UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21076
---------
PIMCO Municipal Income Fund II
--------------------------------------------------
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
-----------------------------------------------------
(Address of principal executive offices) (Zip code)
Lawrence G. Altadonna - 1345 Avenue of the Americas, New York, New York 10105
-----------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-739-3371
------------
Date of fiscal year end: May 31
------
Date of reporting period: November 30
-----------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
Item 1. Report to Shareholders
Semi-Annual Report
11.30.03
PIMCO MUNICIPAL INCOME FUND II
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
PIMCO NEW YORK MUNICIPAL INCOME FUND II
CONTENTS
[PML/NYSE LOGO] Letter to Shareholders ..............................1
[PCK/NYSE LOGO] Performance and Statistics ........................2-4
PNI/NYSE LOGO] Schedules of Investments .........................5-23
Statements of Assets and Liabilities ...............24
Statements of Operations ...........................25
Statements of Changes in Net Assets .............26-27
Notes to Financial Statements ...................28-32
Financial Highlights ............................33-35
Annual Shareholder Meeting Results .................36
[PIMCO ADVISORS LOGO]
PIMCO MUNICIPAL INCOME FUND II LETTER TO SHAREHOLDERS
--------------------------------------------------------------------------------
January 16, 2004
Dear Shareholder:
We are pleased to provide you with the semi-annual report of PIMCO Municipal
Income Fund II, PIMCO California Municipal Income Fund II, and PIMCO New York
Municipal Income Fund II ("PIMCO Municipal Income Funds II" or the "Funds") for
the six months ended November 30, 2003.
Please refer to the following pages for specific information for each of the
PIMCO Municipal Income II Funds. If you have any questions regarding the
information provided, please contact your financial advisor or call our
shareholder services area at 1-800-331-1710. Please note that a wide range of
information and resources can be accessed through our Web site,
www.pimcoadvisors.com.
We at the Funds, together with PIMCO Advisors Fund Management LLC, the Funds'
investment manager and Pacific Investment Management Co. LLC, the Funds'
sub-adviser, thank you for investing with us. We remain dedicated to serving
your investment needs.
Sincerely,
/s/ Stephen Treadway /s/ Brian S. Shlissel
Stephen Treadway Brian S. Shlissel
CHAIRMAN PRESIDENT, CHIEF EXECUTIVE OFFICER
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. There is no guarantee that
these or any other investment techniques will be effective under all market
conditions.
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 1
PIMCO MUNICIPAL INCOME FUND II PERFORMANCE SUMMARY AND STATISTICS
November 30, 2003 (unaudited)
--------------------------------------------------------------------------------
SYMBOL: PRIMARY INVESTMENTS: INCEPTION DATE:
PML Municipal fixed-income June 28, 2002
securities, the interest
OBJECTIVE: from which is exempt TOTAL NET ASSETS(1):
To provide income exempt from federal income tax. $1,352.9 million
from federal income tax.
PORTFOLIO MANAGER:
Mark McCray
TOTAL RETURN(2) : Market Price NAV
--------------------------------------------------------------------------------
Six Months (3.48)% 3.16%
--------------------------------------------------------------------------------
1 Year 3.78% 10.83%
--------------------------------------------------------------------------------
6/28/02 (commencement of
operations) to 11/30/03 1.07% 8.66%
--------------------------------------------------------------------------------
COMMON SHARE PRICE PERFORMANCE: MARKET PRICE/NET ASSET VALUE:
6/28/02 (commencement of -----------------------------------------
operations) to 11/30/03 Market Price $13.82
-----------------------------------------
Net Asset Value $14.64
-----------------------------------------
Market Price Yield(3) 7.33%
-----------------------------------------
[Copy below represents a line graph in the printed piece.]
at Market Price at NAV
--------------- ------
6/28/02 14.32 15.2
14.32 15.08
14.35 15.17
14.37 15.19
14.46 15.03
14.46 15.03
14.52 15.06
14.57 15
14.5 15.02
14.63 15.04
14.77 15.02
14.89 15.11
15.1 15.04
15.13 15
15.17 15.06
15.09 15.06
14.28 14.8
14.15 14.42
14.41 14.74
14.66 14.68
14.53 14.59
14.33 14.4
14.22 14.34
14.51 14.29
14.58 14.1
14.66 14.12
14.5 14.2
14.64 14.54
14.52 14.41
14.49 14.45
14.41 14.43
14.38 14.23
14.39 14.41
14.55 14.5
14.57 14.41
14.39 14.31
14.6 14.31
14.68 14.37
14.48 14.29
14.55 14.25
14.27 14.35
14.35 14.34
14.54 14.49
14.53 14.36
14.57 14.48
14.64 14.64
14.7 14.8
14.68 14.72
14.66 14.8
14.69 14.9
14.77 14.89
14.64 14.75
14.54 14.84
14.56 14.86
14.55 14.67
14.36 14.33
14.06 14.15
13.42 13.64
13.73 14
13.51 13.81
13.54 13.66
13.62 13.63
13.77 14
13.79 13.81
14.03 13.82
14.08 13.79
14.05 13.95
13.93 13.8
13.91 13.68
14.13 13.73
14.19 13.77
14.25 13.95
14.38 13.84
14.52 13.92
11/28/03 14.64 13.82
(1) Inclusive of net assets attributable to Preferred Shares outstanding.
(2) PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Total return is
determined by subtracting the initial investment from the redeemable value at
the end of the period and dividing the remainder by the initial investment and
expressing the result as a percentage. The calculation assumes that all income
dividends and capital gain distributions have been reinvested at prices obtained
under the Fund's dividend reinvestment plan. Total investment return does not
reflect broker commissions or sales charges. Total return for a period greater
than one year represents the average annual total return. Total return for a
period of less than one year is not annualized.
An investment in the Fund involves risk, including the loss of principal.
Investment return, price, yield and net asset value will fluctuate with changes
in market conditions. This data is provided for information only and is not
intended for trading purposes. A portion of the income generated by the Fund may
be subject to federal, state and local taxes, and may at times be subject to the
alternative minimum tax. Closed-end funds, unlike open-end funds, are not
continuously offered. There is a one-time public offering and once issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets applicable to common shareholders less total
liabilities divided by the number of common shares outstanding. Holdings are
subject to change daily.
(3) Market Price Yield is determined by dividing the annualized current monthly
per share dividend payable to common shareholders by the market price per common
share at November 30, 2003.
2 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II PERFORMANCE SUMMARY AND STATISTICS
November 30, 2003 (unaudited)
--------------------------------------------------------------------------------
SYMBOL: PRIMARY INVESTMENTS: INCEPTION DATE:
PCK Municipal fixed-income June 28, 2002
securities, the interest
OBJECTIVE: from which is exempt from TOTAL NET ASSETS(1):
To provide income exempt federal and California $687.5 million
from federal and California State income tax.
State income tax. PORTFOLIO MANAGER:
Mark McCray
TOTAL RETURN(2): Market Price NAV
--------------------------------------------------------------------------------
Six Months (3.61)% 0.07%
--------------------------------------------------------------------------------
1 Year 2.68% 8.16%
--------------------------------------------------------------------------------
6/28/02 (commencement of
operations) to 11/30/03 0.32% 5.77%
--------------------------------------------------------------------------------
COMMON SHARE PRICE PERFORMANCE: MARKET PRICE/NET ASSET VALUE:
-----------------------------------------
6/28/02 (commencement of Market Price $13.79
operations) to 11/30/03 -----------------------------------------
Net Asset Value $14.20
-----------------------------------------
Market Price Yield(3) 7.07%
-----------------------------------------
[Copy below represents a line graph in the printed piece.]
at Market Price at NAV
--------------- ------
6/28/02 14.33 15.19
14.33 15.1
14.42 15.28
14.42 15.26
14.47 15.04
14.44 15.29
14.49 15.28
14.56 15.28
14.48 15.22
14.6 15.05
14.7 15.18
14.86 15.25
15.02 15.25
15.02 15.1
14.98 15.07
14.8 15.07
14.07 14.26
13.93 14.42
14.25 14.72
14.54 14.8
14.34 14.67
14.16 14.27
14.03 14.35
14.26 14.1
14.36 14.18
14.48 14.18
14.45 14.25
14.48 14.25
14.32 14.11
14.23 14.05
14.17 14.08
14.12 14.05
14.13 14.12
14.25 14.06
14.26 14.1
14.2 14.19
14.47 14.5
14.54 14.36
14.32 14.36
14.38 14.4
14.06 14.31
14.12 14.24
14.34 14.25
14.33 14.28
14.42 14.54
14.47 14.64
14.59 14.78
14.69 14.82
14.66 14.78
14.7 14.96
14.83 15
14.57 14.85
14.35 14.59
14.36 14.75
14.29 14.35
13.97 14.1
13.62 13.88
13.06 13.21
13.31 13.66
13.03 13.37
13.09 13.43
13.14 13.62
13.32 13.77
13.33 13.92
13.57 13.98
13.64 13.9
13.59 13.92
13.45 13.88
13.52 13.65
13.68 13.81
13.76 13.88
13.81 13.96
13.94 13.82
14.08 13.74
11/30/03 14.2 13.79
(1) Inclusive of net assets attributable to Preferred Shares outstanding.
(2) PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Total return is
determined by subtracting the initial investment from the redeemable value at
the end of the period and dividing the remainder by the initial investment and
expressing the result as a percentage. The calculation assumes that all income
dividends have been reinvested at prices obtained under the Fund's dividend
reinvestment plan. Total investment return does not reflect broker commissions
or sales charges. Total return for a period greater than one year represents the
average annual total return. Total return for a period of less than one year is
not annualized.
An investment in the Fund involves risk, including the loss of principal.
Investment return, price, yield and net asset value will fluctuate with changes
in market conditions. This data is provided for information only and is not
intended for trading purposes. A portion of the income generated by the Fund may
be subject to federal, state and local taxes, and may at times be subject to the
alternative minimum tax. Closed-end funds, unlike open-end funds, are not
continuously offered. There is a one-time public offering and once issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets applicable to common shareholders less total
liabilities divided by the number of common shares outstanding. Holdings are
subject to change daily.
(3) Market Price Yield is determined by dividing the annualized current monthly
per share dividend to common shareholders by the market price per common share
at November 30, 2003.
11.300.03 | PIMCO Municipal Income Funds II Semi-Annual Report 3
PIMCO NEW YORK MUNICIPAL INCOME FUND II PERFORMANCE SUMMARY AND STATISTICS
November 30, 2003 (unaudited)
--------------------------------------------------------------------------------
SYMBOL: PRIMARY INVESTMENTS: INCEPTION DATE:
PNI Municipal fixed-income June 28, 2002
securities, the interest
OBJECTIVE: from which is exempt from TOTAL NET ASSETS(1):
Seeks to provide current federal, New York State and $239.2 million
income exempt from federal, New York City income tax.
New York State and PORTFOLIO MANAGER:
New York City income tax. Mark McCray
TOTAL RETURN(2) : Market Price NAV
--------------------------------------------------------------------------------
Six Months (2.48)% 2.60%
--------------------------------------------------------------------------------
1 Year 4.38% 8.00%
--------------------------------------------------------------------------------
6/28/02 (commencement of
operations) to 11/30/03 0.84% 6.49%
--------------------------------------------------------------------------------
COMMON SHARE PRICE PERFORMANCE: MARKET PRICE/NET ASSET VALUE:
6/28/02 (commencement of -----------------------------------------
operations) to 11/30/03 Market Price $13.89
-----------------------------------------
Net Asset Value $14.35
-----------------------------------------
Market Price Yield(3) 7.02%
-----------------------------------------
[Copy below represents a line graph in the printed piece.]
at Market Price at NAV
--------------- ------
6/28/02 15.15 14.33
15.2 14.31
15.11 14.36
15.35 14.38
15.02 14.42
15.35 14.46
15.08 14.52
15 14.56
15.16 14.48
15.06 14.59
15.14 14.69
15.12 14.76
15.14 14.91
15.03 14.91
15.06 15.02
14.97 14.95
14.65 14.29
14.25 14.16
14.06 14.35
14.32 14.62
14.3 14.51
14.13 14.33
14.22 14.19
14.06 14.44
14.1 14.55
14.05 14.63
14.02 14.62
14.15 14.71
14.17 14.544
14.09 14.541
13.95 14.416
14.03 14.403
14 14.44
14.03 14.53
14.2 14.48
14.23 14.38
14.34 14.51
14.26 14.62
14.22 14.36
14.23 14.43
14.29 13.78
14.15 13.86
14.1 14.11
14.18 14.02
14.16 14.08
14.4 14.2
14.75 14.25
14.65 14.39
14.71 14.44
14.67 14.47
14.7 14.59
14.55 14.38
14.81 14.31
14.92 14.3
14.71 14.26
14.64 14.01
14.08 13.75
14 13.05
13.84 13.39
13.85 13.12
13.71 13.1
13.8 13.18
13.98 13.3
13.9 13.28
13.57 13.72
13.69 13.87
13.84 13.78
13.64 13.65
13.79 13.62
13.72 13.85
13.8 13.88
13.85 13.94
13.75 14.1
13.71 14.23
11/30/03 13.89 14.35
(1) Inclusive of net assets attributable to Preferred Shares outstanding.
(2) PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Total return is
determined by subtracting the initial investment from the redeemable value at
the end of the period and dividing the remainder by the initial investment and
expressing the result as a percentage. The calculation assumes that all income
dividends have been reinvested at prices obtained under the Fund's dividend
reinvestment plan. Total investment return does not reflect broker commissions
or sales charges. Total return for a period greater than one year represents the
average annual total return. Total return for a period of less than one year is
not annualized.
An investment in the Fund involves risk, including the loss of principal.
Investment return, price, yield and net asset value will fluctuate with changes
in market conditions. This data is provided for information only and is not
intended for trading purposes. A portion of the income generated by the Fund may
be subject to federal, state and local taxes, and may at times be subject to the
alternative minimum tax. Closed-end funds, unlike open-end funds, are not
continuously offered. There is a one-time public offering and once issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets applicable to common shareholders less total
liabilities divided by the number of common shares outstanding. Holdings are
subject to change daily.
(3) Market Price Yield is determined by dividing the annualized current monthly
per share dividend payable to common shareholders by the market price per common
share at November 30, 2003.
4 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
-----------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
=====================================================================================================
MUNICIPAL BONDS & NOTES--80.5%
-----------------------------------------------------------------------------------------------------
ALABAMA--4.2%
$38,145 Birmingham Waterworks & Sewer Board. Rev.,
5.00%-5.25%, 1/1/27-1/1/43, Ser. B (MBIA) Aaa/AAA $ 38,997,798
1,750 Huntsville Health Care Auth., 5.75%, 6/1/32, Ser. B A2/NR 1,808,153
16,580 Jefferson Cnty. Sewer Rev., 4.75%, 2/1/38, Ser. B (FGIC) Aaa/AAA 18,207,161
------------
59,013,112
============
ALASKA--1.2%
State Housing Fin. Corp.,
13,885 5.00%, 12/1/39, Ser. A Aaa/AAA 13,950,954
3,550 5.25%, 6/1/32, Ser. C (MBIA) Aaa/AAA 3,594,162
------------
17,545,116
============
ARIZONA--0.1%
1,300 State Health Fac. Auth. Hosp. Rev., 5.75%, 12/1/32 NR/BBB 1,255,579
============
CALIFORNIA--0.9%
12,300 Golden State Tobacco Securitization Corp., Tobacco
Settlement Rev.,
6.25%-6.75%, 6/1/33-6/1/39, Ser. 2003-A-1 Baa2/BBB 11,891,574
1,000 Rancho Cucamonga Community Facs. Dist. 6.30%,
9/1/23, Ser. A NR/NR 1,015,990
------------
12,907,564
============
COLORADO--4.6%
30,000 Dawson Ridge Dist. No. 1, GO,
zero coupon, 10/1/22, Ser. A Aaa/NR 11,517,300
5,000 Denver Co. City & Cnty. Cert. of Participation,
5.50%, 12/1/25, Ser. B (AMBAC) Aaa/AAA 5,848,150
25,000 Health Fac. Auth. Rev., Catholic Health Initiatives-A,
5.50%, 3/1/32 Aa2/AA 25,783,000
18,305 Health Fac. Auth. Rev., Exempla Inc.,
5.625%, 1/1/33, Ser. A A1/A- 18,596,599
6,500 Health Fac. Auth. Rev., Liberty Height, Retirement Fac.,
zero coupon, 7/15/22 Aaa/AAA 2,499,510
------------
64,244,559
============
DISTRICT OF COLUMBIA--1.2%
17,500 Washington DC Convention Ctr. Auth. Tax Rev.,
4.75%, 10/1/28 (AMBAC) Aaa/AAA 17,198,300
============
FLORIDA--2.9%
8,000 Highlands Cnty. Health Fac. Auth. Rev.,
6.00%, 11/15/31, Ser. A A3/A 8,364,320
635 Hillsborough Cnty. Health Fac. Indl. Dev. Rev.,
5.625%, 8/15/23 Baa2/BBB 611,892
2,335 Hillsborough Cnty. Pollution Control Rev.,
Tampa Electric Co. Proj., 5.50%, 10/1/23 Baa1/BBB- 2,309,805
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 5
PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
-----------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
=====================================================================================================
FLORIDA--(CONCLUDED)
$ 7,135 Jacksonville Health Facs. Auth. Rev.,
5.25%, 11/15/32, Ser. A Aa2/AA $ 7,200,856
11,500 Lakeland Hosp. Syst. Rev., Regional Health Syst.,
5.50%, 11/15/32 A1/NR 11,578,430
3,000 Leesburg Hosp. Rev., Leesburg Regional Medical Center,
5.50%, 7/1/32 A2/A 3,010,020
7,550 Orange Cnty. Health Fac., Adventist Health Syst.,
5.625%-6.25%, 11/15/24-11/15/32 A3/A 8,056,395
1,500 Winter Springs Water & Sewer Rev.,
zero coupon, 10/1/29 (FGIC) Aaa/AAA 391,395
------------
41,523,113
============
GEORGIA--0.7%
4,000 Atlanta Water & Wastewater,
5.00%, 11/1/39, Ser. A (MBIA) Aaa/AAA 4,040,880
1,500 Grantor Trust Gov't CP,
4.75%, 6/1/28, Ser. A (MBIA) Aaa/AAA 1,510,845
9,600 Richmond Cnty. Dev Auth. Rev., zero coupon, 12/1/21 Aaa/NR 3,878,880
------------
9,430,605
============
HAWAII--1.4%
19,170 Honolulu City & Cnty. Wastewater Syst. Rev.,
First Board Resolution, 4.75%, 7/1/28 (FGIC) Aaa/NR 19,179,968
============
ILLINOIS--14.7%
11,760 Central Lake Cnty. Water Agy. Rev.,
5.125%, 5/1/28-5/1/32, Ser. A (AMBAC) Aaa/NR 11,973,517
Chicago Board of Education School Reform GO,
15,535 zero coupon, 12/1/16, Ser. A Aaa/AAA 8,548,600
5,000 zero coupon, 12/1/28 (FGIC), Ser. A Aaa/AAA 1,297,700
4,500 zero coupon, 12/1/31 (FGIC) Aaa/AAA 987,975
94,485 Chicago City Colleges GO, zero coupon,
1/1/37-1/1/39 (FGIC) Aaa/AAA 14,757,213
5,050 Chicago GO, 5.125%, 1/1/29, Ser. A (FGIC) Aaa/AAA 5,119,488
7,000 Chicago Midway Arpt. Rev., 5.00%, 1/1/31, Ser. B (MBIA) Aaa/AAA 7,049,490
9,862 Chicago Special Assessment, Lake Shore East,
6.625%-6.75%, 12/1/22-12/1/32 NR/NR 10,116,354
5,000 Cicero Corp. GO, 5.25%, 12/1/31 (MBIA) Aaa/AAA 5,209,200
144,650 Dev. Fin. Auth. Retirement Housing Rev.,
zero coupon, 7/15/23-7/15/25 NR/AAA 47,412,360
20,100 Health Facs. Auth. Rev., Elmurst Memorial Healthcare,
5.625%, 1/1/28 A2/A- 20,348,235
110,000 Metropolitan Pier & Exposition Auth.,
zero coupon, 12/15/30-12/15/33 (MBIA) Aaa/AAA 23,657,400
68,470 State Sports Facs. Auth, 5.50%, 6/15/30 (AMBAC) Aaa/AAA 49,822,880
------------
206,300,412
============
6 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
-----------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
=====================================================================================================
INDIANA--0.6%
$ 3,000 Brownsburg 1999 School Building Corp.,
5.00%-5.25%, 3/15/25-9/15/25 (FSA) Aaa/AAA $ 3,118,270
500 State Bank Rev., 5.25%, 4/1/30, Ser. D (AMBAC) Aaa/AAA 517,690
4,125 Fort Wayne Pollution Control Rev., 6.20%, 10/15/25 Baa1/BBB 4,328,569
------------
7,964,529
============
KANSAS--0.2%
2,800 Univ. of Kansas, Hosp. Auth. Health Facs. Rev.,
5.625%, 9/1/32 NR/A- 2,868,684
============
KENTUCKY--0.2%
2,500 Economic Dev. Finance Auth. Hospital Facs. Rev.,
5.25%, 10/1/30 A1/AA- 2,527,975
============
IOWA--0.5%
8,850 Tobacco Settlement Auth., 5.60%, 6/1/35, Ser. BBaa2/BBB 7,330,809
============
LOUISIANA--4.2%
20,400 Ochsner Clinic Foundation Pub. Facs. Auth. Rev.,
5.50%, 5/15/32, Ser. B A3/NR 20,578,908
44,395 Tobacco Settlement Financing Corp.,
5.875%, 5/15/39, Ser. 2001B Baa2/BBB 38,393,684
------------
58,972,592
============
MARYLAND--0.1%
1,000 State Health & Higher Educational Fac. Auth. Rev.,
John Hopkins Univ., 5.00%, 7/1/41, Ser. A NR/Baa1 999,950
============
MASSACHUSETTS--4.2%
1,300 Massachusetts Bay Trans. Auth.,
4.75%, 3/1/21, Ser. A (MBIA) Aaa/AAA 1,309,685
32,000 Massachusetts Bay Trans. Auth., Sales Tax Rev.,
5.00%, 7/1/32, Ser. A Aaa2/AAA 32,466,880
4,295 State Turnpike Auth.,
4.75%, 1/1/34, Ser. A (AMBAC) Aaa/AAA 4,254,112
State Water Reserve Auth.,
2,300 4.75%, 12/1/21, Ser. B Aaa/AAA 2,324,150
19,300 4.75%, 8/1/37, Ser. A Aaa/AAA 18,948,740
------------
59,303,567
============
MICHIGAN--2.4%
10,250 Detroit City School Dist.,
5.00%-5.125%, 5/1/31-5/1/32, Ser. A Aaa/AAA 10,440,223
2,500 Detroit Water Supply Syst., 5.00%, 7/1/30, Ser. A (FGIC) Aaa/AAA 2,539,300
5,000 State Hosp. Fin. Auth. Rev., Ascension Health,
5.25%, 11/15/26, Ser. B Aa2/AA 5,053,900
15,425 State Hosp. Fin. Auth. Rev., Oakwood Obligation Group,
5.75%-6.00%, 4/1/22, Ser. A A2/A 15,870,292
------------
33,903,715
============
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 7
PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
-----------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
=====================================================================================================
MISSISSIPPI--0.3%
$ 3,605 Business Finance Corp., Pollution Control Rev.,
5.875%, 4/1/22 Ba1/BBB- $ 3,611,741
1,000 State Dev. Bank Oblig., Projects & Equipment Acquisitions,
5.00%, 7/1/24 (AMBAC) Aaa/AAA 1,058,300
------------
4,670,041
============
MISSOURI--0.1%
1,500 St. Louis Parking Facs. Rev., Downtown Parking Facility,
6.00%, 2/1/28 NR/NR 1,520,115
============
NEVADA--1.7%
3,400 Clark Cnty., GO, 5.00%, 6/1/31 (FGIC) Aaa/AAA 3,450,932
17,030 Reno Lien Trans., 5.125%-5.25%, 6/1/27-6/1/41 (AMBAC) Aaa/AAA 17,540,088
3,290 Truckee Meadows Water Auth Rev.,
5.125%, 7/1/30, Ser. A (FSA) Aaa/AAA 3,367,611
------------
24,358,631
============
NEW HAMPSHIRE--0.2%
3,000 Health & Educational Facs. Auth. Rev., 6.125%, 7/1/32 Baa1/BBB+ 3,031,230
============
NEW JERSEY--2.1%
60,000 Camden Cnty. Impt. Auth. Rev., Cooper Health,
5.875%-6.00%, 2/15/15-2/15/27 Ba2/NR 54,825
750 Economic Dev. Auth., Arbor Glen, 6.00%, 5/15/28, Ser. A NR/NR 665,940
15,405 Economic Dev. Auth., Kapkowski Landfill Proj.,
5.75%, 10/1/21-4/1/31 Baa3/NR 15,970,488
3,500 State Educational Fac. Auth. Rev., 6.00%, 7/1/25, Ser. D NR/NR 3,581,655
10,030 Tobacco Settlement Financing Corp., Rev.,
6.00%-6.75%, 6/1/37-6/1/43 Baa2/BBB 9,125,959
------------
29,398,867
============
NEW MEXICO--0.4%
Farmington Pollution Control Rev.,
3,000 5.80%, 4/1/22 Baa3/NR 3,014,700
2,000 5.80%, 4/1/22 Baa3/BBB- 2,008,160
------------
5,022,860
============
NEW YORK--2.1%
Metropolitan Trans. Auth.,
10,600 5.00%, 11/15/30, Ser. A (FSA) Aaa/AAA 10,783,380
10,000 5.25%, 11/15/32 A2/A 10,344,400
6,700 State Dormitory Auth. Rev.,
5.00%, 7/1/34, Ser. 1 Aa2/AA 6,755,543
2,000 State Environmental Facilities Corp.,
5.00%, 6/15/28 Aaa/AAA 2,047,180
------------
29,930,503
============
8 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
-----------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
=====================================================================================================
NORTH CAROLINA--1.4%
$ 11,105 Cap. Facs. Fin. Agy. Rev., Duke Univ., 5.125%,
7/1/42, Ser. A Aa1/AA+ $ 11,393,619
7,500 Lorian Cnty. Hospital Rev., 5.375%, 10/1/30 A1/AA- 7,594,575
------------
18,988,194
============
PENNSYLVANIA--2.9%
7,250 Allegheny Cnty. Hosp. Dev. Auth. Rev.,
9.25%, 11/15/15-11/15/30, Ser. B B2/B 7,666,730
4,500 Cumberland Cnty. Auth. Rev., 7.25%, 1/1/35, Ser. A NR/NR 4,541,175
8,750 Montgomery Cnty. Higher Education & Health Auth. Hosp. Rev.
5.125%, 6/1/27-6/1/32, Ser. A NR/A 8,534,338
5,000 Philadelphia Auth. Dev. Lease Rev.,
5.25%, 10/1/30, Ser. B (FSA) Aaa/AAA 5,178,200
3,050 Philadelphia Auth. Indl. Dev. Rev. Doubletree,
6.50%, 10/1/27 NR/NR 3,060,248
3,000 Philadelphia, GO, 5.25%, 9/15/25 (FSA) Aaa/AAA 3,132,510
8,520 Philadelphia Hosp. & Higher Ed. Facs. Auth. Rev.,
6.85%, 7/1/22 Baa2/BBB 8,639,706
500 Pittsburgh & Allegheny Cnty. Pub. Auditorium,
5.00%, 2/1/29 (AMBAC) Aaa/AAA 507,320
------------
41,260,227
============
PUERTO RICO--0.3%
4,200 Electric Power Auth. Power Rev., 5.125%, 7/1/29, Ser. NN A3/A- 4,274,592
============
RHODE ISLAND--4.1%
65,000 Tobacco Settlement Financing. Corp., 6.25%, 6/1/42, Ser. A Baa2/BBB 57,594,550
============
SOUTH CAROLINA--5.2%
27,745 Greenville Cnty. School District, 5.50%, 12/1/28 A1/AA- 29,123,649
18,120 Jobs Economic Dev. Auth. Economic Dev. Rev.,
5.625%, 11/15/30 A3/A- 18,495,990
20,000 Lexington Cnty. Health Services Dist. Hosp. Rev.,
5.50%-5.75%, 11/1/28-11/1/32 A2/A 20,512,300
3,250 Tobacco Settlement Rev., 6.375%, 5/15/28, Ser. BBaa2/BBB 3,013,628
1,180 Transportation Infrastructure Rev.,
5.00%, 10/1/29, Ser. A (AMBAC) Aaa/NR 1,325,128
------------
72,470,695
============
TENNESSEE--5.0%
3,750 Knox Cnty. Health Educational & Housing Facs. Board,
Hospital Facs. Rev., 5.25%, 10/1/30 A1/AA- 3,813,300
58,785 Memphis Electric Syst. Rev.,
5.00%, 12/1/11 Ser. A (MBIA) Aaa/AAA 65,844,491
------------
69,657,791
============
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 9
PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
-------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
=======================================================================================================
TEXAS--8.7%
$ 1,000 Arlington Indpt. School Dist, GO, 5.00%, 2/15/24 Aaa/NR $ 1,015,470
4,480 Aubrey Indpt. School Dist., GO, 5.50%, 2/15/33 Aaa/NR 4,444,160
6,500 Brazos Cnty. Health Facs. Dev. Corp., Franciscan Services Corp.,
5.375%, 1/1/32 NR/A- 6,457,750
2,700 Comal Cnty. Health Facs., Mckenna Memorial Hosp.,
6.25%, 2/1/32 Baa2/BBB 2,727,837
5,000 Dallas Area Rapid Transit., 5.00%, 12/1/31 (AMBAC) Aaa/AAA 5,062,400
20,000 Frisco Indpt. School Dist. GO, zero coupon, 8/15/34 Aaa/NR 3,769,800
19,750 Harris Cnty. GO, 4.75%, 8/15/31 Aa1/AA+ 20,060,273
5,250 Harris Cnty. Health Facs. Dev. Corp. Rev.,
5.375%, 2/15/26, Ser. A NR/AA- 5,330,535
25,000 Harris Cnty. Senior Lien Toll Road, 5.00%, 8/15/30 (FSA) Aaa/AAA 25,350,500
7,500 Keller Indpt. School Dist. GO, 4.875%, 8/15/31 Aaa/AAA 7,516,125
3,170 Little Elm Indpt. School Dist. GO, 5.30%, 8/15/29, Ser. A NR/AAA 3,301,523
6,250 North Dallas Thruway Auth., 4.75%, 1/1/29 (FGIC) Aaa/AAA 6,213,500
5,000 Quinlin Indpt. School Dist. GO, 5.10%, 2/15/32 Aaa/NR 5,086,750
State Turnpike Auth. Highway Imps. Rev.,
10,000 zero coupon, 8/15/19 (AMBAC) Aaa/AAA 4,676,500
8,880 5.00%, 8/15/42 (AMBAC) Aaa/AAA 8,941,627
4,900 State Water Financial Assistance, GO,
5.00%-5.25%, 8/1/35-8/1/36 Aa1/AA 4,967,573
8,000 Wichita Falls Water & Sewer Rev., 5.00%, 8/1/27 (AMBAC) Aaa/AAA 8,116,400
--------------
123,038,723
==============
VIRGINIA--0.5%
6,500 Fredericksburg Industrial Dev., Medicorp Health Syst.,
5.125%-5.25%, 6/15/33, Ser. B A3/NR 6,495,340
==============
WASHINGTON--0.4%
5,000 Tacoma Sewer Rev.,
5.00%, 12/1/31, Ser. A (FGIC) Aaa/AAA 5,062,400
==============
WISCONSIN--0.8%
10,850 Badger Tobacco Asset Securitization Corp.,
6.00%-6.125%, 6/1/17-6/1/27 Baa2/BBB 10,515,458
1,000 State Health & Educational Facs. Auth. Rev.,
5.375%, 10/1/30 NR/A+ 1,002,360
--------------
11,517,818
==============
Total Municipal Bonds & Notes (cost-$1,130,991,337) 1,130,762,726
==============
-------------------------------------------------------------------------------------------------------
VARIABLE RATE NOTES (a) (b) (f)--8.3%
-------------------------------------------------------------------------------------------------------
ALABAMA--0.8%
6,675 Jefferson Cnty. Sewer Rev.,
14.02%, 2/1/36, Ser. 352 (FGIC) Aaa/NR 9,698,241
2,100 Montgomery Care Fac.,
13.23%, 11/15/29, Ser. 435 (MBIA) Aaa/NR 2,136,540
--------------
11,834,781
==============
10 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
-------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
=======================================================================================================
COLORADO--0.2%
$ 2,813 Denver City & Cnty. Airpt Rev.,
15.47%, 11/15/25, Ser. 425 (FSA) Aaa/NR $ 2,970,338
==============
FLORIDA--0.5%
2,228 Orange Cnty. School Board CP,
15.38%, 8/1/24, Ser 328 (MBIA) Aaa/NR 2,419,154
4,052 State Governmental Utilities Rev.,
15.38%, 10/1/29, Ser. 327 (AMBAC) Aaa/NR 4,355,200
--------------
6,774,354
==============
ILLINOIS--0.8%
Chicago GO,
2,225 15.88%, 1/1/28, Ser. 332 (MBIA) Aaa/NR 2,316,670
3,300 14.90%, 1/1/40, Ser. 426 (FGIC) Aaa/NR 3,970,230
1,932 Cook Cnty., 13.23%, 11/15/28, Ser. 403 (FGIC) Aaa/NR 1,988,221
2,200 State GO, 18.65%, 4/1/27, Ser. 783 Aaa/NR 2,602,710
--------------
10,877,831
==============
INDIANA--0.5%
6,429 Indianapolis Local Public Improvement Bond Bank,
18.65%, 7/1/33, Ser. 784 (MBIA) Aaa/NR 7,383,454
==============
MASSACHUSETTS--2.3%
2,100 Boston Water & Sewer Community Rev.,
13.37%, 11/1/28, Ser. 434 (FGIC) Aa2/NR 2,188,977
1,190 State College Bldg. Auth. Proj. Rev., 66.986%-67.852%,
11/1/22-11/1/31 (XLCA) NR/NR 3,186,777
2,420 State GO, 18.87%,
11/1/30, Ser. 785 (FGIC) Aaa/NR 2,920,456
State Turnpike Auth. Rev.,
8,498 13.37%, 1/1/39, Ser. 335 (AMBAC) Aaa/NR 8,688,099
4,500 13.37%, 1/1/37, Ser. 489 (AMBAC) Aaa/NR 4,586,265
11,049 13.37%, 1/1/37, Ser. 334 (AMBAC) Aaa/NR 11,260,809
--------------
32,831,383
==============
MICHIGAN--0.4%
4,950 Detroit Water Supply Syst.,
18.65%, 7/1/32, Ser. 782 (MBIA) Aaa/NR 5,946,435
==============
NEVADA--0.3%
3,300 State GO, 13.07%, 5/15/28, Ser. 344 (FGIC) Aaa/NR 3,422,001
==============
OHIO--0.2%
1,975 Hamilton Cnty. Sales Tax
15.59%, 12/1/27, Ser. 356 (MBIA) Aaa/NR 2,103,849
==============
PENNSYLVANIA--0.5%
Philadelphia School Dist. Residual Ctfs., GO,
2,505 12.24%, 4/1/27, Ser. 345 (MBIA) Aaa/NR 2,481,128
4,016 12.42%, 4/1/27, Ser. 496 (MBIA) Aaa/NR 3,977,232
--------------
6,458,360
==============
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 11
PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
-------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
=======================================================================================================
TENNESSEE--0.5%
$ 6,000 Memphis Electric Syst. Rev., Aaa/NR
8.70%, 12/1/11, Ser. 880 (MBIA) (a) (d) $ 7,478,640
==============
TEXAS--1.1%
3,075 Denton Util. Syst. Rev., 3,256,056
16.09%, 12/1/29, Ser. 428 (MBIA) Aaa/NR
1,650 Houston Arpt. Syst. Rev., 1,716,545
13.02%, 7/1/25, Ser. 404 (FGIC) Aaa/NR
Houston Water & Sewer Syst. Rev.,
2,750 15.59%, 12/1/28, Ser. 427 Aaa/NR 2,874,850
3,838 9.03%, 12/1/30, Ser. 495 NR/AAA 4,335,761
3,080 State Affordable Housing, American Housing
Foundation, 19.34%, 9/1/22, Ser. 780 (MBIA) Aaa/NR 3,776,788
--------------
15,960,000
==============
WASHINGTON--0.2%
2,730 Central Puget Sound Regl. Tran. Auth. Sales Tax &
Motor, 12.24%, 2/1/28, Ser. 360 Aaa/NR 2,690,606
==============
Total Variable Rate Notes (cost-$102,468,100) 116,732,032
==============
-------------------------------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (b) (c)--9.1%
-------------------------------------------------------------------------------------------------------
ARIZONA--0.9%
Health Facility Auth. Rev.,
5,600 1.00%, 12/5/03, Ser. B (AMBAC) Aaa/AAA 5,600,000
5,000 1.148%, 12/3/03, Ser. C (AMBAC) Aaa/AAA 5,000,000
University of Arizona, Cert. of Participation,
1,100 1.10%, 12/3/03, Ser. A (AMBAC) VMIG1/A-1+ 1,100,000
1,000 1.10%, 12/3/03, Ser. B (AMBAC) VMIG1/A-1+ 1,000,000
--------------
12,700,000
==============
COLORADO--0.7%
7,500 Denver City & Cnty., CP,
1.10%, 12/3/03 (AMBAC) VMIG1/A-1+ 7,500,000
1,900 State Health Facility Auth. Rev., 0.92%, 12/3/03 (MBIA) Aaa/AAA 1,900,000
--------------
9,400,000
==============
CONNECTICUT--0.2%
2,325 State Housing & Finance Auth., 1.01%, 12/04/03 (AMBAC) NR/A-1+ 2,325,000
==============
FLORIDA--0.1%
Orange Cnty. School Board, CP,
2,200 1.08%, 12/1/03 Ser. B (AMBAC) VMIG1/NR 2,200,000
==============
GEORGIA--0.5%
1,625 Atlanta Downtown Development Auth.,
1.08%, 12/4/03 (AMBAC) VMIG1/A-1+ 1,625,000
Atlanta Water & Wastewater Rev., Ser. C
3,000 1.00%, 12/4/03 (FGIC) Aaa/AAA 3,000,000
2,850 1.08%, 12/1/03 (FSA) VMIG1/A-1+ 2,850,000
--------------
7,475,000
==============
12 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
-------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
=======================================================================================================
INDIANA--1.0%
$ 7,500 Indianapolis Local Public Improvement Bond Bank,
1.04%, 12/3/03 (MBIA) Aaa/AAA $ 7,500,000
State Health Facility Financing Auth.,
5,000 1.00%, 12/5/03 (AMBAC) Aaa/AAA 5,000,000
2,000 1.05%, 12/12/03 (AMBAC) Aaa/AAA 2,000,000
--------------
14,500,000
--------------
MASSACHUSETTS--0.6%
1,500 State GO, 1.10%, 12/4/03 VMIG1/A-1+ 1,500,000
3,450 State Health & Educational Facilities Auth.,
1.03%, 12/1/03, Ser. G VMIG1/A-1+ 3,450,000
3,000 State Housing Finance Agency Housing Rev.,
1.10%, 12/3/03, Ser. F (FSA) VMIG1/A-1+ 3,000,000
--------------
7,950,000
--------------
MICHIGAN--0.9%
3,900 Detroit Sewer Disposal Syst., 1.08%, 12/1/03, Ser. B VMIG1/A-1+ 3,900,000
4,370 Holt Public Schools GO, 1.08%, 12/4/03 NR/A-1+ 4,370,000
2,650 Saline Area Schools, GO, 1.08%, 12/4/03 NR/A-1+ 2,650,000
1,400 State University Rev., 1.08%, 12/1/03, Ser. A VMIG1/A-1+ 1,400,000
--------------
12,320,000
==============
MISSOURI--0.2%
3,500 Dev. Finance Board Cultural Fac. Rev.,
1.10%, 12/1/03, Ser. B (MBIA) VMIG1/A-1+ 3,500,000
==============
NEVADA--0.1%
2,050 Clark Cnty. School Dist. GO, 0.99%, 12/1/03, Ser. B (FSA) VMIG1/A-1+ 2,050,000
==============
NEW YORK--0.7%
State Dormitory Auth. Rev.,
4,150 1.00%, 12/4/03, Ser. C-2 (MBIA) Aaa/AAA 4,150,000
4,000 1.12%, 12/31/03, Ser. C (MBIA) Aaa/AAA 4,000,000
2,000 Triborough Bridge & Tunnel Auth. Rev.,
0.95%, 12/3/03, Ser. G-2 (MBIA) Aaa/AAA 2,000,000
--------------
10,150,000
==============
NORTH CAROLINA--0.2%
3,000 State Public Improvement, 1.10%, 12/3/03, Ser. F VMIG1/A-1+ 3,000,000
==============
PENNSYLVANIA--0.2%
3,000 State Hospitals & Higher Education Facilities Auth.,
1.10%, 12/1/03 (MBIA) VMIG1/A-1+ 3,000,000
==============
SOUTH CAROLINA--1.0%
6,000 Greenville Hospital Syst. Rev.,
1.07%, 12/5/03, Ser. C (AMBAC) Aaa/AAA 6,000,000
7,500 State Transportation Infrastructure Bank Rev.,
1.13, 1/2/04, Ser. B-1 (XLCA) Aaa/NR 7,500,000
--------------
13,500,000
==============
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 13
PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
-------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
=======================================================================================================
TEXAS--1.1%
$ 7,500 Humble Independent School Dist., GO, 1.09%, 12/4/03 VMIG1/A-1+ $ 7,500,000
2,500 Tarrant Cnty Health Facilities Development Auth.,
1.05%, 12/12/03, Ser. B-2 Aaa/AAA 2,500,000
5,000 University of Texas, 1.10%, 12/3/03, Ser. A VMIG1/A-1+ 5,000,000
--------------
15,000,000
--------------
WASHINGTON--0.7%
3,450 Health Care Facilities Auth., 1.10%, 12/1/03, Ser. A Aaa/AAA 3,450,000
6,000 State Public Power Supply Syst.,
1.04%, 12/3/03, Ser 2A-2 (MBIA) VMIG1/A-1 6,000,000
--------------
9,450,000
==============
Total Variable Rate Demand Notes (cost-$128,520,000) 128,520,000
==============
-------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS (e)--2.1%
-------------------------------------------------------------------------------------------------------
29,320 0.87%-0.97%, 12/4/03-12/18/03 (cost-$29,223,729) Aaa/AAA 29,315,562
--------------
TOTAL INVESTMENTS, (cost-$1,363,836,111+)--100.0% $1,405,330,320
==============
=======================================================================================================
+ The cost basis of portfolio securities for federal income tax purposes is
$1,363,836,111. Aggregate gross unrealized appreciation for securities in
which there is an excess of value over tax cost is $48,892,897; aggregate
gross unrealized depreciation for securities in which there is an excess of
tax cost over value is $7,398,688; net unrealized appreciation for federal
income tax purposes is $41,494,209.
14 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03 |
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
------------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
============================================================================================================
CALIFORNIA MUNICIPAL BONDS & NOTES--77.5%
------------------------------------------------------------------------------------------------------------
$31,300 ABAG Financing Auth. Rev.,
5.20%-5.35%, 11/15/22-11/15/32, Ser. A NR/A $ 31,128,596
2,000 ABC Unified School Dist. GO,
zero coupon, 8/1/23, Ser. B (FGIC) Aaa/AAA 728,940
1,000 Alpine Union School Dist. GO, zero coupon, 8/1/24, Ser. B (FSA) Aaa/AAA 342,760
8,115 Anaheim City School Dist. GO, 5.00%, 8/1/26 (FGIC) Aaa/AAA 8,268,698
23,000 Bakersfield, CP, zero coupon, 4/15/21, Ser. B NR/AAA 9,657,010
1,945 Bay Area Govt. Assoc. Improvement Bd. Act 1915,
6.30%, 9/2/25 NR/NR 1,985,650
2,000 Bay Area Govt. Assoc. Lease Rev.,
5.00%, 7/1/32, Ser. 2002-1 (AMBAC) Aaa/AAA 2,041,120
1,085 Capistrano Unified School Dist., Community Fac. Dist.
Special Tax, 5.70%, 9/1/20 NR/NR 1,076,808
565 Catholic Health Facs. Fin. Auth. Rev., 5.00%, 7/1/28, Ser. A Baa2/BBB 516,500
2,300 Ceres Unified School Dist., GO, zero coupon, 8/1/27 (FGIC) Aaa/AAA 621,276
9,865 Chula Vista Special Tax, 6.05%-6.20%, 9/1/25-9/1/33 NR/NR 9,969,521
8,035 Clovis Unified School District, GO,
zero coupon, 8/1/23-8/1/27, Ser. B (FGIC) Aaa/AAA 2,569,647
1,410 Community College Financing Auth. Lease Rev.,
5.00%, 8/1/27, Ser. A (AMBAC) Aaa/AAA 1,442,458
6,355 Corona-Norco Unified School Dist., Public Financing Auth.
Special Tax, 5.55%-6.10%, 9/1/15-9/1/32, Ser. A NR/NR 6,382,245
1,110 Corona-Norco Unified School Dist. Special Tax,
5.10%, 9/1/25 (AMBAC) Aaa/AAA 1,140,658
2,800 Cotati Redev. Agcy. Tax Allocation, 5.00%, 9/1/31, Ser. A (MBIA) Aaa/AAA 2,846,536
3,000 Dinuba Financing Auth. Lease Rev., 5.10%, 8/1/32 (MBIA) Aaa/AAA 3,086,850
2,825 Empire Union School Dist. Special Tax.,
zero coupon, 10/1/30-10/1/32 (AMBAC) Aaa/AAA 642,520
1,000 Escondido Union School Dist. GO, zero coupon, 8/1/27 (FSA) Aaa/AAA 284,750
2,440 Eureka Unified School Dist. GO, zero coupon, 8/1/27 (FSA) Aaa/AAA 694,790
Foothill Eastern Corrider Agcy. Toll Road Rev.,
42,010 zero coupon, 1/1/25-1/1/30, Ser. A Aaa/AAA 12,162,082
1,500 zero coupon, 1/15/27 (MBIA) Aaa/AAA 1,215,930
400 Franklin-McKinley School Dist. GO, 5.00%, 8/1/27, Ser. B (FSA) Aaa/AAA 409,208
47,900 Golden State Tobacco Securitization Corp. Rev.,
6.25%-6.75%, 6/1/33-6/1/39, Ser. 2003-A-1 A3/A- 46,328,366
850 Golden Valley Unified School Dist. GO,
zero coupon, 8/1/35, Ser. B (FGIC) Aaa/AAA 153,476
2,115 Health Facs. Financing Auth. Rev., 5.375%, 11/1/20 NR/A 2,192,769
1,750 Huntington Beach Community Facs. Dist. Special Tax,
6.30%, 9/1/32 NR/NR 1,775,602
2,080 Industry Urban Dev. Agcy. Tax Allocation,
4.75%, 5/1/21 (MBIA) Aaa/AAA 2,126,134
7,000 Irvine Improvement Board Act 1915 Special Assessment,
5.70%, 9/2/26. NR/NR 7,032,760
1,900 Jurupa Unified School Dist. GO, zero coupon, 5/1/27 (FGIC) Aaa/AAA 541,025
2,450 Kings Canyon JT Unified School Dist. GO,
zero coupon, 8/1/27 (FGIC) Aaa/AAA 697,638
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 15
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
------------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
============================================================================================================
$ 5,300 Livermore-Amador Valley Water Management Agcy.,
Sewer Rev., 5.00%, 8/1/31 (AMBAC) Aaa/AAA $ 5,387,344
5,935 Long Beach Unified School Dist., GO,
5.00%, 8/1/27, Ser. C (MBIA) Aaa/NR 6,052,454
Los Angeles, CP,
9,895 5.00%, 2/1/27 (MBIA) Aaa/AAA 10,093,692
2,685 5.00%, 10/1/27, Ser. AU (MBIA) Aaa/AAA 2,742,486
7,200 Los Angeles Wastewater Syst. Rev.,
5.00%, 6/1/30, Ser. A (FGIC) Aaa/AAA 7,334,640
3,475 Loyola Marymount University Educational Facs. Auth. Rev.,
zero coupon, 10/1/34 (MBIA) Aaa/NR 666,297
1,000 Manhattan Beach Unified School Dist. GO,
zero coupon, 9/1/25 (FGIC) Aaa/AAA 317,930
7,295 Manteca Redev. Agcy. Tax Allocation, 5.00%, 10/1/32 (FSA) Aaa/AAA 7,447,538
Manteca Unified School Dist. Special Tax,
5,330 5.00%, 9/1/29, Ser. C Aaa/AAA 5,435,534
2,365 zero coupon, 9/1/25 (MBIA) Aaa/AAA 751,904
4,000 Merced Cnty., CP, 5.00%, 6/1/32 (AMBAC) Aaa/NR 4,069,200
7,320 Modesto Elementary School Dist., Stanislaus Cnty. GO,
zero coupon, 8/1/23-5/1/27, Ser. A (FGIC) Aaa/AAA 2,457,355
2,150 Modesto High School Dist., Stanislaus Cnty. GO,
zero coupon, 8/1/26, Ser. A (FGIC) Aaa/AAA 648,440
1,000 Modesto Public Financing Auth. Lease Rev.,
5.00%, 9/1/29 (AMBAC) Aaa/AAA 1,013,870
2,385 Monrovia Financing Auth. Lease Rev.,
5.125%, 12/1/31 (AMBAC) Aaa/AAA 2,462,966
Montebello Unified School Dist. GO,
7,105 zero coupon, 8/1/24-8/1/27 (FGIC) Aaa/AAA 2,208,025
1,485 zero coupon, 8/1/24 (FSA) Aaa/AAA 508,999
2,400 Morgan Hill Unified School Dist. GO, zero coupon, 8/1/23 (FGIC) Aaa/AAA 874,728
1,500 Mountain View-Whisman School Dist. GO,
5.00%, 6/1/27 Ser. D (MBIA) Aaa/AAA 1,534,140
1,800 Murrieta Redev. Agcy. Tax, 5.00%, 8/1/32 (MBIA) Aaa/AAA 1,837,188
3,245 Newark Unified School Dist. GO,
zero coupon, 8/1/26, Ser. D (FSA) Aaa/AAA 978,692
2,750 North City West School Facs. Financing Auth., Special Tax,
zero coupon, 9/1/27 (AMBAC) Aaa/AAA 779,597
3,580 Oakland Redev. Agcy. Tax Allocation, 5.25%, 9/1/27-9/1/33 NR/A- 3,592,709
1,000 Orange Cnty. Community Facs. Dist. Special Tax,
6.00%, 8/15/25, Ser. A NR/NR 1,024,640
12,000 Orange Cnty. Sanitation Dist. CP, 5.25%, 2/1/30 (FGIC) Aaa/AAA 12,525,960
3,685 Palmdale Community Redev. Agcy. Tax Allocation,
zero coupon, 12/1/30-12/1/32 (AMBAC) Aaa/AAA 825,502
1,750 Paramount Unified School Dist. GO,
zero coupon, 9/1/23, Ser. B (FSA) Aaa/AAA 635,092
Perris Public Financing Auth. Rev.,
1,190 4.75%, 10/1/23, Ser. B (MBIA) Aaa/AAA 1,199,960
2,580 5.375%-5.625%, 10/1/20-10/1/31, Ser. C NR/BBB 2,602,506
16 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
------------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
============================================================================================================
$14,200 Poway Unified School Dist. Special Tax,
5.50%-6.125%, 9/1/25-9/1/33 NR/NR $ 14,113,248
2,000 Rancho Cucamonga Community Facs. Dist., Special Tax,
6.375%, 9/1/31, Ser. A NR/NR 2,029,300
1,500 Richmond Wastewater Rev., zero coupon, 8/1/30 (FGIC) Aaa/AAA 361,410
17,500 Rocklin Unified School Dist. GO,
zero coupon, 8/1/24-8/1/27 (FGIC) Aaa/AAA 5,478,895
9,250 Roseville Redev. Agcy. Tax Allocation,
5.00%, 9/1/27-9/1/33 (MBIA) Aaa/AAA 9,457,993
Sacramento City Financing Auth. Rev.,
4,500 5.00%, 12/1/32, Ser. A (FSA) Aaa/AAA 4,581,540
4,935 6.25%, 9/1/23 NR/NR 5,067,209
16,000 Sacramento Cnty. Airport Syst. Rev., 5.00%, 7/1/32, Ser. A (FSA) Aaa/AAA 16,278,560
1,500 San Diego Public Facs. Financing Auth. Lease Rev.,
5.00%, 4/1/32 (MBIA) Aaa/AAA 1,525,440
1,000 San Diego Public Facs. Financing Auth. Sewer Rev.,
5.00%, 5/15/29, Ser. A (FGIC) Aaa/AAA 1,017,390
14,000 San Diego Public Facs. Financing Auth. Water Rev.,
5.00%, 8/1/32 (MBIA) Aaa/AAA 14,245,280
16,285 San Diego Cnty. Water Auth. Water Rev., CP,
5.00%, 5/1/28-5/1/29, Ser. A (MBIA) Aaa/AAA 16,633,933
San Francisco City & Cnty. Airport Community, Int'l Airport Rev.,
5,585 4.50%, 5/1/28, Ser. 15B (MBIA) Aaa/AAA 5,399,969
20,300 5.00%, 5/1/32, Ser. 28B (MBIA) Aaa/AAA 20,647,739
10,405 San Joaquin Hills Transportation Corridor Agcy. Toll Road Rev.,
zero coupon, 1/1/25 AAA/AAA 3,548,105
10,190 San Jose, GO,
5.125%, 9/1/31 (MBIA) Aa1/AA+ 10,474,301
7,875 San Juan Unified School Dist. GO,
zero coupon, 8/1/23-8/1/26 (FSA). Aaa/AAA 2,486,380
5,000 Santa Margarita Community Fac. Water Dist. Special Tax,
6.00%-6.25%, 9/1/29-9/1/30 NR/NR 5,075,220
2,300 San Mateo Union High School Dist. GO,
zero coupon, 9/1/20 (FGIC). Aaa/AAA 1,015,910
4,835 San Mateo Foster City School Dist. GO, 5.10%, 8/1/31 (FGIC) Aaa/AAA 4,939,919
1,730 San Rafael City High School Dist. GO,
5.00% 8/1/27, Ser. B (FSA) Aaa/AAA 1,760,310
3,280 San Rafael Elementary School Dist. GO,
5.00%, 8/1/27, Ser. B (FSA) Aaa/AAA 3,337,466
8,690 Santa Clara Unified School Dist. GO,
5.00%, 7/1/25-7/1/27 (MBIA) NR/AAA 8,853,144
1,260 Santa Cruz Cnty., CP, 5.25%, 8/1/32 A2/NR 1,280,488
3,485 Saugus Hart School Facs. Financing Auth. Special Tax,
6.10%-6.125%, 9/1/32-9/1/33 NR/NR 3,531,745
1,000 Shasta Union High School Dist. GO,
zero coupon, 8/1/24 (FGIC) Aaa/AAA 342,760
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 17
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
------------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
============================================================================================================
$ 4,745 South Tahoe JT Powers Parking Financing Auth. Rev.,
7.00%, 12/1/27, Ser. A NR/NR $ 4,959,664
1,800 Southern Mono Health Care Dist. GO,
zero coupon, 8/1/26 (MBIA) Aaa/AAA 536,922
9,375 State Health Facs. Financing Auth. Rev.,
5.125%-5.25%, 1/1/22-1/1/26 NR/A 9,339,874
200 State Infrastructure & Economic Dev. Bk. Rev., Bay Area Toll,
5.00%, 7/1/36, Ser. B (AMBAC) Aaa/AAA 203,804
9,605 State Public Works Board Lease Rev.,
5.00%, 10/1/22, Ser. A (FSA) Aaa/AAA 9,901,698
1,710 State University Rev. & Colleges,
5.00%, 11/1/33, Ser. A (AMBAC) Aaa/AAA 1,740,695
1,170 Statewide Community. Dev. Auth. CP, 6.10%, 11/1/15 (d) NR/NR 1,186,134
6,555 Statewide Community. Dev. Auth. Rev.,
6.75%, 10/1/30-7/1/32 (d) NR/NR 6,661,717
2,770 Statewide Community Dev. Auth., Rev., 5.50%, 11/1/32, Ser. A A3/A 2,842,436
Statewide Financing Auth. Tobacco Settlement Rev.,
1,940 5.625%, 5/1/29, Ser. A A3/NR 1,730,111
20,000 6.00%, 5/1/37, Ser. B A3/NR 17,497,200
7,750 Tamalpais Union High School Dist. GO, 5.00%, 8/1/27 (FSA) Aaa/AAA 7,885,780
Tobacco Securization Agcy. Rev.,
15,000 5.625%-6.00%, 6/1/23-6/1/35 A3/A- 13,596,600
1,800 5.875%, 6/1/43, Ser. A A3/NR 1,525,644
4,500 6.00%, 6/1/42 A3/NR 3,892,050
1,000 Tracy Community Facs. Dist. Special Tax, 6.00%, 9/1/27 NR/NR 1,005,420
6,250 University Revs., Ser. A, 5.00%, 5/15/11 (AMBAC) Aaa/AAA 6,986,000
1,555 Ventura Unified School Dist. GO, 5.00%, 8/1/32, Ser. F (FSA) Aaa/AAA 1,582,244
10,000 Ventura Cnty. Community College Dist. GO,
5.00%, 8/1/27, Ser. A (MBIA) Aaa/AAA 10,230,200
2,000 Vernon Elec. Syst. Rev., 5.50%, 4/1/33 A2/BBB+ 2,030,560
3,535 Victor Elementary School Dist.,
zero coupon, 8/1/24-8/1/26, Ser. A (FGIC) Aaa/AAA 1,112,236
1,000 Vista Unified School Dist. GO,
zero coupon, 8/1/26, Ser. A (FSA) Aaa/AAA 301,600
7,320 West Contra Costa University School Dist. GO,
5.00%, 8/1/26-8/1/31, Ser. A (MBIA) Aaa/AAA 7,456,747
3,375 Westlands Water Dist. Rev. CP, 5.00%, 9/1/34 (MBIA) Aaa/AAA 3,439,969
2,110 Yuba City Unfied School Dist. GO, zero coupon, 9/1/25 (FGIC) Aaa/AAA 670,832
--------------
Total California Municipal Bonds & Notes (cost-$524,072,563) 529,871,502
==============
------------------------------------------------------------------------------------------------------------
OTHER MUNICIPAL BONDS & NOTES--1.7%
------------------------------------------------------------------------------------------------------------
PUERTO RICO--0.3%
2,000 Electric Power Auth. Rev., 5.125%, 7/1/29, Ser. NN A3/A- 2,035,520
TENNESSEE--1.4%
8,535 Memphis Elec. Syst. Rev., 5.00%, 12/1/16, Ser. A (MBIA) Aaa/AAA 9,247,075
--------------
Total Other Municipal Bonds & Notes (cost-$11,217,481) 11,282,595
==============
18 PIMCO Municipal Income Funds II Annual Report | 11.30.03
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
------------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
============================================================================================================
CALIFORNIA VARIABLE RATE NOTES (a) (b) (f)--6.0%
------------------------------------------------------------------------------------------------------------
$ 4,238 Los Angeles Dept. of Water & Power, Waterworks Rev.,
16.54%, 7/1/41 (FGIC) Aaa/NR $ 4,637,351
12,465 Los Angeles Unified School Dist. GO,
28.28%-32.16%, 1/1/11 (FSA) NR/NR 15,419,289
1,875 Modesto Public Financing Auth. Lease Rev.,
16.04%, 9/1/29, Ser. 354 (AMBAC) AAA/NR 1,979,025
4,952 Oakland, GO, 16.04%, 1/15/32, Ser. 756 (FGIC) Aaa/NR 5,309,989
San Diego Unified School Dist. GO,
1,944 16.04%, 7/1/27, Ser. 758 (FGIC) Aaa/NR 2,106,829
2,209 16.04%, 7/1/26, Ser. 759 (FSA) NR/NR 2,390,668
3,743 San Jose GO, 16.04%, 9/1/32 (MBIA) Aaa/NR 4,006,720
2,288 San Jose Unified School Dist. Santa Clara Cnty. GO,
16.04%, 8/1/27 (FSA) Aaa/NR 2,447,808
2,500 University Revs., 16.04%, 9/1/28, Ser. 762 (FGIC) Aaa/NR 2,708,650
--------------
Total California Variable Rate Notes (cost-$37,949,936) 41,006,329
==============
------------------------------------------------------------------------------------------------------------
CALIFORNIA VARIABLE RATE DEMAND NOTES (b) (c)--12.0%
------------------------------------------------------------------------------------------------------------
7,000 Bay Area Toll Auth., Toll Bridge Rev.,
1.07%, 12/4/03 (AMBAC) Aaa/AAA 7,000,000
1,000 Chela Financial Student Loan Rev.,
1.15%, 1/2/04, Ser. A-2 Aaa/AAA 1,000,000
7,900 East Bay Muni. Util. Dist. Water Syst. Rev.,
1.07%, 12/3/03, Ser. A (FSA) Aaa/AAA 7,900,000
2,000 Eastern Municipal Water & Sewer Dist. Rev. CP,
1.08%, 12/4/03, Ser. B (FGIC) VMIG1/A1+ 2,000,000
7,050 Irvine Unified School Dist. Special Tax,
1.05%, 12/1/03 (Bank of New York) VMIG1/NR 7,050,000
1,800 Irvine Ranch Water Dist., 1.07%, 12/1/03 Aaa/AAA 1,800,000
5,700 Irvine Ranch Water Dist. GO, 1.07%-1.10%, 12/1/03, Ser. B NR/A1+ 5,700,000
4,950 Long Beach Unified School Dist. CP, 1.10%, 12/4/03 (AMBAC) VMIG1/NR 4,950,000
3,000 Los Angeles Cnty. Metropolitan Transportation Auth. Rev.,
Sales Tax Rev., 1.08%, 12/4/03, Ser. A (MBIA) VMIG1/A1+ 3,000,000
2,200 Los Angeles Dept. Water & Power Waterworks Rev.,
1.05%, 12/1/03, Ser. B-2 . VMIG1/A1+ 2,200,000
2,300 Los Angeles Water & Power Rev.,
1.11%, 12/1/03, Ser. B-3 VMIG1/AA- 2,300,000
Metropolitan Water Dist., Southern CA Waterworks Rev.,
2,700 1.07%, 12/4/03, Ser. A VMIG1/A1+ 2,700,000
4,300 1.05%, 12/1/03, Ser. B-1 VMIG1/A1+ 4,300,000
4,500 Orange Cnty. Sanitation Dist. CP, 1.07%, 12/1/03, Ser. B VMIG1/A1+ 4,500,000
6,000 Sacramento Unified School Dist. CP, 1.10%, 12/4/03 (FSA) VMIG1/NR 6,000,000
2,800 Southern Cal. Public Power Auth. Transmision Rev.,
1.07%, 12/3/03 (FSA) VMIG1/AAA 2,800,000
3,700 State Health Facs. Fin. Auth. Rev.,
1.05%, 12/1/03, Ser. B (AMBAC) VMIG1/A1+ 3,700,000
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 19
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
------------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
============================================================================================================
$ 5,750 State Infrastructure & Economic Dev. Rev.,
1.05%, 12/1/03, Ser. B (AMBAC) Aaa/A1+ $ 5,750,000
3,850 Statewide Community Dev. Auth. CP,
1.07%, 12/1/03 (AMBAC) VMIG1/A1 3,850,000
3,750 Western Mun. Water Dist. Facs. Rev.,
1.07%, 12/3/03, Ser. A (FSA) NR/AAA 3,750,000
--------------
Total California Variable Rate Demand Notes (cost-$82,250,000) 82,250,000
==============
------------------------------------------------------------------------------------------------------------
OTHER SHORT-TERM VARIABLE RATE DEMAND NOTES (b) (c)--0.6%
------------------------------------------------------------------------------------------------------------
TEXAS--0.6%
4,000 State Univ. Revs., 1.10%, 12/3/03, Ser. A (cost-$4,000,000) Aaa/AAA 4,000,000
--------------
------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS (e)--2.2%
------------------------------------------------------------------------------------------------------------
15,370 1.00%-1.07%, 12/4/03-12/18/03 (cost-$15,365,199) Aaa/AAA 15,365,301
--------------
TOTAL INVESTMENTS (cost-$674,855,179+)--100.0% $ 683,775,727
==============
------------------------------------------------------------------------------------------------------------
+ The cost basis of portfolio securities for federal income tax purposes is
$674,855,179. Aggregate gross unrealized appreciation for securities in
which there is an excess of value over tax cost is $14,309,706; aggregate
gross unrealized depreciation for securities in which there is an excess of
tax cost over value is $5,389,158, net unrealized appreciation for federal
income tax purposes is $8,920,548.
20 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03 |
| SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
PIMCO NEW YORK MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
------------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
============================================================================================================
NEW YORK MUNICIPAL BONDS & NOTES--91.7%
------------------------------------------------------------------------------------------------------------
$ 1,250 Buffalo Municipal Water Fin. Auth., Water Syst. Rev.,
5.00%-5.125%, 7/1/27-7/1/32, Ser. B (FSA) Aaa/AAA $ 1,278,715
10,000 Erie Cnty. Tobacco Asset 6.50%, 7/15/32 Baa2/BBB 10,335,200
5,000 Metropolitan Transportation Auth. Dedicated Tax Fund,
5.00%, 11/15/30, Ser. A A1/AA- 5,039,350
Metropolitan Transportation Auth. Rev.,
1,850 5.00%, 11/15/30, Ser. A (FSA) Aaa/AAA 1,882,005
10,000 5.25%, 11/15/31, Ser. E A2/A 10,324,000
7,000 Metropolitan Transportation Auth., Service Contract,
5.35%, 7/1/31, Ser. B A3/AAA 7,267,820
New York City, GO
4,000 5.00%, 3/1/33, Ser. I A2/A 4,002,640
1,500 5.75%, 8/1/16, Ser. A A2/A 1,646,700
3,100 New York City Health & Hospital Corp., Rev.,
5.375%-5.45%, 2/15/26, Ser. A A3/BBB 3,154,645
New York City Municipal Water Fin. Auth.,
Water & Sewer Syst. Rev.
3,055 4.75%, 6/15/25, Ser. D (MBIA) Aaa/AAA 3,063,798
20,000 5.00%-5.125%, 6/15/32-6/15/34, Ser. A Aa2/AA 20,453,100
New York City Transitional Fin. Auth. Rev.,
10,000 5.00%, 11/1/27, Ser. B Aa2/AA+ 10,179,500
8,395 5.00%-5.25%, 11/1/11-11/15/26, Ser. A Aa2/AA+ 8,694,278
500 5.50%, 11/1/29 Aa2/AA+ 581,935
1,245 New York City Indl. Dev. Agcy., Civic Fac. Rev.,
6.45%, 7/1/32 Baa3/NR 1,303,191
1,000 New York City Indl Dev. Agcy. Rev., 4.95%, 11/20/32 (GNMA) NR/AA+ 995,400
3,600 Port Auth. New York & New Jersey, 5.00%, 4/15/32 Aaa/AAA 3,693,564
6,590 Sachem Central School District of Holbrook,
5.00%, 6/15/28-6/15/29 Aaa/AAA 6,733,080
7,500 State Dormitory Auth. Lease Rev., State Univ. Dormitory Facs.,
5.00%, 7/1/32 A1/AA- 7,546,500
3,225 State Dormitory Auth. Revs., FHA-NY & Presbyterian Hospital,
4.75%, 8/1/27(AMBAC) Aaa/AAA 3,211,165
5,000 State Dormitory Auth. Revs., FHA-Saint Barnabas,
5.00%, 2/1/31, Ser. A (AMBAC) Aaa/AAA 5,080,500
5,300 State Dormitory Auth. Revs., Lenox Hill Hospital,
5.50%, 7/1/30 A3/NR 5,456,721
1,400 State Dormitory Auth. Revs., Long Island Univ.,
5.25%, 9/1/28 Baa3/AA 1,441,160
7,000 State Dormitory Auth. Revs., Memorial Sloan-Kettering Center,
Ser 1, 5.00%, 7/1/34 Aa2/AA 7,058,030
8,850 State Dormitory Auth. Revs., North General Hospital,
5.00%, 2/15/25 NR/AA- 8,901,242
4,270 State Dormitory Auth. Rev., Teachers College,
5.00%, 7/1/32 (MBIA) Aaa/NR 4,335,288
8,600 State Dormitory Auth. Rev., State Personal Income Tax,
5.00%, 3/15/32 NR/AA 8,688,494
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 21
PIMCO NEW YORK MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
------------------------------------------------------------------------------------------------------------
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
============================================================================================================
$ 2,000 State Environmental Facs. Corp.,
State Clean Water & Drinking, 5.125%, 6/15/31 Aaa/AAA $ 2,056,320
1,500 State Power Auth., 4.75%, 11/15/22, Ser. A Aa2/AA- 1,524,030
6,000 State Urban Dev. Corp., Correctional & Youth Facs.
Services, 5.50%, 1/1/17, Ser. A A3/AA- 6,682,740
6,100 State Urban Dev. Corp., Personal Income Tax,
5.00%, 3/15/33, Ser. C A1/AA 6,162,769
Triborough Bridge & Tunnel Auth. Revs., Ser. A,
4,000 5.00%, 1/1/27 Aa3/AA- 4,066,280
4,700 5.00%, 1/1/32 (FGIC) Aaa/AAA 4,784,177
TOB Settlement Asset Backed, Inc.
25,000 5.75%, 7/15/32 A3/BBB 24,824,500
10,000 6.375%, 7/15/39 A3/BBB+ 10,190,600
2,000 Warren & Washington Cnty. Indl. Dev. Agy. Fac. Rev.,
5.00%, 12/1/35, Ser A Aaa/AAA 2,018,800
750 Westchester Cnty. Indl Dev. Agcy. Continuing Care,
6.50%, 1/1/34 NR/NR 751,988
--------------
Total New York Municipal Bonds & Notes (cost-$210,490,690) 215,410,225
==============
------------------------------------------------------------------------------------------------------------
OTHER MUNICIPAL BONDS & NOTES--3.2%
------------------------------------------------------------------------------------------------------------
PUERTO RICO--3.2%
5,675 Children Trust Fund Puerto Rico Tobacco Settlement Rev.,
5.625%, 5/15/43 Baa2/BBB 5,274,175
1,500 Puerto Rico Commonwealth Highway & Transportation Auth.,
5.25%, 7/1/38, Ser. D Baa1/A 1,534,230
750 Puerto Rico Electric Power Authority, Power Revenue
5.125%, 7/1/29, Ser. NN A3/A- 763,320
--------------
Total Other Municipal Bonds & Notes (cost-$7,709,765) 7,571,725
==============
------------------------------------------------------------------------------------------------------------
NEW YORK VARIABLE RATE NOTES (a) (b) (f)--3.5%
------------------------------------------------------------------------------------------------------------
6,994 Long Island Power Auth. Elec. Syst. Rev., Ser. 339,
16.95%, 12/4/03 (MBIA) Aaa/NR
Total New York Variable Rate Notes (cost-$7,007,546) 8,230,819
==============
------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS (e)--1.6%
------------------------------------------------------------------------------------------------------------
3,835 .94%, 12/4/03-12/18/04 (cost-$3,834,040) Aaa/AAA 3,834,079
--------------
TOTAL INVESTMENTS (cost-$229,042,041+)--100.0% $ 235,046,848
==============
============================================================================================================
+ The cost basis of portfolio securities for federal income tax purposes is
$229,042,041. Aggregate gross unrealized appreciation for securities in
which there is an excess of value over tax cost is $6,562,524, aggregate
gross unrealized depreciation for securities in which there is an excess of
tax cost over value is $557,717 and net unrealized appreciation for federal
income tax purposes is $6,004,807.
22 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
PIMCO NEW YORK MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
November 30, 2003 (unaudited)
--------------------------------------------------------------------------------
================================================================================
NOTES TO SCHEDULES OF INVESTMENTS:
* Long-term debt securities are valued by an independent price service
authorized by the Board of Trustees.
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, typically to qualified institutional investors. These
securities amounted to $116,732,032 or 8.3% of total investments,
$41,006,329 or 6.0% of total investments and $8,230,819 or 3.5% of total
investments, respectively, for Municipal II, California Municipal II and New
York Municipal II.
(b) Variable Rate Notes--instruments whose interest rates change on specified
date (such as a coupon date or interest payment date) and/or whose interest
rates vary with changes in a designated base rate (such as the prime
interest rate).
(c) Maturity date shown is date of next call.
(d) Security deemed illiquid.
(e) All or partial principal amount segregated as initial margin on futures
contracts.
(f) Residual Interest/Tax Exempt Municipal Bonds. The interest rate shown bears
an inverse relationship to the interest rate on another security or the
value of an index.
--------------------------------------------------------------------------------
GLOSSARY:
AMBAC -- insured by American Municipal Bond Assurance Corp.
CP -- Certificates of Participation
FGIC -- insured by insured Financial Guaranty Insurance Co.
FSA -- Financial Services Authority
GNMA -- Government National Mortgage Association
GO -- General Obligation Bonds
MBIA -- insured by Municipal Bond Investors Assurance
NR -- Not Rated
PSF -- Public School Fund
XLCA -- insured by XL Capital Assurance
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS |
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 23
PIMCO MUNICIPAL INCOME FUNDS II STATEMENTS OF ASSETS AND LIABILITIES
November 30, 2003 (unaudited)
CALIFORNIA NEW YORK
MUNICIPAL II MUNICIPAL II MUNICIPAL II
-------------- ------------ ------------
ASSETS:
Investments, at value (cost-$1,363,836,111,
$674,855,179 and $229,042,041, respectively) $1,405,330,320 $683,775,727 $235,046,848
-------------------------------------------------------- ----------------- --------------- --------------
Cash 1,408,601 1,036,079 346,498
-------------------------------------------------------- ----------------- --------------- --------------
Interest receivable 20,562,147 12,780,037 4,322,885
-------------------------------------------------------- ----------------- --------------- --------------
Receivable for variation margin on futures contracts 4,873,125 2,049,375 439,688
-------------------------------------------------------- ----------------- --------------- --------------
Receivable for investments sold 100,000 -- --
-------------------------------------------------------- ----------------- --------------- --------------
Prepaid expenses 37,663 31,073 14,817
-------------------------------------------------------- ----------------- --------------- --------------
Total Assets 1,432,311,856 699,672,291 240,170,736
======================================================== ================= =============== ==============
LIABILITIES:
Payable for investments purchased 73,795,631 9,283,757 --
-------------------------------------------------------- ----------------- --------------- --------------
Dividends payable to common and preferred shareholders 4,954,010 2,475,401 853,010
-------------------------------------------------------- ----------------- --------------- --------------
Investment management fees payable 548,397 278,671 96,901
-------------------------------------------------------- ----------------- --------------- --------------
Accrued expenses 111,371 93,056 42,335
-------------------------------------------------------- ----------------- --------------- --------------
Total Liabilities 79,409,409 12,130,885 992,246
-------------------------------------------------------- ----------------- --------------- --------------
PREFERRED SHARES ($0.00001 PAR VALUE AND $25,000 NET
ASSET AND LIQUIDATION VALUE PER SHARE APPLICABLE TO
AN AGGREGATE OF 20,200, 10,400 AND 3,600 SHARES
ISSUED AND OUTSTANDING, RESPECTIVELY) 505,000,000 260,000,000 90,000,000
-------------------------------------------------------- ----------------- --------------- --------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS $ 847,902,447 $427,541,406 $149,178,490
======================================================== ================= =============== ==============
COMPOSITION OF NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS:
Common Stock:
Par value ($0.00001 per share) $ 579 $ 301 $ 104
-------------------------------------------------------- ----------------- --------------- --------------
Paid-in-capital in excess of par 823,152,606 427,804,627 147,517,644
-------------------------------------------------------- ----------------- --------------- --------------
Undistributed net investment income 5,813,596 2,930,152 288,636
-------------------------------------------------------- ----------------- --------------- --------------
Accumulated net realized loss (14,856,605) (8,056,096) (3,662,795)
-------------------------------------------------------- ----------------- --------------- --------------
Net unrealized appreciation of investments and
futures contracts 33,792,271 4,862,422 5,034,901
-------------------------------------------------------- ----------------- --------------- --------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS $ 847,902,447 $427,541,406 $149,178,490
======================================================== ================= =============== ==============
Common Shares Outstanding 57,917,258 30,114,041 10,393,279
-------------------------------------------------------- ----------------- --------------- --------------
NET ASSET VALUE PER COMMON SHARE $14.64 $14.20 $14.35
======================================================== ================= =============== ==============
24 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
| SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
PIMCO MUNICIPAL INCOME FUNDS II STATEMENTS OF OPERATIONS
For the six months ended November 30, 2003 (unaudited)
================================================================================
CALIFORNIA NEW YORK
MUNICIPAL II MUNICIPAL II MUNICIPAL II
-------------------------------------------------------- --------------- --------------- --------------
INVESTMENT INCOME:
Interest $38,371,215 $20,004,178 $6,425,244
-------------------------------------------------------- --------------- --------------- --------------
EXPENSES:
Investment management fees 4,300,347 2,191,249 758,631
-------------------------------------------------------- --------------- --------------- --------------
Auction agent fees and commissions 645,257 337,945 117,809
-------------------------------------------------------- --------------- --------------- --------------
Custodian and accounting agent fees 66,186 67,205 44,723
-------------------------------------------------------- --------------- --------------- --------------
Reports to shareholders 60,707 32,738 13,297
-------------------------------------------------------- --------------- --------------- --------------
Investor relations 48,603 23,547 9,671
-------------------------------------------------------- --------------- --------------- --------------
Audit and tax services 41,498 15,010 17,364
-------------------------------------------------------- --------------- --------------- --------------
New York Stock Exchange listing fees 38,538 25,088 19,993
-------------------------------------------------------- --------------- --------------- --------------
Trustees' fees and expenses 27,044 21,031 7,536
-------------------------------------------------------- --------------- --------------- --------------
Transfer agent fees 18,247 17,467 15,520
-------------------------------------------------------- --------------- --------------- --------------
Legal fees 15,006 9,315 2,220
-------------------------------------------------------- --------------- --------------- --------------
Insurance expense 14,679 8,217 3,595
-------------------------------------------------------- --------------- --------------- --------------
Miscellaneous 6,487 5,030 3,300
-------------------------------------------------------- --------------- --------------- --------------
Total expenses 5,282,599 2,753,842 1,013,659
-------------------------------------------------------- --------------- --------------- --------------
Less: investment management fees waived (992,388) (505,673) (174,069)
-------------------------------------------------------- --------------- --------------- --------------
custody credits earned on cash balances (1,799) (10,034) (863)
-------------------------------------------------------- --------------- --------------- --------------
Net expenses 4,288,412 2,238,135 838,727
-------------------------------------------------------- --------------- --------------- --------------
NET INVESTMENT INCOME $34,082,803 $17,766,043 $5,586,517
======================================================== =============== =============== ==============
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments 951,806 (2,412,662) (89,557)
-------------------------------------------------------- --------------- --------------- --------------
Futures contracts 20,712,494 8,200,562 543,103
-------------------------------------------------------- --------------- --------------- --------------
Options written 3,431,840 2,386,407 593,941
-------------------------------------------------------- --------------- --------------- --------------
Net change in unrealized appreciation/depreciation
of investments, futures contracts and options written (31,111,074) (25,486,078) (2,624,338)
-------------------------------------------------------- --------------- --------------- --------------
Net realized and unrealized loss on investments,
futures contracts and options written (6,014,934) (17,311,771) (1,576,851)
-------------------------------------------------------- --------------- --------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
INVESTMENT OPERATIONS 28,067,869 454,272 4,009,666
======================================================== =============== =============== ==============
DIVIDENDS ON PREFERRED SHARES FROM
NET INVESTMENT INCOME (2,129,186) (932,802) (336,760)
-------------------------------------------------------- --------------- --------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS RESULTING FROM INVESTMENT
OPERATIONS $25,938,683 $ (478,530) $3,672,906
======================================================== =============== =============== ==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS |
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 25
PIMCO MUNICIPAL INCOME FUNDS II STATEMENTS OF CHANGES IN NET ASSETS
APPLICABLE TO COMMON SHAREHOLDERS
================================================================================
MUNICIPAL II
--------------------------------
Six Months For the period
ended June 28, 2002*
November 30, through
2003 May 31,
(unaudited) 2003
-------------- ----------------
INVESTMENT OPERATIONS:
Net investment income $ 34,082,803 $ 53,776,637
-------------------------------------------------------------------------------- -------------- ----------------
Net realized gain (loss) on investments, futures contracts and options written 25,096,140 (34,060,562)
-------------------------------------------------------------------------------- -------------- ----------------
Net change in unrealized appreciation/depreciation of investments, futures
contracts and options written (31,111,074) 64,903,345
-------------------------------------------------------------------------------- -------------- ----------------
Net increase in net assets resulting from investment operations 28,067,869 84,619,420
-------------------------------------------------------------------------------- -------------- ----------------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income (2,129,186) (4,384,249)
-------------------------------------------------------------------------------- -------------- ----------------
Net realized gains -- (504,626)
-------------------------------------------------------------------------------- -------------- ----------------
Net increase (decrease) in net assets applicable to common shareholders
resulting from investment operations 25,938,683 79,730,545
-------------------------------------------------------------------------------- -------------- ----------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income (26,865,578) (48,666,775)
-------------------------------------------------------------------------------- -------------- ----------------
Net realized gains -- (5,387,613)
-------------------------------------------------------------------------------- -------------- ----------------
Total dividends and distributions to common shareholders (26,865,578) (54,054,388)
================================================================================ ============== ================
CAPITAL SHARE TRANSACTIONS:
Net proceeds from the sale of common stock -- 823,703,945
-------------------------------------------------------------------------------- -------------- ----------------
Preferred shares underwriting discount charged to paid-in capital
in excess of par -- (5,050,000)
-------------------------------------------------------------------------------- -------------- ----------------
Common stock and preferred shares offering costs charged to paid-in capital
in excess of par -- (1,540,514)
-------------------------------------------------------------------------------- -------------- ----------------
Reinvestment of dividends and distributions 1,944,155 3,995,596
-------------------------------------------------------------------------------- -------------- ----------------
Net increase from capital transactions 1,944,155 821,109,027
-------------------------------------------------------------------------------- -------------- ----------------
Total increase (decrease) in net assets applicable to common shareholders 1,017,260 846,785,184
================================================================================ ============== ================
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period 846,885,187 100,003
-------------------------------------------------------------------------------- -------------- ----------------
End of period (including undistributed (dividends in excess of) net investment
income of $5,813,596 and $725,557; $2,930,152 and $(465,795);
$288,636 and $(322,399); respectively) $847,902,447 $846,885,187
================================================================================ ============== ================
COMMON SHARES ISSUED AND REINVESTED:
Issued -- 57,501,148
-------------------------------------------------------------------------------- -------------- ----------------
Issued in reinvestment of dividends and distributions 136,392 272,737
-------------------------------------------------------------------------------- -------------- ----------------
NET INCREASE 136,392 57,773,885
================================================================================ ============== ================
* Commencement of operations.
26 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
| SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
================================================================================
CALIFORNIA MUNICIPAL II NEW YORK MUNICIPAL II
------------------------------- ---------------------------------
Six Months For the period Six Months For the period
ended June 28, 2002* ended June 28, 2002*
November 30, through November 30, through
2003 May 31, 2003 May 31,
(unaudited) 2003 (unaudited) 2003
-------------- --------------- --------------- ----------------
$ 17,766,043 $ 26,020,045 $ 5,586,517 $ 8,865,872
-------------- --------------- --------------- ----------------
8,174,307 (16,230,403) 1,047,487 (4,710,282)
-------------- --------------- --------------- ----------------
(25,486,078) 30,348,500 (2,624,338) 7,659,239
-------------- --------------- --------------- ----------------
454,272 40,138,142 4,009,666 11,814,829
-------------- --------------- --------------- ----------------
(932,802) (2,140,933) (336,760) (794,061)
-------------- --------------- --------------- ----------------
-- -- -- --
-------------- --------------- --------------- ----------------
(478,530) 37,997,209 3,672,906 11,020,768
-------------- --------------- --------------- ----------------
(13,437,294) (24,344,907) (4,638,722) (8,394,210)
-------------- --------------- --------------- ----------------
-- -- -- --
-------------- --------------- --------------- ----------------
(13,437,294) (24,344,907) (4,638,722) (8,394,210)
============== =============== =============== ================
-- 428,317,500 -- 147,473,483
-------------- --------------- --------------- ----------------
-- (2,600,000) -- (900,000)
-------------- --------------- --------------- ----------------
-- (951,964) -- (458,454)
-------------- --------------- --------------- ----------------
1,486,832 1,452,557 538,705 764,011
-------------- --------------- --------------- ----------------
1,486,832 426,218,093 538,705 146,879,040
-------------- --------------- --------------- ----------------
(12,428,992) 439,870,395 (427,111) 149,505,598
============== =============== =============== ================
439,970,398 100,003 149,605,601 100,003
-------------- --------------- --------------- ----------------
$427,541,406 $439,970,398 $149,178,490 $149,605,601
============== =============== =============== ================
-- 29,900,000 -- 10,294,833
-------------- --------------- --------------- ----------------
107,168 99,892 38,697 52,768
-------------- --------------- --------------- ----------------
107,168 29,999,892 38,697 10,347,601
============== =============== =============== ================
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 27
PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
November 30, 2003 (unaudited)
================================================================================
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PIMCO Municipal Income Fund II ("Municipal II"), PIMCO California Municipal
Income Fund II ("California Municipal II") and PIMCO New York Municipal Income
Fund II ("New York Municipal II") collectively referred to as the "Funds" or
"PIMCO Municipal Income Funds II", were organized as Massachusetts business
trusts on March 29, 2002. Prior to commencing operations on June 28, 2002, the
Funds had no operations other than matters relating to their organization and
registration as closed-end management investment companies registered under the
Investment Company Act of 1940 and the rules and regulations thereunder, as
amended, and the sale and issuance of 6,981 shares of beneficial interest of
each Fund at an aggregate purchase price of $100,003 per Fund to Allianz
Dresdner Asset Management of America L.P., ("ADAM"). PIMCO Advisors Fund
Management LLC, (the "Investment Manager"), serves as the Fund's Investment
Manager and is an indirect, wholly-owned subsidiary of ADAM. ADAM is an
indirect, majority-owned subsidiary of Allianz AG. The Funds have an unlimited
amount of $0.00001 par value common stock authorized.
Municipal II invests substantially all of its assets in a portfolio of municipal
bonds, the interest from which is exempt from federal income taxes. California
Municipal II invests substantially all of its assets in municipal bonds which
pay interest that is exempt from federal and California state income taxes. New
York Municipal II invests substantially all of its assets in municipal bonds
which pay interest that is exempt from federal, New York State and New York City
income taxes. The Funds will seek to avoid bonds generating interest income
which could potentially subject individuals to alternative minimum tax. The
issuers' abilities to meet their obligations may be affected by economic and
political developments in a specific state or region.
Municipal II, California Municipal II and New York Municipal II issued
50,500,000, 26,000,000 and 9,000,000 shares of common stock, respectively, in
their initial public offerings. An additional 7,001,148, 3,900,000 and 1,294,833
shares of Municipal II, California Municipal II and New York Municipal II,
respectively, were issued in connection with the exercises of the underwriters'
over-allotment option on July 15, 2002 and August 6, 2002. These shares were all
issued at $15.00 per share before an underwriting discount of $0.675 per share.
The Investment Manager agreed to reimburse the amount by which the aggregate of
each Fund's organizational and common offering costs (other than sales load)
exceeded $0.03 per common share. Common offering costs of $1,174,197, $682,616
and $308,845 (representing $0.02 per common share for Municipal II and
California Municipal II and $0.03 per common share for New York Municipal II),
were offset against the proceeds of the offerings and have been charged to
paid-in capital in excess of par.
In addition, the underwriters discount and offering costs associated with the
Funds' issuance of Preferred Shares in the amounts of $5,050,000 and $366,317,
$2,600,000 and $269,348 and $900,000 and $149,609, for Municipal II, California
Municipal II and New York Municipal II, respectively, have been charged to
paid-in capital in excess of par.
The preparation of the financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates.
In the normal course of business the Funds enter into contracts that contain a
variety of representations which provide general indemnifications. The Funds'
maximum exposure under these arrangements is unknown as this would involve
future claims that may be made against the Funds based upon events that have not
yet been asserted. However, the Funds expect the risk of any loss to be remote.
The following is a summary of significant accounting policies consistently
followed by the Funds:
(a) VALUATION OF INVESTMENTS
Portfolio securities and other financial instruments for which market quotations
are readily available are stated at market value. Debt securities are valued
daily by an independent pricing service approved by the Board of Trustees.
Prices may be obtained from independent pricing services which use information
provided by market makers or estimates of market values obtained from yield data
relating to investments or securities with similar characteristics. The value of
the Funds' investments is determined at the close of regular trading (normally,
4:00 p.m., Eastern Time) on the New York Stock Exchange ("NYSE") on each day the
NYSE is open. Short term investments maturing in sixty days or less are valued
at amortized cost, which approximates market value. Certain fixed income
securities for which daily market quotations are not readily available may be
valued, pursuant to guidelines established by the Board of Trustees, with
reference to fixed income securities whose prices are more readily obtainable.
The prices used by the Funds to value securities may differ from the value that
would be realized if the securities were sold.
28 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
November 30, 2003 (unaudited)
================================================================================
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on the trade date. Realized gains and
losses on investments are determined on the identified cost basis. Interest
income is recorded on an accrual basis. Original issue discounts or premiums on
debt securities purchased are accreted or amortized daily to non-taxable
interest income. Market discount, if any, is accreted daily to taxable income.
(c) FEDERAL INCOME TAXES
The Funds intend to distribute all of their taxable income and to comply with
the other requirements of the U.S. Internal Revenue Code of 1986, as amended,
applicable to regulated investment companies. Accordingly, no provision for U.S.
federal income taxes is required. In addition, by distributing substantially all
of their taxable ordinary income and long-term capital gains, if any, during
each calendar year, the Funds intend not to be subject to U.S. federal excise
tax.
(d) DIVIDENDS AND DISTRIBUTIONS--COMMON STOCK
The Funds declare dividends from net investment income monthly to common
shareholders. Distributions of net realized capital gains, if any, are paid at
least annually. Each Fund records dividends and distributions to its
shareholders on the ex-dividend date. The amount of dividends and distributions
from net investment income and net realized capital gains are determined in
accordance with federal income tax regulations, which may differ from generally
accepted accounting principles. These "book-tax" differences are either
considered either temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal income tax treatment; temporary
differences do not require reclassification. To the extent dividends and/or
distributions exceed current and accumulated earnings and profits for federal
income tax purposes they are reported as dividends and/or distributions of
paid-in capital in excess of par.
(e) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
financial instrument at a set price on a future date. Upon entering into such a
contract, the Funds are required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange.
Pursuant to the contracts, the Funds agree to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in the value of the contracts.
Such receipts or payments are known as "variation margin" and are recorded by
the Funds as unrealized appreciation or depreciation. When the contracts are
closed, the Funds record a realized gain or loss equal to the difference between
the value of the contracts at the time they were opened and the value at the
time they were closed. Any unrealized appreciation or depreciation recorded is
simultaneously reversed. The use of futures transactions involves the risk of an
imperfect correlation in the movements in the price of futures contracts,
interest rates and the underlying hedged assets, and the possible inability of
counterparties to meet the terms of their contracts.
(f) OPTION TRANSACTIONS
For hedging purposes, the Funds may purchase and write (sell) put and call
options on municipal bonds, U.S. government securities, swap agreements, indexes
or futures contracts which are standardized and traded on a U.S. or other
exchange, boards of trade, or similar entity, or quoted on an automated
quotation system. The risk associated with purchasing an option is that the
Funds pay a premium whether or not the option is exercised. Additionally, the
Funds bear the risk of loss of premium and change in market value should the
counterparty not perform under the contract. Put and call options purchased are
accounted for in the same manner as portfolio securities. The cost of securities
acquired through the exercise of call options is increased by the premiums paid.
The proceeds from the securities sold through the exercise of put options is
decreased by the premiums paid.
When an option is written, the premium received is recorded as an asset with an
equal liability which is subsequently adjusted to the current market value of
the option written. Premiums received from writing options which expire
unexercised are recorded on the expiration date as a realized gain. The
difference between the premium received and the amount paid on effecting a
closing purchase transaction, including brokerage commissions, is also treated
as a realized gain, or if the premium is less than the amount paid for the
closing purchase transactions, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security in determining whether there has been a realized gain or loss. If a put
option is exercised, the premium reduces the cost basis of the security. In
writing an option, the Funds bear the market risk of an unfavorable change in
the price of the security underlying the written option. Exercise of an option
written could result in the Funds purchasing a security at a price different
from the current market price.
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 29
PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
November 30, 2003 (unaudited)
================================================================================
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED)
(g) RESIDUAL INTEREST MUNICIPAL BONDS (RIBS)
The Funds invest in Residual Interest Municipal Bond ("RIBS") whose interest
rates bear an inverse relationship to the interest rate on another security or
the value of an index, RIBS are created by dividing the income stream provided
by the underlying bonds to create two securities, one short-term and one
long-term. The interest rate on the short-term component is reset by an index or
auction process normally every seven to 35 days. After income is paid on the
short-term securities at current rates, the residual income from the underlying
bond(s) goes to the long-term securities. Therefore, rising short-term interest
rates result in lower income for the longer-term portion, and vice versa. The
longer-term bonds may be more volatile and less liquid than other Municipal
Bonds of comparable maturity. An investment in RIBS typically will involve
greater risk than an investment in a fixed rate bond.
(h) CUSTODY CREDITS EARNED ON CASH BALANCES
The Funds benefit from an expense offset arrangement with their custodian bank
whereby uninvested cash balances earn credits which reduce monthly custodian and
accounting agent expenses. Had these cash balances been invested in income
producing securities, they would have generated income for the Funds.
2. INVESTMENT MANAGER AND SUB-ADVISER
Each Fund has entered into an Investment Management Agreement (the "Agreements")
with the Investment Manager to serve as Investment Manager to each Fund. Subject
to the supervision by each Fund's Board of Trustees, the Investment Manager is
responsible for managing, either directly or through others selected by it, the
investment activities of the Fund and the Fund's business affairs and other
administrative matters. Pursuant to the Agreements, the Investment Manager will
receive an annual fee, payable monthly, at the annual rate of 0.65% of each
Fund's average daily net assets (including net assets attributable to any
preferred shares that may be outstanding). In order to reduce Fund expenses, the
Investment Manager has contractually agreed to reimburse each Fund for fees and
expenses at the annual rate of 0.15% of each Fund's average daily net assets
(including net assets attributable to any preferred shares that may be
outstanding) from the commencement of operations through June 30, 2007, and for
a declining amount thereafter through June 30, 2009.
The Investment Manager has retained its affiliate, Pacific Investment Management
Company LLC (the "Sub-Adviser") to manage each Fund's investments. Subject to
the supervision of the Investment Manager, the Sub-Adviser makes all investment
decisions with respect to each Fund's assets. The Investment Manager (not the
Funds) pays a portion of the fees it receives to the Sub-Adviser in return for
its services, at the maximum annual rate of 0.50% of each Fund's average daily
net assets (including net assets attributable to any preferred shares that may
be outstanding). The Sub-Adviser has contractually agreed to waive a portion of
the fees it is entitled to receive from the Investment Manager, such that the
Sub-Adviser will receive 0.26% of each Fund's average daily net assets
(including net assets attributable to any preferred shares that may be
outstanding) from the commencement of the Funds' operations through June 30,
2007, and will receive an increasing amount (not to exceed 0.50% of each Fund's
average daily net assets, including net assets attributable to any preferred
shares that may be outstanding) thereafter through June 30, 2009. The Investment
Manager informed the Funds that it paid the Sub-Adviser $1,720,139, $876,500 and
$303,452 in connection with sub-advisory services for Municipal II, California
Municipal II and New York Municipal II, respectively, for the six months ended
November 30, 2003.
30 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
November 30, 2003 (unaudited)
================================================================================
3. INVESTMENTS IN SECURITIES
(a) For the six months ended November 30, 2003, purchases and sales of
investments, other than short-term securities, were:
California New York
Municipal II Municipal II Municipal II
----------------------------------------------------------------------------------------------------
Purchases $115,985,163 $ 79,588,948 $15,508,417
Sales 160,284,192 133,200,334 16,202,585
(b) Futures contracts outstanding at November 30, 2003 were:
# of Expiration Unrealized
Fund Type Contracts Date Depreciation
----------------------------------------------------------------------------------------------------
Municipal II Short: U.S. Treasury 30 Year Bond 5,198 12/19/03 $7,701,938
California Municipal II Short: U.S. Treasury 30 Year Bond 2,186 12/19/03 $4,058,126
New York Municipal II Short: U.S. Treasury 30 Year Bond 469 12/19/03 $969,906
(c) Transactions in options written for the six months ended November 30, 2003
were:
Contracts Premiums
----------------------------------------------------------------------------------------------------
MUNICIPAL II:
Options outstanding, May 31, 2003 2,587 $ 2,227,143
-------- -----------
Options written 10,636 9,334,018
-------- -----------
Options expired (3,495) (2,494,144)
-------- -----------
Options terminated in closing purchase transactions (4,844) (4,877,554)
-------- -----------
Options exercised (4,884) (4,189,463)
-------- -----------
Options outstanding, November 30, 2003 -- $0
======== ===========
CALIFORNIA MUNICIPAL II:
Options outstanding, May 31, 2003 947 $ 743,511
-------- -----------
Options written 5,300 4,129,446
-------- -----------
Options expired (1,473) (1,074,320)
-------- -----------
Options terminated in closing purchase transactions (2,722) (2,764,136)
-------- -----------
Options exercised (2,052) (1,034,501)
-------- -----------
Options outstanding, November 30, 2003 -- $0
======== ===========
NEW YORK MUNICIPAL II:
Options outstanding, May 31, 2003 507 453,255
-------- -----------
Options written 1,058 1,004,283
-------- -----------
Options expired (335) (355,962)
-------- -----------
Options terminated in closing purchase transactions (682) (606,443)
-------- -----------
Options exercised (548) (495,133)
-------- -----------
Options outstanding, November 30, 2003 -- $0
======== ===========
4. AUCTION PREFERRED SHARES
Municipal II has issued 4,040 shares of Preferred Shares Series A, 4,040 shares
of Preferred Shares Series B, 4,040 shares of Preferred Shares Series C, 4,040
shares of Preferred Shares Series D and 4,040 shares of Preferred Shares Series
E, each with a net asset and liquidation value of $25,000 per share plus accrued
dividends.
California Municipal II has issued 2,080 shares of Preferred Shares Series A,
2,080 shares of Preferred Shares Series B, 2,080 shares of Preferred Shares
Series C, 2,080 shares of Preferred Shares Series D and 2,080 shares of
Preferred Shares
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 31
PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
November 30, 2003 (unaudited)
================================================================================
4. AUCTION PREFERRED SHARES (CONCLUDED)
Series E, each with a net asset and liquidation value of $25,000 per share plus
accrued dividends.
New York Municipal II has issued 1,800 shares of Preferred Shares Series A and
1,800 shares of Preferred Shares Series B, each with a net asset and liquidation
value of $25,000 per share, plus accrued dividends.
Dividends are accumulated daily at an annual rate set through auction
procedures. Distributions of net realized capital gains, if any, are paid
annually.
For the six months ended November 30, 2003, the annualized dividend rates ranged
from:
High Low At 11/30/03
--------------------------------------------------------------------------------
MUNICIPAL II:
Series A 1.15% 0.70% 1.00%
Series B 1.10% 0.70% 1.00%
Series C 1.10% 0.65% 1.05%
Series D 1.10% 0.60% 1.05%
Series E 1.10% 0.64% 1.00%
CALIFORNIA MUNICIPAL II:
Series A 0.90% 0.39% 0.45%
Series B 1.00% 0.40% 0.95%
Series C 1.00% 0.40% 1.00%
Series D 1.05% 0.40% 1.00%
Series E 1.05% 0.40% 0.95%
NEW YORK MUNICIPAL II:
Series A 1.15% 0.40% 0.40%
Series B 1.15% 0.65% 0.82%
The Funds are subject to certain limitations and restrictions while Preferred
Shares are outstanding. Failure to comply with these limitations and
restrictions could preclude the Funds from declaring any dividends or
distributions to common shareholders or repurchasing common shares and/or could
trigger the mandatory redemption of Preferred Shares at their liquidation value.
Preferred Shares, which are entitled to one vote per share, generally vote with
the common stock but vote separately as a class to elect two Trustees and on any
matters affecting the rights of the Preferred Shares.
5. SUBSEQUENT COMMON DIVIDEND DECLARATIONS
On December 1, 2003, the following dividends were declared to common
shareholders payable December 31, 2003 to shareholders of record on December 12,
2003:
Municipal II $0.084375 per common share
California Municipal II $0.08125 per common share
New York Municipal II $0.08125 per common share
On January 2, 2004, the following dividends were declared to common shareholders
payable February 2, 2004 to shareholders of record on January 16, 2004:
Municipal II $0.084375 per common share
California Municipal II $0.08125 per common share
New York Municipal II $0.08125 per common share
32 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
PIMCO MUNICIPAL INCOME FUNDS II FINANCIAL HIGHLIGHTS
For a share of common stock outstanding throughout each period
MUNICIPAL II
---------------------------
Six Months For the period
ended June 28,
November 30, 2002*
2003 through
(unaudited) May 31, 2003
------------ --------------
Net asset value, beginning of period $14.66 $14.33**
---------------------------------------------------- ------------ --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.59 0.93
---------------------------------------------------- ------------ --------------
Net realized and unrealized gain (loss) on
investments, futures contracts and options written (0.11) 0.53
---------------------------------------------------- ------------ --------------
Total from investment operations 0.48 1.46
---------------------------------------------------- ------------ --------------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income (0.04) (0.08)
---------------------------------------------------- ------------ --------------
Net realized gains -- (0.01)
---------------------------------------------------- ------------ --------------
Total dividends and distributions on
preferred shares (0.04) (0.09)
---------------------------------------------------- ------------ --------------
Net increase in net assets applicable to common
shareholders resulting from investment operations 0.44 1.37
---------------------------------------------------- ------------ --------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON
SHAREHOLDERS FROM:
Net investment income (0.46) (0.84)
---------------------------------------------------- ------------ --------------
Net realized gains -- (0.09)
---------------------------------------------------- ------------ --------------
Total dividends and distributions to
common shareholders (0.46) (0.93)
---------------------------------------------------- ------------ --------------
CAPITAL SHARE TRANSACTIONS:
Common stock offering costs charged to paid-in
capital in excess of par -- (0.02)
---------------------------------------------------- ------------ --------------
Preferred shares offering costs/underwriting
discounts charged to paid-in capital in
excess of par -- (0.09)
---------------------------------------------------- ------------ --------------
Total capital share transactions -- (0.11)
---------------------------------------------------- ------------ --------------
Net asset value, end of period $14.64 $14.66
---------------------------------------------------- ------------ --------------
Market price, end of period $13.82 $14.80
---------------------------------------------------- ------------ --------------
TOTAL INVESTMENT RETURN (1) (3.48)% 5.19%
---------------------------------------------------- ------------ --------------
RATIOS/SUPPLEMENTAL DATA:
Net assets applicable to common shareholders,
end of period (000) $847,902 $846,885
---------------------------------------------------- ------------ --------------
Ratio of expenses to average net assets (2)(3)(4)(5) 1.05% 0.95%
---------------------------------------------------- ------------ --------------
Ratio of net investment income to average net
assets (2)(4)(5) 8.33% 6.99%
---------------------------------------------------- ------------ --------------
Preferred shares asset coverage per share $66,970 $66,920
---------------------------------------------------- ------------ --------------
Portfolio turnover 10% 27%
---------------------------------------------------- ------------ --------------
* Commencement of operations
** Initial public offering price of $15.00 per share less underwriting discount
of $0.675 per share.
(1) Total investment return is calculated assuming a purchase of common stock at
the current market price on the first day of each period and a sale at the
current market price on the last day for each period reported. Dividends and
distributions are assumed, for purposes of this calculation, to be
reinvested at prices obtained under the Fund's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions or sales
charges. Total investment return for a period of less than one year is not
annualized.
(2) Calculated on the basis of income and expenses applicable to both common and
preferred shares relative to the average net assets of common shareholders.
(3) Inclusive of expenses offset by custody credits earned on cash balances at
the custodian bank. (See note 1(h) in Notes to Financial Statements).
(4) Annualized.
(5) During the periods indicated above, the Investment Manager waived a portion
of its investment management fee. If such waiver had not been in effect, the
ratio of expenses to average net assets and the ratio of net investment
income to average net assets would have been 1.29% (annualized) and 8.09%
(annualized), respectively for the six months ended November 30, 2003 and
1.18% (annualized) and 6.76% (annualized), respectively for the period June
28, 2002 (commencement of operations) through May 31, 2003.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
| 11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 33
PIMCO MUNICIPAL INCOME FUNDS II FINANCIAL HIGHLIGHTS
For a share of common stock outstanding throughout each period
CALIFORNIA MUNICIPAL II
---------------------------
Six Months For the period
ended June 28,
November 30, 2002*
2003 through
(unaudited) May 31, 2003
------------ --------------
Net asset value, beginning of period $14.66 $14.33**
---------------------------------------------------- ------------ --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.59 0.87
---------------------------------------------------- ------------ --------------
Net realized and unrealized gain (loss) on
investments, futures contracts and options written (0.57) 0.46
---------------------------------------------------- ------------ --------------
Total from investment operations 0.02 1.33
---------------------------------------------------- ------------ --------------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income (0.03) (0.07)
---------------------------------------------------- ------------ --------------
Net realized gains -- --
---------------------------------------------------- ------------ --------------
Total dividends and distributions on
preferred shares (0.03) (0.07)
---------------------------------------------------- ------------ --------------
Net increase (decrease) in net assets applicable
to common shareholders resulting from
investment operations (0.01) 1.26
---------------------------------------------------- ------------ --------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income (0.45) (0.81)
---------------------------------------------------- ------------ --------------
Net realized gains -- --
---------------------------------------------------- ------------ --------------
Total dividends and distributions to
common shareholders (0.45) (0.81)
---------------------------------------------------- ------------ --------------
CAPITAL SHARE TRANSACTIONS:
---------------------------------------------------- ------------ --------------
Common stock offering costs charged to paid-in
capital in excess of par -- (0.02)
---------------------------------------------------- ------------ --------------
Preferred shares offering costs/underwriting
discounts charged to paid-in capital in
excess of par -- (0.10)
---------------------------------------------------- ------------ --------------
Total capital share transactions -- (0.12)
---------------------------------------------------- ------------ --------------
Net asset value, end of period $14.20 $14.66
---------------------------------------------------- ------------ --------------
Market price, end of period $13.79 $14.78
---------------------------------------------------- ------------ --------------
TOTAL INVESTMENT RETURN (1) (3.61)% 4.23%
---------------------------------------------------- ------------ --------------
RATIOS/SUPPLEMENTAL DATA:
Net assets applicable to common shareholders,
end of period (000) $427,541 $439,970
---------------------------------------------------- ------------ --------------
Ratio of expenses to average net assets (2)(3)(4)(5) 1.08% 0.97%
---------------------------------------------------- ------------ --------------
Ratio of net investment income to average net
assets (2)(4)(5) 8.58% 6.56%
---------------------------------------------------- ------------ --------------
Preferred shares asset coverage per share $66,105 $67,301
---------------------------------------------------- ------------ --------------
Portfolio turnover 11% 84%
---------------------------------------------------- ------------ --------------
* Commencement of operations
** Initial public offering price of $15.00 per share less underwriting discount
of $0.675 per share.
(1) Total investment return is calculated assuming a purchase of common stock at
the current market price on the first day of each period and a sale at the
current market price on the last day for each period reported. Dividends and
distributions are assumed, for purposes of this calculation, to be
reinvested at prices obtained under the Fund's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions or sales
charges. Total investment return for a period of less than one year is not
annualized.
(2) Calculated on the basis of income and expenses applicable to both common and
preferred shares relative to the average net assets of common shareholders.
(3) Inclusive of expenses offset by custody credits earned on cash balances at
the custodian bank. (See note 1(h) in Notes to Financial Statements).
(4) Annualized.
(5) During the periods indicated above, the Investment Manager waived a portion
of its investment management fee. If such waiver had not been in effect, the
ratio of expenses to average net assets and the ratio of net investment
income to average net assets would have been 1.32% (annualized) and 8.34%
(annualized), respectively for the six months ended November 30, 2003 and
1.20% (annualized) and 6.34% (annualized), respectively for the period June
28, 2002 (commencement of operations) through May 31, 2003.
34 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
| SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
PIMCO MUNICIPAL INCOME FUNDS II FINANCIAL HIGHLIGHTS
For a share of common stock outstanding throughout each period
================================================================================
NEW YORK MUNICIPAL II
---------------------------
Six Months For the period
ended June 28,
November 30, 2002*
2003 through
(unaudited) May 31, 2003
------------ --------------
Net asset value, beginning of period $14.45 $14.33**
---------------------------------------------------- ------------ --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.48 0.86
---------------------------------------------------- ------------ --------------
Net realized and unrealized gain (loss) on
investments, futures contracts and
options written (0.10) 0.28
---------------------------------------------------- ------------ --------------
Total from investment operations 0.38 1.14
---------------------------------------------------- ------------ --------------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income (0.03) (0.08)
---------------------------------------------------- ------------ --------------
Net realized gains -- --
---------------------------------------------------- ------------ --------------
Total dividends and distributions on preferred shares (0.03) (0.08)
---------------------------------------------------- ------------ --------------
Net increase in net assets applicable to common
shareholders resulting from investment operations 0.35 1.06
---------------------------------------------------- ------------ --------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON
SHAREHOLDERS FROM:
Net investment income (0.45) (0.81)
---------------------------------------------------- ------------ --------------
Net realized gains --
---------------------------------------------------- ------------ --------------
Total dividends and distributions to
common shareholders (0.45) (0.81)
---------------------------------------------------- ------------ --------------
CAPITAL SHARE TRANSACTIONS:
Common stock offering costs charged to paid-in
capital in excess of par -- (0.03)
---------------------------------------------------- ------------ --------------
Preferred shares offering costs/underwriting
discounts charged to paid-in capital in
excess of par -- (0.10)
---------------------------------------------------- ------------ --------------
Total capital share transactions -- (0.13)
---------------------------------------------------- ------------ --------------
Net asset value, end of period $14.35 $14.45
---------------------------------------------------- ------------ --------------
Market price, end of period $13.89 $14.71
---------------------------------------------------- ------------ --------------
TOTAL INVESTMENT RETURN (1) (2.48)% 3.76%
---------------------------------------------------- ------------ --------------
RATIOS/SUPPLEMENTAL DATA:
Net assets applicable to common shareholders,
end of period (000) $149,178 $149,606
---------------------------------------------------- ------------ --------------
Ratio of expenses to average net assets (2)(3)(4)(5) 1.17% 1.02%
---------------------------------------------------- ------------ --------------
Ratio of net investment income to average
net assets (2)(4)(5) 7.79% 6.47%
---------------------------------------------------- ------------ --------------
Preferred shares asset coverage per share $66,435 $66,552
---------------------------------------------------- ------------ --------------
Portfolio turnover 7% 27%
---------------------------------------------------- ------------ --------------
* Commencement of operations
** Initial public offering price of $15.00 per share less underwriting discount
of $0.675 per share.
(1) Total investment return is calculated assuming a purchase of common stock at
the current market price on the first day of each period and a sale at the
current market price on the last day for each period reported. Dividends and
distributions are assumed, for purposes of this calculation, to be
reinvested at prices obtained under the Fund's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions or sales
charges. Total investment return for a period of less than one year is not
annualized.
(2) Calculated on the basis of income and expenses applicable to both common and
preferred shares relative to the average net assets of common shareholders.
(3) Inclusive of expenses offset by custody credits earned on cash balances at
the custodian bank. (See note 1(h) in Notes to Financial Statements).
(4) Annualized.
(5) During the periods indicated above, the Investment Manager waived a portion
of its investment management fee. If such waiver had not been in effect, the
ratio of expenses to average net assets and the ratio of net investment
income to average net assets would have been 1.41% (annualized) and 7.55%
(annualized), respectively for the six months ended November 30, 2003, and
1.25% (annualized) and 6.25% (annualized), respectively for the period June
28, 2002 (commencement of operations) through May 31, 2003.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS |
11.30.03 | PIMCO Municipal Income Funds II Semi-Annual Report 35
PIMCO MUNICIPAL INCOME FUNDS II ANNUAL SHAREHOLDER MEETINGS
================================================================================
The Funds held their annual meetings of shareholders on September 16, 2003.
Common/Preferred shareholders voted to re-elect Stephen J. Treadway as a Class
III Trustee to serve until 2005 and Robert E. Connor as a Class I Trustee to
serve until 2006. Preferred shareholders voted to re-elect Hans W. Kertess as a
Class I Trustee to serve until 2006.
The resulting vote count is indicated below:
Withhold
Affirmative Authority
--------------------------------------------------------------------------------
MUNICIPAL II:
Election of Stephen J. Treadway 52,204,988 454,567
Election of Robert E. Connor 52,187,392 472,163
Election of Hans W. Kertess* 19,619 44
CALIFORNIA MUNICIPAL II:
Election of Stephen J. Treadway 26,106,145 253,369
Election of Robert E. Connor 26,097,270 262,244
Election of Hans W. Kertess* 8,214 7
NEW YORK MUNICIPAL II:
Election of Stephen J. Treadway 9,598,415 103,912
Election of Robert E. Connor 9,595,941 106,386
Election of Hans W. Kertess* 3,340 13
Paul Belica, John J. Dalessandro II*, and R. Peter Sullivan continue to serve as
Trustees of the Funds.
----------
* Preferred Stock Trustee
36 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.03
TRUSTEES AND PRINCIPAL OFFICERS
Stephen Treadway
Trustee, Chairman, Chairman of the Board
Paul Belica
Trustee
Robert E. Connor
Trustee
John J. Dalessandro II
Trustee
Hans W. Kertess
Trustee
R. Peter Sullivan, III
Trustee
Brian S. Shlissel
President & Chief Executive Officer
Newton B. Schott, Jr.
Vice President & Secretary
Mark V. McCray
Vice President
Lawrence G. Altadonna
Treasurer, Principal Financial & Accounting Officer
INVESTMENT MANAGER
PIMCO Advisors Fund Management LLC
1345 Avenue of the Americas
New York, NY 10105
SUB-ADVISER
Pacific Investment Management Company LLC
840 Newport Center Drive
Newport Beach, CA 92660
TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR
PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02210-2624
This report, including the financial information herein, is transmitted to the
shareholders of PIMCO Municipal Income Fund II, PIMCO California Municipal
Income Fund II and PIMCO New York Municipal Income Fund II for their
information. It is not a prospectus, circular or representation intended for use
in the purchase of shares of the Funds or any securities mentioned in this
report.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that from time to time each Fund may purchase
shares of its common stock in the open market.
The financial information included herein is taken from the records of each Fund
without examination by independent auditors, who did not express an opinion
hereon.
Daily information on the Funds is available at www.pimcoadvisors.com or by
calling 1-800-331-1710.
[PIMCO ADVISORS LOGO]
-14-
ITEM 2. CODE OF ETHICS Not required in this filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT Not required in this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES Disclosure requirement not
currently effective
ITEM 5. [RESERVED]
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES Not required in this filing.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES
(a) The registrant's President and Chief Executive Officer and Principal
Financial Officer have concluded that the registrant's disclosure controls
and procedures (as defined in Rule 30a-2(c) under the Investment Company
Act of 1940, as amended are effective based on their evaluation of these
controls and procedures as of a date within 90 days of the filing date of
this document.
(b) There were no significant changes in the registrant's internal controls or
in factors that could affect these controls subsequent to the date of
their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS
(a) Exhibit 99.Cert. - Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
(b) Exhibit 99.906 Cert. - Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) PIMCO Municipal Income Fund II
------------------------------
By /s/ Brian S. Shlissel
------------------------
President and Chief Executive Officer
Date February 6, 2004
---------------------
By /s/ Lawrence G. Altadonna
----------------------------
Treasurer, Principal Financial & Accounting Officer
Date February 6, 2004
---------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ Brian S. Shlissel
------------------------
President and Chief Executive Officer
Date February 6, 2004
---------------------
By /s/ Lawrence G. Altadonna
----------------------------
Treasurer, Principal Financial & Accounting Officer
Date February 6, 2004
---------------------