[LOGO]
PIONEER
Pioneer
Intermediate Tax-Free
Fund
SEMIANNUAL REPORT 6/30/97
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
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
Trustees, Officers and Service Providers 27
Program and Services for Pioneer Shareowners 28
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
LETTER FROM THE CHAIRMAN 6/30/97
- --------------------------------------------------------------------------------
Dear Shareowner,
- --------------------------------------------------------------------------------
It is with pleasure that I introduce this semiannual report for Pioneer
Intermediate Tax-Free Fund, covering the six months ended June 30, 1997.
It was a time of uncertainty for bond investors, and emotions and perceptions
seemed to be the primary factors moving the bond market. Corrections in the
stock market and an economy that was alternately growing and retreating -
depending on how data were interpreted - kept bond investors on the lookout for
indications of a trend. Tax-free issues performed better than most other bond
sectors, and we are happy to report that your Fund continued to reward
shareowners by paying monthly tax-free dividends and generating a positive total
return. The questions and answers that follow in the Portfolio Management
Discussion provide details of your investment team's strategies and results.
Recently, the stock market has generally outperformed the bond market. We happen
to be in the midst of the longest bull market in history, and our concern is
that many investors, especially newer ones, see stocks moving only in an upward
direction, which will not always be the case. When the stock market slows or
retreats, people will be reminded how important it is to diversify among a
variety of investments. Intermediate-term municipal bond funds, in addition to
providing tax advantages, can be a conservative, effective way to enhance a
portfolio's diversity and liquidity. If you haven't taken a look at your
portfolio recently, perhaps this is a good time to speak with your investment
professional. Varying performance of your investments can change the balance of
your portfolio, and you may need to get back on track.
If you have any questions about Pioneer Intermediate Tax-Free Fund, please
contact your investment representative, or Pioneer at 1-800-225-6292. Thank you
for your continued support.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
PORTFOLIO SUMMARY 6/30/97
- --------------------------------------------------------------------------------
Portfolio Quality
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[The following table was depicted as a Pie Chart in the printed material]
AAA 35%
AA 43%
A 22%
Portfolio Maturity
- --------------------------------------------------------------------------------
(Effective life as a percentage of total investment portfolio)
[The following table was depicted as a Pie Chart in the printed material]
0-2 Years 7%
2-5 Years 14%
5-7 Years 11%
7-10 Years 37%
10-15 Years 25%
15+ Years 6%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of long-term holdings)
1. Detroit City School District General Obligation, AMBAC Insured,
6.5%, 5/1/08 2.44%
2. Kansas State Department of Transportation, 6.125%, 9/1/09 2.42
3. Pennsylvania State General Obligation, 6.25%, 7/1/10 2.41
4. Connecticut State Special Tax Obligation Revenue, MBIA Insured,
6.0%, 10/1/06 2.38
5. Indiana Municipal Power Agency Revenue, 6.0%, 1/1/12 2.35
6. State of Texas General Obligation, 5.8%, 10/1/04 2.34
7. Grand River Dam Authority Electric Revenue, 5.75%, 6/1/06 2.33
8. Georgia State General Obligation, 5.5%, 8/1/06 2.31
9. University of Maryland Revenue, 5.4%, 4/1/06 2.28
10. Maine General Obligation, 5.375%, 5/15/06 2.28
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 6/30/97 CLASS A SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 6/30/97 12/31/96
$10.26 $10.28
Distributions per Share Income Short-Term Long-Term
(12/31/96 - 6/30/97) Dividends Capital Gains Capital Gains
$0.222 -- --
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.
Average Annual Total Returns
(As of June 30, 1997)
Net Asset Public Offering
Period Value Price*
10 Years 7.30% 6.92%
5 Years 5.39 4.64
1 Year 5.89 2.16
* Reflects deduction of the maximum 3.5% sales charge at the beginning of
the period and assumes reinvestment of distributions at net asset value.
Growth of $10,000
Date Pioneer Intermediate Lehman Brothers
Tax-Free* Municipal Bond Index
6/30/87 9,650 10,000
6/30/88 10,398 10,741
6/30/89 11,829 11,964
6/30/90 12,471 12,780
6/30/91 13,506 13,931
6/30/92 15,020 15,573
6/30/93 16,674 17,436
6/30/94 16,572 17,466
6/30/95 17,727 19,006
6/30/96 18,444 20,268
6/30/97 19,531 21,945
- - Pioneer Intermediate Tax-Free Fund*
- - - Lehman Brothers Municipal Bond Index
The Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds. Bonds in the Index have a minimum credit
rating of BBB, were part of at least a $50 million issuance made within the past
five years and have a maturity of at least two years. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
3
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 6/30/97 CLASS B SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
Net Asset Value
per Share 6/30/97 12/31/96
$10.29 $10.31
Distributions per Share Income Short-Term Long-Term
(12/31/96 - 6/30/97) Dividends Capital Gains Capital Gains
$0.186 -- --
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.
Average Annual Total Returns
(As of June 30, 1997)
If If
Period Held Redeemed*
Life-of-Fund 4.61% 4.33%
(4/29/94)
1 Year 5.11 2.11
* 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.
Growth of $10,000
Date Pioneer Intermediate Lehman Brothers
Tax-Free* Municipal Bond Index
4/30/94 10,000 10,000
6/30/94 10,038 10,025
9/30/94 10,046 10,094
12/31/94 9,851 9,949
3/31/95 10,420 10,653
6/30/95 10,636 10,910
9/30/95 10,832 11,224
12/31/95 11,102 11,686
3/31/96 10,980 11,546
6/30/96 10,976 11,634
9/30/96 11,133 11,901
12/31/96 11,351 12,204
3/31/97 11,255 12,176
6/30/97 11,437 12,597
- - Pioneer Intermediate Tax-Free Fund*
- - - Lehman Brothers Municipal Bond Index
The Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds. Bonds in the Index have a minimum credit
rating of BBB, were part of at least a $50 million issuance made within the past
five years and have a maturity of at least two years. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
4
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 6/30/97 CLASS C SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 6/30/97 12/31/96
$10.29 $10.29
Distributions per Share Income Short-Term Long-Term
(12/31/96 - 6/30/97) Dividends Capital Gains Capital Gains
$0.168 -- --
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.
Average Annual Total Returns
(As of June 30, 1997)
If If
Period Held Redeemed*
Life-of-Fund 2.03% 2.03%
(1/31/96)
1 Year 4.89 4.89
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
Growth of $10,000
Date Pioneer Intermediate Lehman Brothers
Tax-Free* Municipal Bond Index
1/31/96 10,000 10,000
2/29/96 9,964 9,932
3/31/96 9,813 9,805
4/30/96 9,786 9,777
5/31/96 9,759 9,774
6/30/96 9,809 9,880
7/31/96 9,889 9,969
8/31/96 9,872 9,967
9/30/96 9,930 10,107
10/31/96 10,026 10,221
11/30/96 10,172 10,408
12/31/96 10,122 10,364
1/31/97 10,130 10,384
2/28/97 10,187 10,479
3/31/97 10,037 10,340
4/30/97 10,074 10,427
5/31/97 10,202 10,584
6/30/97 10,289 10,697
- - Pioneer Intermediate Tax-Free Fund*
- - - Lehman Brothers Municipal Bond Index
The Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds. Bonds in the Index have a minimum credit
rating of BBB, were part of at least a $50 million issuance made within the past
five years and have a maturity of at least two years. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
5
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/97
- --------------------------------------------------------------------------------
The first half of Pioneer Intermediate Tax-Free Fund's 11th fiscal year came to
a close on June 30, 1997. The bond market was resilient over the past six
months, recovering from several episodes of investor nervousness and repeatedly
regaining lost ground. While the bond market's performance was mixed, your
Fund's overall results were positive.
For this report, we offer a discussion with portfolio manager Kathleen D.
McClaskey. She heads up the investment team responsible for the day-to-day
management of Pioneer Intermediate Tax-Free Fund, and has been with Pioneer for
11 years.
How did the Fund perform over the past six months?
The Fund was competitive, especially considering the varied conditions in the
municipal bond market. The Fund continued to meet its objective of providing
income exempt from regular federal income tax, with a portfolio that has a
weighted average maturity of 10 years or less. Shareowners received monthly
dividends, and the Fund offered a tax-free 30-day SEC yield of 3.75% at the end
of the period. This is equivalent to a taxable yield of 6.21% for investors in
the maximum 39.6% income tax bracket.
The Fund generated a six-month total return of 2.00% for Class A Shares, 1.63%
for Class B Shares and 1.66% for Class C Shares. The Fund's conservative
positioning resulted in slightly lower returns than the 2.50% average for the
139 funds in Lipper Analytical Services' Intermediate Municipal Debt category.
(Returns do not reflect sales charges.)
What happened in the bond market in the first six months of 1997?
Investor expectations shaped the market - almost more than actual events.
Concern about the pace of economic growth, inflation, changes in interest rates
and the volatility in the stock market kept many bond investors on their toes.
Tax-free bond investors also had the possibility of "flat tax" legislation
holding their attention. Throughout the period, however, inflation remained
contained despite continued economic expansion, interest rates generally were
low and the push for a flat tax went away.
6
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We entered 1997 with bond prices falling. By February, the bond market had
recovered ground lost in January. The economy showed substantial growth in the
first quarter of 1997, and the Federal Reserve increased short-term interest
rates one-quarter of a percentage point (0.25%) on March 25. The rate hike
didn't have a significant or lasting effect. Because investors acted in advance
of the Fed's much-discussed move, bond prices had already moved down, sending
yields up. Bond prices resumed their ascent in April, finishing higher in June.
As the period closed, the Fed was continuing its "wait and see" attitude.
Tax-free bonds outperformed most sectors of the bond market over the six-month
period, but intermediate municipal bonds didn't perform as well as those with
longer maturities. While municipal bond prices rose and fell in a similar
pattern to U.S. government issues, their movements were not as pronounced. With
the exception of short-term issues, the supply of tax-free bonds was lower than
usual during the period. Normally, this "tightening" of supply would have driven
up prices. Unfortunately, though, demand for munis languished. Investors,
probably still feeling the hangover of proposed tax reform, found other places
for their money. As a result, municipal bond investors were hesitant to sell, as
there were fewer better issues to buy.
Against this backdrop, what kind of changes did you make to the portfolio?
We adjusted the Fund's maturity profile as interest rates inched up and down.
The portfolio focuses on intermediate- and shorter-term issues, which helps make
it less volatile than funds that emphasize long-term bonds. Last December 31,
portfolio holdings had an average effective life of 8.06 years; they were only
slightly longer, 8.68 years, as of June 30. (Effective maturity takes into
account the time left until a bond matures or can be called on demand by the
issuer, whichever is sooner.)
Over the six months, we decreased the Fund's concentration in securities with
shorter maturities (2-7 years) from 32% to 25%, while increasing the allocation
to bonds with somewhat longer maturities (7-15 years) from 55% to 62%, favoring
them for their stronger income stream and potential
7
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/97 (continued)
- --------------------------------------------------------------------------------
for price appreciation. Recently, we increased the Fund's maturity to take a
more aggressive stance, since we think interest rates will probably be stable or
falling in the near term.
We kept the Fund's diversification fairly consistent over the period, although
we did make some adjustments. We added to education bonds, lifting them from
6.2% to 9.2% of the portfolio. We also increased holdings in transportation
bonds from 9.7% to 13.3%. We substantially reduced the Fund's holdings in
escrowed bonds from 18.4 to 12.0%, and reduced housing bonds from 5.0% to 2.4%.
Insured bonds comprised 19.7% of the portfolio as of June 30, the largest
percentage to date. Today, more and more municipal bonds are insured. This means
your Fund will receive interest and principal payments on time and in full, even
if the issuer of the debt is unable to pay as scheduled. (This guarantee does
not extend to the price or yield of Fund shares.) Rating agencies, such as
Standard & Poor's or Moody's, grant bonds covered by major insurers their
highest rating, AAA and Aaa, respectively. The average quality rating of Fund
holdings was AA on June 30, the same as throughout the period.
What's your outlook going forward?
We have a positive outlook for bonds, so currently we are increasing the
portfolio's duration. (Duration measures a bond fund's sensitivity to interest
rates.) The economy and markets seem to be moving forward with an "all news is
good news" attitude. There are indications that inflation will likely remain
contained, with interest rates staying near their current range. This would be
good for almost all bond investors.
We don't foresee any major increase in the supply of municipal bonds; however,
we are optimistic about an increase in demand as the threat of a flat tax
dissipates and inevitable stock market downturns bring more investors to the
municipal bond market. We'll continue to focus on credit analysis and strategic
bond selection, and we believe the Fund's emphasis on high-quality,
intermediate-term bonds can help us continue to reward investors with tax-free
current income and solid total returns.
8
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
<C> <C> <S> <C>
INVESTMENTS IN SECURITIES - 99.4%
TAX-EXEMPTED OBLIGATIONS - 99.4%
Arizona - 6.3%
$1,000,000 AA/Aa Arizona Transportation Board Highway Revenue,
6.0%, 2008 $1,094,480
1,000,000 AA-/Aa Phoenix Civic Improvement Corporation
Water Revenue, 6.5%, 2006 1,121,540
1,000,000 AA/Aa Salt River Agricultural Improvement and
Power District Arizona, 5.75%, 2007 1,067,880
1,000,000 A+/A1 Tucson Water Revenue, 5.5%, 2014 1,009,920
----------
$4,293,820
----------
Connecticut - 3.9%
1,000,000 AA-/Aa3 Connecticut State General Obligation, 6.0%, 2004 $1,080,950
1,500,000 AAA/Aaa Connecticut State Special Tax Obligation Revenue
MBIA Insured, 6.0%, 2006 1,628,415
----------
$2,709,365
----------
District of Columbia - 0.8%
500,000 A+/A1 Georgetown University General Obligation,
8.125%, 2008 $ 523,805
----------
Delaware - 1.5%
1,000,000 AA/A1 Delaware Transportation Authority,
Revenue, 5.2%, 2001 $1,028,330
----------
Florida - 3.1%
1,000,000 AA/Aa Gainesville Utilities Revenue, 5.75%, 2006 $1,069,450
1,000,000 AA/Aa1 Orlando Utilities Commission Water & Electric
Revenue, 5.6%, 2003 1,055,390
$2,124,840
----------
Georgia - 6.1%
1,000,000 AAA/Aaa Atlanta, Airport Facilities Revenue,
AMBAC Insured, 6.25%, 2005+ $1,089,800
1,500,000 AA+/Aaa Georgia State General Obligation, 5.5%, 2006 1,584,435
</TABLE>
The accompanying footnotes are an integral part of
these financial statements. 9
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/97 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
<C> <C> <S> <C>
Georgia - (continued)
$ 400,000 A/A3 Municipal Electric Authority of Georgia Special
Obligation Revenue, 7.65%, 2003 414,488
1,000,000 A/A3 Municipal Electric Authority of Georgia
Power Revenue, 6.2%, 2010 1,076,770
----------
$4,165,493
----------
Illinois - 4.6%
1,000,000 A+/A1 Illinois State Toll Highway Authority Revenue,
6.3%, 2012 $1,089,710
1,000,000 AA/Aa1 Illinois Education Facilities Authority Revenue,
Northwestern University, 5.5%, 2013 1,005,330
1,000,000 A+/A2 Metropolitan Pier & Exposition Authority,
Sales Tax Revenue, 5.75%, 2002 1,049,990
----------
$3,145,030
----------
Indiana - 7.4%
1,500,000 AAA/Aaa Indiana Municipal Power Agency, Revenue
MBIA Insured, 6.0%, 2012 $1,610,055
750,000 A/NR Indiana Municipal Power Agency, Power Supply
System Revenue, 7.1%, Prerefunded, 2000* 812,250
500,000 A+/A1 Indiana Transportation Finance Authority Highway
Revenue, 8.0%, Prerefunded, 1998* 528,035
1,000,000 AAA/Aaa Indiana University, Revenue
MBIA Insured, 5.8%, 2010 1,057,840
1,000,000 AA-/Aa2 Purdue University, Indiana, Revenue
5.75%, 2004 1,060,810
----------
$5,068,990
----------
Kansas - 2.4%
1,500,000 AA/Aa Kansas Department of Transportation Highway
Revenue, 6.125%, 2009 $1,653,780
----------
Kentucky - 2.7%
1,000,000 AAA/Aaa Kentucky Turnpike Authority Revenue,
AMBAC Insured, 5.25%, 2005 $1,030,950
750,000 AAA/A1 Lexington-Fayette Urban County Government
Revenue, 7.0%, 2006 819,428
----------
$1,850,378
----------
</TABLE>
10 The accompanying footnotes are an integral part of
these financial statements.
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
<C> <C> <S> <C>
Maine - 3.9%
$1,500,000 AA+/Aa3 Maine State General Obligation, 5.375%, 2006 $1,558,350
1,000,000 AAA/Aaa Maine State Turnpike Authority Revenue,
6.0%, 2005 1,078,270
----------
$2,636,620
----------
Maryland - 4.5%
1,500,000 NR/Aa2 Maryland Community Development Administration,
Single Family Mortgage Revenue, 5.95%, 2006 $1,535,160
1,500,000 AA+/Aa3 University of Maryland Revenue, 5.4%, 2006 1,561,410
----------
$3,096,570
----------
Massachusetts - 4.6%
1,000,000 A+/A1 Massachusetts Bay Transportation Authority
Revenue, 5.5%, 2009 $1,033,000
1,000,000 AAA/Aaa Massachusetts State General Obligation,
5.5%, 2003 1,047,190
1,000,000 AAA/Aaa Massachusetts Water Pollution Abatement Trust
Sewer Revenue, 6.0%, 2007 1,091,290
----------
$3,171,480
----------
Michigan - 5.5%
1,500,000 AAA/Aaa Detroit City School District General Obligation,
AMBAC Insured, 6.5%, 2008 $1,683,675
1,000,000 AA-/A1 Michigan State Trunk Line Fuel Sales Tax Revenue,
Series A, 5.625%, 2003 1,052,850
1,000,000 AA-/A1 Michigan State Trunk Line Fuel Sales Tax Revenue,
Series B, 5.625%, 2003 1,052,850
----------
$3,789,375
----------
Minnesota - 4.1%
750,000 AAA/Aaa Minnesota Public Facilities Authority Water
Pollution Control Revenue, 7.0%, Prerefunded,
1999* $ 798,877
1,000,000 AAA/Aaa Minnesota Public Facilities Authority Water
Pollution Control Revenue, 5.0%, 2006 1,016,820
1,000,000 AA/Aa3 University of Minnesota Revenue, 5.75%, 2018 1,034,710
----------
$2,850,407
----------
</TABLE>
The accompanying footnotes are an integral part of
these financial statements. 11
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/97 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
<C> <C> <S> <C>
Nebraska - 1.6%
$1,000,000 AAA/NR Omaha Public Power District Electric System
Revenue, 6.5%, Prerefunded, 2002* $1,095,970
----------
Nevada - 0.1%
70,000 AA/Aa2 Nevada Housing Division Single Family Program
Revenue, 8.0%, 2009 $ 71,629
----------
New Hampshire - 0.8%
500,000 AAA/Aaa New Hampshire Turnpike System Revenue,
7.375%, Prerefunded, 2000* $ 548,775
----------
New Jersey - 4.4%
1,000,000 AA/Aa3 New Jersey Wastewater Treatment Trust Sewer
Revenue, 6.5%, 2006 $1,120,080
750,000 AA-/Aaa New Jersey Highway Authority, Garden State
Parkway Senior Revenue, 7.25%,
Prerefunded, 1999* 798,547
1,000,000 AA+/Aa1 State of New Jersey Sales Tax
General Obligation, 5.8%, 2007 1,077,890
$2,996,517
----------
New Mexico - 1.4%
1,000,000 AA/Aa Bernalillo County, Gross Receipts,
Tax Revenue, 5.0%, 2013 $ 972,310
----------
New York - 1.5%
1,000,000 A/A3 New York State Local Assistance, 5.5%, 2017 $1,002,300
----------
Ohio - 1.6%
1,000,000 AAA/Aaa Ohio State Water Development Authority,
AMBAC Insured, 6.0%, 2006 $1,086,090
----------
Oklahoma - 2.3%
1,500,000 A-/A Grand River Dam Authority, Electric Revenue,
5.75%, 2006 $1,592,280
----------
Pennsylvania - 5.5%
1,500,000 AA-/A1 Pennsylvania State General Obligation,
6.25%, 2010 $1,650,495
</TABLE>
12 The accompanying footnotes are an integral part of
these financial statements.
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
<C> <C> <S> <C>
Pennsylvania - (continued)
$1,000,000 A-/NR Pennsylvania Industrial Development Authority
Revenue, 7.0%, Prerefunded, 2001* 1,108,160
1,000,000 A/A1 Pennsylvania State Turnpike Commission Highway
Revenue, 5.45%, 2002 1,040,320
----------
$3,798,975
----------
Puerto Rico - 1.6%
1,000,000 AAA/Aaa University of Puerto Rico
Revenue, MBIA Insured, 6.25%, 2008 $1,114,860
----------
South Carolina - 4.7%
1,000,000 AA/Aa Columbia Waterworks & Sewer System,
5.5%, 2009 $1,044,420
1,000,000 AA/Aa1 Greenville Waterworks Revenue, 6.0%, 2008 1,086,520
1,000,000 AAA/Aaa South Carolina General Obligation
5.75%, 2003 $1,065,860
----------
$3,196,800
----------
Texas - 7.0%
1,000,000 A/A3 Houston, Water & Sewer System
Revenue, 5.4%, 2000 $1,029,790
750,000 AAA/Aaa San Antonio Prior Lien Water
Revenue, 7.125%, Prerefunded, 1999* 799,703
1,500,000 AA/Aa2 State of Texas General Obligation, 5.8%, 2004 1,605,045
1,000,000 AAA/Aaa Texas Municipal Power Agency Revenue
MBIA Insured, 5.5%, 2010 1,035,030
250,000 AAA/Aaa University of Texas Permanent University Fund,
Escrowed to Maturity in Government
Securities, 8.0%, 2004 299,240
----------
$4,768,808
----------
Utah - 0.1%
40,000 AA/Aa Utah Housing Finance Agency,
Single Family Mortgage Purchase Revenue,
7.3%, 2003+ $ 40,378
----------
</TABLE>
The accompanying footnotes are an integral part of
these financial statements. 13
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/97 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
Vermont - 0.8%
$ 500,000 AAA/Aaa Vermont Municipal Bond Bank, 7.9%,
Prerefunded, 1998* $ 536,170
-----------
Virginia - 1.5%
1,000,000 AA/Aa Virginia Public School Authority Revenue,
5.4%, 2004 $ 1,043,900
-----------
Washington - 1.6%
1,000,000 AA/Aa1 State of Washington General Obligation,
6.0%, 2002 $ 1,064,470
-----------
Wisconsin - 1.5%
1,000,000 AA/Aa2 State of Wisconsin General Obligation,
5.5%, 2001 $ 1,038,380
-----------
TOTAL INVESTMENT IN SECURITIES - 99.4%
(Cost $65,912,317) $68,076,895
-----------
TEMPORARY CASH INVESTMENT - 0.6%
400,000 Uinta County, Wyoming, Pollution
Control Revenue, Chevron Corporation
Guarantee, 3.5%, 2020** $ 400,000
-----------
TOTAL TEMPORARY CASH INVESTMENT - 0.6%
(Cost $400,000) $ 400,000
-----------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $66,312,317)(a)(b)(c) $68,476,895
===========
</TABLE>
14 The accompanying footnotes are an integral part of
these financial statements.
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
** Security with daily "put" feature with resetting interest rates. Coupon
rate disclosed is as of June 30, 1997.
+ A portion of the bond was called on July 1, 1997.
(a) The concentration of securities, by type of obligation/market
sector, is as follows:
General Obligation 17.2%
Escrowed in U.S. Government Securities 12.0
Revenue Bonds:
Education 9.2
Housing 2.4
Insured 19.8
Pollution Control 3.1
Power 9.2
Sales Tax 4.4
Transportation 13.3
Water 9.4
(b) At June 30, 1997, the net unrealized gain on investments
based on cost for federal income tax purposes
of $66,312,317 was as follows:
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $ 2,188,446
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value (23,868)
---------------
Net unrealized gain $ 2,164,578
===============
(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
six months ended June 30, 1997 aggregated $16,388,900 and $23,736,433,
respectively.
The accompanying footnotes are an integral part
of these financial statements. 15
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
BALANCE SHEET 6/30/97
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities, at value (including temporary cash
investment of $400,000) (cost $66,312,317) $ 68,476,895
Receivables -
Fund shares sold 59,667
Interest 1,162,146
Other 379
--------------
Total assets $ 69,699,087
--------------
LIABILITIES:
Payables -
Fund shares repurchased $ 250
Dividends 90,809
Due to bank 50,675
Due to affiliates 75,639
Accrued expenses 27,418
--------------
Total liabilities $ 244,791
--------------
NET ASSETS:
Paid-in capital $ 67,235,170
Distributions in excess of net investment income (16,607)
Accumulated net realized gain on investments 71,155
Net unrealized gain on investments 2,164,578
--------------
Total net assets $ 69,454,296
==============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $66,479,069/6,478,848 shares) $ 10.26
==============
Class B (based on $2,759,594/268,207 shares) $ 10.29
==============
Class C (based on $215,633/20,957 shares) $ 10.29
==============
MAXIMUM OFFERING PRICE:
Class A $ 10.63
==============
The accompanying footnotes are an integral part
16 of these financial statements.
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended 6/30/97
INVESTMENT INCOME:
Interest $ 1,903,875
------------
EXPENSES:
Management fees $ 177,479
Transfer agent fees
Class A 39,581
Class B 2,515
Class C 265
Distribution fees
Class A 80,166
Class B 14,033
Class C 1,033
Accounting 46,500
Custodian fees 10,220
Registration fees 18,680
Professional fees 8,780
Printing 6,050
Fees and expenses of nonaffiliated trustees 7,372
Miscellaneous 10,100
------------
Total expenses $ 422,774
Less management fees waived by
Pioneering Management Corporation (44,653)
Less fees paid indirectly (11,177)
------------
Net expenses $ 366,944
------------
Net investment income $ 1,536,931
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 574,973
Change in net unrealized gain on investments (667,173)
------------
Net loss on investments $ (92,200)
------------
Net increase in net assets resulting from operations $ 1,444,731
============
The accompanying footnotes are an integral part
of these financial statements. 17
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 6/30/97 and the Year Ended 12/31/96
<TABLE>
<CAPTION>
Six Months Ended Year Ended
FROM OPERATIONS: 6/30/97 12/31/96
<S> <C> <C>
Net investment income $ 1,536,931 $ 3,540,782
Net realized gain on investments 574,973 196,137
Change in net unrealized gain on investments (667,173) (1,494,178)
------------ -------------
Net increase in net assets resulting from operations $ 1,444,731 $ 2,242,741
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.22 and $0.47 per share, respectively) $ (1,483,233) $ (3,461,175)
Class B ($0.18 and $0.38 per share, respectively) (50,065) (105,009)
Class C ($0.17 and $0.33 per share, respectively) (3,439) (6,042)
In excess of net investment income:
Class A ($0.00 and $0.00 per share, respectively) (15,201) (5,392)
Class B ($0.01 and $0.01 per share, respectively) (1,600) (238)
------------ -------------
Total distributions to shareholders $ (1,553,538) $ (3,577,856)
------------ -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 1,423,220 $ 8,160,271
Reinvestment of distributions 966,972 2,196,836
Cost of shares repurchased (9,279,625) (14,554,121)
------------ -------------
Net decrease in net assets resulting from
fund share transactions $ (6,889,433) $ (4,197,014)
------------ -------------
Net decrease in net assets $ (6,998,240) $ (5,532,129)
NET ASSETS:
Beginning of period 76,452,536 81,984,665
------------ -------------
End of period (including distributions in excess of
net investment income of $16,607 and $0, respectively) $ 69,454,296 $ 76,452,536
============ ============
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A '97 Shares '97 Amount '96 Shares '96 Amount
Shares sold 104,713 $ 1,072,199 678,298 $ 6,961,860
Reinvestment of distributions 91,106 929,103 206,717 2,116,538
Less shares repurchased (859,150) (8,802,058) (1,352,057) (13,837,542)
------------ ------------ ------------ -------------
Net decrease (663,331) $(6,800,756) (467,042) $ (4,759,144)
============ ============ ============ =============
CLASS B
Shares sold 33,579 $ 340,190 95,563 $ 984,982
Reinvestment of distributions 3,378 34,549 7,217 74,044
Less shares repurchased (46,650) (477,461) (68,872) (701,579)
------------ ------------ ------------ -------------
Net increase (decrease) (9,693) $ (102,722) 33,908 $ 357,447
============ ============ ============ =============
CLASS C*
Shares sold 1,045 $ 10,831 20,459 $ 213,429
Reinvestment of distributions 325 3,320 611 6,254
Less shares repurchased (11) (106) (1,472) (15,000)
------------ ------------ ------------ -------------
Net increase 1,359 $ 14,045 19,598 $ 204,683
============ ============ ============ =============
</TABLE>
* Class C shares were first publicly offered on January 31, 1996.
The accompanying footnotes are an integral part
18 of these financial statements.
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
CLASS A 6/30/97 12/31/96 12/31/95 12/31/94(a) 12/31/93 12/31/92
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.28 $ 10.44 $ 9.62 $ 10.76 $ 10.32 $ 10.06
-------- -------- --------- --------- -------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.22 $ 0.46 $ 0.49 $ 0.49 $ 0.56 $ 0.59
Net realized and unrealized gain (loss) on investments (0.02) (0.15) 0.82 0.56 0.56 0.25
-------- -------- --------- --------- -------- --------
Net increase (decrease) from investment operations $ 0.20 $ 0.31 $ 1.31 $ (0.64) $ 1.12 $ 0.84
Distributions to shareholders:
Net investment income $ (0.22) (0.47) (0.49) (0.49) (0.56) (0.58)
Net realized gain -- -- -- (0.01) -- --
-------- -------- --------- --------- -------- --------
Net increase (decrease) in net asset value $ (0.02) $ (0.16) $ 0.82 $ (1.14) $ 0.44 $ 0.26
-------- -------- --------- --------- -------- --------
Net asset value, end of period $ 10.26 $ 10.28 $ 10.44 $ 9.62 $ 10.76 $ 10.32
======== ======== ========= ========= ======== ========
Total return* 2.00% 3.03% 13.80 (6.02)% 11.08% 8.65%
Ratio of net expenses to average net assets 1.02%**+ 1.03%+ 1.02%+ 1.00 0.85% 0.85%
Ratio of net investment income to average net assets 4.31%**+ 4.47%+ 4.77%+ 4.89 5.23% 5.78%
Portfolio turnover rate 47% 34% 29% 39% 14% 4%
Net assets, end of period (in thousands) $ 66,479 $ 73,387 $ 79,432 $ 76,674 $ 82,907 $ 57,353
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction for
fees paid indirectly: PMC and no reduction for fees paid
indirectly:
Net expenses 1.14%** 1.14% 1.12% 1.22% 1.12% 1.27%
Net investment income 4.19%** 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% 1.00% -- -- --
Net investment income 4.33%** 4.50% 4.79% -- -- --
</TABLE>
(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.
The accompanying footnotes are an integral part
19 of these financial statements.
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year 4/29/94
Ended Ended Ended to
CLASS B 6/30/97 12/31/96 12/31/95 12/31/94(a)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.31 $ 10.46 $ 9.65 $ 10.07
---------- ---------- --------- ---------
Increase (decrease) from investment operations:
Net investment income $ 0.19 $ 0.38 $ 0.41 $ 0.27
Net realized and unrealized gain (loss) on investments (0.02) (0.15) 0.80 (0.42)
---------- ---------- --------- ---------
Net increase (decrease) from investment operations $ 0.17 $ 0.23 $ 1.21 $ (0.15)
Distributions to shareholders:
Net investment income (0.18) (0.38) (0.40) (0.27)
In excess of net investment income (0.01) (0.01) - -
---------- ---------- --------- ---------
Net increase (decrease) in net asset value $ (0.02) $ (0.15) $ 0.81 $ (0.42)
---------- ---------- --------- ---------
Net asset value, end of period $ 10.29 $ 10.31 $ 10.46 $ 9.65
========== ========== ========= =========
Total return* 1.63% 2.25% 12.71% (1.49)%
Ratio of net expenses to average net assets 1.85%**+ 1.81%+ 1.86%+ 1.84%**
Ratio of net investment income to average net assets 3.48%**+ 3.68%+ 3.90%+ 4.17%**
Portfolio turnover rate 47%** 34% 29% 39%
Net assets, end of period (in thousands) $ 2,760 $ 2,864 $ 2,553 $ 1,529
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction for
fees paid indirectly:
Net expenses 1.97%** 1.91% 1.96% 2.14%**
Net investment income 3.36%** 3.58% 3.80% 3.87%**
Ratios assuming waiver of management fees by PMC and
reduction for fees paid indirectly:
Net expenses 1.78%** 1.76% 1.82% -
Net investment income 3.55%** 3.73% 3.94% -
</TABLE>
(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.
The accompanying footnotes are an integral part
20 of these financial statements.
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/97
- --------------------------------------------------------------------------------
Six Months
Ended 1/31/96 to
CLASS C 6/30/97 12/31/96
Net asset value, beginning of period $ 10.29 $ 10.51
------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.18 $ 0.33
Net realized and unrealized loss on investments (0.01) (0.21)
------- -------
Net increase from investment operations $ 0.17 $ 0.12
Distributions to shareholders:
Net investment income (0.17) (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 $ 10.29
======= =======
Total return* 1.66% 1.22%
Ratio of net expenses to average net assets 1.92%**+ 1.97%**+
Ratio of net investment income to average net assets 3.41%**+ 3.51%**+
Portfolio turnover rate 47%** 34%
Net assets, end of period (in thousands) $ 216 $ 202
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction
for fees paid indirectly:
Net expenses 2.05%** 2.08%**
Net investment income 3.28%** 3.40%**
Ratios assuming waiver of management fees and
assumption of expenses by PMC and reduction
for fees paid indirectly:
Net expenses 1.84%** 1.89%**
Net investment income 3.49%** 3.59%**
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying footnotes are an integral part
of these financial statements. 21
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/97
- --------------------------------------------------------------------------------
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.
The Fund offers three classes of shares - Class A, Class B, and Class C shares.
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.
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 $2,749 in
underwriting commissions on the sale of the fund shares during the six
months ended June 30, 1997.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset
value attributable to Class A, Class B, and Class C shares of the Fund,
respectively. Shareholders of each class share all expenses and fees paid
to the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each
class and the ratable allocation of related out-of-pocket expense (see
Note 3). Income, common expenses and realized and unrealized gains and
losses are calculated at the Fund level and allocated daily to
23
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/97 (continued)
- --------------------------------------------------------------------------------
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 fee 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 June 30, 1997, $28,483 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 $6,499 in transfer agent fees payable to PSC at June 30, 1997.
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 $40,657 in distribution fees payable to PFD at June 30,
1997.
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of purchase.
Class B shares that are redeemed within six years of purchase are subject to a
CDSC at declining rates beginning at 3.5%, 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 six months ended June 30, 1997, CDSCs in the amount of $3,197 were paid
to PFD.
5. Expense Reductions
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the six months ended June 30, 1997,
the Fund's expenses were reduced by $11,177 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 June 30, 1997, and the
related statement of operations, the statements of changes in net assets, and
the financial highlights for the periods presented. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1997, 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 June 30, 1997, the results of its
operations, the changes in its net assets and the financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
August 1, 1997
26
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
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
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
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
27
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
- --------------------------------------------------------------------------------
Your investment representative can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-8O0-225-6292.
FactFoneSM
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
9O-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as you
meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need to
do is authorize a set amount of money to be moved out of your bank account into
the Pioneer fund of your choice. Investomatic also allows you to change the
dollar amount, frequency and investment date right over the phone. By putting
aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing Pioneer
to deduct from participating employees' paychecks. You specify the dollar amount
you want to invest into the Pioneer fund(s) of your choice.
28
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Automatic Exchange Program
A simple way to move money from a money market or bond fund into a stock fund
over a period of time. Just invest a lump sum in a Pioneer money market fund or
bond fund. Then, select the Pioneer equity fund or funds you wish to invest in,
and choose the amounts and dates for Pioneer to sell shares of your money market
or bond fund and use the proceeds to buy shares of the Pioneer equity fund you
have chosen. Over time, your original investment will be shifted to your Pioneer
equity fund.
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals. You
decide the frequency and the day of the month you want. Pioneer will send the
proceeds by check to the address you designate, or electronically to your bank
account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available only for accounts with a value of $10,000 or
more.)
29
<PAGE>
- --------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call us:
Account Information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFoneSM for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneer funds.com
This report must be preceded or accompanied by a current Fund prospectus.
[LOGO] Pioneer Funds Distributor, Inc.
60 State Street
Boston, Massachusetts 02109
0897-4365
(C) Pioneer Funds Distributor, Inc.
[LOGO] Printed on Recycled Paper
