<PAGE>
PIONEER INTERMEDIATE
TAX-FREE FUND
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
OFFICERS
John F. Cogan, Jr., Chairman and President
David D. Tripple, Executive Vice President
Kathleen D. McClaskey, Vice President
William H. Keough, Treasurer
Joseph P. Barri, Secretary
TRUSTEES
John F. Cogan, Jr. Marguerite A. Piret
Richard H. Egdahl, M.D. David D. Tripple
Margaret B.W. Graham Stephen K. West
John W. Kendrick John Winthrop
INVESTMENT ADVISER LEGAL COUNSEL
Pioneering Management Hale and Dorr
Corporation
CUSTODIAN PRINCIPAL UNDERWRITER
Brown Brothers Pioneer Funds
Harriman & Co. Distributor, Inc.
SHAREHOLDER SERVICES AND TRANSFER AGENT
Pioneering Services
Corporation
60 State Street
Boston, Massachusetts 02109
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
<TABLE>
<S> <C>
Please call Pioneer for information on:
Existing accounts, new accounts,
prospectuses, applications, and
service forms.................................. 1-800-225-6292
Fund yields and prices......................... 1-800-225-4321
Toll-free fax.................................. 1-800-225-4240
Retirement plans............................... 1-800-622-0176
Telecommunications Device for the Deaf (TDD)... 1-800-225-1997
</TABLE>
When distributed to persons who are not shareowners of the Fund, this report
must be accompanied by an official prospectus, which discusses the objectives,
policies and other information concerning the Fund.
0296-2998
(C) Pioneer Funds Distributor, Inc.
[PIONEER LOGO]
Pioneer
Intermediate
Tax-Free Fund
ANNUAL REPORT
DECEMBER 31, 1995
<PAGE>
DEAR FELLOW SHAREOWNERS,
- --------------------------------------------------------------------------------
Pioneer Intermediate Tax-Free Fund completed its ninth fiscal year on December
31, 1995. A healthy investing environment of low inflation, slow economic growth
and favorable interest rates translated into impressive results for the bond
market throughout the year. Your Fund, too, performed well as it provided
shareowners with a positive total return and competitive income stream.
HOW YOUR FUND PERFORMED
For the year ended December 31, 1995, we report the following results:
- - CLASS A SHARES -- Shareowners received income dividends totaling $0.485 per
share. The Fund's 30-day yield was 3.68% as of December 31, 1995.(1) Net asset
value stood at $10.44 per share at the close of the period, versus $9.62 a
year earlier. The Fund's total return was 13.80% based on net asset value and
9.81% based on maximum public offering price. Total return assumes
reinvestment of all distributions at net asset value.
- - CLASS B SHARES -- Shareowners received a total of $0.399 per share in income
dividends for the period. As of December 31, the Fund's 30-day yield was
2.78%.1 Net asset value stood at $10.46 per share on December 31, versus $9.65
a year earlier. The Fund's total return was 12.71% assuming shares were held
throughout the period and 9.71% if shares were redeemed. Total return assumes
reinvestment of all distributions.
Because your Fund's income is free from federal taxation, its yield compares
favorably with taxable bonds on an "after-tax" basis. The Fund's 3.68% yield on
Class A shares, and 2.78% yield on Class B shares, would be equal to these
taxable yields:
<TABLE>
<CAPTION>
FEDERAL TAXABLE
TAX BRACKET EQUIVALENT YIELD
- ------------ -----------------------------
A SHARES B SHARES
-------- --------
<S> <C> <C>
39.6% 6.09% 4.60%
36.0% 5.75% 4.34%
31.0% 5.33% 4.03%
</TABLE>
AN EXCEPTIONAL YEAR FOR BOND INVESTORS
Performance in the United States bond market was impressive for much of 1995,
making it an especially rewarding year. The strong results came on the heels of
a tumultuous 1994, when concerns about inflation and the increasing pace of
economic growth caused the Federal Reserve (the Fed) to initiate a series of
hikes in short-term interest rates. The higher rates, while triggering a severe
decline in bond prices throughout 1994, ultimately proved successful moving into
1995; a number of important indicators pointed to a slower-growing economy, and
inflation remained low. Even the Fed's additional increase in February added
enthusiasm to the bond market; investors saw the hike as an indication of the
Fed's resolve to keep inflation low and to prevent the economy from moving
forward too quickly. Indeed, signs of a slowing economy began to surface,
sending long-term interest rates lower and creating an optimistic climate for
investing.
To keep the economy from slowing too significantly, the Fed began to lower the
federal funds rate later in the year -- on July 6 and December 19. Investors
again viewed the Fed's actions favorably, further fueling the bond market's
positive momentum. Volatility did exist, however, particularly during the latter
half of the fiscal year, due primarily to the heightening debate about the
federal budget. While events in Washington, DC show promise for a balanced
budget, concerns surfaced about how soon an agreement might be reached,
triggering some temporary declines.
The municipal bond market also performed strongly for the year. Results
generally tracked those of the taxable bond market, although at times municipals
moved at a slower pace due to uncertainty about changes in tax rates and
credits. Of course, periods of underperformance made municipal securities
extremely inexpensive relative to Treasury investments, creating attractive
buying opportunities for investors. This, along with a 10% decline in new
issuance in 1995 versus 1994, helped demand and prices move higher.
HOW PIONEER MANAGED YOUR INVESTMENT
Pioneer Intermediate Tax-Free Fund pursues current income exempt from federal
income taxes by investing in high-quality, intermediate-maturity issues. All
portfolio holdings have a rating of A or better; the average quality rating
stood at AA as of December 31. During the period, we increased the Fund's
weighting in the highest-rated issues, AAA, to 40% of the portfolio, versus 28%
one year ago. Your management's focus on these securities proved rewarding over
the course of the year, since the difference between yields on AAA- and A-rated
bonds narrowed during 1995. Therefore, the Fund did not pay an unnecessary
premium for the higher
(1) Yield is based on a standard formula prescribed by the Securities and
Exchange Commission. The Fund's investment manager, Pioneering Management
Corporation, currently is reducing its management fee and certain other
expenses, otherwise the yield for Class A shares and Class B shares would
have been 3.51% and 2.65%, respectively.
<PAGE>
quality, just as investors in the lower-quality issues were not adequately
rewarded in terms of yield to take on additional credit risk.
PORTFOLIO QUALITY
(As of December 31, 1995)
[PIE CHART]
A 16%
AA 43%
AAA 40%
Cash and Cash Equivalents 1%
Your management's conservative focus applies to the Fund's average life as well
as its quality. For example, we reduced the Fund's exposure to long-maturity
bonds, due to the uncertain environment resulting from the ongoing debate about
tax reform. Instead, your management added to the Fund's position in seven-to-10
year bonds, emphasizing noncallable investments that issuers cannot redeem, or
"call," prior to maturity and deprive investors of future income and potential
gains. In our view, a conservative, intermediate position should be most
successful in maintaining the Fund's share price and income stream in the
current political climate. We therefore reduced the portfolio's average life to
7.8 years on December 31, from 9.3 years 12 months earlier.
EFFECTIVE PORTFOLIO MATURITY
(As of December 31, 1995)
[PIE CHART]
15+ years 6%
10-15 years 20%
7-10 years 34%
5-7 years 13%
2-5 years 20%
0-2 years 7%
LOOKING AHEAD
Bond investors will not soon forget the past year. The strong results in 1995
came as a huge relief to those who were in the market in 1994. While the past
two years' extreme results -- both negative and positive -- are unusual, they
nonetheless illustrate how investing for the long term can help one ride out
market turbulence. Moving into 1996, concerns exist about the ability of
politicians to put together and pass a credible, balanced budget. For municipal
bond investors, an additional topic remains the so-called flat tax. While such
an initiative may not be enacted, some shifting of tax rates could occur.
Discussions and debate undoubtedly will remain in the forefront given the
election year, although it is unlikely that any definitive action will be taken
on tax reform before November. We will continue to monitor progress on these
issues.
Tax reform aside, with slow economic growth expected over the near term, the
overall bond market looks quite healthy to us. We are confident that municipal
bonds will continue to play a significant role for investors, especially given
their recent value and limited supply. We think the Fund's conservative
positioning not only should help minimize the effects of interest rate changes,
but its high-quality holdings should be better able to cope with a weaker
economy than lower-quality investments. We are confident our strategy will offer
shareowners solid performance and a high level of comfort.
Please read on through the following pages, which provide the Fund's audited
Schedule of Investments and financial statements as of December 31, 1995. If you
have any questions about your investment in Pioneer Intermediate Tax-Free Fund,
contact your investment representative, or call Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
- ----------------------------------
John F. Cogan, Jr.
Chairman and President,
Pioneer Intermediate Tax-Free Fund
2
<PAGE>
GROWTH OF A $10,000 INVESTMENT*
This chart shows the growth of a $10,000 investment made in Pioneer Intermediate
Tax-Free Fund Class A at public offering price, compared to the growth of the
Lehman Brothers Municipal Bond Index.+
PIONEER INTERMEDIATE TAX-FREE FUND CLASS A:
Average ANNUAL TOTAL RETURNS
(as of December 31, 1995)
Life of Fund
1 Year 5 Years 10/22/86
------ ------- ------------
Net Asset Value 13.80% 7.49% 6.72%
Public Offering Price* 9.81 6.73 6.31
[LINE GRAPH]
Pioneer Intermediate Lehman Brothers
Tax-Free A Municipal Bond Index
10/31/86 9,650 10,000
12/31/86 9,662 10,170
9,115 10,133
12/31/87 9,284 10,323
9,820 10,885
12/31/88 10,472 11,372
11,172 12,125
12/31/89 11,494 12,599
11,778 12,951
12/31/90 12,232 13,517
12,755 14,118
12/31/91 13,598 15,159
14,185 15,780
12/31/92 14,775 16,495
15,748 17,667
12/31/93 16,412 18,521
15,651 17,702
12/31/94 15,424 17,564
16,742 19,258
12/31/95 17,823 20,629
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 assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index.
* Reflects deduction of the maximum 3.5% sales charge at the beginning of the
period and assumes reinvestment of all distributions at net asset value.
+ Index comparison begins October 31, 1986.
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>
GROWTH OF A $10,000 INVESTMENT*
This chart shows the growth of a $10,000 investment made in Pioneer Intermediate
Tax-Free Fund Class B, compared to the growth of the Lehman Brothers Municipal
Bond Index.+
PIONEER INTERMEDIATE TAX-FREE FUND CLASS B:
Average Annual Total Returns
(as of December 31, 1995)
Life of Fund
1 Year 4/29/94
------ -------
Net Asset Value 12.71% 6.46%
Public Offering Price* 9.71 4.73
[LINE GRAPH]
Pioneer Intermediate Lehman Brothers
Tax-Free Fund B Municipal Bond Index
4/29/94 10,000 10,000
10,082 10,087
6/30/94 10,038 10,028
10,171 10,209
10,204 10,244
9/30/94 10,046 10,094
9,868 9,915
9,700 9,735
12/31/94 9,851 9,949
10,061 10,234
10,343 10,532
3/31/95 10,420 10,653
10,433 10,665
10,705 11,005
6/30/95 10,636 10,909
10,722 10,012
10,809 11,152
9/30/95 10,832 11,223
10,929 11,386
11,036 11,575
12/31/95 10,925 11,686
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 assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index.
* Reflects deduction of the maximum 3.0% contingent deferred sales charge at the
end of the period and assumes reinvestment of all distributions.
+ Index comparison begins April 30, 1994.
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>
SCHEDULE OF INVESTMENTS--PIONEER INTERMEDIATE TAX-FREE FUND--DECEMBER 31, 1995
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
STANDARD
& POOR'S/
MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) INVESTMENTS+ VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT IN TAX-EXEMPT SECURITIES--99.3%
ALASKA--1.3%
$1,000,000 AAA/Aaa Alaska Housing Finance Corporation Revenue, MBIA Insured, 5.125%, 2006....... $1,014,170
----------
ARIZONA--2.7%
1,000,000 AA/Aaa Arizona State Transportation Board Highway Revenue, 6.5%, Prerefunded,
2001*...................................................................... 1,120,270
1,000,000 AA/Aa Salt River Project Agriculture Improvement and Power District Revenue, 5.2%,
2008....................................................................... 1,018,790
----------
2,139,060
----------
CONNECTICUT--3.3%
1,500,000 AA-/A1 Connecticut Special Tax Transportation Revenue, 5.2%, 2005................... 1,551,105
1,000,000 AA/Aa Connecticut Housing Finance Authority, 6.25%, 2011........................... 1,048,150
----------
2,599,255
----------
DISTRICT OF COLUMBIA--0.7%
500,000 A+/NR Georgetown University General Obligation, 8.125%, 2008....................... 550,985
----------
FLORIDA--6.3%
750,000 AAA/Aaa Broward County, School General Obligation, 7.125%, Prerefunded, 1999*........ 831,937
1,000,000 AA/Aa Florida State Board of Education Capital Outlay General Obligation, 5.125%,
2005....................................................................... 1,035,790
1,000,000 AAA/Aaa Florida State Department of Environmental Protection Revenue, AMBAC Insured,
5.25%, 2003................................................................ 1,051,870
1,020,000 AAA/Aaa Homstead Special Insurance Assessment, MBIA Insured, Escrowed to Maturity in
Government Securities, 5.25%, 2003......................................... 1,068,929
1,000,000 AA/Aa1 Orlando Utilities Commission Revenue, 5.6%, 2003............................. 1,073,980
----------
5,062,506
----------
GEORGIA--1.6%
500,000 AA-/A1 Metropolitan Atlanta Rapid Transit Authority Sales Tax Revenue, 7.25%,
2010....................................................................... 541,925
250,000 AAA/Aaa Municipal Electric Authority of Georgia Revenue, 7.75%, Prerefunded, 1997*... 265,222
400,000 A/A Municipal Electric Authority of Georgia Special Obligation Revenue, 7.65%,
2003....................................................................... 432,024
----------
1,239,171
----------
HAWAII--3.9%
2,000,000 AA/Aa Hawaii General Obligation, 5.25%, 2000....................................... 2,092,180
1,000,000 AA/Aa Honolulu, City and County General Obligation, 5.1%, 2002..................... 1,036,740
----------
3,128,920
----------
ILLINOIS--6.1%
1,000,000 AAA/Aaa Chicago, General Obligation, AMBAC Insured, 5.7%, 2007....................... 1,054,360
1,000,000 AAA/Aaa Chicago Wastewater Transmission Revenue, 6.3%, Prerefunded, 2003*............ 1,124,350
600,000 AAA/Aaa Illinois Sales Tax Revenue, 7.25%, Prerefunded, 1999*........................ 671,238
1,000,000 AAA/A1 Illinois Sales Tax Revenue, 5.5%, 2018....................................... 998,690
1,000,000 AA-/Aa1 Illinois Education Facilities Authority Revenue, Northwestern University,
5.5%, 2013................................................................. 1,032,290
----------
4,880,928
----------
INDIANA--3.7%
750,000 A/NR Indiana Municipal Power Agency, Power Supply System Revenue, 7.1%,
Prerefunded, 2000*......................................................... 841,230
1,500,000 NR/Aaa Indiana State Educational Facilities Authority Revenue, Notre Dame, 6.0%,
2023....................................................................... 1,560,075
500,000 A+/A1 Indiana Transportation Finance Authority Highway Revenue, 8.0%, Prerefunded,
1998*...................................................................... 554,430
----------
2,955,735
----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER INTERMEDIATE TAX-FREE FUND--DECEMBER 31, 1995
continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
STANDARD
& POOR'S/
MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) INVESTMENTS+ VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
KANSAS--2.0%
$1,000,000 AAA/Aaa Kansas City, Kansas, General Obligation, MBIA Insured, 5.375%, 2010.......... $1,024,550
500,000 AA/NR Kansas Department of Transportation Highway Revenue, 6.5%, Prerefunded,
2002*...................................................................... 563,240
----------
1,587,790
----------
KENTUCKY--2.3%
1,000,000 AAA/Aaa Kentucky Turnpike Authority Economic Development Road Revenue, AMBAC Insured,
5.25%, 2005................................................................ 1,040,220
750,000 A+/A1 Lexington-Fayette Urban County Government Revenue, 7.0%, 2006................ 822,735
----------
1,862,955
----------
MAINE--0.7%
250,000 A+/NR Maine Municipal Bond Bank Revenue, 7.15%, Prerefunded, 2001*................. 289,340
245,000 A+/NR Maine Municipal Bond Bank Revenue, 7.65%, Prerefunded, 1998*................. 273,665
----------
563,005
----------
MARYLAND--2.0%
1,500,000 NR/Aa Maryland Community Development Administration, Single Family Mortgage
Revenue, 5.95%, 2006....................................................... 1,558,785
----------
MASSACHUSETTS--4.0%
1,000,000 A+/A1 Massachusetts Bay Transportation Authority, 5.5%, 2009....................... 1,037,950
1,000,000 AAA/Aaa Massachusetts Housing Finance Agency, FNMA Collateralized, 6.875%, 2021...... 1,056,190
1,000,000 AA-/Aa Massachusetts Water Pollution Abatement Trust Revenue, 6.0%, 2008............ 1,071,060
----------
3,165,200
----------
MICHIGAN--2.7%
1,000,000 AA-/A1 Michigan State Trunk Line Fuel Sales Tax Revenue, Series A, 5.625%, 2003..... 1,067,490
1,000,000 AA-/A1 Michigan State Trunk Line Fuel Sales Tax Revenue, Series B, 5.625%, 2003..... 1,067,490
----------
2,134,980
----------
MINNESOTA--1.0%
750,000 AAA/Aa Minnesota Public Facilities Authority Water Pollution Control Revenue, 7.0%,
2009....................................................................... 828,398
----------
MISSOURI--1.3%
1,000,000 NR/Aa Missouri State Environmental Improvement & Energy Resources Authority
Revenue, 5.15%, 2004....................................................... 1,033,100
----------
NEBRASKA--1.4%
1,000,000 AA/NR Omaha Public Power District Electric System Revenue, 6.5%, Prerefunded,
2002*...................................................................... 1,124,280
----------
NEVADA--0.2%
130,000 AA/Aa Nevada Housing Division Single Family Program Revenue, 8.0%, 2009............ 135,209
----------
NEW HAMPSHIRE--2.0%
1,000,000 AA+/Aaa New Hampshire Higher Educational Facilities Authority Revenue, Dartmouth
College, 5.5%, 2013........................................................ 1,018,350
500,000 AAA/Aaa New Hampshire Turnpike System Revenue, 7.375%, Prerefunded, 2000*............ 570,030
----------
1,588,380
----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER INTERMEDIATE TAX-FREE FUND--DECEMBER 31, 1995
continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
STANDARD
& POOR'S/
MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) INVESTMENTS+ VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NEW JERSEY--2.4%
$ 750,000 AA-/Aaa New Jersey Highway Authority, Garden State Parkway Senior Revenue,
7.25%, Prerefunded, 1999*.................................................. $ 830,798
1,000,000 AA+/Aa1 State of New Jersey Sales Tax General Obligation, 5.8%, 2007................. 1,087,440
----------
1,918,238
----------
NEW YORK--2.3%
750,000 AA-/Aa Municipal Assistance Corporation for the City of New York Revenue, 7.25%,
2008....................................................................... 777,165
500,000 AAA/Aaa New York City Municipal Water Finance Authority Revenue, 7.75%, Prerefunded,
1998*...................................................................... 551,315
500,000 A+/Aaa Triborough Bridge and Tunnel Authority General Purpose Revenue,
7.375%, Prerefunded, 1998*................................................. 542,665
----------
1,871,145
----------
NORTH CAROLINA--2.0%
1,500,000 AAA/Aaa Charlotte General Obligation, 5.7%, 2007..................................... 1,612,410
----------
OHIO--1.3%
1,000,000 AAA/Aaa Cuyahoga County, Ohio, General Obligation, MBIA Insured, 5.0%, 2007.......... 1,010,560
----------
OKLAHOMA--3.3%
1,500,000 A-/A Grand River Dam Authority Electric Revenue, 5.75%, 2006...................... 1,609,365
1,000,000 AA/Aa Oklahoma City General Obligation, 5.0%, 2004................................. 1,026,240
----------
2,635,605
----------
OREGON--1.0%
500,000 AA-/Aa State of Oregon Veterans Welfare General Obligation, 7.0%, 2011.............. 542,340
250,000 AA-/Aa State of Oregon Veterans Welfare General Obligation, 7.75%, 2003............. 265,085
----------
807,425
----------
PENNSYLVANIA--4.9%
1,500,000 AA-/A1 Pennsylvania General Obligation, 6.25%, 2010................................. 1,682,040
1,000,000 A-/NR Pennsylvania Industrial Development Authority Revenue, 7.0%, Prerefunded,
2001*...................................................................... 1,140,580
1,000,000 A/A1 Pennsylvania State Turnpike Commission Highway Revenue, 5.45%, 2002.......... 1,052,890
----------
3,875,510
----------
PUERTO RICO--5.8%
500,000 AAA/NR Puerto Rico Highway Authority Revenue, 8.0%, Prerefunded, 1998*.............. 557,305
1,500,000 A/Baa1 Puerto Rico Highway and Transportation Authority Revenue, 5.5%, 2019......... 1,482,450
1,000,000 AAA/Aaa Puerto Rico Electric Power Authority, MBIA Insured, 5.0%, 2004............... 1,032,160
1,500,000 A/Baa1 Commonwealth of Puerto Rico General Obligation, 5.375%, 2006................. 1,546,770
----------
4,618,685
----------
SOUTH CAROLINA--1.1%
750,000 AAA/Aaa South Carolina Public Service Authority Revenue, 7.0%, Prerefunded, 2001*.... 861,398
----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER INTERMEDIATE TAX-FREE FUND--DECEMBER 31, 1995
continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
STANDARD
& POOR'S/
MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) INVESTMENTS+ VALUE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TEXAS--7.7%
$1,250,000 AAA/Aaa Dallas, Texas, Independent School District General Obligation, Permanent
School Fund Guarantee, 5.3% 2008........................................... $ 1,269,700
1,000,000 A/A Houston Water & Sewer System Revenue, 5.4%, 2000............................. 1,047,840
750,000 AAA/Aaa San Antonio Prior Lien Water Revenue, 7.125%, Prerefunded, 1999*............. 830,385
1,500,000 AA/Aa State of Texas General Obligation, 5.8%, 2004................................ 1,630,665
1,000,000 AA/Aaa Tarrant County Water Control Revenue, 6.0%, Prerefunded, 2001*............... 1,079,460
250,000 AAA/Aaa University of Texas Permanent University Fund, Escrowed to Maturity in
Government Securities, 8.0%, 2004.......................................... 310,072
-----------
6,168,122
-----------
UTAH--2.5%
750,000 AA/Aa Intermountain Power Agency Special Obligation Second Crossover Revenue, 7.5%,
2016....................................................................... 777,090
1,000,000 AA/Aa Intermountain Power Agency Power Supply Revenue, 5.5%, 2020.................. 986,750
240,000 AA/Aa Utah Housing Finance Agency, Single Family Mortgage Purchase Revenue, 7.3%,
2003++..................................................................... 230,009
-----------
1,993,849
-----------
VERMONT--0.7%
500,000 AAA/Aaa Vermont Municipal Bond Bank, 7.9%, Prerefunded, 1998*........................ 562,455
-----------
VIRGINIA--5.5%
1,000,000 AAA/Aaa Fairfax County General Obligation, 4.8%, 2003................................ 1,022,280
750,000 AA/Aaa Richmond General Obligation, 7.0%, Prerefunded, 2000*........................ 840,623
1,000,000 AA/Aa Virginia Public School Authority Revenue, 5.4%, 2004......................... 1,056,730
1,500,000 AA/Aa Virginia State Transportation Board Revenue, 5.5%, 2018...................... 1,504,260
-----------
4,423,893
-----------
WASHINGTON--6.0%
1,000,000 AA+/Aa1 King County General Obligation, 4.5%, 2003................................... 998,090
1,000,000 AA/Aa Lewis County Public Utility District #1 Revenue, 5.0%, 2004.................. 1,017,670
800,000 A+/Aaa Metropolitan Seattle Limited Sales Tax General Obligation, 7.2%, Prerefunded,
1997*...................................................................... 844,408
750,000 AA/Aaa State of Washington Motor Vehicle Fuel Tax General Obligation, 7.25%,
Prerefunded, 1999*......................................................... 820,950
1,000,000 AA/Aa State of Washington General Obligation, 6.0%, 2002........................... 1,085,300
-----------
4,766,418
-----------
WISCONSIN--1.3%
1,000,000 AA/Aa State of Wisconsin General Obligation, 5.5%, 2001............................ 1,054,200
-----------
WYOMING--2.3%
750,000 A-/Aa2 Sweetwater County Pollution Control Revenue, 7.625%, 2013.................... 787,718
1,015,000 AA-/NR Wyoming Farm Loan Board Capital Facilities Revenue, 6.25%, 2008.............. 1,086,882
-----------
1,874,600
-----------
TOTAL INVESTMENT IN TAX-EXEMPT SECURITIES
(Cost $74,881,396)(a)(b)................................................... $79,207,325
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER INTERMEDIATE TAX-FREE FUND--DECEMBER 31, 1995
continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT INVESTMENTS+ VALUE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TEMPORARY TAX-EXEMPT INVESTMENTS--0.7%
$ 250,000 Nebraska Public Power District Series B, 3.6%, 1/18/96....................... $ 252,047
100,000 Peninsula Port Authority, Virginia, Port Facility Revenue, 5.9%, 2005**...... 100,387
100,000 Perry County, Mississippi, Pollution Control Revenue, Credit Suisse
Guarantee, 5.9%, 2002**.................................................... 100,387
100,000 Uinta County, Wyoming, Pollution Control Revenue, Chevron Corp. Guarantee,
5.9%, 2020**............................................................... 100,384
-----------
TOTAL TEMPORARY TAX-EXEMPT INVESTMENTS (Cost $550,000)....................... $ 553,205
-----------
TOTAL INVESTMENT IN SECURITIES--100%
(Total Cost $75,431,396)................................................... $79,760,530
===========
</TABLE>
+ The concentration of securities by type of obligation/market sector is as
follows:
<TABLE>
<S> <C>
General Obligation........................................................ 22.1%
Escrowed in U.S. Government Securities.................................... 23.9%
Revenue Bonds:
Education Revenue....................................................... 6.5%
Water & Sewer Revenue................................................... 2.7%
Housing Revenue......................................................... 5.1%
Insured................................................................. 10.7%
Pollution Control Revenue............................................... 3.3%
Power Revenue........................................................... 8.7%
Sales Tax Revenue....................................................... 2.9%
Transportation Revenue.................................................. 11.0%
Other................................................................... 2.4%
Reserves.................................................................. 0.7%
</TABLE>
++ A portion of the bond was called on January 2, 1996.
* Prerefunded bonds have been collateralized 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.
** Securities with daily "put" features with resetting interest rates.
Coupon rates disclosed are as of December 31, 1995.
NR Not Rated.
(a) At December 31, 1995, the net unrealized gain on investments based on cost
for federal income tax purposes of $74,881,396 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost...................... $4,327,839
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value...................... (1,910)
----------
Net unrealized gain............................................ $4,325,929
==========
</TABLE>
(b) At December 31, 1995, the Fund had a net capital loss carryforward of
$699,955 which will expire between 2002 and 2003 if not utilized.
Purchase and sales of securities (excluding temporary cash investments) for
the year ended December 31, 1995 aggregated $22,956,030 and $27,082,537,
respectively.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
BALANCE SHEET--PIONEER INTERMEDIATE TAX-FREE FUND--DECEMBER 31, 1995
<TABLE>
- ---------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments in securities, at value (including temporary cash investments of
$553,205) (Cost $75,431,396; see Schedule of Investments and Note 1)............... $79,760,530
Cash................................................................................ 53,173
Receivables--
Interest.......................................................................... 1,415,070
Trust shares sold................................................................. 511
Investment securities sold........................................................ 1,077,744
Other............................................................................... 5,618
-----------
Total assets................................................................... $82,312,646
-----------
LIABILITIES:
Payables--
Trust shares repurchased.......................................................... $ 39,695
Dividends......................................................................... 115,439
Due to affiliates (Notes 2, 3 and 4)................................................ 107,816
Accrued expenses.................................................................... 65,031
-----------
Total liabilities.............................................................. $ 327,981
-----------
NET ASSETS:
Paid-in capital (Note 1)............................................................ $78,323,513
Accumulated undistributed net investment income (Note 1)............................ 35,178
Accumulated net realized loss on investments (Note 1)............................... (699,955)
Net unrealized gain on investments (Note 1)......................................... 4,325,929
-----------
Total net assets............................................................... $81,984,665
===========
NET ASSET VALUE PER SHARE:
Class A--(based on $79,432,311/7,609,221 shares of beneficial interest outstanding--
unlimited number of shares authorized with no par value)........................... $ 10.44
===========
Class B--(based on $2,552,354/243,992 shares of beneficial interest outstanding--
unlimited number of shares authorized with no par value)........................... $ 10.46
===========
MAXIMUM OFFERING PRICE:
Class A............................................................................. $ 10.82
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
STATEMENT OF OPERATIONS--PIONEER INTERMEDIATE TAX-FREE FUND
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME (NOTE 1):
Interest............................................................. $ 4,743,496
-----------
EXPENSES:
Management fees (Note 2)............................................. $408,497
Distribution fees (Note 4)
Class A......................................................... 181,894
Class B......................................................... 22,195
Transfer agent fees (Note 3)
Class A......................................................... 82,035
Class B......................................................... 4,034
Registration fees.................................................... 39,583
Professional fees.................................................... 57,693
Accounting (Note 2).................................................. 71,687
Custodian fees....................................................... 19,196
Printing............................................................. 16,235
Fees and expenses of nonaffiliated trustees.......................... 17,210
Miscellaneous........................................................ 19,922
--------
Total expenses.................................................. $940,181
Less fees paid indirectly (Note 5).............................. (13,350)
Less management fees waived by Pioneering Management Corporation
(Note 2)...................................................... (89,114)
--------
Net expenses.................................................... $ 837,717
-----------
Net investment income....................................... $ 3,905,779
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments (Note 1)............................ $ (400,733)
Change in net unrealized loss on investments......................... 6,979,005
-----------
Net gain on investments......................................... $ 6,578,272
-----------
Net increase in net assets resulting from operations........ $10,484,051
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS--PIONEER INTERMEDIATE TAX-FREE FUND
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
1995 1994
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income............................................................... $ 3,905,779 $ 4,034,832
Net realized loss on investments.................................................... (400,733) (299,222)
Change in net unrealized gain/loss on investments................................... 6,979,005 (8,771,933)
------------ ------------
Net increase (decrease) in net assets resulting from operations................. $ 10,484,051 $ (5,036,323)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A--($0.49 and $0.49 per share, respectively)................................ $ (3,800,009) $ (4,031,997)
Class B--($0.40 and $0.27 per share, respectively)................................ (86,280) (24,385)
In excess of net investment income
Class A--($0.00 and $0.00 per share, respectively)................................ -- (16,135)
Class B--($0.00 and $0.00 per share, respectively)................................ -- (313)
From net realized gain on investments
Class A--($0.00 and $0.01 per share, respectively)................................ -- (32,059)
Class B--($0.00 and $0.00 per share, respectively)................................ -- (97)
------------ ------------
Decrease in net assets resulting from distributions to shareholders................. $ (3,886,289) $ (4,104,986)
------------ ------------
FROM TRUST SHARE TRANSACTIONS:
Net proceeds from sale of shares.................................................... $ 7,101,676 $ 18,171,021
Net asset value of shares issued to shareholders in reinvestment of dividends....... 2,437,890 2,597,115
Cost of shares repurchased.......................................................... (12,355,539) (15,520,911)
------------ ------------
Increase (decrease) in net assets resulting from trust share transactions......... $ (2,815,973) $ 5,247,225
------------ ------------
Net increase (decrease) in net assets........................................... $ 3,781,789 $ (3,894,084)
NET ASSETS:
Beginning of year................................................................... 78,202,876 82,096,960
------------ ------------
End of year (including accumulated undistributed (distributions in excess of) net
investment income of $35,178 and ($16,448), respectively).......................... $ 81,984,665 $ 78,202,876
============ ============
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold................................................ 567,733 $ 5,747,321 1,602,661 $ 16,366,775
Shares issued to shareholders in reinvestment of
distributions............................................ 233,794 2,382,977 257,363 2,584,951
Less shares repurchased.................................... (1,158,605) (11,807,545) (1,526,764) (15,286,865)
---------- ------------ ---------- ------------
Net increase (decrease)................................ (357,078) $ (3,677,247) 333,260 $ 3,664,861
========== ============ ========== ============
CLASS B*
Shares sold................................................ 133,711 $ 1,354,355 180,473 $ 1,804,246
Shares issued to shareholders in reinvestment of
distributions............................................ 5,360 54,913 1,240 12,164
Less shares repurchased.................................... (53,564) (547,994) (23,228) (234,046)
---------- ------------ ---------- ------------
Net increase........................................... 85,507 $ 861,274 158,485 $ 1,582,364
========== ============ ========== ============
</TABLE>
- ------------
* Class B shares were first publicly offered on April 29, 1994.
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
FINANCIAL HIGHLIGHTS--PIONEER INTERMEDIATE TAX-FREE FUND
SELECTED DATA FOR A SHARE OUTSTANDING FOR THE PERIODS PRESENTED
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
CLASS A 1995 1994+ 1993 1992 1991 1990
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....................... $ 9.62 $ 10.76 $ 10.32 $ 10.06 $ 9.63 $ 9.66
------- ------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income..................................... $ 0.49 $ 0.49 $ 0.56 $ 0.59 $ 0.61 $ 0.63
Net realized and unrealized gain (loss) on investments.... 0.82 (1.13) 0.56 0.25 0.43 (0.04)
------- ------- ------- ------- ------- -------
Total increase (decrease) from investment operations.... $ 1.31 $ (0.64) $ 1.12 $ 0.84 $ 1.04 $ 0.59
Distribution to shareholders from:
Net investment income..................................... (0.49) (0.49) (0.56) (0.58) (0.61) (0.62)
Net realized gain......................................... -- (0.01) (0.12) -- -- --
------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value................. $ 0.82 $ (1.14) $ 0.44 $ 0.26 $ 0.43 $ (0.03)
------- ------- ------- ------- ------- -------
Net asset value, end of period............................. $ 10.44 $ 9.62 $ 10.76 $ 10.32 $ 10.06 $ 9.63
======= ======= ======= ======= ======= =======
Total return*.............................................. 13.80% (6.02)% 11.08% 8.65% 11.17% 6.42%
Ratio of net operating expenses to average net assets...... 1.02%++ 1.00% 0.85% 0.85% 0.75% 0.66%
Ratio of net investment income to average net assets....... 4.77%++ 4.89% 5.23% 5.78% 6.21% 6.56%
Portfolio turnover rate.................................... 28.75% 39.24% 13.93% 3.52% 4.61% 7.99%
Net assets, end of period (in thousands)................... $79,432 $76,674 $82,097 $57,353 $44,631 $34,118
Ratios assuming no waiver of management fees and assumption
of expenses by PMC and no reduction for fees paid
indirectly:
Net operating expenses.................................... 1.12% 1.22% 1.12% 1.27% 1.33% 1.17%
Net investment income..................................... 4.67% 4.67% 4.97% 5.36% 5.63% 6.05%
Ratios assuming waiver of management fees and assumption of
expenses by PMC and reduction for fees paid indirectly:
Net operating expenses.................................... 1.00% -- -- -- -- --
Net investment income..................................... 4.79% -- -- -- -- --
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
OCTOBER 27,
FOR THE YEARS ENDED DECEMBER 31, 1986 TO
-------------------------------- DECEMBER 31,
CLASS A 1989 1988 1987 1986
------- ------- ------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period....................... $ 9.40 $ 8.95 $ 10.01 $10.00
------- ------- ------- ------
Increase (decrease) from investment operations:
Net investment income..................................... $ 0.63 $ 0.63 $ 0.62 $ 0.05
Net realized and unrealized gain (loss) on investments.... 0.26 0.47 (1.02) (0.04)
------- ------- ------- ------
Total increase (decrease) from investment operations.... $ 0.89 $ 1.10 $ (0.40) $ 0.01
Distribution to shareholders from:
Net investment income..................................... (0.63) (0.65) (0.66) --
Net realized gain......................................... -- -- -- --
------- ------- ------- ------
Net increase (decrease) in net asset value................. $ 0.26 $ 0.45 $ (1.06) $ 0.01
------- ------- ------- ------
Net asset value, end of period............................. $ 9.66 $ 9.40 $ 8.95 $10.01
======= ======= ======= ======
Total return*.............................................. 9.77% 12.79% (3.91)% 0.10%
Ratio of net operating expenses to average net assets...... 0.60% 0.50% 0.35% 0.61%**
Ratio of net investment income to average net assets....... 6.60% 6.89% 7.08% 9.73%**
Portfolio turnover rate.................................... 4.09% 10.03% 0.06% --
Net assets, end of period (in thousands)................... $28,754 $20,121 $13,107 $3,066
Ratios assuming no waiver of management fees and assumption
of expenses by PMC and no reduction for fees paid
indirectly:
Net operating expenses.................................... 1.10% 1.28% 1.53% --
Net investment income..................................... 6.10% 6.11% 5.90% --
Ratios assuming waiver of management fees and assumption of
expenses by PMC and reduction for fees paid indirectly:
Net operating expenses.................................... -- -- -- --
Net investment income..................................... -- -- -- --
</TABLE>
- ------------
+ The per share data is based upon average shares outstanding for the period
presented.
++ Ratios assuming no reduction for fees paid indirectly.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all 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.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
FINANCIAL HIGHLIGHTS--PIONEER INTERMEDIATE TAX-FREE FUND
SELECTED DATA FOR A SHARE OUTSTANDING FOR THE PERIODS PRESENTED
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
FOR THE YEAR APRIL 29,
ENDED 1994 TO
DECEMBER 31, DECEMBER 31,
CLASS B*** 1995 1994+
------------ ------------
<S> <C> <C>
Net asset value, beginning of period................................... $ 9.65 $10.07
------ ------
Increase (decrease) from investment operations:
Net investment income................................................. $ 0.41 $ 0.27
Net realized and unrealized gain (loss) on investments................ 0.80 (0.42)
------ ------
Total increase (decrease) from investment operations................ $ 1.21 $(0.15)
Distribution to shareholders from:
Net investment income................................................. (0.40) (0.27)
------ ------
Net increase (decrease) in net asset value............................. $ 0.81 $(0.42)
------ ------
Net asset value, end of period......................................... $10.46 $ 9.65
====== ======
Total return*.......................................................... 12.71% (1.49)%
Ratio of net operating expenses to average net assets.................. 1.86%++ 1.84%**
Ratio of net investment income to average net assets................... 3.90%++ 4.17%**
Portfolio turnover rate................................................ 28.75% 39.24%
Net assets, end of period (in thousands)............................... $2,553 $1,529
Ratios assuming no waiver of management fees and assumption of expenses
by PMC and no reduction for fess paid indirectly:
Net operating expenses................................................ 1.96% 2.14%**
Net investment income................................................. 3.80% 3.87%**
Ratios assuming waiver of management fees and assumption of expenses by
PMC and reduction for fess paid indirectly:
Net operating expenses................................................ 1.82% --
Net investment income................................................. 3.94% --
</TABLE>
- ------------
+ The per share data is based upon average shares outstanding for the period
presented.
++ Ratios assuming no reduction for fees paid indirectly.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all 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.
*** Class B shares were first publicly offered on April 29, 1994.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS--PIONEER INTERMEDIATE TAX-FREE FUND
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
1. Pioneer Intermediate Tax-Free Fund (the Fund) is a Massachusetts business
trust registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company. Effective January 1, 1994, the Fund
changed its name from the Pioneer Municipal Bond Fund to the Pioneer
Intermediate Tax-Free Fund. The investment objective of the Fund is to provide
as high a level of current income exempt from federal income taxes.
The Board of Trustees has authorized the issuance of two classes of the Fund,
designated as Class A and Class B shares. Class B shares were first publicly
offered on April 29, 1994. Shares issued and outstanding prior to April 29, 1994
were designated as Class A shares. The shares of each class represent an
interest in the same portfolio of investments of the Fund and have equal rights
to voting, redemptions, dividends and liquidation, 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 and Class B shareholders, respectively.
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 based on valuations furnished by an independent pricing
service that utilizes a matrix system. This matrix system reflects such factors
as security prices, yields, maturities and ratings and is supplemented by dealer
and exchange quotations and fair market value information from other sources, as
required. Original issue discount is accreted daily into interest income on a
yield-to-maturity basis. Market discount and premium are accreted or amortized
daily on a straight-line basis. Temporary cash investments are valued at
amortized cost plus accrued interest, which approximates value. Interest income
is recorded on the 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. 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.
The Fund has reclassified $32,136 to accumulated undistributed net investment
income, $215 to accumulated net realized loss and $31,921 from paid-in capital.
The reclassification has no impact on the net asset value of the Fund and is
designed to present the Fund's capital accounts on a tax basis.
C. Trust Shares--The Fund records sales and repurchases of trust shares on
trade date. Shares are sold and redeemed on a continuous basis at net asset
value per share. 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 $16,256
in underwriting commissions on the sale of the Fund's trust shares during the
year ended December 31, 1995. The Fund declares as daily dividend substantially
all of its net investment income. All dividends are paid on a monthly basis.
Short-term capital gain distribu-
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS--PIONEER INTERMEDIATE TAX-FREE FUND
DECEMBER 31, 1995--continued
- --------------------------------------------------------------------------------
tions, if any, may be declared with the daily dividends. Distributions paid by
the Fund, if any, with respect to each class of shares are calculated in the
same manner, at the same time, on the same day and in the same amount, except
that Class A and Class B shares bear different transfer agent and distribution
fees.
D. Class Allocations--Distribution fees are calculated based on the average
daily net asset value attributable to Class A and Class B shares of the Fund,
respectively. Shareholders of Class A and Class B share all expenses and fees
paid to the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on number of accounts in each class and the
ratable allocation of related out-of-pocket expenses (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.
2. Pioneering Management Corporation (PMC), 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 average
daily net assets.
PMC has agreed not to impose a portion of its management fees and to assume
other operating expenses of the Fund to the extent necessary to limit Class A
expenses to 1.00% of the Fund's average daily net assets attributable to the
Class A shares; the portion of the Fund-wide expenses attributable to Class B
shares will be reduced only to the extent that such expenses are reduced for the
Class A shares. PMC's agreement is voluntary and temporary and may be revised or
terminated at any time.
In addition, under the management agreement, certain other services and costs,
including accounting, regulatory reporting and insurance premiums, are paid by
the Fund. Included in due to affiliates is $44,416 and $11,211 in management and
accounting fees, respectively, payable to PMC at December 31, 1995.
3. 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 $5,338 in transfer agent fees payable to PSC at December 31,
1995.
4. The Fund adopted a Plan of Distribution for Class A shares (Class A Plan)
and Class B shares (Class B Plan) in accordance with Rule 12b-1 of the
Investment Company Act of 1940. These plans allow for Class A shares and Class B
shares to reimburse and compensate, respectively, PFD for providing varying
levels of distribution services and other account maintenance services. The
Class A Plan and Class B Plan provide for reimbursement of PFD's distribution
services in an amount up to 0.25% and 0.75%, respectively, of the average daily
net assets of the respective classes of shares. The Fund may also compensate PFD
for additional services in an amount up to 0.25% of the Fund's average daily net
assets attributable to Class B shares. Included in due to affiliates is $46,851
in distribution fees payable to PFD at December 31, 1995.
In addition, Class B shares that are redeemed within four years of purchase
are subject to a contingent deferred sales charge (CDSC) at declining rates
beginning at 3.0% based on the lower of cost or market value of shares being
redeemed. Proceeds from the CDSC are paid to PFD. For the year ended December
31, 1995, CDSC in the amount of $9,324 was paid to PFD.
5. The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the year ended December 31, 1995,
the Fund's expenses were reduced by $13,350 under such arrangements.
16
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER INTERMEDIATE TAX-FREE
FUND:
We have audited the accompanying balance sheet of Pioneer Intermediate Tax-Free
Fund, including the schedule of investments, as of December 31, 1995, and the
related statement of operations, statements of changes in net assets and
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
December 31, 1995 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 Intermediate Tax-Free Fund as of December 31, 1995, the results of its
operations, the changes in its net assets and financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 2, 1996
17
<PAGE>
TAX TREATMENT OF DISTRIBUTIONS MADE DURING THE YEAR ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE
FROM
NET INVESTMENT INCOME
------------------------
PAYMENT DATE CLASS A CLASS B
------------ --------- --------
<S> <C> <C>
Jan. 31, 1995................. 0.043 0.036
Feb. 28, 1995................. 0.042 0.035
Mar. 31, 1995................. 0.042 0.035
Apr. 28, 1995................. 0.040 0.033
May 31, 1995.................. 0.040 0.033
June 30, 1995................. 0.040 0.033
July 31, 1995................. 0.040 0.033
Aug. 31, 1995................. 0.040 0.033
Sept. 29, 1995................ 0.039 0.032
Oct. 31, 1995................. 0.039 0.032
Nov. 30, 1995................. 0.039 0.032
Dec. 31, 1995................. 0.041 0.032
------ ------
TOTALS...................... $0.485 $0.399
====== ======
</TABLE>
Of the $0.485 and $0.399 per share distributed by Class A and Class B shares,
respectively, 100% is tax exempt.
For purposes of the dividend exclusion, none of the $0.485 and $0.399 per share
for Class A and Class B shares, respectively, qualifies for the exclusion.
18
<PAGE>
TRUSTEES' FEES, PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP OF TRUSTEES AND
OFFICERS (UNAUDITED)
- --------------------------------------------------------------------------------
The aggregate direct remuneration paid by the Fund to nonaffiliated trustees and
officers during the year ended December 31, 1995 was approximately $14,000, plus
expenses incurred in attending trustees meetings of approximately $3,000. Fees
of trustees who are affiliated with or "interested persons" of Pioneering
Management Corporation and Pioneer Funds Distributor, Inc., investment adviser
and principal underwriter, respectively, of the Fund ($1000 in 1995) are
reimbursed to the Fund by Pioneering Management Corporation in accordance with
the management agreement with the Fund. At December 31, 1995, the trustees and
officers of the Fund owned beneficially 24,141 Class A shares of the Fund
(approximately 0.3% of the Class A outstanding shares). The Pioneer Group, Inc.,
the parent company of Pioneering Management Corporation and Pioneer Funds
Distributor, Inc., is a publicly held corporation of which Mr. Cogan, Chairman
and President of the Fund, owned approximately 15% of the outstanding shares of
capital stock at December 31, 1995.
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