[PIONEER LOGO]
Pioneer
America Income
Trust
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ANNUAL REPORT 12/31/97
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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 11
Notes to Financial Statements 17
Report of Independent Public Accountants 21
Trustees, Officers and Service Providers 22
Retirement Plans from Pioneer 24
Programs and Services for Pioneer Shareowners 26
The Pioneer Family of Mutual Funds 28
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Pioneer America Income Trust
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LETTER FROM THE CHAIRMAN 12/31/97
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Dear Shareowner,
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I am pleased to present this report for Pioneer America Income Trust, covering
its fiscal year ended December 31, 1997. On behalf of the Fund's investment
team, I thank you for your interest and this opportunity to comment briefly on
today's investing environment.
Since October, investors have shown increasing demand for U.S. bonds, as the
world's stock markets have been exceptionally volatile. Asian markets plunged in
the face of severe instability in currencies and economic growth. Here in the
United States, the Dow Jones Industrial Average experienced - in the space of
two days - both its biggest one-day point drop and its biggest one-day point
gain. Although it recovered, its pace has since been unsteady. European markets
bounced around, shaken by the drop in Asia and then heartened by the speedy U.S.
rebound. Even Latin American markets were affected, mostly in a chain reaction
from nervous investors.
After consecutive quarters of robust growth in stocks, this fast-paced change
forced individuals and institutions to rethink their investment strategy. Money
has poured into the bond market, driving prices up and yields down - to record
levels in the case of the 30-year U.S. Treasury bond. Many investors have moved
away from stocks and into high-quality U.S. fixed-income securities - like those
held by your Fund - to shelter their portfolio. We have always believed it is
important to allocate assets among both stocks and bonds, and recent market
conditions demonstrate this importance.
I encourage you to read on to learn more about your Fund. Please contact your
investment representative, or us at 1-800-225-6292, if you have questions about
Pioneer America Income Trust.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
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Pioneer America Income Trust
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PORTFOLIO SUMMARY 12/31/97
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[The following table was a pie chart in the printed materials.]
U.S. Treasury Obligations 59%
U.S. Government Agency Obligations 38%
Short-Term Cash Equivalents 3%
Portfolio Maturity
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(Effective life as a percentage of total investment portfolio)
[The following table was a pie chart in the printed materials.]
0-2 Years 8%
2-5 Years 13%
5-7 Years 35%
7-10 Years 26%
10-20 Years 5%
20+ Years 13%
10 Largest Holdings
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(As a percentage of long-term holdings)
1. U.S. Treasury Bonds, 8.0%, 11/15/21 13.02%
2. U.S. Treasury Notes, 7.0%, 7/15/06 12.21
3. Government National Mortgage Association, 7.5%, 2/15/27 12.02
4. Government National Mortgage Association, 8.0%, 10/15/24 5.93
5. U.S. Treasury Bonds, 8.25%, 5/15/05 5.63
6. U.S. Treasury Notes, 7.25%, 5/15/04 5.09
7. U.S. Treasury Bonds, 7.25%, 5/15/16 4.60
8. U.S. Treasury Bonds, 9.125%, 5/15/09 4.40
9. U.S. Treasury Bonds, 10.375%, 11/15/09 3.37
10. Government National Mortgage Association, 8.0%, 4/20/27 3.33
Fund holdings will vary for other periods.
2
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Pioneer America Income Trust
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PERFORMANCE UPDATE 12/31/97 CLASS A SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 12/31/97 12/31/96
$9.93 $9.77
Distributions per Share Income Short-Term Long-Term
(12/31/96 - 12/31/97) Dividends Capital Gains Capital Gains
$0.640 -- --
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer America Income Trust at public offering price, compared to the growth of
the Lehman Brothers Government Bond Index.
[The following table was a mountain chart in the printed materials.]
Growth of $10,000
Pioneer America Lehman Brothers
Income Trust* Government Bond
Index
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6/30/88 9,550 10,000
12/31/88 9,799 10,265
10,439 11,208
12/31/89 10,926 11,725
11,283 11,985
11,909 12,747
12,385 13,199
12/31/91 13,354 14,700
13,371 15,014
14,246 15,762
15,197 16,951
12/31/93 15,538 17,442
15,871 16,724
14,921 16,853
16,358 18,741
12/31/95 17,318 19,945
16,976 19,587
17,715 20,497
18,186 21,036
12/31/97 19,223 22,463
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[boxed text]
Average Annual Total Returns
(As of December 31, 1997)
Net Asset Public Offering
Period Value Price*
Life-of-Fund 7.69% 7.18%
(6/1/88)
5 Years 6.18 5.21
1 Year 8.51 3.63
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* Reflects deduction of the maximum 4.5% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
+ Index comparison begins 6/30/88. The Lehman Brothers Government Bond Index is
an unmanaged measure of the performance of U.S. Treasury debt, all publicly
issued debt of U.S. government agencies and quasi-federal corporations, and
corporate debt guaranteed by the U.S. government. Index returns assume
reinvestment of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
3
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Pioneer America Income Trust
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PERFORMANCE UPDATE 12/31/97 CLASS B SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 12/31/97 12/31/96
$9.90 $9.75
Distributions per Share Income Short-Term Long-Term
(12/31/96 - 12/31/97) Dividends Capital Gains Capital Gains
$0.566 -- --
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer America Income Trust, compared to the growth of the Lehman Brothers
Government Bond Index.
[The following table was a mountain chart in the printed materials.]
Growth of $10,000
Pioneer America Lehman Brothers
Income Trust* Government Bond
Index
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4/30/94 10,000 10,000
9,952 9,964
9,978 10,006
12/31/94 9,943 10,041
10,395 10,514
6/30/95 10,856 11,166
11,034 11,364
12/31/95 11,442 11,883
11,197 11,614
6/30/96 11,186 11,670
11,338 11,866
12/31/96 11,624 12,212
11,516 12,113
6/30/97 11,890 12,533
12,188 12,953
12/31/97 12,208 13,383
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[boxed text]
Average Annual Total Returns
(As of December 31, 1997)
If If
Period Held Redeemed*
Life-of-Fund 6.27% 5.57%
(4/29/94)
1 Year 7.61 3.61
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* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes rein vestment of distributions.
The maximum CDSC of 4% declines over six years.
The Lehman Brothers Government Bond Index is an unmanaged measure of the
performance of U.S. Treasury debt, all publicly issued debt of U.S. government
agencies and quasi-federal corporations, and corporate debt guaranteed by the
U.S. government. Index returns assume reinvestment of dividends and, unlike Fund
returns, do not reflect any fees, expenses or sales charges. You cannot invest
directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
4
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Pioneer America Income Trust
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PERFORMANCE UPDATE 12/31/97 CLASS C SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 12/31/97 12/31/96
$9.90 $9.74
Distributions per Share Income Short-Term Long-Term
(12/31/96 - 12/31/97) Dividends Capital Gains Capital Gains
$0.572 -- --
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer America Income Trust, compared to the growth of the Lehman Brothers
Government Bond Index.
[The following table was a mountain chart in the printed materials.]
Growth of $10,000
Pioneer America Lehman Brothers
Income Trust* Government Bond
Index
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1/31/96 10,000 10,000
9,810 9,796
3/31/96 9,748 9,714
9,686 9,652
9,652 9,636
6/30/96 9,728 9,761
9,755 9,785
9,730 9,763
9/30/96 9,861 9,925
10,051 10,143
10,210 10,320
12/31/96 10,104 10,214
10,122 10,226
10,129 10,240
3/30/97 10,020 10,131
10,155 10,278
10,239 10,366
6/30/97 10,335 10,483
10,568 10,780
10,469 10,674
9/30/97 10,607 10,834
10,745 11,022
10,762 11,078
12/31/97 10,890 11,194
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[boxed text]
Average Annual Total Returns
(As of December 31, 1997)
If If
Period Held Redeemed*
Life-of-Fund 4.54% 4.54%
(1/31/96)
1 Year 7.78 7.78
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* Assumes reinvestment of distributions. A 1% contingent deferred sales charge
(CDSC) applies to redemptions made within one year of purchase.
The Lehman Brothers Government Bond Index is an unmanaged measure of the
performance of U.S. Treasury debt, all publicly issued debt of U.S. government
agencies and quasi-federal corporations, and corporate debt guaranteed by the
U.S. government. Index returns assume reinvestment of dividends and, unlike Fund
returns, do not reflect any fees, expenses or sales charges. You cannot invest
directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
5
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Pioneer America Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/97
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Pioneer America Income Trust ended its fiscal year on December 31, 1997. We are
pleased to report that the past 12 months presented significant opportunity to
investors in the U.S. government securities market. Interest rates fell
dramatically, sending bond prices higher. Foreign investors, especially, sought
refuge in U.S. government securities from the turmoil in international financial
markets.
The following discussion with Sherman B. Russ, your Fund's portfolio manager,
provides a detailed account of the investment environment and strategies that
influenced your Fund's performance over the past year, and his expectations for
1998. An investment professional for more than 20 years, Mr. Russ oversees the
team responsible for the daily management of Pioneer America Income Trust.
How was the Fund's performance over the past 12 months?
Pioneer America Income Trust generated an attractive level of income and a solid
total return. The Fund also maintained the highest standards of quality,
investing only in securities that carry the "full faith and credit" of the U.S.
government. The U.S. government guarantee applies to the timely payment of
interest and principal, not to the underlying value of the securities
themselves, nor to the value of Fund shares. As of December 31, 1997, the Fund's
30-day SEC yield stood at 5.52%.
For the 12 months ended December 31, 1997, Class A Shares returned 8.51%, Class
B Shares returned 7.61% and Class C Shares returned 7.78% at net asset value.
These results were modestly lower than the average return of 8.84% generated by
the general U.S. government funds followed by Lipper Analytical Services. We
attribute this to the Fund's high investment standards. Other funds in this
category can invest in U.S. agency securities that do not carry the "full faith
and credit" of the U.S. government, as well as foreign government securities.
These investments often provide higher yields.
What was the environment for U.S. government securities this year?
Extremely favorable for most of the period. After peaking at 7.17% in April, the
yield on the benchmark 30-year U.S. Treasury bond fell to a four-year low of
5.87% in December, and bond prices rose considerably.
6
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Pioneer America Income Trust
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The decline in interest rates was driven by both national and international
factors. In the United States, inflation remained low despite moderate-to-strong
economic growth. An increasing number of investors became convinced the economy
could continue to grow with minimal inflation because of worldwide improvements
in productivity and technology. The strong economy also produced higher tax
revenues, helping reduce the federal budget deficit and the need for the U.S.
government to borrow. The result was a smaller supply of securities.
At the same time, demand was strong, particularly from overseas investors. In
the fourth quarter, especially, upheaval in Asia's financial markets prompted
investors to seek a safe haven. This "flight to quality" translated into greater
demand for U.S. government securities, causing interest rates to fall to levels
of historical significance.
The rally marked a dramatic change from the early part of 1997, when interest
rates rose. Then, investors were concerned the economy's strength would
stimulate future inflation. These fears were affirmed by the Federal Reserve
when it raised the federal funds rate - the rate at which banks lend to each
other overnight and the benchmark for short-term interest rates - from 5.25% to
5.50% in March.
What strategies did you use in managing the Fund?
We actively managed allocations to U.S. Treasurys and mortgage-backed
securities. We also adjusted the Fund's maturity profile. (All of the Fund's
mortgage-backed security investments are issued by the Government National
Mortgage Association (GNMA) and carry the full faith and credit guarantee of the
U.S. government.) As of December 31, 1997, the portfolio was 59% U.S. Treasurys
and 35% GNMA holdings, with 3% in other government agency issues and 3% in cash
reserves.
In the first part of the year, we increased investments in GNMAs and reduced
holdings in U.S. Treasurys because mortgage-backed securities tend to outperform
Treasurys when interest rates are rising and also provide higher income. We also
took advantage of the higher yields available from bonds with longer maturities.
We reduced holdings in securities with maturities of two to 10 years and
reinvested in bonds in
7
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Pioneer America Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/97 (continued)
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the 10- to 30-year maturity range. This improved income and positioned the Fund
to benefit from the declining interest rates that prevailed later in the year.
In the second half of the year, we focused on improving total return and
reducing prepayment risk that could limit the performance of mortgage-backed
securities. Prepayment risk is the possibility that underlying mortgages in a
security will be paid before their stated maturity or average life-expectancy.
This possibility increases as interest rates fall, because mortgage holders can
refinance their debt at lower interest rates.
To reduce the prepayment risk tied to changing interest rates, we sold GNMAs we
believed were most likely to be prepaid. We reinvested in GNMAs with lower
coupons, which offer an attractive balance of income and protection against
prepayment risk. We also selected U.S. Treasurys with seven- to 12-year
maturities. As of year-end, a 10-year U.S. Treasury note provided approximately
96% of the yield of a 30-year U.S. Treasury bond, with only 57% of its
sensitivity to interest rate changes.
What is your outlook for U.S. government securities over the next six months?
We are optimistic that many of the positive trends we witnessed over the past 12
months will continue. But we also recognize that the financial crisis in Asia
and the degree to which it will affect the U.S. economy is still unknown. We
expect inflation to remain low, the federal budget deficit to continue to
shrink, and investor preference for safe, high-quality investments to be strong.
While many factors point to steady economic activity in the United States, such
as brisk employment growth and high consumer confidence, we believe the slowdown
in the Asian economies could reduce U.S. economic growth from 3% to 2% per year
and lower inflation by 1%. We will closely monitor developments in both the
international and national arenas, but believe the Fund's emphasis on the
highest-quality investments and careful security selection should keep it
well-positioned going forward.
8
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Pioneer America Income Trust
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SCHEDULE OF INVESTMENTS 12/31/97
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Principal
Amount Value
INVESTMENT IN SECURITIES - 97.4%
U.S. GOVERNMENT OBLIGATIONS - 58.9%
$ 2,000,000 U.S. Treasury Bond, 10.75%, 2003 $ 2,455,940
7,915,000 U.S. Treasury Bond, 8.25%, 2005 8,360,060
5,590,000 U.S. Treasury Bond, 9.125%, 2009 6,534,766
4,000,000 U.S. Treasury Bond, 10.375%, 2009 5,001,840
3,000,000 U.S. Treasury Bond, 10.00%, 2010 3,727,650
6,000,000 U.S. Treasury Bond, 7.25%, 2016 6,832,920
15,500,000 U.S. Treasury Bond, 8.00%, 2021 19,332,375
3,000,000 U.S. Treasury Notes, 9.25%, 1998 4,281,840
4,000,000 U.S. Treasury Notes, 8.875%, 2000 3,064,980
7,000,000 U.S. Treasury Notes, 7.25%, 2004 7,556,010
4,000,000 U.S. Treasury Notes, 7.875%, 2004 4,472,440
16,800,000 U.S. Treasury Notes, 7.00%, 2006 18,136,776
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Total U.S. Government Obligations $ 89,757,597
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U.S. GOVERNMENT AGENCY OBLIGATIONS - 35.6%
64,062 GNMA Midget, 10.5%, 1998 to 2003 $ 67,418
626,015 GNMA Midget, 10.0%, 2001 to 2006 659,801
76,403 GNMA Midget, 9.0%, 2003 to 2005 78,717
567,723 GNMA Midget, 9.5%, 2003 to 2006 591,469
1,311,381 GNMA, 10.0%, 2016 to 2020 1,454,135
5,833,887 GNMA, 9.0%, 2016 to 2024 6,276,049
124,387 GNMA, 10.5%, 2017 to 2019 139,445
299,250 GNMA, 9.5%, 2019 to 2021 323,927
948,339 GNMA, 8.5%, 2024 1,003,950
24,953,228 GNMA, 8.0%, 2024 to 2027 25,893,921
17,400,000 GNMA, 7.5%, 2027 17,855,031
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Total U.S. Government Agency Obligations $ 54,343,863
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OTHER GOVERNMENT AGENCIES - 2.9%
4,275,000 Federal Credit System Financial Assistance
Corp., 9.45%, 2003 $ 4,407,482
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Total Other Government Agencies $ 4,407,482
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TOTAL INVESTMENT IN SECURITIES
(Cost $145,314,232) $ 148,508,942
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The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer America Income Trust
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SCHEDULE OF INVESTMENTS 12/31/97 (continued)
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Principal
Amount Value
TEMPORARY CASH INVESTMENT - 2.6%
REPURCHASE AGREEMENT - 2.6%
$3,900,000 Chase Manhattan Bank, 1/2/98, 6.05%, repurchase
price of $3,900,000 plus accrued interest on
1/2/98, collateralized by $3,963,000 U.S.
Treasury Notes, 6.00%, 6/30/99 $ 3,900,000
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TOTAL TEMPORARY CASH INVESTMENT
(Cost $3,900,000) $ 3,900,000
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TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $149,214,232)(a)(b) $ 152,408,942
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Note: The Trust's investments in mortgage-backed securities of the Government
National Mortgage Association (GNMA) are interests in separate pools of
mortgages. All separate investments in this issuer which have the same
coupon rate have been aggregated for the purpose of presentation in this
schedule of investments.
(a) At December 31, 1997, the net unrealized gain on investments based on cost
for federal income tax purposes of $149,214,232 was as follows:
Aggregate gross unrealized gain for all investments
in which there is an excess of value over tax cost $ 3,901,145
Aggregate gross unrealized loss for all investments
in which there is an excess of tax cost over value (706,435)
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Net unrealized gain $ 3,194,710
==============
(b) At December 31, 1997, the Trust had a net capital loss carry forward of
$7,671,053 which will expire between 2002 and 2004 if not utilized.
Purchases and sales of securities (excluding temporary cash investments) for the
year ended December 31, 1997 aggregated $90,612,562 and $99,178,192,
respectively.
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer America Income Trust
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BALANCE SHEET 12/31/97
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ASSETS:
Investment in securities, at value (including temporary cash
investment of $3,900,000) (cost $149,214,232) $ 152,408,942
Cash 75,715
Receivables -
Fund shares sold 172,057
Interest 1,715,124
Other 5,735
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Total assets $ 154,377,573
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LIABILITIES:
Payables -
Fund shares repurchased $ 176,546
Dividends 217,653
Due to affiliates 187,328
Accrued expenses 59,108
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Total liabilities $ 640,635
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NET ASSETS:
Paid-in capital $ 158,205,299
Accumulated undistributed net investment income 7,982
Accumulated net realized loss on investments (7,671,053)
Net unrealized gain on investments 3,194,710
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Total net assets $ 153,736,938
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NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $138,022,401/13,902,963 shares) $ 9.93
=============
Class B (based on $11,934,752/1,205,012 shares) $ 9.90
=============
Class C (based on $3,779,785/381,852 shares) $ 9.90
=============
MAXIMUM OFFERING PRICE:
Class A $ 10.40
=============
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer America Income Trust
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STATEMENT OF OPERATIONS
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For the Year Ended 12/31/97
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 11,316,474
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EXPENSES:
Management fees $ 747,663
Transfer agent fees
Class A 302,506
Class B 21,878
Class C 4,467
Distribution fees
Class A 340,346
Class B 98,813
Class C 25,953
Accounting 89,621
Custodian fees 32,310
Registration fees 26,722
Professional fees 52,471
Printing 14,682
Fees and expenses of nonaffiliated trustees 10,484
Miscellaneous 38,395
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Total expenses $ 1,806,311
Less management fees waived by
Pioneering Management Corporation (190,847)
Less fees paid indirectly (31,848)
Net expenses $ 1,583,616
------------
Net investment income $ 9,732,858
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $ 363,186
Change in net unrealized gain on investments 1,972,746
------------
Net gain on investments $ 2,335,932
------------
Net increase in net assets resulting from operations $ 12,068,790
============
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer America Income Trust
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STATEMENTS OF CHANGES IN NET ASSETS
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For the Years Ended 12/31/97 and 12/31/96
<TABLE>
<CAPTION>
Year Ended Year Ended
FROM OPERATIONS: 12/31/97 12/31/96
<S> <C> <C>
Net investment income $ 9,732,858 $ 10,482,518
Net realized gain (loss) on investments 363,186 (1,540,059)
Change in net unrealized gain on investments 1,972,746 (5,605,335)
------------- -------------
Net increase in net assets resulting from operations $ 12,068,790 $ 3,337,124
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.64 and $0.64 per share, respectively) $ (9,003,410) $ (10,028,781)
Class B ($0.57 and $0.57 per share, respectively) (574,191) (493,224)
Class C ($0.57 and $0.52 per share, respectively) (151,208) (31,004)
------------- -------------
Total distributions to shareholders $ (9,728,809) $ (10,553,009)
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FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 27,247,962 $ 22,744,467
Reinvestment of distributions 7,358,078 8,227,893
Cost of shares repurchased (39,480,276) (37,185,374)
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Net decrease in net assets resulting from
fund share transactions $ (4,874,236) $ (6,213,014)
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Net decrease in net assets $ (2,534,255) $ (13,428,899)
NET ASSETS:
Beginning of year 156,271,193 169,700,092
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End of year (including accumulated undistributed net
investment income of $7,982 and $3,933, respectively) $ 153,736,938 $ 156,271,193
============= =============
<CAPTION>
Class A '97 Shares '97 Amount '96 Shares '96 Amount
<S> <C> <C> <C> <C>
Shares sold 1,872,947 $ 18,276,093 1,619,071 $ 15,878,995
Reinvestment of distributions 701,123 6,834,431 800,704 7,833,834
Less shares repurchased (3,559,994) (34,576,696) (3,487,423) (34,124,157)
---------- ------------ ---------- ------------
Net decrease (985,924) $ (9,466,172) (1,067,648) $(10,411,328)
========== ============ ========== ============
Class B
Shares sold 519,608 $ 5,065,460 545,668 $ 5,342,163
Reinvestment of distributions 44,189 430,240 37,373 364,533
Less shares repurchased (339,383) (3,295,763) (289,970) (2,822,817)
---------- ------------ ---------- ------------
Net increase 224,414 $ 2,199,937 293,071 $ 2,883,879
========== ============ ========== ============
Class C*
Shares sold 402,752 $ 3,906,409 155,653 $ 1,523,309
Reinvestment of distributions 9,590 93,407 3,036 29,526
Less shares repurchased (164,594) (1,607,817) (24,585) (238,400)
---------- ------------ ---------- ------------
Net increase 247,748 $ 2,391,999 134,104 $ 1,314,435
========== ============ ========== ============
</TABLE>
* Class C shares were first publicly offered on January 31, 1996.
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer America Income Trust
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FINANCIAL HIGHLIGHTS 12/31/97
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<TABLE>
<CAPTION>
Year Year Year Year Year
Ended Ended Ended Ended Ended
CLASS A 12/31/97 12/31/96 12/31/95 12/31/94 12/31/93
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.77 $ 10.20 $ 9.41 $ 10.48 $ 10.27
-------- -------- -------- -------- --------
Increase (decrease) from investment
operations:
Net investment income $ 0.64 $ 0.64 $ 0.68 $ 0.66 $ 0.68
Net realized and unrealized gain
(loss) on investments 0.16 (0.43) 0.79 (1.07) 0.24
-------- -------- -------- -------- --------
Net increase (decrease) from
investment operations $ 0.80 $ 0.21 $ 1.47 $ (0.41) $ 0.92
Distributions to shareholders:
Net investment income (0.64) (0.64) (0.68) (0.66) (0.67)
Net realized gain -- -- -- -- (0.04)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset
value $ 0.16 $ (0.43) $ 0.79 $ (1.07) $ 0.21
-------- -------- -------- -------- --------
Net asset value, end of year $ 9.93 $ 9.77 $ 10.20 $ 9.41 $ 10.48
======== ======== ======== ======== ========
Total return* 8.51% 2.29% 16.06% (3.97)% 9.07%
Ratio of net expenses to average
net assets 1.02%+ 1.01%+ 1.02%+ 1.00% 1.00%
Ratio of net investment income to
average net assets 6.55%+ 6.51%+ 6.85%+ 6.84% 6.37%
Portfolio turnover rate 63% 43% 62% 61% 42%
Net assets, end of year (in thousands) $138,022 $145,408 $162,708 $161,858 $105,892
Ratios assuming no waiver of management fees
by PMC and no reduction for fees
paid indirectly:
Net expenses 1.14% 1.17% 1.22% 1.12% 1.13%
Net investment income 6.43% 6.35% 6.65% 6.72% 6.24%
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 6.57% 6.52% 6.87% -- --
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratio assuming no reduction for fees paid indirectly.
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer America Income Trust
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended 4/4/94 to
CLASS B 12/31/97 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.75 $ 10.17 $ 9.40 $ 9.85
------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.57 $ 0.57 $ 0.61 $ 0.40
Net realized and unrealized gain
(loss) on investments 0.15 (0.42) 0.77 (0.45)
------- ------- ------- -------
Net increase (decrease) from investment
operations $ 0.72 $ 0.15 $ 1.38 $ (0.05)
Distributions to shareholders:
Net investment income (0.57) (0.57) (0.61) (0.40)
------- ------- ------- -------
Net increase (decrease) in net asset value $ 0.15 $ (0.42) $ 0.77 $ (0.45)
------- ------- ------- -------
Net asset value, end of period $ 9.90 $ 9.75 $ 10.17 $ 9.40
======= ======= ======= =======
Total return* 7.61% 1.59% 15.08% (0.57)%
Ratio of net expenses to average
net assets 1.77%+ 1.75%+ 1.77%+ 1.78%**
Ratio of net investment income to
average net assets 5.78%+ 5.78%+ 5.92%+ 6.35%**
Portfolio turnover rate 63% 43% 62% 61%
Net assets, end of period
(in thousands) $11,935 $ 9,557 $ 6,992 $ 2,170
Ratios assuming no waiver of management
fees by PMC and no reduction for fees
paid indirectly:
Net expenses 1.90% 1.91% 1.97% 1.90%**
Net investment income 5.65% 5.62% 5.72% 6.23%**
Ratios assuming waiver of management fees
by PMC and reduction for fees paid
indirectly:
Net expenses 1.75% 1.73% 1.72% --
Net investment income 5.80% 5.80% 5.97% --
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer America Income Trust
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/97
- --------------------------------------------------------------------------------
Year Ended 1/31/96 to
CLASS C 12/31/97 12/31/96
Net asset value, beginning of period $ 9.74 $ 10.16
------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.57 $ 0.52
Net realized and unrealized gain (loss)
on investments 0.16 (0.42)
------- -------
Net increase from investment operations $ 0.73 $ 0.10
Distributions to shareholders:
Net investment income (0.57) (0.52)
------- -------
Net increase (decrease) in net asset value $ 0.16 $ (0.42)
------- -------
Net asset value, end of period $ 9.90 $ 9.74
======= =======
Total return* 7.78% 1.04%
Ratio of net expenses to average net assets 1.73%+ 1.80%**+
Ratio of net investment income to average net assets 5.74%+ 5.73%**+
Portfolio turnover rate 63% 43%
Net assets, end of period (in thousands) $ 3,780 $ 1,306
Ratios assuming no waiver of management fees by
PMC and no reduction for fees paid indirectly:
Net expenses 1.85% 1.95%**
Net investment income 5.62% 5.58%**
Ratios assuming waiver of management fees by
PMC and reduction for fees paid indirectly:
Net expenses 1.68% 1.76%**
Net investment income 5.79% 5.77%**
* 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.
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer America Income Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/97
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer America Income Trust (the Trust) 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 Trust is to
provide a high level of current income consistent with preservation of capital
and prudent investment risk.
The Trust 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 Trust 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 Trust's financial statements have been prepared in conformity with generally
accepted accounting principles that require the management of the Trust 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 Trust, 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. Principal
amounts of mortgage-backed securities are adjusted for monthly paydowns. Premium
and discount related to certain mortgage-backed securities are amortized or
accreted in proportion to the underlying monthly paydowns. Interest income is
recorded on the accrual basis. Temporary cash investments are valued at
amortized cost.
17
<PAGE>
Pioneer America Income Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/97 (continued)
- --------------------------------------------------------------------------------
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
Trust'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 Trust's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to dis tribute 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 Trust'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. Trust Shares
The Trust 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 Trust and an indirect subsidiary
of The Pioneer Group, Inc. (PGI). PFD earned $19,509 in under writing
commissions on the sale of trust shares during the year ended December 31, 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 Trust, 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
Trust level and allocated daily to each class of shares based on the respective
percentage of adjusted net assets at the beginning of the day.
18
<PAGE>
Pioneer America Income Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Trust 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 Trust 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.
E. Repurchase Agreements
With respect to repurchase agreements entered into by the Trust, the value of
the underlying securities (collateral), including accrued interest received from
counterparties, is required to be at least equal to or in excess of the value of
the repurchase agreement at the time of purchase. The collateral for all
repurchase agreements is held in safekeeping in the customer-only account of the
Trust's custodian, or subcustodians. The Trust's investment adviser, Pioneer
Management Corporation (PMC), is responsible for determining that the value of
the collateral remains at least equal to the repurchase price.
2. Management Agreement
PMC manages the Trust's portfolio and is a wholly owned subsidiary of PGI.
Management fees are calculated daily at the annual rate of 0.50% of the Trust'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 Trust 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 Trust-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 Trust. At December 31, 1997, $54,099 was payable to PMC related to
management fees and certain other services.
19
<PAGE>
Pioneer America Income Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/97 (continued)
- --------------------------------------------------------------------------------
3. Transfer Agent
PSC, a wholly owned subsidiary of PGI, provides substantially all transfer agent
and shareholder services to the Trust at negotiated rates. Included in due to
affiliates is $33,961 in transfer agent fees payable to PSC at December 31,
1997.
4. Distribution Plans
The Trust 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 Trust pays PFD a service
fee of up to 0.25% of the Trust'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 Trust 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 $99,268 in distribution fees payable to
PFD at December 31, 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 4.0%, based on the lower of cost or market
value of shares being redeemed. Redemptions of Class C shares within one year of
purchase are subject to a CDSC of 1.00%. Proceeds from the CDSCs are paid to
PFD. For the year ended December 31, 1997, CDSCs in the amount of $33,502 were
paid to PFD.
5. Expense Reductions
The Trust has entered into certain expense offset arrangements resulting in a
reduction in the Trust's total expenses. For the year ended December 31, 1997,
the Trust's expenses were reduced by $31,848 under such arrangements.
20
<PAGE>
Pioneer America Income Trust
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and the Board of Trustees of Pioneer America Income Trust:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer America Income Trust as of December 31, 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 the financial highlights are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by man
agement, as well as evaluating the overall financial statement pre sentation. 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 America Income Trust as of December 31, 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
February 2, 1998
21
<PAGE>
Pioneer America Income Trust
- --------------------------------------------------------------------------------
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. Sherman B. Russ, 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
