[PIONEER LOGO]
PIONEER
INTERMEDIATE TAX-FREE
FUND
----------------------
ANNUAL REPORT 12/31/96
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<PAGE>
TABLE OF CONTENTS
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Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 16
Notes to Financial Statements 22
Report of Independent Public Accountants 26
Tax Treatment of Distributions 27
Trustees' Fees and Share Ownership 28
Trustees, Officers and Service Providers 29
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
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LETTER FROM THE CHAIRMAN 12/31/96
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DEAR SHAREOWNER,
It is with pleasure that I introduce this report for Pioneer Intermediate Tax-
Free Fund, covering the year ended December 31, 1996.
The bond market went full cycle during the year, going from falling interest
rates and rising bond prices to rising rates and falling prices, and back again.
The municipal bond market faced the additional challenge of working through a
cycle of tax-reform proposals. Early on, the talk was aggressive, with a focus
on flat tax proposals that would have eliminated many of the benefits of owning
municipal bonds. By the end of the year, however, the issue had retreated from
center stage.
Your Fund's management team had an active year adjusting the portfolio to pursue
tax-free income and a solid total return. We are pleased to report that, despite
the fast-changing environment for bonds overall, Pioneer Intermediate Tax-Free
Fund continued to pay shareowners attractive dividends and generated a
competitive, positive total return. The Fund remains a high-quality alternative
for investors looking for tax-free income.
A final note. As you see, we've given your Fund's annual report a facelift. The
new, improved style reflects what shareowners told us they want to see in fund
reports. Now you'll find a Table of Contents and consistent, easy-to-read
summaries of portfolio information and performance. There's also a Portfolio
Management Discussion of the portfolio management team's insights into market
conditions, portfolio strategy and results. We hope you find them informative.
Please contact your investment representative, or us at 1-800-225-6292, if you
have questions your investment in Pioneer Intermediate Tax-Free Fund. Thank you
for your continued support.
Respectfully,
[SIGNATURE]
John F. Cogan, Jr.,
Chairman and President
1
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PIONEER INTERMEDIATE TAX-FREE FUND
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PORTFOLIO SUMMARY 12/31/96
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PORTFOLIO QUALITY
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(As a percentage of total investment portfolio)
[A pie chart depicting the quality of the portfolio as a percentage of the total
investment portfolio. The numbers are as follows:
AAA 36%
AA 46%
A 18%]
PORTFOLIO MATURITY
- ------------------------------------------------------------------------------
(Effective life as a percentage of total investment portfolio)
[A pie chart depicting the maturity of the portfolio with the effective life as
a percentage of the total investment portfolio. The numbers are as follows:
0-2 Years 5%
2-5 Years 17%
5-7 Years 15%
7-10 Years 53%
10-15 Years 18%
15+ Years 11% ]
10 LARGEST HOLDINGS
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(As a percentage of long-term holdings)
1.Detroit City School District General Obligation, AMBAC Insured
6.5%, 2008
2.22%
2.Pennsylvania State General Obligation,
6.25%, 20102.18
3. Connecticut State Special Tax Obligation Revenue,
MBIA Insured,
6.0%, 20062.16
4.State of Texas General Obligation,
5.8%, 20042.13
5.Indiana Municipal Power Agency Revenue, MBIA Insured,
6.0%, 20122.11
6.Grand River Dam Authority Electric Revenue,
5.75%, 20062.10
7.Georgia State Obligation,
5.5%, 20062.09
8.University of Maryland Revenue,
5.4%, 20062.07
9.Maine State General Obligation,
5.375%, 20062.06
10. Maryland Community Development Administration,
Single Family Mortgage Revenue,
5.95%, 20062.03
Fund holdings will vary for other periods.
2
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PIONEER INTERMEDIATE TAX-FREE FUND
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PERFORMANCE UPDATE 12/31/96 CLASS A SHARES
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SHARE PRICES AND DISTRIBUTIONS
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NET ASSET VALUE
PER SHARE 12/31/96 12/31/95
$10.28 $10.44
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/95 - 12/31/96) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
$0.465 - -
INVESTMENT RETURNS
- ------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Intermediate Tax-Free Fund at public offering price, compared to the
growth of the Lehman Brothers Municipal Bond Index.
[A MOUNTAIN CHART DEPICTING THE GROWTH OF A $10,000 INVESTMENT FROM DECEMBER
1986 TO DECEMBER 1996. THE LINE FOR PIONEER AMERICA INCOME TRUST ENDS AT
$18,067 FOR DECEMBER 1996. THE LINE FOR THE LEHMAN BROTHERS MUNICIPAL BOND
INDEX ENDS AT $21,184 FOR DECEMBER 1996.]
- ------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(As of December 31, 1996)
NET ASSET PUBLIC OFFERING
PERIOD VALUE PRICE*
10 Years 6.47% 6.09%
5 Years 5.87 5.12
1 Year 3.03 -0.58
- ------------------------------------------------------
*Reflects deduction of the maximum 3.5% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
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.
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
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PIONEER INTERMEDIATE TAX-FREE FUND
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PERFORMANCE UPDATE 12/31/96 CLASS B SHARES
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SHARE PRICES AND DISTRIBUTIONS
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NET ASSET VALUE
PER SHARE 12/31/96 12/31/95
$10.31 $10.46
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(12/31/95 - 12/31/96) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
$0.377 - -
INVESTMENT RETURNS
- ------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Intermediate Tax-Free Fund, compared to the growth of the Lehman
Brothers Municipal Bond Index.
[A MOUNTAIN CHART DEPICTING THE GROWTH OF A $10,000 INVESTMENT FROM APRIL 1994
TO DECEMBER 1996. THE LINE FOR PIONEER AMERICA INCOME TRUST ENDS AT $11,151 FOR
DECEMBER 1996. THE LINE FOR THE LEHMAN BROTHERS MUNICIPAL BOND INDEX ENDS AT
$12,204 FOR DECEMBER 1996.]
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AVERAGE ANNUAL TOTAL RETURNS
(As of December 31, 1996)
IF IF
PERIOD HELD REDEEMED*
Life-of-Fund 4.84% 4.15%
(4/29/94)
1 Year 2.25 -0.71
- ------------------------------------------------------
* 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 3% declines over four years.
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.
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
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PIONEER INTERMEDIATE TAX-FREE FUND
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PERFORMANCE UPDATE 12/31/96 CLASS C SHARES
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SHARE PRICES AND DISTRIBUTIONS
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NET ASSET VALUE
PER SHARE 12/31/96 1/31/96
$10.29 $10.51
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(1/31/96 - 12/31/96) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
$0.341 - -
INVESTMENT RETURNS
- ------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Intermediate Tax-Free Fund, compared to the growth of the Lehman
Brothers Municipal Bond Index.
[A MOUNTAIN CHART DEPICTING THE GROWTH OF A $10,000 INVESTMENT FROM JANUARY 1996
TO DECEMBER 1996. THE LINE FOR PIONEER AMERICA INCOME TRUST ENDS AT $10,024 FOR
DECEMBER 1996. THE LINE FOR THE LEHMAN BROTHERS MUNICIPAL BOND INDEX ENDS AT
$10,365 FOR DECEMBER 1996.]
- ------------------------------------------------------
CUMULATIVE TOTAL RETURNS
(As of December 31, 1996)
IF IF
PERIOD HELD REDEEMED*
Life-of-Fund 1.22% 0.24%
(1/31/96)
- ------------------------------------------------------
* Reflects deduction of the 1% contingent deferred sales charge (CDSC) at the
end of the period and assumes reinvestment of distributions.
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.
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
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PIONEER INTERMEDIATE TAX-FREE FUND
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/96
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DEAR SHAREOWNER,
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It's my pleasure to report that Pioneer Intermediate Tax-Free Fund completed its
10th year on December 31, 1996, with positive performance despite the bond
market's tremendous volatility. The economy, having finished 1996 in much
stronger standing than most forecasters anticipated, created a difficult
environment for all fixed-income investments - including municipal bonds.
Although the Federal Reserve (the Fed) never actually raised short-term interest
rates, investor perceptions of rising inflation and the specter of inflation
unnerved bond investors. Despite these trying market conditions, the Fund's
yield remained competitive. An investor in the maximum 39.6% federal tax bracket
would have had to receive a 6.24% return on a fully taxable investment to match
the Fund's 3.77% tax-free 30-day SEC yield on December 31.
INVESTOR PERCEPTIONS DROVE BOND MARKET'S VOLATILITY
Market conditions at the beginning and end of your Fund's fiscal year might
suggest that the period was generally favorable for bonds. However, the interim
months were enough to test even the most experienced bond fund managers. Early
on, benign inflation and slow economic growth led the Fed to lower short-term
interest rates by 0.25% in January. Investor optimism and bond prices soared.
However, the announcement of stronger employment numbers in early March fueled
fears of inflation and potential for a reversal of the Fed's monetary policy.
The bond market's sell-off then began in earnest. While the sudden reversal in
the direction of interest rates hurt prices of all fixed-income securities, tax-
free bonds fared better than their fully taxable counterparts.
For the better part of a year, prices of tax-free bonds had reflected lingering
investor concerns about the perceived effect of tax-reform proposals. Central to
this debate was the flat-tax proposal, which in its purest form would deprive
municipal bonds of their tax-exempt status. Fortunately, investors realized that
the passage of a flat tax was far from certain and that many tax-reform
proposals would be debated before being approved.
6
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PIONEER INTERMEDIATE TAX-FREE FUND
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Once their initial fears were allayed, investors renewed their interest in
municipal bonds, providing some impetus for higher prices. As a result,
municipal bonds outperformed their taxable counterparts during the first half of
the year.
Following the uncertainty of the summer months, in which bond investors kept a
nervous eye on policy makers at the Fed, the municipal bond market enjoyed a
long-awaited rally in late fall. Signs of slowing economic growth helped cool
investors' concerns over rising interest rates, sparking upward movement in
prices of municipal bonds.
HOW PIONEER MANAGED YOUR INVESTMENT
High-quality continues to be the defining characteristic of your Fund. All
portfolio holdings have a rating of A or better; the average quality rating
remains AA. The Fund is broadly diversified, with 36 states and 77 issues in the
portfolio at year-end, and 92% of it assets in securities with remaining
maturities of 15 years or less. We believe the Fund's conservative, intermediate
focus can be an effective way to limit price volatility while generating
attractive tax-free income.
The overall credit quality of the municipal marketplace has been increasing over
time. This trend, evidenced by the fact that credit upgrades outpaced downgrades
in 1996, is partly the result of the fact that over half of the new issuance
coming to market is insured. Bond insurance assures the timely payment of
principal and interest in the event the issuer of debt is unable to meet its
obligations. In the aftermath of the bankruptcy of Orange County, California in
1994, municipal bond insurance provides additional security for investors and
enhanced liquidity and price after the initial offering. Rating agencies, such
as Standard & Poor's or Moody's, place bonds covered by major insurers in the
highest rating category, AAA and Aaa, respectively. By December 31, we had
doubled the Fund's exposure to insured bonds to 19% of net assets, buying when
new issuances pushed prices lower.
7
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PIONEER INTERMEDIATE TAX-FREE FUND
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/96 (continued)
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During the period, we made structural modifications to the portfolio as well.
Given the secular decline in interest rates over the past several years, bonds
with higher coupons are at risk of being called away by their issuers. To reduce
the Fund's exposure to this risk, we extended call protection by swapping out of
bonds approaching their call dates and purchasing bonds with a minimum of 10
years or longer before their call dates. This defensive strategy helps protect
the higher coupon bonds in your portfolio, and thus your Fund's stream of tax-
free income. Adding a higher degree of call protection extended the portfolio's
average life from 7.84 years to 8.06 years by December 31 - well below the
Fund's maximum limit of 10 years.
LOOKING AHEAD
At least two important points emerged from the discussions of 1996 - the general
acknowledgement that tax reform is a complicated issue and the realization that
municipal bonds play an important role for both investors and issuers. With that
backdrop, we think enthusiasm for municipal bonds should increase in 1997.
Pioneer Intermediate Tax-Free Fund continues to offer you an efficient,
convenient way to participate in the municipal bond market and enjoy the
benefits of tax-free income. The portfolio's focus on intermediate- and shorter-
term issues helps make it more conservative than funds that emphasize long-term
bonds, but the Fund's investment guidelines offer enough flexibility to help
generate an attractive level of tax-free income. As we move through 1997, we'll
fine-tune the portfolio in an effort to maintain or improve its income stream,
but without losing sight of generating a solid total return.
Respectfully,
[SIGNATURE]
Kathleen A. McClaskey,
Portfolio Manager
8
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
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SCHEDULE OF INVESTMENTS 12/31/96
- ------------------------------------------------------------------------------
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<S> <C> <C> <C>
INVESTMENTS IN SECURITIES - 100.0%
TAX-EXEMPT OBLIGATIONS - 100.0%
ALASKA - 1.3%
$1,000,000 AAA/Aaa Alaska Housing Finance Corporation Revenue,
MBIA Insured, 5.125%, 2006 $ 1,003,430
------------
ARIZONA - 5.6%
1,000,000 AA/Aaa Arizona Transportation Board Highway Revenue,
6.5%, Prerefunded, 2001* $ 1,098,080
1,000,000 AA-/Aa Phoenix Civic Improvement Corporation
Water Revenue, 6.5%, 2006 1,120,370
1,000,000 AA/Aa Salt River Agricultural Improvement and
Power District Arizona, 5.2%, 2008 1,014,060
1,000,000 A+/A1 Tucson Water Revenue, 5.5%, 2014 1,008,970
------------
$ 4,241,480
------------
CONNECTICUT - 3.5%
1,000,000 AA/Aa Connecticut Housing Finance Authority Housing
Mortgage Finance Program, 6.25%, 2011 $ 1,029,910
1,500,000 AAA/Aaa Connecticut State Special Tax Obligation
Revenue MBIA Insured, 6.0%, 2006 1,628,985
------------
$ 2,658,895
------------
DISTRICT OF COLUMBIA - 0.7%
500,000 A+/A1 Georgetown University General Obligation,
8.125%, 2008 $ 532,335
------------
DELAWARE - 1.4%
1,000,000 AA/A1 Delaware Transportation Authority,
Revenue, 5.2%, 2001 $ 1,029,460
------------
FLORIDA - 7.0%
1,000,000 AA/Aa Florida State Board of Education Capital Outlay
General Obligation, 5.125%, 2005 $ 1,025,730
1,000,000 AAA/Aaa Florida State Department of Environmental
Protection Sales Tax Revenue,
AMBAC Insured, 5.25%, 2003 1,039,580
1,000,000 AA/Aa Gainesville Regional Utilities Revenue,
5.75%, 2006 1,069,980
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
9
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<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
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SCHEDULE OF INVESTMENTS 12/31/96 (continued)
- ------------------------------------------------------------------------------
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<S> <C> <C> <C>
FLORIDA (CONTINUED)
1,020,000 AAA/Aaa Homestead Special Insurance Assessment
Revenue, MBIA Insured, Escrowed to Maturity
in Government Securities, 5.25%, 2003 1,062,238
1,000,000 AA/Aa1 Orlando, Utilities Commission Water & Electric
Revenue, 5.6%, 2003 1,060,660
------------
$ 5,258,188
------------
GEORGIA - 6.2%
1,000,000 AAA/Aaa Atlanta, Airport Facilities Revenue,
AMBAC Insured, 6.25%, 2005+ $ 1,094,000
1,500,000 AA+/A1 Georgia State General Obligation, 5.5%, 2006 1,581,015
500,000 AA-/A1 Metropolitan Atlanta Rapid Transit Authority
Sales Tax Revenue, 7.25%, 2010 529,310
400,000 A/A Municipal Electric Authority of Georgia Special
Obligation Revenue, 7.65%, 2003 420,484
1,000,000 A/A Municipal Electric Authority of Georgia
Power Revenue, 6.2%, 2010 1,066,330
------------
$ 4,691,139
------------
HAWAII - 1.4%
1,000,000 AA/Aa Honolulu, City and County General Obligation,
5.1%, 2002 $ 1,027,470
------------
ILLINOIS - 5.5%
1,000,000 AAA/Aaa Chicago, General Obligation,
AMBAC Insured, 5.7%, 2007 $ 1,048,140
1,000,000 A+/A1 llinois State Toll Highway Authority
Revenue, 6.3%, 2012 1,082,060
1,000,000 AA/Aa1 Illinois Education Facilities Authority Revenue,
Northwestern University, 5.5%, 2013 994,510
1,000,000 A+/A Metropolitan Pier & Exposition Authority,
Sales Tax Revenue, 5.75%, 2002 1,041,740
------------
$ 4,166,450
------------
INDIANA - 5.3%
1,500,000 AAA/Aaa Indiana Municipal Power Agency, Revenue
MBIA Insured, 6.0%, 2012 $ 1,596,495
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
10
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
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- ------------------------------------------------------------------------------
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<S> <C> <C> <C>
INDIANA (CONTINUED)
750,000 A/NR Indiana Municipal Power Agency, Power Supply
System Revenue, 7.1%, Prerefunded, 2000* 819,052
500,000 A+/A1 Indiana Transportation Finance Authority Highway
Revenue, 8.0%, Prerefunded, 1998* 536,945
1,000,000 AA-/Aa2 Purdue University, Indiana, Revenue
5.75%, 2004 1,063,780
------------
$ 4,016,272
------------
KANSAS - 2.1%
1,000,000 AA/Aa Kansas Department of Transportation Highway
Revenue, 5.375%, 2007 $ 1,033,560
500,000 AA/NR Kansas Department of Transportation Highway
Revenue, 6.5%, Prerefunded, 2002* 552,745
------------
$ 1,586,305
------------
KENTUCKY - 2.5%
1,000,000 AAA/Aaa Kentucky Turnpike Authority Revenue,
AMBAC Insured, 5.25%, 2005 $ 1,034,630
750,000 A+/A1 Lexington-Fayette Urban County Government
Revenue, 7.0%, 2006 826,763
------------
$ 1,861,393
------------
MAINE - 2.1%
1,500,000 AA+/Aa Maine State General Obligation, 5.375%, 2006 $ 1,557,510
------------
MARYLAND - 4.1%
1,500,000 NR/Aa Maryland Community Development Administration,
Single Family Mortgage Revenue, 5.95%, 2006 $ 1,532,565
1,500,000 AA+/Aa University of Maryland Revenue, 5.4%, 2006 1,563,060
------------
$ 3,095,625
------------
MASSACHUSETTS - 4.2%
1,000,000 A+/A1 Massachusetts Bay Transportation Authority
Revenue, 5.5%, 2009 $ 1,027,630
1,000,000 AAA/Aaa Massachusetts Housing Finance Agency,
FNMA Collateralized, 6.875%, 2021 1,049,000
1,000,000 AA-/Aa Massachusetts Water Pollution Abatement Trust
Sewer Revenue, 6.0%, 2008 1,061,740
------------
$ 3,138,370
------------
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
11
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
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SCHEDULE OF INVESTMENTS 12/31/96 (continued)
- ------------------------------------------------------------------------------
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<S> <C> <C> <C>
MICHIGAN - 5.0%
1,500,000 AAA/Aaa Detroit City School District General
Obligation, AMBAC Insured, 6.5%, 2008 $ 1,677,570
1,000,000 AA-/A1 Michigan State Trunk Line Fuel Sales Tax
Revenue, Series A, 5.625%, 2003 1,057,870
1,000,000 AA-/A1 Michigan State Trunk Line Fuel Sales Tax
Revenue, Series B, 5.625%, 2003 1,057,870
------------
$ 3,793,310
------------
MINNESOTA - 2.4%
750,000 AAA/Aaa Minnesota Public Facilities Authority Water
Pollution Control Revenue, 7.0%,
Prerefunded, 1999* $ 808,755
1,000,000 AAA/Aaa Minnesota Public Facilities Authority Water
Pollution Control Revenue, 5.0%, 2006 1,015,370
------------
$ 1,824,125
------------
MISSOURI - 1.4%
1,000,000 NR/Aa Missouri Environmental Improvement & Energy
Resource Authority Water Pollution Control
Revenue, 5.15%, 2004 $ 1,022,390
------------
NEBRASKA - 1.5%
1,000,000 AAA/NR Omaha Public Power District Electric System
Revenue, 6.5%, Prerefunded, 2002* $ 1,100,360
------------
NEVADA - 0.1%
70,000 AA/Aa Nevada Housing Division Single Family Program
Revenue, 8.0%, 2009 $ 72,324
------------
NEW HAMPSHIRE - 0.7%
500,000 AAA/Aaa New Hampshire Turnpike System Revenue,
7.375%, Prerefunded, 2000* $ 554,915
------------
NEW JERSEY - 4.0%
1,000,000 AA/Aa New Jersey Wastewater Treatment Trust Sewer
Revenue, 6.5%, 2006 $ 1,123,020
750,000 AA-/Aaa New Jersey Highway Authority, Garden State
Parkway Senior Revenue, 7.25%,
Prerefunded, 1999* 809,948
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
12
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<S> <C> <C> <C>
NEW JERSEY (CONTINUED)
1,000,000 AA+/Aa1 State of New Jersey Sales Tax
General Obligation, 5.8%, 2007 1,071,420
------------
$ 3,004,388
------------
NEW MEXICO - 1.3%
1,000,000 AA/Aa Bernalillo County, Gross Receipts,
Tax Revenue, 5.0%, 2013 $ 959,090
------------
NEW YORK - 0.7%
500,000 AAA/Aaa New York City Municipal Water Finance Authority
Revenue, 7.75%, Prerefunded, 1998* $ 534,920
------------
OHIO - 1.3%
1,000,000 AAA/Aaa Cuyahoga County, General Obligation,
MBIA Insured, 5.0%, 2007 $ 1,008,200
------------
OKLAHOMA - 3.4%
1,500,000 A-/A Grand River Dam Authority
Electric Revenue, 5.75%, 2006 $ 1,587,060
1,000,000 AA/Aa Oklahoma City, General Obligation, 5.0%, 2004 1,018,620
------------
$ 2,605,680
------------
OREGON - 0.3%
250,000 AA/Aa State of Oregon Veterans Welfare
General Obligation, 7.75%, 2003 $ 256,585
------------
PENNSYLVANIA - 5.0%
1,500,000 AA-/A1 Pennsylvania State General
Obligation, 6.25%, 2010 $ 1,645,305
1,000,000 A-/NR Pennsylvania Industrial Development Authority
Revenue, 7.0%, Prerefunded, 2001* 1,115,460
1,000,000 A/A1 Pennsylvania State Turnpike Commission
Highway Revenue, 5.45%, 2002 1,041,500
------------
$ 3,802,265
------------
PUERTO RICO - 2.2%
500,000 AAA/NR Puerto Rico Highway Authority
Revenue Refunding, 8.0%, Prerefunded, 1998* $ 540,250
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
13
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/96 (continued)
- ------------------------------------------------------------------------------
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<S> <C> <C> <C>
PUERTO RICO (CONTINUED)
1,000,000 AAA/Aaa University of Puerto Rico
Revenue, MBIA Insured, 6.25%, 2008 1,112,300
------------
$ 1,652,550
------------
SOUTH CAROLINA - 1.1%
750,000 AAA/Aaa South Carolina Public Service Authority
Revenue, 7.0%, Prerefunded, 2001* $ 840,833
------------
TEXAS - 8.0%
1,000,000 A/A Houston, Water & Sewer System
Revenue, 5.4%, 2000 $ 1,034,130
750,000 AAA/Aaa San Antonio Prior Lien Water
Revenue, 7.125%, Prerefunded, 1999* 809,992
1,500,000 AA/Aa State of Texas General Obligation, 5.8%, 2004 1,609,035
1,000,000 AA/Aaa Tarrant County, Water Control & Improvement
District #001 Revenue, 6.0%,
Prerefunded, 2001* 1,060,240
1,250,000 AAA/Aaa Texas Department of Housing and Community
Affairs Revenue, MBIA Insured, 5.75%, 2010 1,258,337
250,000 AAA/Aaa University of Texas Permanent University Fund,
Escrowed to Maturity in Government
Securities, 8.0%, 2004 302,520
------------
$ 6,074,254
------------
UTAH - 0.1%
100,000 AA/Aa Utah Housing Finance Agency,
Single Family Mortgage Purchase
Revenue, 7.3%, 2003+ $ 103,271
------------
VERMONT - 0.7%
500,000 AAA/Aaa Vermont Municipal Bond Bank, 7.9%,
Prerefunded, 1998* $ 545,660
------------
VIRGINIA - 2.7%
1,000,000 AAA/Aaa Portsmouth General Obligation, FGIC
Insured, 5.0%, 2007 $ 1,007,320
1,000,000 AA/Aa Virginia Public School Authority
Revenue, 5.4%, 2004 1,046,550
------------
$ 2,053,870
------------
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
14
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<CAPTION>
S&P/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<S> <C> <C> <C>
WASHINGTON - 3.8%
1,000,000 AA-/Aa1 Lewis County, Public Utility District #1,
5.0%, 2004 $ 1,008,880
750,000 AA/Aaa State of Washington Motor Vehicle Fuel Tax
General Obligation, 7.25%, Prerefunded, 1999* 798,862
1,000,000 AA/Aa State of Washington General
Obligation, 6.0%, 2002 1,068,060
------------
$ 2,875,802
------------
WISCONSIN - 1.4%
1,000,000 AA/Aa State of Wisconsin General Obligation,5.5%,
2001 $ 1,040,500
------------
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $ 72,757,863)(a)(b)(c) $ 75,589,614
============
<FN>
NR Not rated.
* Prerefunded bond has been collateralized by U.S. Treasury securities which
are held in escrow and used to pay principal and interest in the tax-exempt
issue and to retire the bond in full at the earliest refunding date.
+ A portion of the bond was called on January 1, 1997.
(a)The concentration of securities, by type of obligation/market sector, is as
follows:
General Obligation 17.8%
Escrowed in U.S. Government Securities 18.4
Revenue Bonds:
Education 6.2
Housing 5.0
Insured 19.2
Pollution Control 2.7
Power 9.6
Sales Tax 3.3
Transportation 9.7
Water 7.1
Other 1.0
(b)At December 31, 1996, the net unrealized gain on investments based on cost
for federal income tax purposes of $72,757,863 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 2,893,691
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (61,940)
-------------
Net unrealized gain $ 2,831,751
=============
(c)At December 31, 1996, the Fund had a capital loss carryforward of $503,818,
which will expire between 2002 and 2003 if not utilized.
Purchases and sales of securities (excluding temporary cash investments) for
the year ended December 31, 1996 aggregated $26,283,460 and $28,527,022,
respectively.
</FN>
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
15
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
BALANCE SHEET 12/31/96
- ------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investment in securities, at value (cost $72,757,863) $ 75,589,614
Receivables -
Fund shares sold 231
Interest 1,312,151
Other 5,514
-------------
Total assets $ 76,907,510
-------------
LIABILITIES:
Payables -
Fund shares repurchased $ 14,655
Dividends 101,467
Due to bank 199,878
Due to affiliates 92,136
Accrued expenses 46,838
-------------
Total liabilities $ 454,974
-------------
NET ASSETS:
Paid-in capital $ 74,124,603
Accumulated net realized loss (503,818)
Net unrealized gain on investments 2,831,751
-------------
Total net assets $ 76,452,536
=============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $73,386,965/7,142,179 shares) $ 10.28
=============
Class B (based on $2,863,871/277,900 shares) $ 10.31
=============
Class C (based on $201,700/19,598 shares) $ 10.29
=============
MAXIMUM OFFERING PRICE:
Class A $ 10.65
=============
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
16
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------
FOR THE YEAR ENDED 12/31/96
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 4,356,819
-----------
EXPENSES:
Management fees $396,543
Transfer agent fees
Class A 91,021
Class B 3,727
Class C 399
Distribution fees
Class A 178,968
Class B 28,597
Class C 1,745
Accounting 74,473
Custodian fees 17,848
Registration fees 45,860
Professional fees 44,916
Printing 10,463
Fees and expenses of nonaffiliated trustees 15,495
Miscellaneous 16,989
--------
Total expenses $ 927,044
Less management fees waived by
Pioneering Management Corporation (87,136)
Less fees paid indirectly (23,871)
-----------
Net expenses $ 816,037
-----------
Net investment income $ 3,540,782
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 196,137
Change in net unrealized gain on investments (1,494,178)
-----------
Net loss on investments $(1,298,041)
-----------
Net increase in net assets resulting from operations $ 2,242,741
===========
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
17
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------
FOR THE YEARS ENDED 12/31/96 AND 12/31/95
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
FROM OPERATIONS: 12/31/96 12/31/95
Net investment income $ 3,540,782 $ 3,905,779
Net realized gain (loss) on investments 196,137 (400,733)
Change in net unrealized gain or loss on investments (1,494,178) 6,979,005
------------ ------------
Net increase in net assets resulting from operations$ 2,242,741 $ 10,484,051
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.47 and $0.49 per share, respectively) $ (3,461,175) $ (3,800,009)
Class B ($0.38 and $0.40 per share, respectively) (105,009) (86,280)
Class C ($0.33 and $0.00 per share, respectively) (6,042) -
In excess of net investment income:
Class A ($0.00 and $0.00 per share, respectively) (5,392) -
Class C ($0.01 and $0.00 per share, respectively) (238) -
------------ ------------
Total distributions to shareholders $ (3,577,856) $ (3,886,289)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 8,160,271 $ 7,101,676
Reinvestment of distributions 2,196,836 2,437,890
Cost of shares repurchased (14,554,121) (12,355,539)
------------ ------------
Net decrease in net assets resulting from
fund share transactions $ (4,197,014) $ (2,815,973)
------------ ------------
Net increase (decrease) in net assets $ (5,532,129) $ 3,781,789
NET ASSETS:
Beginning of year 81,984,665 78,202,876
------------ ------------
End of year (including accumulated undistributed net
investment income of $0 and $35,178, respectively) $76,452,536 $ 81,984,665
============ ============
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A '96 SHARES '96 AMOUNT '95 SHARES '95 AMOUNT
Shares sold 678,298 $ 6,961,860 567,733 $ 5,747,321
Reinvestment of distributions 206,717 2,116,538 233,794 2,382,977
Less shares repurchased (1,352,057) (13,837,542) (1,158,605) (11,807,545)
---------- ----------- ---------- -----------
Net decrease (467,042) $ (4,759,144) (357,078) $ (3,677,247)
========== ============ ========== ===========
CLASS B
Shares sold 95,563 $ 984,982 133,711 $ 1,354,355
Reinvestment of distributions 7,217 74,044 5,360 54,913
Less shares repurchased (68,872 ) (701,579) (53,564) (547,994)
---------- ----------- ---------- -----------
Net increase 33,908 $ 357,447 85,507 $ 861,274
========== ============ ========== ===========
CLASS C*
Shares sold 20,459 $ 213,429
Reinvestment of distributions 611 6,254
Less shares repurchased (1,472) (15,000)
---------- -----------
Net increase 19,598 $ 204,683
========== ============
<FN>
* Class C shares were first publicly offered on January 31, 1996.
</FN>
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
18
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/96
- ------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
CLASS A 12/31/96 12/31/95 12/31/94(a) 12/31/93 12/31/92
Net asset value,
beginning of year $ 10.44 $ 9.62 $ 10.76 $ 10.32 $ 10.06
-------- -------- -------- -------- --------
Increase (decrease) from
investment operations:
Net investment income $ 0.46 $ 0.49 $ 0.49 $ 0.56 $ 0.59
Net realized and unrealized
gain (loss) on investments (0.15) 0.82 (1.13) 0.56 0.25
-------- -------- -------- -------- --------
Net increase (decrease)
from investment operations $ 0.31 $ 1.31 $ (0.64) $ 1.12 $ 0.84
Distributions to shareholders:
Net investment income (0.47) (0.49) (0.49) (0.56) (0.58)
Net realized gain - - (0.01) (0.12) -
-------- -------- -------- -------- --------
Net increase (decrease) in
net asset value $ (0.16) $ 0.82 $ (1.14) $ 0.44 $ 0.26
-------- -------- -------- -------- --------
Net asset value, end of year $ 10.28 $ 10.44 $ 9.62 $ 10.76 $ 10.32
======== ======== ======== ======== ========
Total return* 3.03% 3.80% (6.02)% 11.08% 8.65%
Ratio of net expenses to
average net assets 1.03%+ 1.02%+ 1.00% 0.85% 0.85%
Ratio of net investment income
to average net assets 4.47%+ 4.77%+ 4.89% 5.23% 5.78%
Portfolio turnover rate 34% 29% 39% 14% 4%
Net assets, end of year
(in thousands) $ 73,387 $ 79,432 $ 76,674 $ 82,097 $ 57,353
Ratios assuming no waiver of
management fees by PMC and no
reduction for fees paid
indirectly:
Net expenses 1.14% 1.12% 1.22% 1.12% 1.27%
Net investment income 4.36% 4.67% 4.67% 4.97% 5.36%
Ratios assuming waiver of
management fees by PMC and
reduction for fees paid
indirectly:
Net expenses 1.00% 1.00% - - -
Net investment income 4.50% 4.79% - - -
<FN>
(a)The per share data presented above is based upon the average shares
outstanding for the period presented.
* 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.
+ Ratio assuming no reduction for fees paid indirectly.
</FN>
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
19
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/96
- ------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED YEAR ENDED 4/29/94 TO
CLASS B 12/31/96 12/31/95 12/31/94(a)
Net asset value, beginning of period $ 10.46 $ 9.65 $ 10.07
--------- -------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.38 $ 0.41 $ 0.27
Net realized and unrealized gain (loss)
on investments (0.15) 0.80 (0.42)
--------- -------- --------
Net increase (decrease) from
investment operations $ 0.23 $ 1.21 (0.15)
Distributions to shareholders:
Net investment income (0.38) (0.40) (0.27) )
--------- -------- ---------
Net increase (decrease) in net asset value $ (0.15) $ 0.81 $ (0.42)
--------- -------- ---------
Net asset value, end of period $ 10.31 $ 10.46 $ 9.65
========= ======== =========
Total return* 2.25% 12.71% (1.49)%
Ratio of net expenses to average net assets 1.81%+ 1.86%+ 1.84%**
Ratio of net investment income to
average net assets 3.68%+ 3.90%+ 4.17%**
Portfolio turnover rate 34% 29% 39%
Net assets, end of period (in thousands) $ 2,864 $ 2,553 $ 1,529
Ratios assuming no waiver of management fees
by PMC and no reduction for fees paid
indirectly:
Net expenses 1.91% 1.96% 2.14%**
Net investment income 3.58% 3.80% 3.87%**
Ratios assuming waiver of management fees by
PMC and reduction for fees paid indirectly:
Net expenses 1.76% 1.82% -
Net investment income 3.73% 3.94% -
<FN>
(a)The per share data presented above is based upon the average shares
outstanding for the period presented.
* 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.
</FN>
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
20
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/96
- ------------------------------------------------------------------------------
<CAPTION>
<S> <C>
1/31/96 TO
CLASS C (A) 12/31/96
Net asset value, beginning of period $ 10.51
---------
Increase (decrease) from investment operations:
Net investment income $ 0.33
Net realized and unrealized loss on investments (0.21)
---------
Net increase from investment operations $ 0.12
Distributions to shareholders:
Net investment income (0.33)
In excess of net investment income (0.01)
---------
Net decrease in net asset value $ (0.22)
---------
Net asset value, end of period $ 10.29
=========
Total return* 1.22%
Ratio of net expenses to average net assets 1.97%**+
Ratio of net investment income to average net assets 3.51%**+
Portfolio turnover rate 34%
Net assets, end of period (in thousands) $ 202
Ratios assuming no waiver of management fees by
PMC and no reduction for fees paid indirectly:
Net expenses 2.08%**
Net investment income 3.40%**
Ratios assuming waiver of management fees by
PMC and reduction for fees paid indirectly:
Net expenses 1.89%**
Net investment income 3.59%**
<FN>
(a)Class C shares were first publicly offered on January 31, 1996.
* 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.
</FN>
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
21
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/96
- ------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
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. The investment objective of the Fund is to seek a
high level of current income exempt from federal income taxes from a high-
quality portfolio of municipal bonds.
The Fund offers three classes of shares - Class A, Class B and Class C shares.
Class C shares were first publicly offered on January 31, 1996. 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 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, Class B and Class C
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 independent pricing services that utilize
matrix systems. These matrix systems reflect such factors as security
prices, yields, maturities and ratings and are supplemented by dealer and
exchange quotations and fair market value information from 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.
22
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
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 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 $1,896 from paid-in capital to accumulated
distributions in excess of net investment income. 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. 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 $11,322
in underwriting commissions on the sale of fund shares during the year
ended December 31, 1996.
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
23
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/96 (continued)
- ------------------------------------------------------------------------------
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
shares can bear different transfer agent and distribution fees.
2. MANAGEMENT AGREEMENT
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 average daily net assets attributable to Class A
shares; the portion of the Fund-wide expenses attributable to Class B and Class
C shares will be reduced only to the extent that such expenses are reduced for
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. At December 31, 1996, $37,075 was payable to PMC related to management
fees 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 $9,143 in transfer agent fees payable to PSC at December 31,
1996.
24
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
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 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 $45,918 in distribution fees payable to PFD at December 31,
1996.
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 four years of purchase are subject to a
CDSC at declining rates beginning at 3.0%, 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 CDSC are paid to
PFD. For the year ended December 31, 1996, CDSCs in the amount of $11,695 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 year ended December 31, 1996,
the Fund's expenses were reduced by $23,871 under such arrangements.
25
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
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, including the schedule of
investments, of Pioneer Intermediate Tax-Free Fund, as of December 31, 1996,
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
December 31, 1996 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, 1996, 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
February 3, 1997
26
<PAGE>
<TABLE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
TAX TREATMENT OF DISTRIBUTIONS
- ------------------------------------------------------------------------------
Made during the Year Ended 12/31/96
During the year ended December 31, 1996, Pioneer Intermediate
Tax-Free Fund paid the following distributions per share from investment income:
<CAPTION>
<S> <C> <C> <C>
PAYMENT INCOME DIVIDENDS
DATE CLASS A CLASS B CLASS C
1/31/96 $ 0.041 $ 0.032 $ 0.000
2/29/96 0.041 0.032 0.032
3/29/96 0.040 0.032 0.032
4/30/96 0.040 0.032 0.032
5/31/96 0.040 0.032 0.032
6/28/96 0.040 0.032 0.032
7/31/96 0.040 0.032 0.032
8/30/96 0.039 0.033 0.033
9/30/9 0.036 0.030 0.029
10/31/96 0.036 0.030 0.029
11/29/96 0.036 0.030 0.029
12/31/96 0.036 0.030 0.029
-------- -------- -------
Total $ 0.465 $ 0.377 $ 0.341
======== ======== =======
</TABLE>
Of the $0.465, $0.377, and $0.341 per share distributed by Class A, Class B, and
Class C shares, respectively, 100% is tax-exempt.
For purposes of the dividend exclusion, none of the distributions per share
qualifiy for the exclusion.
27
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
- ------------------------------------------------------------------------------
TRUSTEES' FEES AND SHARE OWNERSHIP 12/31/96
- ------------------------------------------------------------------------------
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, 1996 was $13,496, plus expenses
incurred in attending trustees meetings of $3,277. 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 ($1,000 in 1996), are reimbursed to the Fund by
Pioneering Management Corporation in accordance with the management agreement
with the Fund. At December 31, 1996, the trustees and officers of the Fund
owned beneficially 25,362 Class A shares of the Fund (0.4% of the outstanding
Class A 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 14% of the outstanding shares of capital stock at December 31,
1996.
28
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PIONEER INTERMEDIATE TAX-FREE FUND
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TRUSTEES, OFFICERS AND SERVICE PROVIDERS
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TRUSTEES
John F. Cogan, Jr.
Richard H. Egdahl, M.D.
Margaret B.W. Graham
John W. Kendrick
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
OFFICERS
John F. Cogan, Jr., Chairman and President
David D. Tripple, Executive Vice President
Sherman B. Russ, Vice President
William H. Keough, Treasurer
Joseph P. Barri, Secretary
INVESTMENT ADVISER
Pioneering Management Corporation
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
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HOW TO CONTACT PIONEER
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We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
YOU CAN 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
OR WRITE TO US AT:
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)
THIS REPORT MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT FUND PROSPECTUS.
[PIONEER LOGO]PIONEER FUNDS DIST., INC. 0297-3933
60 STATE STREET [COPYRIGHT]PIONEER FUNDS DIST.,INC.
BOSTON, MASSACHUSETTS 02109 [LOGO]PRINTED ON RECYCLED PAPER
