS C
Shares sold 478,604 $ 5,602,343 252,146 $ 3,069,147
Reinvestment of distributions 1,963 23,115 5,781 69,703
Less shares repurchased (312,262) (3,632,562) (120,497) (1,474,325)
---------- ------------ ---------- ------------
Net increase 168,305 $ 1,992,896 137,430 $ 1,664,525
========== ============ ========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements. 25
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
CLASS A 6/30/99 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.02 $ 12.17 $ 11.96 $ 12.36 $ 11.24 $ 12.68
-------- -------- -------- -------- ------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.26 $ 0.55 $ 0.59 $ 0.62 $ 0.64 $ 0.64
Net realized and unrealized gain (loss) on
investments (0.51) 0.19 0.45 (0.21) 1.21 (1.44)
-------- -------- -------- -------- ------- --------
Net increase (decrease) from investment
operations $ (0.25) $ 0.74 $ 1.04 $ 0.41 $ 1.85 $ (0.80)
Distributions to shareholders:
Net investment income (0.26) (0.55) (0.59) (0.62) (0.64) (0.64)
Net realized gain -- (0.34) (0.24) (0.19) (0.09) --
-------- -------- -------- -------- ------- --------
Net increase (decrease) in net asset value $ (0.51) $ (0.15) $ 0.21 $ (0.40) $ 1.12 $ (1.44)
-------- -------- -------- -------- ------- --------
Net asset value, end of period $ 11.51 $ 12.02 $ 12.17 $ 11.96 $ 12.36 $ 11.24
======== ======== ======== ======== ======= ========
Total return* (2.16)% 6.20% 8.94% 3.57% 16.84% (6.38)%
Ratio of net expenses to average net assets 0.92%**+ 0.93%+ 0.93%+ 0.92%+ 0.91%+ 0.91%
Ratio of net investment income to average net assets 4.29%**+ 4.48%+ 4.87%+ 5.16%+ 5.37%+ 5.37%
Portfolio turnover rate 25%** 52% 22% 44% 35% 55%
Net assets, end of period (in thousands) $413,081 $393,390 $413,856 $441,733 $476,584 $452,661
Ratios assuming reduction for fees paid indirectly:
Net expenses 0.91%** 0.92% 0.91% 0.90% 0.89% --
Net investment income 4.30%** 4.49% 4.89% 5.18% 5.39% --
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
26 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year Year 4/28/95
Ended Ended Ended Ended to
CLASS B 6/30/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.93 $ 12.09 $11.88 $12.31 $11.81
------- ------- ------ ------ ------
Increase (decrease) from investment operations:
Net investment income $ 0.21 $ 0.46 $ 0.50 $ 0.53 $ 0.35
Net realized and unrealized gain
(loss) on investments $ (0.49) 0.18 0.44 (0.22) 0.58
------- ------- ------ ------ ------
Net increase (decrease) from investment
operations $ (0.28) $ 0.64 $ 0.94 $ 0.31 $ 0.93
Distributions to shareholders:
Net investment income (0.21) (0.46) (0.49) (0.53) (0.34)
In excess of net investment income -- -- -- (0.02) --
Net realized gain -- (0.34) (0.24) (0.19) (0.09)
------- ------- ------ ------ ------
Net increase (decrease) in net asset value $ (0.49) $ (0.16) $ 0.21 $(0.43) $ 0.50
------- ------- ------ ------ ------
Net asset value, end of period $ 11.44 $ 11.93 $12.09 $11.88 $12.31
======= ======= ====== ====== ======
Total return* (2.41)% 5.43% 8.16% 2.66% 7.94%
Ratio of net expenses to average net assets 1.69%**+ 1.64%+ 1.68%+ 1.67%+ 1.72%**+
Ratio of net investment income to
average net assets 3.52%**+ 3.73%+ 4.12%+ 4.38%+ 4.38%**+
Portfolio turnover rate 25%** 52% 22% 44% 35%
Net assets, end of period (in thousands) $14,158 $10,790 $5,588 $4,792 $2,069
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.67%** 1.63% 1.66% 1.65% 1.65%**
Net investment income 3.54%** 3.74% 4.14% 4.40% 4.45%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 27
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year 1/31/96
Ended Ended Ended to
CLASS C 6/30/99 12/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.94 $12.11 $11.88 $12.32
------ ------ ------ ------
Increase (decrease) from investment operations:
Net investment income $ 0.21 $ 0.46 $ 0.49 $ 0.49
Net realized and unrealized gain (loss) on
investments (0.49) 0.17 0.47 (0.24)
------ ------ ------ ------
Net increase (decrease) from investment
operations $(0.28) $ 0.63 $ 0.96 $ 0.25
Distributions to shareholders:
Net investment income (0.21) (0.46) (0.49) (0.49)
In excess of net investment income -- -- -- (0.01)
Net realized gain -- (0.34) (0.24) (0.19)
------ ------ ------ ------
Net increase (decrease) in net asset value $(0.49) $(0.17) $ 0.23 $(0.44)
------ ------ ------ ------
Net asset value, end of period $11.45 $11.94 $12.11 $11.88
====== ====== ====== ======
Total return* (2.41)% 5.33% 8.32% 2.19%
Ratio of net expenses to average net assets 1.64%**+ 1.63%+ 1.70%+ 1.71%**+
Ratio of net investment income to average net assets 3.51%**+ 3.72%+ 4.04%+ 4.34%**+
Portfolio turnover rate 25%** 52% 22% 44%
Net assets, end of period (in thousands) $5,054 $3,262 $1,643 $ 383
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.59%** 1.60% 1.67% 1.69%**
Net investment income 3.56%** 3.75% 4.07% 4.36%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
28 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/99
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Tax-Free Income Fund (the Fund) is a Delaware business trust registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek a high level
of income exempt from federal income tax, consistent with preservation of
capital.
The Fund offers three classes of shares - Class A, Class B and Class C shares.
The shares of Class A, Class B and Class C each represent an interest in the
same portfolio of investments of the Fund and have equal rights to voting,
redemptions, dividends and liquidations, except that each class of shares can
bear different transfer agent and distribution fees and have exclusive voting
rights with respect to the distribution plans that have been adopted by Class A,
Class B and Class C shareholders, respectively.
On March 31, 1999 (Closing Date), the Fund acquired the assets of the Pioneer
Intermediate Tax-Free Fund in exchange solely for (i) the issuance of Class A,
B, and C shares of beneficial interest of the Fund and (ii) the assumption by
the Fund of the liabilities of the Pioneer Intermediate Tax-Free Fund. Following
this transfer, the Pioneer Intermediate Tax-Free Fund was liquidated and
dissolved and Class A, B, and C shares of the Fund were distributed to the
former shareholders of the Pioneer Intermediate Tax-Free Fund.
The reorganization was accomplished by a tax-free transfer of assets whereby
each shareholder of the Pioneer Intermediate Tax-Free Fund received a number of
full and fractional shares of the Fund held as of the Closing Date. The net
assets, net asset values per share and shares outstanding as of the Closing Date
were:
<TABLE>
<CAPTION>
Intermediate
Tax-Free
Fund
(Pre-reorganization)
----------------------------------------------------
Class A Class B Class C
----------------------------------------------------
<S> <C> <C> <C>
Net Assets $54,324,957 $3,216,001 $961,794
Shares Outstanding 5,328,944 313,997 94,496
Net Asset Value Per Share 10.19 10.24 10.18
<CAPTION>
Tax-Free
Income Fund
(Pre-reorganization)
----------------------------------------------------
Class A Class B Class C
----------------------------------------------------
Net Assets $384,347,190 $11,175,662 $4,352,569
Shares Outstanding 32,272,218 944,724 367,515
Net Asset Value Per Share 11.91 11.83 11.84
</TABLE>
29
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/99 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Tax-Free
Income Fund
(Post-reorganization)
----------------------------------------------------
Class A Class B Class C
----------------------------------------------------
<S> <C> <C> <C>
Net Assets $438,672,147 $14,391,663 $5,314,363
Shares Outstanding 36,833,685 1,216,586 448,725
Net Asset Value Per Share 11.91 11.83 11.84
</TABLE>
The Fund's financial statements have been prepared in conformity with generally
accepted accounting principles that require the management of the Fund to, among
other things, make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates. The following is a summary of significant accounting policies
consistently followed by the Fund, which are in conformity with those generally
accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded on trade date. Securities are valued at
prices supplied by independent pricing services, which consider such factors
as Treasury spreads, yields, maturities and ratings, and valuations may be
supplemented by dealers and other sources, as required. Market discount and
premium are accreted or amortized daily on a straight-line basis. Original
issue discount is accreted daily into interest income on a yield-to-maturity
basis with a corresponding increase in the cost basis of the security.
Interest income is recorded on the accrual basis. Temporary cash investments
are valued at amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes. It
is the Fund's practice to first select for sale those securities that have
the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
B. Federal Income Taxes
It is the Fund'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
shareholders. Therefore, no federal income tax provision is required.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with federal income tax rules.
Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
30
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
C. Fund Shares
The Fund records sales and repurchases of its shares on trade date. Net
losses, if any, as a result of cancellations are absorbed by Pioneer Funds
Distributor, Inc. (PFD), the principal underwriter for the Fund and an
indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $24,171 in
underwriting commissions on the sale of Fund shares during the six months
ended June 30, 1999.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Shareholders of each class share all expenses and fees paid to
the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each class
and the ratable allocation of related out-of-pocket expense (see Note 3).
Income, common expenses and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to each class of shares
based on the respective percentage of adjusted net assets at the beginning of
the day.
The Fund declares as daily dividends substantially all of its net investment
income. All dividends are paid on a monthly basis. Short-term capital gain
distributions, if any, may be declared with the daily dividends.
Distributions to shareholders are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B and Class C share can bear different transfer
agent and distribution fees.
2. Management Agreement
Pioneer Investment Management, Inc. (PIM), the Fund's investment adviser,
manages the Fund's portfolio and is a wholly owned subsidiary of PGI. Management
fees are calculated daily at the annual rate of 0.50% of the Fund's average
daily net assets up to $250 million; 0.48% of the next $50 million; and 0.45% of
the excess over $300 million.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At June 30, 1999, $212,393 was payable to PIM
related to management fees, administrative and certain other services.
3. Transfer Agent
PSC, a wholly owned subsidiary of PGI, provides substantially all transfer agent
and shareholder services to the Fund at negotiated rates. Included in due to
affiliates is $52,066 in transfer agent fees payable to PSC at June 30, 1999.
31
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/99 (continued)
- --------------------------------------------------------------------------------
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the Investment
Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service
fee of up to 0.25% of the Fund's average daily net assets in reimbursement of
its actual expenditures to finance activities primarily intended to result in
the sale of Class A shares. Pursuant to the Class B Plan and the Class C Plan,
the Fund pays PFD 1.00% of the average daily net assets attributable to each
class of shares. The fee consists of a 0.25% service fee and a 0.75%
distribution fee paid as compensation for personal services and/or account
maintenance services or distribution services with regard to Class B and Class C
shares. Included in due to affiliates is $95,342 in distribution fees payable to
PFD at June 30, 1999.
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of purchase.
Class B shares that are redeemed within six years of purchase are subject to a
CDSC at declining rates beginning at 4.0%, based on the lower of cost or market
value of shares being redeemed. Redemptions of Class C shares within one year of
purchase are subject to a CDSC of 1.00%. Proceeds from the CDSCs are paid to
PFD. For the six months ended June 30, 1999, CDSCs in the amount of $24,586 were
paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the six months ended June 30, 1999,
the Fund's expenses were reduced by $34,106 under such arrangements.
6. Line of Credit Facility
The Fund, along with certain other funds in the Pioneer Family of Funds (the
Funds), collectively participate in a $50 million committed, unsecured revolving
line of credit facility. Borrowings are used solely for temporary or emergency
purposes. The Fund may borrow up to the lesser of $50 million or the limits set
by its prospectus for borrowings. Interest on collective borrowings of up to $25
million is payable at the Federal Funds Rate plus 3/8% on an annualized basis,
or at the Federal Funds Rate plus 1/2% if the borrowing exceeds $25 million at
any one time. The Funds pay an annual commitment fee for this facility. The
commitment fee is allocated among such Funds based on their respective borrowing
limits. For the six months ended June 30, 1999, the Fund had no borrowings under
this agreement.
32
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
T o t h e S h a r e o w n e r s a n d t h e B o a r d o f T r u s t e e s
of P i o n e e r T a x - F r e e I n c o m e F u n d :
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer Tax-Free Income Fund, as of June 30, 1999, and the
related statement of operations, the statements of changes in net assets and the
financial highlights for the periods presented. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1999, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Tax-Free Income Fund as of June 30, 1999, the results of its operations,
the changes in its net assets and the financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
August 6, 1999
33
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees
John F. Cogan, Jr.
Mary K. Bush
Richard H. Egdahl, M.D.
Margaret B.W. Graham
John W. Kendrick
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
Officers
John F. Cogan, Jr., Chairman and
President
David D. Tripple, Executive Vice President
Eric W. Reckard, Treasurer
Joseph P. Barri, Secretary
34
<PAGE>
- --------------------------------------------------------------------------------
THE PIONEER FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
For information about any Pioneer mutual fund, please contact your investment
professional, or call Pioneer at 1-800-225-6292. Ask for a free fund information
kit, which includes a fund prospectus. Please read the prospectus carefully
before you invest or send money.
<TABLE>
<S> <C>
Growth Funds Income Funds
United States Taxable
Pioneer Capital Growth Fund Pioneer America Income Trust
Pioneer Growth Shares Pioneer Bond Fund
Pioneer Cash Reserves Fund Pioneer Short-Term Income Trust
Pioneer Micro-Cap Fund Pioneer Strategic Income Fund
Pioneer Mid-Cap Fund
Pioneer Small Company Fund Tax-Free
Pioneer Tax-Free Income Fund
International/Global
Pioneer Emerging Markets Fund Money Market Fund
Pioneer Europe Fund Pioneer Cash Reserves Fund
Pioneer Indo-Asia Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
Growth and Income Funds
Pioneer Fund
Pioneer II
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Real Estate Shares
</TABLE>
35
<PAGE>
- --------------------------------------------------------------------------------
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
- --------------------------------------------------------------------------------
Your investment professional can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-8O0-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
9O-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as you
meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need to
do is authorize a set amount of money to be moved out of your bank account into
the Pioneer fund of your choice. Investomatic also allows you to change the
dollar amount, frequency and investment date right over the phone. By putting
aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing Pioneer
to deduct from participating employees' paychecks. You specify the dollar amount
you want to invest into the Pioneer fund(s) of your choice.
36
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds you
wish to invest in. You choose the amounts and dates for Pioneer to sell shares
of your original fund and use the proceeds to buy shares of the funds you have
chosen. Over time, your investment will be shifted out of the original fund.
(Automatic Exchange is available for originating accounts with a balance of
$5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applica-
ble information on a Pioneer Account Options Form. (This program is available
for dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals. You
decide the frequency and the day of the month you want. Pioneer will send the
proceeds by check to the address you designate, or electronically to your bank
account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available for accounts with a value of $10,000 or more.)
37
<PAGE>
- --------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, propectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current Fund prospectus.
[Pioneer Logo]
Pioneer Investment Management, Inc. 089-6836
60 State Street (c) Pioneer Funds Distributor, Inc.
Boston, Massachusetts 02109 (Recycle logo) Printed on Recycled Paper
www.pioneerfunds.com
