[LOGO]
Pioneer
Intermediate Tax-FreeFund
SEMIANNUAL REPORT 6/30/98
<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
Trustees, Officers and Service Providers 27
Programs and Services for Pioneer Shareowners 28
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Pioneer Intermediate Tax-Free Fund
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LETTER FROM THE CHAIRMAN 6/30/98
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Dear Shareowner,
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While the Taxpayer Relief Act of 1997 provided lower rates on capital gains, it
did not ease the tax burden on investment income. As a result, municipal bonds
remain one of the few effective ways for investors to protect themselves from
taxes. We are happy to offer Pioneer Interme-diate Tax-Free Fund as a choice for
conservative, tax-sensitive investors. The Fund's professional management and
diversified portfolio make tax-free investing affordable and accessible, an
important point since municipal bonds can be difficult for individuals to buy
and sell directly. Although municipal bonds did not keep pace with the snappy
gains posted by taxable U.S. government and corporate bonds over the past six
months, they generated solid returns and attractive after-tax dividends.
We have always recommended that investors diversify their portfolios among
different types of both stocks and bonds. Recent market volatility has
underscored this point. What can you as an investor do? I encourage you to
periodically review your financial goals and strategy with your investment
professional. It's a simple step to make sure you will be better prepared to
weather the inevitable swings in the market.
Please read on to learn more about how your Fund is being managed. If you have
questions about Pioneer Intermediate Tax-Free Fund, please contact your
investment professional, or Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.,
- --------------------------------
John F. Cogan, Jr.,
Chairman and President
1
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Pioneer Intermediate Tax-Free Fund
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PORTFOLIO SUMMARY 6/30/98
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Portfolio Quality
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(As a percentage of total investment portfolio)
[The following data was represented as a pie chart in the printed material.]
Short-Term Cash Equivalents .. 2%
A ............................ 8%
AA ........................... 52%
AAA .......................... 38%
Portfolio Maturity
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(Effective life as a percentage of total investment portfolio)
[The following data was represented as a pie chart in the printed material.]
0-2 Years ................... 6%
2-5 Years ................... 10%
5-7 Years .................... 14%
7-10 Years .................. 31%
10-15 Years ................. 32%
15+ Years .................... 7%
10 Largest Holdings
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(As a percentage of long-term holdings)
1. Kansas State Department of Transportation Highway
Revenue, 6.125%, 9/1/09 2.81%
2. Grand River Dam Authority Electric Revenue,
5.75%, 6/1/06 2.67
3. Texas State General Obligation, 5.8%, 10/1/04 2.67
4. University of Maryland System Auxiliary Facility
and Tuition Revenue, 5.4%, 4/1/06 2.63
5. Maine State General Obligation, 5.375%, 5/15/06 2.63
6. Phoenix Civic Improvement Corporation Water
Revenue, 6.5%, 7/1/06 1.87
7. California State General Obligation, 6.0%, 9/1/09 1.85
8. Arizona State Transportation Board Highway
Revenue, 6.0%, 7/1/08 1.85
9. Greenville Waterworks Revenue, 6.0%, 2/1/08 1.84
10. Ohio State Water Development Authority, 6.0%, 12/1/06 1.83
Fund holdings will vary for other periods.
2
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Pioneer Intermediate Tax-Free Fund
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PERFORMANCE UPDATE 6/30/98 CLASS A SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 6/30/98 12/31/97
$10.41 $10.45
Distributions per Share Income Short-Term Long-Term
(12/31/97 - 6/30/98) Dividends Capital Gains Capital Gains
$0.215 -- --
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, 1998)
Net Asset Public Offering
Period Value Price*
10 Years 7.19% 6.80%
5 Years 4.53 3.79
1 Year 6.55 2.84
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* Reflects deduction of the maximum 3.5% sales charge at the beginning of
the period and assumes reinvestment of distributions at net asset value.
[mountain chart]
Pioneer Intermediate
Tax-Free Lehman Brothers
Fund* Municipal Bond Index
------- --------------------
6/88 9,650 10,000
10,980 11,139
6/90 11,575 11,898
12,536 12,970
6/92 13,941 14,497
15,447 16,231
6/94 15,382 16,263
16,454 17,692
6/96 17,120 18,864
18,128 20,422
6/98 19,316 22,188
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
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Pioneer Intermediate Tax-Free Fund
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PERFORMANCE UPDATE 6/30/98 CLASS B SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 6/30/98 12/31/97
$10.45 $10.47
Distributions per Share Income Short-Term Long-Term
(12/31/97 - 6/30/98) Dividends Capital Gains Capital Gains
$0.154 -- --
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, 1998)
If If
Period Held Redeemed*
Life-of-Fund 4.88% 4.88%
(4/29/94)
1 Year 5.72 2.72
- --------------------------------------
* 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.
[mountain chart]
Pioneer Intermediate
Tax-Free Lehman Brothers
Fund* Municipal Bond Index
-------- --------------------
4/94 10,000 10,000
6/94 10,038 10,028
10,046 10,094
9,851 9,949
10,420 10,653
6/95 10,636 10,909
10,832 11,223
11,102 11,686
11,980 11,543
6/96 10,976 11,631
11,133 11,899
11,351 12,202
11,255 12,173
6/97 11,537 12,592
11,799 12,972
12,042 13,324
12,098 13,477
6/98 12,197 13,682
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
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Pioneer Intermediate Tax-Free Fund
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PERFORMANCE UPDATE 6/30/98 CLASS C SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 6/30/98 12/31/97
$10.42 $10.48
Distributions per Share Income Short-Term Long-Term
(12/31/97 - 6/30/98) Dividends Capital Gains Capital Gains
$0.179 -- --
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, 1998)
If If
Period Held Redeemed*
Life-of-Fund 3.47% 3.47%
(1/31/96)
1 Year 5.51 5.51
- --------------------------------------
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
[mountain chart]
Pioneer Intermediate
Tax-Free Lehman Brothers
Fund* Municipal Bond Index
-------- --------------------
1/96 10,000 10,000
9,813 9,804
6/96 9,809 9,879
9,930 10,106
10,122 10,363
10,037 10,338
6/97 10,289 10,695
10,524 10,017
10,734 11,316
10,753 11,446
6/98 10,857 11,620
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
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/98
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Dear Shareowner,
Pioneer Intermediate Tax-Free Fund closed the first half of its fiscal year on
June 30, 1998. During that time, favorable economic conditions in the United
States and a "flight to quality" in the U.S. Treasury market pushed taxable bond
prices higher and long-term interest rates to historic lows. Even so, an
increased supply of municipal bonds combined with weak demand to restrain the
performance of munis, especially when compared to taxable bonds.
Kathleen D. McClaskey has managed Pioneer Intermediate Tax-Free Fund for the
past 11 years, leading the investment team responsible for the Fund's daily
management. In the following discussion, Ms. McClaskey reviews the investment
environment and the strategies that affected your Fund's performance and
provides her outlook for the second half of 1998.
Q: How did the Fund perform?
A: For the six month period ended June 30, the Fund's Class A shares returned
1.69%, Class B 1.29% and Class C 1.15%, all at net asset value. In
comparison, the 151 intermediate municipal debt funds followed by Lipper
Analytical Services returned 2.05% for the same period. (Returns do not
reflect sales charges.) We attribute your Fund's slight lag in performance
to its investment standards. Over the past six months, the Fund maintained
an emphasis on higher-rated bonds. Other funds in this category often
invest in lower-rated bonds, which often provide higher returns since they
involve greater risk.
The Fund's class A shares provided a tax-free 30-day yield of 3.31% on
June 30. That translated into an attractive taxable-equivalent yield of
5.49% for an investor in the maximum 39.6% tax bracket.
Q: Did the situation in Asia affect U.S. interest rates and bonds?
A: The uncertainty of the Asian crisis kept interest rates, and bond prices,
within a narrow range for most of the period. It also sparked a "flight to
quality." Generally, investors waited for new developments and evidence
of the situation's effect on the U.S. economy.
6
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Pioneer Intermediate Tax-Free Fund
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When the crisis worsened this spring, investors sought the safety and
security of U.S. Treasurys. This demand again pushed up prices of taxable
bonds and lowered interest rates.
Asia's problems held down U.S. interest rates for another reason, too.
Many investors were concerned that our strong economy eventually might
stimulate inflation and lead the Federal Reserve to raise interest rates.
But, because the United States and Asia are active trading partners,
slowing Asian economies could lessen U.S. economic growth. That would ease
inflationary pressures and reduce the Fed's impetus to change rates.
Q: What was the environment like for municipal bonds over the past six
months?
A: Basically it was a case of supply and demand. The supply of municipal
bonds increased dramatically during the first half of 1998, as many state
and local governments took advantage of lower interest rates to refinance
existing bonds or to finance new projects. In fact, this period included
the largest transaction ever to occur in the tax-exempt market - Long
Island Power Authority's $6.5 billion issue. Ironically, all this good
news for municipalities didn't help municipal bond investors much, since
the flood of supply kept prices from rising. In addition, the continuing
economic problems in Asia increased the popularity of U.S. Treasury bonds,
particularly among foreign investors. Municipal bond prices rose, but not
as fast or far as Treasurys.
The yield on the benchmark 30-year U.S. Treasury fell from 5.92% on
December 31, 1997 to 5.63% on June 30. In comparison, the yield on the
Lehman Brothers Municipal Bond Index - a good indicator of the municipal
bond market - only fell from 4.70% on December 31 to 4.65% on June 30.
Q: What strategies did you use to manage the Fund?
A: We sought to maximize income and total return by maintaining high
standards of quality and emphasizing relative value. During the period,
lower-quality bonds provided little yield advantage over higher rated
bonds. In that scenario, we believed higher-quality bonds represented
better relative value.
7
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Pioneer Intermediate Tax-Free Fund
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/98 (continued)
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As of June 30, 90% of the Fund's holdings were rated AA or above,
translating into an average rating of "AA." (Ratings apply to underlying
securities, not Fund shares.) The portfolio remained well diversified with
57 holdings spread over 32 states.
We increased total return potential by maintaining the portfolio's
duration - it rose slightly from 6.63 years on December 31 to 6.68 years
on June 30. Duration measures a Fund's sensitivity to changes in interest
rates. Generally, an investment's price will change 1% for every 1% change
in interest rates. Higher durations mean more potential for both price
appreciation when interest rates fall and price declines when interest
rates rise; shorter durations reduce interest rate sensitivity.
We implemented this strategy by selling bonds with nearing "call dates"
and reinvesting in bonds with 15 - to 20 - year non-callable maturities.
Call provisions set a predetermined date for an issuer to repurchase a
bond from its holder. Often, this happens when interest rates decline so
that an issuer can refinance the bonds at lower rates. Selling callable
bonds improved the Fund's potential for both price appreciation and
long-term income generation for several reasons. Bonds with longer
maturities offer better potential for price appreciation when interest
rates decline, and longer streams of predictable income.
Q: What is your outlook for municipal bonds over the next six months?
A: Over the near-term, we expect many of the trends that were positive for
municipal bonds during the past six months to continue through the end of
1998. We believe solid economic growth and minimal inflation in the United
States can spur ongoing improvement in the financial health of
municipalities. After the recent flood of offerings, we think issuers are
taking a breather, which should give tax-exempt bond prices a lift.
Looking out further, we expect Asia to have a powerful influence on
interest rates. If there is a significant spillover into the U.S. economy,
interest rates could remain stable or move moderately lower.
8
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Pioneer Intermediate Tax-Free Fund
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SCHEDULE OF INVESTMENTS 6/30/98
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
TAX-EXEMPT OBLIGATIONS - 98.4%
Arizona - 5.4%
$1,000,000 A/Aa Arizona State Transportation Board
Highway Revenue, 6.0%, 7/1/08 $ 1,125,760
1,000,000 AA-/Aa Phoenix Civic Improvement Corporation
Water Revenue, 6.5%, 7/1/06 1,136,760
1,000,000 AA/Aa2 Salt River Project Agricultural Improvement
and Power District, 5.75%, 1/1/07 1,092,680
-----------
$ 3,355,200
-----------
California - 1.8%
1,000,000 A+/A1 California State General Obligation,
6.0%, 9/1/09 $ 1,125,800
-----------
Colorado - 1.7%
1,000,000 AA/Aa2 Denver, Colorado City and County
General Obligation, 5.0%, 8/1/07 $ 1,042,220
-----------
Connecticut - 3.5%
1,000,000 AA-/Aa3 Connecticut State General
Obligation, 6.0%, 10/1/04 $ 1,096,860
1,000,000 AAA/Aaa Connecticut State Special Tax
Obligation, 5.25%, 10/1/09 1,066,490
-----------
$ 2,163,350
-----------
Delaware - 1.7%
1,000,000 AA/A1 Delaware Transportation Authority,
Transportation System Revenue,
5.2%, 07/1/01 $ 1,032,210
-----------
Florida - 5.3%
1,000,000 AA/Aa3 Gainsville Utilities Revenue, 5.75%, 10/1/06 $ 1,099,040
1,000,000 AA/Aa1 Orlando Utilities, Community Water & Electric
Revenue, 5.6%, 10/1/03 1,069,200
1,000,000 AAA/Aaa Palm Beach County Criminal Justice
Revenue, 5.75%, 6/1/13 1,103,720
-----------
$ 3,271,960
-----------
The accompanying notes are an integral part of these financial statements.
9
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Pioneer Intermediate Tax-Free Fund
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SCHEDULE OF INVESTMENTS 6/30/98 (continued)
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
Georgia - 6.8%
$1,000,000 AA/Aa3 Clayton County Water Authority, 5.1%, 5/1/14 $ 1,029,580
1,000,000 AAA/Aaa Georgia Municipal Electric Authority
Power Revenue, 5.5%, 1/1/12 1,067,940
1,000,000 AAA/Aaa Georgia State Tollway Authority, 5.0%, 7/1/10 1,038,450
1,000,000 AA/Aa1 Private Colleges & Universities
Revenue, 5.5%, 11/1/05 1,076,710
-----------
$ 4,212,680
-----------
Hawaii - 1.7%
1,000,000 AAA/Aaa Honolulu, Hawaii City and County
General Obligation, 5.5%, 11/1/09$ 1,080,580
-----------
Illinois - 5.1%
1,000,000 AA+/Aa1 Illinois Education Facilities Authority
Northwestern University Revenue,
5.5%, 12/1/13 $ 1,071,090
1,000,000 AAA/Aa2 Illinois State Sales Tax Revenue, 5.25%, 6/5/10 1,055,480
1,000,000 A+/A2 Metropolitan Pier and Exposition Authority,
Dedicated State Tax Revenue, 5.75%, 6/15/02 1,057,080
-----------
$ 3,183,650
-----------
Indiana - 3.5%
1,000,000 AAA/Aaa Indiana University Revenue, 5.8%, 11/15/10 $ 1,110,220
1,000,000 AA/Aa2 Purdue University Revenue, 5.75%, 7/1/04 1,076,550
-----------
$ 2,186,770
-----------
Kansas - 2.8%
1,500,000 AA+/Aa2 Kansas State Department of Transportation
Highway Revenue, 6.125%, 9/1/09 $ 1,712,040
-----------
Kentucky - 3.0%
1,000,000 AAA/Aaa Kentucky State Turnpike Authority, Economic
Development Revenue, 5.25%, 7/1/05 $ 1,055,680
750,000 AAA/A1 Lexington-Fayette Urban County Government
Revenue, 7.0%, 6/1/06 805,298
-----------
$ 1,860,978
-----------
The accompanying notes are an integral part of these financial statements.
10
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Pioneer Intermediate Tax-Free Fund
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SCHEDULE OF INVESTMENTS 6/30/98 (continued)
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
Maine - 4.4%
$1,500,000 AA+/Aa2 Maine State General Obligation,
5.375%, 5/15/06 $ 1,599,450
1,000,000 AAA/Aaa Maine State Turnpike Authority Revenue,
6.0%, 7/1/05 1,098,690
-----------
$ 2,698,140
-----------
Maryland - 2.6%
1,500,000 AA+/Aa3 University of Maryland System Auxiliary Facility
and Tuition Revenue, 5.4%, 4/1/06 $ 1,599,555
-----------
Massachusetts - 5.3%
1,000,000 AAA/Aaa Commonwealth of Massachusetts Consolidated
Loan General Obligation, 5.5%, 6/1/03 $ 1,058,570
1,000,000 AA-/Aa3 Massachusetts Bay Transportation Authority
Revenue, 5.5%, 3/1/09 1,080,410
1,000,000 AAA/Aaa Massachusetts Water Pollution Abatement
Trust Sewer Revenue, 6.0%, 2/1/07 1,109,570
-----------
$ 3,248,550
-----------
Michigan - 1.8%
1,000,000 AAA/Aaa Detroit Michigan Water Supply Revenue,
5.75%, 7/1/11 $ 1,100,270
-----------
Minnesota - 4.7%
1,000,000 AAA/Aaa Minnesota Public Facilities Authority Water
Pollution Control Revenue, 5.0%, 3/1/06 $ 1,043,930
750,000 AAA/Aaa Minnesota Public Facilities Authority Water
Pollution Control Revenue, 7.0%, 3/1/09 781,447
1,000,000 AA/Aa2 University of Minnesota Revenue,
5.75%, 7/1/18 1,090,150
-----------
$ 2,915,527
-----------
Missouri - 1.7%
1,000,000 AA/Aa3 Kansas City, Missouri Water Revenue,
5.0%, 12/1/08 $ 1,040,340
-----------
The accompanying notes are an integral part of these financial statements.
11
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Pioneer Intermediate Tax-Free Fund
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S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
Nebraska - 1.8%
$1,000,000 AAA/NR Omaha Public Power District Electric System
Revenue, 6.5%, Prerefunded, 2/1/02* $ 1,093,010
-----------
Nevada - 0.1%
60,000 AA/Aa2 Nevada Housing Division Single Family
Program Revenue, 8.0%, 4/1/09 $ 60,812
-----------
New Jersey - 1.8%
1,000,000 AA+/Aa1 New Jersey Sales Tax General Obligation,
5.8%, 2/15/07 $ 1,103,300
-----------
New Mexico - 1.6%
1,000,000 AA/Aa Bernalillo County, New Mexico, Gross
Receipts Tax Revenue, 5.0%, 4/1/13 $ 1,020,900
-----------
New York - 3.5%
1,000,000 AAA/Aaa Long Island Power Authority New York
Electric System Revenue, 5.5%, 12/1/10 $ 1,079,470
1,000,000 A+/A3 New York State Local Government Assistance
Corp. Revenue, 5.5%, 4/1/17 1,064,080
-----------
$ 2,143,550
-----------
Ohio - 1.8%
1,000,000 AAA/Aaa Ohio State Water Development Authority,
6.0%, 12/1/06 $ 1,111,520
-----------
Oklahoma - 2.6%
1,500,000 A-/A2 Grand River Dam Authority Electric Revenue,
5.75%, 6/1/06 $ 1,627,860
-----------
Pennsylvania - 1.7%
1,000,000 AA-/Aa3 Pennsylvania State Turnpike Commission
Highway Revenue, 5.45%, 12/1/02 $ 1,049,780
-----------
The accompanying notes are an integral part of these financial statements.
12
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Pioneer Intermediate Tax-Free Fund
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S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
South Carolina - 5.3%
$1,000,000 AA/Aa2 Columbia Waterworks and Sewer System
Revenue, 5.5%, 2/1/09 $ 1,082,560
1,000,000 AA/Aa1 Greenville Waterworks Revenue, 6.0%, 2/1/08 1,119,020
1,000,000 AAA/Aaa South Carolina General Obligation,
5.75%, 8/1/03 1,075,020
-----------
$ 3,276,600
-----------
Texas - 7.8%
1,000,000 AA/Aa2 Port Houston Authority Revenue,
5.0%, 10/1/05 $ 1,038,730
750,000 AAA/Aaa San Antonio Prior Lien Water Revenue,
7.125%, Prerefunded, 5/1/99* 782,452
1,000,000 AAA/Aaa Texas Dallas-Fort Worth Regional
Airport Revenue, 5.5%, 11/1/04 1,066,450
1,500,000 AA/Aa2 Texas State General Obligation, 5.8%, 10/1/04 1,626,375
250,000 AAA/Aaa University of Texas Permanent University
Fund, Escrowed to Maturity in Government
Securities, 8.0%, 7/1/04 299,213
-----------
$ 4,813,220
-----------
Vermont - 0.8%
500,000 AAA/Aaa Vermont Municipal Bond Bank, 7.9%,
Prerefunded, 12/1/98* $ 518,830
-----------
Virginia - 3.4%
1,000,000 AAA/Aaa Virginia Metro Authority Expressway,
5.25%, 7/15/22 $ 1,034,720
1,000,000 AA/Aa Virginia State Public School Authority,
Special Obligation, 5.4%, 6/1/04 1,059,590
-----------
$ 2,094,310
-----------
Washington - 1.7%
1,000,000 AA+/Aa1 Washington State General Obligation,
6.0%, 5/1/02 $ 1,066,020
-----------
The accompanying notes are an integral part of these financial statements.
13
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Pioneer Intermediate Tax-Free Fund
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SCHEDULE OF INVESTMENTS 6/30/98 (continued)
- --------------------------------------------------------------------------------
S&P/
Moody's
Principal Ratings
Amount (Unaudited) Value
Wisconsin - 1.7%
$1,000,000 AA/Aa2 Wisconsin State General Obligation,
5.3%, 11/1/12 $ 1,056,650
-----------
TOTAL TAX-EXEMPT OBLIGATIONS
(Cost $58,641,468)(a) $60,866,182
-----------
TEMPORARY CASH INVESTMENTS - 1.6%
100,000 Jackson County, Mississippi Pollution Control
Revenue, 3.65%, 12/1/16** $ 100,000
400,000 Jackson County, Mississippi Pollution Control
Revenue, 2.65%, 6/1/23** 400,000
500,000 Uinta County, Wyoming Pollution Control
Revenue, 3.0%, 12/1/22** 500,000
-----------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $1,000,000) $ 1,000,000
-----------
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $59,641,468)(b) $61,866,182
-----------
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
Pioneer Intermediate Tax-Free Fund
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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, 1998.
(a) The concentration of securities, by type of obligation/market sector, is
as follows:
General Obligation 19.4%
Escrowed in U.S. Government Securities 7.0
Insured 23.1
Revenue Bonds:
Education 11.5
Housing 0.1
Pollution Control 3.6
Power 8.0
Sales Tax 6.9
Transportation 11.6
Water & Sewer 8.8
(b) At June 30, 1998, the net unrealized gain on
investments based on cost for federal income
tax purposes of $59,641,468 was as follows:
Aggregate gross unrealized gain for all
investments in which there is an excess
of value over tax cost $2,267,396
Aggregate gross unrealized loss for all
investments in which there is an excess
of tax cost over value (42,682)
----------
Net unrealized gain $2,224,714
----------
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended June 30, 1998 aggregated $11,547,090 and $17,572,945,
respectively.
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
BALANCE SHEET 6/30/98
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities, at value (including temporary cash
investments of $1,000,000) (cost $59,641,468) $61,866,182
Receivables -
Fund shares sold 9,955
Interest 881,214
Other 2,561
-----------
Total assets $62,759,912
-----------
LIABILITIES:
Payables -
Fund shares repurchased $ 2,010
Dividends 72,342
Due to bank 6,515
Due to affiliates 73,651
Accrued expenses 39,282
-----------
Total liabilities $ 193,800
-----------
NET ASSETS:
Paid-in capital $59,339,992
Distributions in excess of net investment income (30,017)
Accumulated undistributed net realized gain on investments 1,031,423
Net unrealized gain on investments 2,224,714
-----------
Total net assets $62,566,112
-----------
Net Asset Value Per Share:
(Unlimited number of shares authorized)
Class A (based on $59,728,553/5,736,667 shares) $ 10.41
-----------
Class B (based on $2,667,081/255,150 shares) $ 10.45
-----------
Class C (based on $170,478/16,366 shares) $ 10.42
-----------
Maximum Offering Price:
Class A $ 10.79
-----------
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended 6/30/98
INVESTMENT INCOME:
Interest $ 1,637,913
-----------
EXPENSES:
Management fees $ 161,698
Transfer agent fees
Class A 35,446
Class B 2,293
Class C 313
Distribution fees
Class A 72,102
Class B 13,211
Class C 1,133
Accounting 33,767
Custodian fees 5,212
Registration fees 16,428
Professional fees 22,673
Printing 6,270
Fees and expenses of nonaffiliated trustees 9,922
Miscellaneous 27,329
-----------
Total expenses $ 407,797
Less management fees waived by
Pioneering Management Corporation (70,193)
Less fees paid indirectly (2,285)
-----------
Net expenses $ 335,319
-----------
Net investment income $ 1,302,594
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 948,694
Change in net unrealized gain on investments (1,186,933)
-----------
Net loss on investments $ (238,239)
-----------
Net increase in net assets resulting from operations $ 1,064,355
-----------
The accompanying notes 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 6/30/98 and the Year Ended 12/31/97
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
6/30/98 12/31/97
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 1,302,594 $ 2,963,928
Net realized gain on investments 948,694 1,112,008
Change in net unrealized gain on investments (1,186,933) 579,896
------------ ------------
Net increase in net assets resulting from operations $ 1,064,355 $ 4,655,832
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.22 and $0.44 per share, respectively) $ (1,291,265) $ (2,841,400)
Class B ($0.15 and $0.37 per share, respectively) (39,456) (101,513)
Class C ($0.18 and $0.34 per share, respectively) (3,973) (7,472)
Net realized gain:
Class A ($0.00 and $0.08 per share, respectively) -- (511,871)
Class B ($0.00 and $0.08 per share, respectively) -- (22,707)
Class C ($0.00 and $0.08 per share, respectively) -- (2,343)
------------ ------------
Total distributions to shareholders $ (1,334,694) $ (3,487,306)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 3,324,797 $ 3,967,917
Reinvestment of distributions 854,355 2,280,319
Cost of shares repurchased (9,877,697) (15,334,302)
------------ ------------
Net decrease in net assets resulting from
fund share transactions $ (5,698,545) $ (9,086,066)
------------ ------------
Net decrease in net assets $ (5,968,884) $ (7,917,540)
NET ASSETS:
Beginning of period 68,534,996 76,452,536
------------ ------------
End of period (including (distributions in excess
of)/accumulated undistributed net investment
income of $(30,017) and $2,083, respectively) $ 62,566,112 $ 68,534,996
------------ ------------
</TABLE>
<TABLE>
Class A '98 Shares '98 Amount '97 Shares '97 Amount
<S> <C> <C> <C> <C>
Shares sold 124,322 $ 1,298,771 290,169 $ 3,000,480
Reinvestment of distributions 79,206 825,150 212,121 2,189,076
Less shares repurchased (706,733) (7,359,135) (1,404,597) (14,465,457)
-------- ---------- --------- ----------
Net decrease (503,205) $ (5,235,214) (902,307) $(9,275,901)
-------- ---------- ------- --------
Shares sold 153,103 $ 1,602,440 85,716 $ 882,162
Reinvestment of distributions 2,505 26,185 7,998 82,765
Less shares repurchased (187,993) (1,964,022) (84,079) (868,240)
-------- ---------- ------- --------
Net increase (decrease) (32,385) $ (335,397) 9,635 $ 96,687
-------- ---------- --------- ----------
Class C
Shares sold 40,900 $ 423,586 8,221 $ 85,275
Reinvestment of distributions 289 3,020 819 8,478
Less shares repurchased (53,403) (554,540) (58) (605)
-------- ---------- --------- ----------
Net increase (decrease) (12,214) $ (127,934) 8,982 $ 93,148
-------- ---------- --------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
CLASS A 6/30/98 12/31/97 12/31/96 12/31/95 12/31/94(a) 12/31/93
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.45 $10.28 $ 10.44 $ 9.62 $ 10.76 $ 10.32
------- ------ ------- ------- ------- -------
Increase (decrease) from investment
operations:
Net investment income $ 0.21 $ 0.44 $ 0.46 $ 0.49 $ 0.49 $ 0.56
Net realized and unrealized
gain (loss) on investments (0.03) 0.25 (0.15) 0.82 (1.13) 0.56
------- ------ ------- ------- ------- -------
Net increase (decrease) from
investment operations $ 0.18 $ 0.69 $ 0.31 $ 1.31 $ (0.64) $ 1.12
Distributions to shareholders:
Net investment income (0.22) (0.44) (0.47) (0.49) (0.49) (0.56)
Net realized gain -- (0.08) -- -- (0.01) (0.12)
------- ------ ------- ------- ------- -------
Net increase (decrease) in net
asset value $ (0.04) $ 0.17 $ (0.16) $ 0.82 $ (1.14) $ 0.44
------- ------ ------- ------- ------- -------
Net asset value, end of period $ 10.41 $10.45 $ 10.28 $ 10.44 $ 9.62 $ 10.76
------- ------ ------- ------- ------- -------
Total return* 1.69% 6.87% 3.03% 13.80% (6.02)% 11.08%
Ratio of net expenses to
average net assets 1.01%**+ 1.02%+ 1.03%+ 1.02%+ 1.00% 0.85%
Ratio of net investment income
to average net assets 4.06%**+ 4.23%+ 4.47%+ 4.77%+ 4.89% 5.23%
Portfolio turnover rate 36%** 35% 34% 29% 39% 14%
Net assets, end of period (in
thousands) $59,729 $65,225 $73,387 $79,432 $76,674 $82,907
Ratios assuming no waiver of
management fees by PMC and
no reduction for fees
paid indirectly:
Net expenses 1.23%** 1.17% 1.14% 1.12% 1.22% 1.12%
Net investment income 3.84%** 4.08% 4.36% 4.67% 4.67% 4.97%
Ratios assuming waiver of
management fees by PMC and
reduction for fees paid
indirectly:
Net expenses 1.00%** 1.00% 1.00% 1.00% -- --
Net investment income 4.07%** 4.25% 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 notes are an integral part of these financial statements.
19
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Year Year 4/29/94
Ended Ended Ended Ended to
CLASS B 6/30/98 12/31/97 12/31/96 12/31/95 12/31/94(a)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.47 $10.31 $10.46 $ 9.65 $10.07
------ ------ ------ ------ ------
Increase (decrease) from investment
operations:
Net investment income $ 0.17 $ 0.36 $ 0.38 $ 0.41 $ 0.27
Net realized and unrealized gain
(loss) on investments (0.04) 0.25 (0.15) 0.80 (0.42)
------ ------ ------ ------ ------
Net increase (decrease) from
investment operations $ 0.13 $ 0.61 $ 0.23 $ 1.21 $(0.15)
Distributions to shareholders:
Net investment income (0.15) (0.37) (0.38) (0.40) (0.27)
Net realized gain -- (0.08) -- -- --
Net increase (decrease) in net
asset value $(0.02) $ 0.16 $(0.15) $ 0.81 $(0.42)
------ ------ ------ ------ ------
Net asset value, end of period $10.45 $10.47 $10.31 $10.46 $ 9.65
------ ------ ------ ------ ------
Total return* 1.29% 6.08% 2.25% 12.71% (1.49)%
Ratio of net expenses to average
net assets 1.84%**+ 1.81%+ 1.81%+ 1.86%+ 1.84%**
Ratio of net investment income to
average net assets 3.23%**+ 3.44%+ 3.68%+ 3.90%+ 4.17%**
Portfolio turnover rate 36%** 35% 34% 29% 39%
Net assets, end of period
(in thousands) $2,667 $3,010 $2,864 $2,553 $1,529
Ratios assuming no waiver of management
fees by PMC and no reduction for fees
paid indirectly:
Net expenses 2.05%** 1.96% 1.91% 1.96% 2.14%**
Net investment income 3.02%** 3.29% 3.58% 3.80% 3.87%**
Ratios assuming waiver of management
fees by PMC and reduction for fees
paid indirectly:
Net expenses 1.83%** 1.79% 1.76% 1.82% --
Net investment income 3.24%** 3.46% 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 notes are an integral part of these financial statements.
20
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/98
- --------------------------------------------------------------------------------
Six Months
Ended Year Ended 1/31/96 to
SCLASS C 6/30/98 12/31/97 12/31/96
Net asset value, beginning of period $10.48 $10.29 $10.51
------ ------ ------
Increase (decrease) from investment
operations:
Net investment income $ 0.16 $ 0.35 $ 0.33
Net realized and unrealized
gain (loss) on investments (0.04) 0.26 (0.21)
------ ------ ------
Net increase from investment
operations $ 0.12 $ 0.61 $ 0.12
Distributions to shareholders:
Net investment income (0.18) (0.34) (0.33)
In excess of net investment income -- -- (0.01)
Net realized gain -- (0.08) --
------ ------ ------
Net increase (decrease) in net asset
value $(0.06) $ 0.19 $(0.22)
------ ------ ------
Net asset value, end of period $10.42 $10.48 $10.29
------ ------ ------
Total return* 1.15% 6.04% 1.22%
Ratio of net expenses to average net
assets 1.95%**+ 1.84%+ 1.97%**+
Ratio of net investment income to average
net assets 3.21%**+ 3.41%+ 3.51%**+
Portfolio turnover rate 36%** 35% 34%
Net assets, end of period (in thousands) $ 170 $ 300 $ 202
Ratios assuming no waiver of management
fees by PMC and no reduction for fees
paid indirectly:
Net expenses 2.17%** 1.99% 2.08%**
Net investment income 2.99%** 3.26% 3.40%**
Ratios assuming waiver of management
fees by PMC and reduction for fees paid
indirectly:
Net expenses 1.94%** 1.82% 1.89%**
Net investment income 3.22%** 3.43% 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 notes are an integral part of these financial statements.
21
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/98
- --------------------------------------------------------------------------------
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 has 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 at
prices supplied by independent pricing services, which consider such
factors as Treasury spreads, yields, maturities and ratings, and
valuations may be supplemented by dealers and other sources, as required.
Market discount and premium are accreted or amortized daily on a
straight-line basis. Original issue discount is accreted daily into
interest income on a yield-to-maturity basis with a corresponding increase
in the cost basis of the security. Interest income is recorded on the
accrual basis. Temporary cash investments are valued at amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
It is the Fund's practice to first select for sale those securities that
have the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
22
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
B. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income and net realized capital gains, if
any, to its shareholders. Therefore, no federal income tax provision is
required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Fund's distributions may be shown in
the accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
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 $1,984 in
underwriting commissions on the sale of the fund shares during the six
months ended June 30, 1998.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset
value attributable to Class A, Class B, and Class C shares of the Fund,
respectively. Shareholders of each class share all expenses and fees paid
to the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each
class and the ratable allocation of related out-of-pocket expense (see
Note 3). Income, common expenses and realized and unrealized gains and
losses are calculated at the Fund level and allocated daily to each class
of shares based on the respective percentage of adjusted net assets at the
beginning of the day.
The Fund declares as daily dividends substantially all of its net
investment income. All dividends are paid on a monthly basis. Short-term
capital gain distributions, if any, may be declared with the daily
dividends. Distributions to shareholders are recorded as of the
ex-dividend date. Distributions paid by the Fund with respect to each
class of shares are calculated in the same manner, at the same time, and
in the same amount, except that Class A, Class B, and Class C shares can
bear different transfer agent and distribution fees.
23
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/98 (continued)
- --------------------------------------------------------------------------------
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 Fund's 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, 1998, $18,225 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 $16,298 in transfer agent fees payable to PSC at June 30, 1998.
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan, and Class C Plan) in accordance with Rule 12b-1 of the Investment
Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service
fee of up to 0.25% of the Fund's average daily net assets in reimbursement of
its actual expenditures to finance activities primarily intended to result in
the sale of Class A shares. Pursuant to the Class B Plan and the Class C Plan,
the Fund pays PFD 1.00% of the average daily net assets attributable to each
class of shares. The fee consists of a 0.25% service fee and a 0.75%
distribution fee paid as compensation for personal services and/or account
maintenance services or distribution services with regard to Class B and Class C
shares. Included in due to affiliates is $39,128 in distribution fees payable to
PFD at June 30, 1998.
24
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
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 CDSCs are paid to
PFD. For the six months ended June 30, 1998, CDSCs in the amount of $2,171 were
paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the six months ended June 30, 1998,
the Fund's expenses were reduced by $2,285 under such arrangements.
6. Line of Credit Facility
Effective April 14, 1998, the Fund, along with certain others in the Pioneer
Family of Funds (the "Funds"), collectively participate in a $50 million
committed, unsecured revolving line of credit facility. Borrowings are used
solely for temporary or emergency purposes. The Fund may borrow up to the lesser
of $50 million or the limits set by its prospectus for borrowings. Interest on
collective borrowings of up to $25 million is payable at the Federal Funds Rate
plus 3/8% on an annualized basis, or at the Federal Funds Rate plus 1/2% if the
borrowings exceed $25 million at any one time. The Funds pay an annual
commitment fee for this facility. The commitment fee is allocated among such
Funds based on their respective borrowing limits.
The average daily amount of borrowings outstanding during the period from April
14, 1998 through June 30, 1998 was $23,252. The average daily shares outstanding
during the period were 6,105,687, resulting in an average borrowing of less than
one cent per share. The related weighted average annualized interest rate for
the period was 5.91%, and the total interest expense on such borrowings was
$298.
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, 1998, 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, 1998 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, 1998, 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 7, 1998
26
<PAGE>
Pioneer Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and President
Mary K. Bush David D. Tripple, Executive Vice President
Richard H. Egdahl, M.D. Kathleen D. McClaskey, Vice President
Margaret B.W. Graham William H. Keough, Treasurer
John W. Kendrick Joseph P. Barri, Secretary
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
27
<PAGE>
- --------------------------------------------------------------------------------
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
- --------------------------------------------------------------------------------
Your investment professional can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-8O0-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
9O-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as you
meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need to
do is authorize a set amount of money to be moved out of your bank account into
the Pioneer fund of your choice. Investomatic also allows you to change the
dollar amount, frequency and investment date right over the phone. By putting
aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing Pioneer
to deduct from participating employees' paychecks. You specify the dollar amount
you want to invest into the Pioneer fund(s) of your choice.
28
<PAGE>
- --------------------------------------------------------------------------------
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds you
wish to invest in. You choose the amounts and dates for Pioneer to sell shares
of your original fund and use the proceeds to buy shares of the funds you have
chosen. Over time, your investment will be shifted out of the original fund.
(Automatic Exchange is available for originating accounts with a balance of
$5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the 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 for accounts with a value of $10,000 or more.)
29
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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.
Call us for:
Account Information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(sm) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current
Fund prospectus.
[LOGO] Pioneer Funds Distributor, Inc. 0898-5428
60 State Street (c) Pioneer Funds Distributor, Inc.
Boston, Massachusetts 02109 Printed on Recycled Paper
www.pioneerfunds.com
