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 811-10379
---------
PIMCO California Municipal Income Fund
--------------------------------------
(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)
Brian S. Shlissel - 1345 Avenue of the Americas, New York, New York 10105
-------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-739-3369
-------------
Date of fiscal year end: April 30
--------
Date of reporting period: April 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
ANNUAL REPORT
4.30.03
PIMCO MUNICIPAL INCOME FUND
PIMCO CALIFORNIA MUNICIPAL INCOME FUND
PIMCO NEW YORK MUNICIPAL INCOME FUND
--------------------------------------------------------------------------------
[THE NEW YORK STOCK EXCHANGE PMF GRAPHIC OMITTED]
[THE NEW YORK STOCK EXCHANGE PCQ GRAPHIC OMITTED]
[THE NEW YORK STOCK EXCHANGE PNF GRAPHIC OMITTED]
CONTENTS
Letter to Shareholders .................................................3
Performance and Statistics ...........................................4-6
Schedules of Investments ............................................7-19
Statements of Assets and Liabilities ..................................20
Statements of Operations ..............................................21
Statements of Changes in Net Assets ................................22-23
Notes to Financial Statements ......................................24-29
Financial Highlights ...............................................30-31
Report of Independent Auditors ........................................32
Tax Information .......................................................33
Dividend Reinvestment Plan ............................................34
Board of Trustees .....................................................35
Privacy Policy ........................................................36
[PIMCO ADVISORS LOGO OMITTED]
PIMCO MUNICIPAL INCOME FUNDS LETTER TO SHAREHOLDERS
June 12, 2003
Dear Shareholder:
We are pleased to provide you with the annual report of PIMCO Municipal Income
Fund, PIMCO California Municipal Income Fund, and PIMCO New York Municipal
Income Fund ("PIMCO Municipal Income Funds" or the "Funds") for the fiscal year
ended April 30, 2003.
Please refer to the following pages for specific information for each of the
PIMCO Municipal Income 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 Treadwary /s/ Brian S. Shlissel
Stephen Treadway Brian S. Shlissel
Chairman President, Chief Executive Officer
04.30.03 | PIMCO Municipal Income Funds Annual Report 3
PIMCO MUNICIPAL INCOME FUND PERFORMANCE SUMMARY AND STATISTICS (UNAUDITED)
SYMBOL: PRIMARY INVESTMENTS: FUND INCEPTION DATE:
PMF Municipal fixed-income June 26, 2001
securities, the interest from
OBJECTIVE: which is exempt from federal TOTAL NET ASSETS(1):
PIMCO Municipal Income income tax. $537.7 million (at
Fund seeks to provide 4/30/03)
income exempt from
federal income tax. PORTFOLIO MANAGER:
Mark McCray
TOTAL RETURN (2): Market Price NAV
-------------------------------------------------------------------------------------------------------
1 Year 3.80% 5.87%
Commencement of Operations (6/26/01) to 4/30/03 3.73% 5.58%
COMMON SHARE PRICE PERFORMANCE (WEEKLY): PORTFOLIO STATISTICS:
For the period 6/26/01 - 4/30/03 ----------------------------------------------
Municipal Income Fund at Market Price Market Price $14.22
Municipal Income Fund at NAV ----------------------------------------------
Net Asset Value $14.03
----------------------------------------------
Market Price Yield(3) 6.85%
----------------------------------------------
[GRAPHIC OMITTED]
6/26/2001 15 14.32
15.1 14.31
15 14.32
15.04 14.42
15.01 14.57
15.05 14.59
15.15 14.69
15.16 14.82
15.58 14.97
15.34 14.84
15.08 14.99
15.05 14.9
15.06 14.94
14.4 14.48
14.98 14.57
15.05 14.87
14.96 14.65
14.88 14.69
14.84 14.64
14.95 14.92
14.93 15.08
14.93 14.54
14.9 14.37
15 14.45
14.75 13.98
14.99 13.92
14.2 13.96
13.87 13.97
14.6 14.05
14.48 14.38
14.72 14.44
14.67 14.23
14.86 14.32
14.95 14.41
14.96 14.35
14.83 14.53
14.92 14.48
14.7 14.09
14.76 13.97
14.44 13.89
14.3 13.91
14.47 14.1
14.45 14.2
14.28 14.06
14.6 14.22
14.6 14.29
14.63 14.13
14.64 13.97
14.65 14.17
14.79 14.29
14.88 14.36
14.85 14.44
14.8 14.45
14.75 14.42
14.95 14.49
14.98 14.48
15.1 14.57
14.94 14.66
15.02 14.54
15.06 14.54
15.05 14.5
14.92 14.43
14.96 14.51
15.04 14.74
15 14.68
15 14.83
15.11 14.83
15.11 14.91
14.99 14.75
14.69 14.18
14.14 14.1
14.79 14.25
14.72 14.45
14.5 14.29
14.22 14.16
14.18 14.13
14.21 14.29
14.25 14.27
14.33 14.35
14.23 14.35
14.45 14.38
14.28 14.29
14.4 14.18
14.22 14.26
14.25 14.24
14.49 14.25
14.25 14.29
14.35 14.33
14.3 14.35
14.48 14.45
14.56 14.42
14.13 14.17
14.45 14.22
14.33 13.77
14.18 13.76
14.2 13.99
14.21 14.01
4/30/2003 14.22 14.03
(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 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 by the Fund 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.
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 current annualized per
share dividend to common shareholders by the market price per common share.
4 PIMCO Municipal Income Funds Annual Report | 04.30.03
PIMCO CALIFORNIA MUNICIPAL INCOME FUND PERFORMANCE SUMMARY AND STATISTICS
(UNAUDITED)
SYMBOL: PRIMARY INVESTMENTS: INCEPTION DATE:
PCQ Municipal fixed-income June 26, 2001
securities, the interest
OBJECTIVE: from which is exempt from TOTAL NET ASSETS(1):
PIMCO California Municipal federal and California State $401.8 million (at 4/30/03)
Income Fund seeks to provide income tax.
current income exempt from PORTFOLIO MANAGER:
federal and California State Mark McCray
income tax.
TOTAL RETURN(2): Market Price NAV
---------------------------------------------------------------------------------------------------
1 Year 2.64% 8.00%
Commencement of Operations (6/26/01) to 4/30/03 2.98% 5.65%
COMMON SHARE PRICE PERFORMANCE (WEEKLY): PORTFOLIO STATISTICS:
For the period 6/26/01 - 4/30/03 -----------------------------------
California Municipal Income Fund at Market Price Market Price $14.15
California Municipal Income Fund at NAV -----------------------------------
Net Asset Value $14.17
-----------------------------------
Market Price Yield(3) 6.55%
-----------------------------------
[GRAPHIC OMITTED]
6/26/2001 15 14.32
15.1 14.3
15.03 14.29
15.01 14.36
15.03 14.46
15.09 14.46
15.34 14.51
15.25 14.65
15.88 14.84
15.5 14.78
15.33 14.9
15.31 14.87
15.31 14.94
14.95 14.52
15 14.67
15.11 14.9
15.1 14.76
15.31 14.77
15.23 14.76
15.35 14.92
15.6 15.09
15.09 14.7
15 14.53
15.39 14.49
15.1 14.07
15.09 13.99
14.6 13.96
14.7 14.01
14.86 14.06
15.02 14.35
15.06 14.36
15.05 14.22
15.02 14.28
15.18 14.35
15.28 14.31
15.06 14.4
15.2 14.36
15.2 14
14.9 13.83
14.7 13.65
14.5 13.63
14.44 13.85
14.36 13.98
14.68 13.86
14.95 14.03
14.9 14.09
14.97 13.96
14.7 13.81
14.57 13.96
14.9 14.07
14.76 14.15
14.75 14.2
14.82 14.21
14.85 14.24
14.96 14.34
14.85 14.38
14.78 14.41
14.89 14.49
15 14.32
15.02 14.32
15.13 14.28
15.05 14.23
15.2 14.34
15.14 14.57
15.35 14.64
15.1 14.78
15.05 14.84
15.06 14.83
14.95 14.64
14.84 13.97
14.7 13.9
14.75 14.14
15.01 14.3
14.8 14.14
14.8 14.01
14.79 14
14.46 14.16
14.28 14.14
14.09 14.15
14.05 14.18
14.5 14.18
14.2 14.07
14.13 13.97
14.11 13.99
14.14 13.96
14.11 13.99
14.02 14.01
14 14.07
14.03 14.18
14.06 14.29
13.94 14.25
13.74 13.95
13.98 14.13
13.96 14.03
14.11 13.97
14.14 14.11
14.1 14.14
4/30/2003 14.15 14.17
(1) Inclusive of net assets to attributable 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 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 by the Fund 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.
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 current annualized per
share dividend to common shareholders by the market price per common share.
04.30.03 | PIMCO Municipal Income Funds Annual Report 5
PIMCO NEW YORK MUNICIPAL INCOME FUND PERFORMANCE SUMMARY AND STATISTICS
(UNAUDITED)
SYMBOL: PRIMARY INVESTMENTS: INCEPTION DATE:
PNF Municipal fixed-income June 26, 2001
securities, the interest
OBJECTIVE: from which is exempt from TOTAL NET ASSETS(1):
PIMCO New York Municipal federal, New York State and $161.2 million (at 4/30/03)
Income Fund seeks to provide New York City income tax.
current income exempt from PORTFOLIO MANAGER:
federal, New York State and Mark McCray
New York City income tax.
TOTAL RETURN(2): Market Price NAV
------------------------------------------------------------------------------------------
1 Year 1.82% 3.37%
Commencement of Operations (6/26/01) to 4/30/03 0.80% 3.07%
COMMON SHARE PRICE PERFORMANCE (WEEKLY): PORTFOLIO STATISTICS:
For the period 6/26/01 - 4/30/03 ---------------------------------
New York Municipal Income Fund at Market Price Market Price $13.55
New York Municipal Income Fund at NAV ---------------------------------
Net Asset Value $13.49
---------------------------------
Market Yield Price(3) 6.64%
---------------------------------
[GRAPHIC OMITTED]
6/26/2001 15 14.32
15 14.3
15.09 14.33
15.1 14.38
15.07 14.46
15.01 14.55
15.06 14.59
15.2 14.67
15.4 14.81
15.4 14.73
15.18 14.79
15.33 14.71
15.25 14.74
14.25 14.27
14.89 14.31
14.9 14.57
14.81 14.39
14.7 14.36
14.75 14.25
14.83 14.56
15.12 14.8
14.96 14.19
14.88 13.97
14.7 14.11
14.62 13.58
14.6 13.54
13.7 13.53
13.7 13.51
13.95 13.61
14.44 14.02
14.76 14.13
14.8 13.89
14.73 13.98
14.73 14.14
14.8 14.1
14.7 14.33
14.77 14.28
14.55 13.87
14.5 13.64
13.93 13.58
14.17 13.6
14.18 13.81
14.25 13.92
14.31 13.78
14.27 13.94
14.37 13.96
14.34 13.78
14 13.55
13.96 13.71
14.1 13.85
14.33 13.9
14.31 13.99
14.32 13.98
14.27 13.93
14.44 14.02
14.9 14.02
14.7 14.11
14.58 14.17
15 14.06
14.8 14.05
14.75 14.03
14.67 13.97
14.67 14.05
14.7 14.28
14.63 14.24
14.55 14.39
14.66 14.46
14.75 14.5
14.6 14.33
14.18 13.73
14.12 13.67
14.37 13.86
14.34 14.05
13.93 13.9
14.18 13.75
14.05 13.72
13.89 13.94
13.69 13.96
13.63 14.03
13.5 14.12
13.95 14.15
13.8 13.92
13.8 13.86
13.42 13.84
13.5 13.86
13.51 13.88
13.48 13.92
13.51 13.94
13.5 13.97
13.68 14.04
13.46 14.07
13.23 13.75
13.48 13.89
13.5 13.31
13.42 13.22
13.38 13.46
13.46 13.48
4/30/2003 13.55 13.49
(1)Inclusive of net assets 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 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 by the Fund 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.
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 current annualized per
share dividend to common shareholders by the market price per common share.
6 PIMCO Municipal Income Funds Annual Report | 04.30.03
PIMCO MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
MUNICIPAL BONDS & NOTES-87.2%
ALABAMA--2.0%
$ 2,500 Birmingham Baptist Med. Ctr., Baptist Health Syst., Ser. A,
5.875%, 11/15/24 A3/NR $ 2,598,825
8,000 Huntsville Health Care Auth., Ser. A, 5.75%, 6/1/31 A2/NR 8,181,120
------------
10,779,945
------------
ALASKA--0.8%
6,000 Northern Tobacco Securitization Corp., 5.50%, 6/1/29 A3/A- 4,443,960
------------
ARIZONA--0.3%
2,000 Apache Cnty. Pollution Control Rev., Tucson Elec. Power Co.,
5.875%, 3/1/33 Ba3/B+ 1,806,980
------------
CALIFORNIA--1.6%
10,000 Tobacco Securitization Agcy. Rev., 6.75%, 6/1/39 A3/A- 8,846,300
------------
COLORADO--2.3%
3,000 Denver Health & Hosp. Auth. Healthcare Rev., Ser. A,
5.375%-6.00%, 12/1/23-12/1/28 Baa2/BBB+ 2,924,920
12,400 Liberty Heights Health Auth. Retirement Facs. Rev., zero coupon,
7/15/24 NR/AAA 4,212,032
4,965 Northwest Pkwy. Pub. Hwy. Auth., Ser. D, 7.125%, 6/15/41 Ba1/BB+ 5,125,072
------------
12,262,024
------------
CONNECTICUT--0.2%
1,000 State Dev. Auth. Pollution Control Rev., Conn. Light & Power,
5.85%, 9/1/28 A3/BBB 1,049,250
------------
DISTRICT OF COLUMBIA--1.1%
6,555 Tobacco Settlement Fin. Corp., 6.25%, 5/15/24 A3/A- 5,951,022
------------
FLORIDA--1.8%
9,000 Highlands Cnty. Health Fac. Auth. Rev., Adventist Health Syst.,
Ser. A, 6.00%, 11/15/31 A3/A- 9,516,960
------------
GEORGIA--2.1%
10,000 Muni Elec. Auth. Power Rev., Ser. Z, 5.50%, 1/1/20 (MBIA) Aaa/AAA 11,506,600
------------
ILLINOIS--13.6%
5,215 Champaign Cnty. School Dist., GO, 5.375%, 1/1/15-1/1/16 (FGIC) Aaa/AAA 5,983,303
10,115 Chicago Education Board GO, Ser. A, zero coupon, 12/1/31 Aaa/AAA 2,182,412
9,080 Chicago, GO, Ser. A, 5.375%, 1/1/34 (FGIC) Aaa/AAA 9,447,286
2,000 Chicago Water Rev., 5.25%, 11/1/27 (FGIC) Aaa/AAA 2,067,680
6,260 Dev. Fin. Auth. Hosp. Rev., Adventist Health Syst.,
5.50%-5.65%, 11/15/24-11/15/29 A3/A- 6,281,181
5,000 Educational Fac. Auth. Rev., Chicago Univ., Ser. A, 5.25%, 7/1/41 Aa1/AA 5,161,050
1,115 Educational Fac. Auth. Rev., Midwestern Univ., Ser. B,
5.50%, 5/15/18 NR/BBB+ 1,157,258
3,000 Health Fac. Auth. Rev., Decatur Memorial Hosp., 5.75%, 10/1/24 A2/A 3,076,140
500 Health Fac. Auth. Rev., Midwest Physician Group Ltd.,
5.50%, 11/15/19 NR/BBB- 403,305
4.30.03 PIMCO Municipal Income Funds Annual Report 7
PIMCO MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
MUNICIPAL BONDS & NOTES (CONTINUED)
ILLINOIS (CONCLUDED)
$ 5,425 Health Fac. Auth. Rev., Silver Cross Hosp., 5.50%, 8/15/25 NR/A- $ 5,428,092
5,690 Lake Cnty. High School Dist., GO, Ser. B, zero coupon,
2/1/19-2/1/22 (FGIC) Aaa/AAA 6,674,760
1,215 Northern Univ. Rev., Auxilary Fac. Syst., 5.00%, 4/1/16 (FGIC) Aaa/NR 1,299,163
7,345 Regional Transportation Auth., Ser. B, 5.50%, 6/1/23 (FGIC) Aaa/AAA 8,350,898
2,500 State, GO, 5.375%, 8/1/14 (MBIA) Aaa/AAA 2,805,650
3,000 State Sales Tax Rev., 5.125%, 6/15/20 Aa2/AAA 3,169,950
5,000 Univ. Rev., Auxiliary Fac. Syst., Ser. B, 5.25%, 4/1/32 (FGIC) Aaa/AAA 5,182,950
4,000 Winnebago Boone ETC Cntys., Rock Valley Community College,
5.30%, 10/1/18 (FGIC) Aaa/NR 4,314,360
------------
72,985,438
------------
INDIANA--1.8%
6,500 Carmel School Bldg. Corp., 5.00%, 7/15/22 (MBIA) NR/AAA 6,737,120
2,725 Richland Beanblossom School Bldg. Corp., 5.00%, 1/15/22 (FGIC) Aaa/AAA 2,815,443
------------
9,552,563
------------
KANSAS--3.9%
Wichita Hosp. Rev.,
5,000 Ser. III, 5.625%, 11/15/31 NR/A+ 5,184,600
14,370 Ser. XI, 6.25%, 11/15/24 NR/A+ 15,488,705
------------
20,673,305
------------
LOUISIANA--6.2%
10,000 Local Gov't Environmental Fac., Community Dev. Auth. Rev.,
6.55%, 9/1/25 NR/A 11,339,400
27,890 Tobacco Settlement Fin. Corp. Rev., 5.875%, 5/15/39 A3/A- 21,850,699
------------
33,190,099
------------
MARYLAND--0.7%
3,500 Baltimore Water Proj. Rev., Ser. A, 5.125%, 7/1/42 (FGIC) Aaa/AAA 3,612,070
------------
MICHIGAN--4.7%
2,000 Detroit GO, Ser. A-1, 5.375%, 4/1/15-4/1/17 (MBIA) Aaa/AAA 2,210,420
5,650 Forest Hills Pub. School, GO, 5.25%, 5/1/18 Aa2/NR 6,051,997
3,000 Mount Clemens Community School Dist., 5.00%, 5/1/31 AaaAAA 3,049,770
50 Royal Oak Hosp. Fin. Auth., William Beaumont Hosp., Ser. M,
5.25%, 11/15/35 (MBIA) Aaa/AAA 51,523
4,000 State Health Fac. Auth. Rev., Detroit Med. Ctr., 6.25%, 8/15/13 Ba1/BBB- 3,726,800
3,000 State Strategic Oblig. Rev., Detroit Edison Co., 5.45%, 9/1/29 A3/A- 3,090,750
3,000 Taylor Tax lncrement Fin. Auth., 5.375%, 5/1/17 (FSA) Aaa/AAA 3,281,850
6,265 Wayne Charter Cnty. Airport Fac. Rev., Northwest Airlines, Inc.,
6.75%, 12/1/15 NR/NR 3,887,057
------------
25,350,167
------------
8 PIMCO Municipal Income Funds Annual Report 4.30.03
PIMCO MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
MUNICIPAL BONDS & NOTES (CONTINUED)
MINNESOTA--0.6%
$ 3,000 Agricultural & Econ. Dev. Board Rev., Health Care Syst., Ser. A,
6.375%, 11/15/29 A2/A $ 3,224,040
------------
MISSOURI--0.5%
2,500 Interstate 470 & 350 Trans. Dev., Motranson Rev., 6.35%, 5/1/22 NR/NR 2,535,075
------------
NEVADA--1.5%
3,000 Clark Cnty. Airport Rev., Ser. B, 5.25%, 7/1/34 (FGIC) Aaa/AAA 3,079,830
4,250 Truckee Meadows Water Auth. Rev., Ser. A, 5.25%, 7/1/34 (FSA) Aaa/AAA 4,409,503
805 Washoe Cnty. Improvement Dist. No. 23, 6.50%, 11/1/17 NR/NR 826,188
------------
8,315,521
------------
NEW HAMPSHIRE--0.6%
3,000 State Bus. Fin. Auth. Pollution Control Rev., Conn. Light & Power
Co., 5.85%, 12/1/22 A3/BBB 3,093,900
------------
NEW JERSEY--4.0%
1,860 Camden Cnty. Improvement Auth. Rev., Cooper Health Syst.,
5.60%-6.00%, 2/15/07-2/15/27 Ba3/NR 1,728,786
3,000 Economic Dev. Auth. Rev., Arbor Glen, Ser. A, 5.875%, 5/15/16 NR/NR 2,716,890
16,550 Economic Dev. Auth. Rev., Kapkowski Landfill Proj., 5.75%, 4/1/31 Baa3/NR 16,850,217
------------
21,295,893
------------
NEW MEXICO--0.5%
2,500 Farmington Pollution Control Rev., Public Service Co.,
5.80%, 4/1/22 Baa3/BBB- 2,480,025
------------
NEW YORK--0.9%
1,700 State Dorm Auth. Rev., Sloan-Kettering Ctr., Ser. 1, 5.00%, 7/1/34 Aa2/AA 1,714,994
2,875 Westchester Cnty. Health Care Corp. Rev., Ser. A,
5.875%, 11/1/25 A3/A 3,043,389
------------
4,758,383
------------
NORTH CAROLINA--0.6%
3,000 Fin. Agy. Rev., Duke Univ. Proj., Ser. A, 5.125%, 10/1/41 Aa1/AA+ 3,075,000
------------
OHIO--1.3%
5,065 Lorain Cnty. Hosp. Rev., Catholic Healthcare Partners,
5.625%-5.75%, 10/1/17-10/1/18 A1/AA- 5,454,062
1,235 State Turnpike Rev., 5.50%, 2/15/15 Aa3/AA 1,383,978
------------
6,838,040
------------
PENNSYLVANIA--4.7%
7,280 Allegheny Cnty. Hosp. Dev. Auth. Rev., Ser. B, 9.25%, 11/15/30 B1/B+ 8,184,686
1,000 Allegheny Cnty. Indl. Dev. Auth. Rev., USX Corp., 5.60%, 9/1/30 Baa1/BBB+ 1,002,160
1,095 Allegheny Cnty. Port Auth. Rev., 5.25%, 3/1/20 (FGIC) Aaa/AAA 1,171,464
2,575 Delaware Cnty. Auth. College Rev., Neumann College,
5.80%, 10/1/17 NR/BBB- 2,608,990
1,000 Philadelphia Auth. Indl. Rev., Franklin Institute, 5.20%, 6/15/26 Baa2/NR 950,930
4.30.03 PIMCO Municipal Income Funds Annual Report 9
PIMCO MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
MUNICIPAL BONDS & NOTES (CONTINUED)
PENNSYLVANIA (CONCLUDED)
$ 4,610 Philadelphia Hosp. & Higher Education Fac. Hosp. Rev., Temple
Univ. Hosp., Ser. A, 6.625%, 11/15/23 Baa2/BBB $ 4,663,660
6,200 State Higher Educational Fac. Auth. Rev., UPMC Health Syst.,
Ser. A, 6.00%, 1/15/31 NR/A 6,450,480
------------
25,032,370
------------
RHODE ISLAND--2.8%
18,000 Tobacco Settlement Fin. Corp. Rev., Ser. A, 6.25%, 6/1/42 A3/A- 14,879,880
------------
SOUTH CAROLINA--4.1%
5,500 Greenwood Cnty. Hosp. Rev., Self Memorial Hosp.,
5.50%, 10/1/21-10/1/26 A2/A+ 5,608,665
3,000 Jobs Economic Dev. Auth. Hosp. Facs. Rev., Georgetown
Memorial Hosp., 5.375%, 2/1/30 NR/AA 3,097,470
15,600 Tobacco Settlement Rev., Ser. B, 6.375%, 5/15/30 A3/A- 13,263,432
------------
21,969,567
------------
TENNESSEE--2.5%
4,000 Knox Health Educational & Housing Fac. Rev., Baptist Health
Syst., 6.375%, 4/15/22 Baa2/NR 4,138,200
9,320 Memphis Health Educational & Housing Fac., Wesley Housing
Corp., 6.95% 1/1/20 (e) NR/NR 9,434,356
------------
13,572,556
------------
TEXAS--10.8%
5,000 Austin Convention Enterprises Inc., Ser. B, 5.75%, 1/1/32 Aa3/A+ 5,274,750
4,000 Austin Water & Wastewater Syst. Rev., Ser. A & B,
5.25%, 5/15/31 (FSA) Aaa/AAA 4,145,640
2,935 Bell Cnty. Health Fac. Dev. Corp., Buckner Retirement Fac.,
5.25%, 11/15/19 NR/A- 2,934,941
2,865 Corpus Christi Refin. & Improvement, GO, 5.375%, 3/1/18 (FSA) Aaa/AAA 3,121,160
3,680 Duncanville Indpt. School Dist., Ser. B, 5.25%, 2/15/32 Aaa/AAA 3,815,902
5,000 Harris Cnty. Health Fac. Dev. Corp., Christus Health, Ser. A,
5.375%, 7/1/29 (MBIA) Aaa/AAA 5,175,100
7,000 Harris Cnty. Health Fac. Dev. Corp., Memorial Hermann
Healthcare, 6.375%, 6/1/29 A2/A 7,504,840
1,840 Houston Water Conveyance Syst., CP., Ser. J, 6.25%, 12/15/12
(AMBAC) Aaa/AAA 2,238,121
2,000 Mansfield Indpt. School Dist., GO, 5.25%, 2/15/23 Aaa/AAA 2,094,700
4,380 Southlake Parks Dev. Corp., Sales Tax Rev., 5.60%, 8/15/31
(AMBAC) Aaa/AAA 4,648,625
4,530 State Water Financial Assistance, Ser. A, 5.30%, 8/1/18, Aa1/AA 4,887,825
4,255 University North Texas Univ. Rev., 5.00%, 4/15/34 (FSA) Aaa/AAA 4,333,462
7,450 Water Dev. Board Rev., 5.125%, 7/15/18 Aaa/AAA 7,852,524
------------
58,027,590
------------
10 PIMCO Municipal Income Funds Annual Report 4.30.03
PIMCO MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
MUNICIPAL BONDS & NOTES (CONCLUDED)
UTAH--1.3%
$ 7,000 Salt Lake Cnty. Hosp. Rev., IHC Health Services Inc., 5.125%,
2/15/33 (AMBAC) Aaa/AAA $ 7,155,820
------------
WASHINGTON--3.6%
3,120 Cowlitz Cnty. School Dist., GO, 5.625%, 12/1/14-12/1/16 (FSA)
5,000 Kent, GO, 5.375%, 12/1/20 (MBIA) Aaa/NR 3,501,005
5,420 King Cnty. School Dist., GO, Ser. A, 5.25%, 12/1/21 (MBIA) Aaa/AAA 5,370,250
4,000 Northwest Energy Elec. Rev., Ser. A, 5.50%, 7/1/13-7/1/15 Aaa/AAA 5,726,013
Aa1/AA- 4,532,720
------------
19,129,988
WISCONSIN--3.8% ------------
14,785 Badger Tobacco Asset Corp., 5.75%-6.00%, 6/1/12-6/1/17
1,070 Hortonville School Dist., GO, 5.25%, 4/1/18 (AMBAC) A3/A 13,557,617
3,515 State, GO, Ser. A, 5.00%, 5/1/22 (FGIC) Aaa/NR 1,129,492
2,230 State Health & Educational Fac. Auth. Rev., Kenosha Hosp. & Aaa/AAA 3,612,330
Med. Ctr., 5.625%, 5/15/29
NR/A 2,256,381
------------
20,555,820
Total Municipal Bonds & Notes (cost-$467,092,539) ------------
467,466,151
VARIABLE RATE NOTES (B)--10.7% ------------
HAWAII--0.7%
3,468 Honolulu City & Cnty. Wastewater Syst. Rev., Ser. 400,
8.28%, 7/1/23 (FGIC)
ILLINOIS--2.7% Aaa/NR 3,643,094
7,253 Cook Cnty. GO, Ser. 458, 8.35%, 11/15/28 (FGIC) ------------
6,900 Educational Fac. Auth. Rev., 8.62%, 7/1/26
Aaa/NR 7,497,925
NR/AA 7,201,530
------------
MASSACHUSETTS--1.1% 14,699,455
5,000 State Health & Educational Fac. Auth. Rev., 9.94%, 1/1/10 ------------
NEVADA--1.4% NR/NR 5,612,700
7,500 Clark Cnty. Passenger Fac. Change Rev., Ser. 343, 7.78%, ------------
7/1/22 (MBIA)
NEW YORK--1.3% Aaa/AAA 7,580,400
6,500 City Muni. Water Auth. Rev., 8.39%, 6/15/05 ------------
TEXAS--2.6% NR/AA 6,903,780
4,250 Harris Cnty. Health Fac. Dev. Corp., 9.12%, 2/15/21 ------------
8,988 Harris Cnty. Health Fac. Dev. Corp., Ser. 357, 9.10%, 7/1/29
(MBIA) NR/AA 4,405,550
Aaa/NR 9,616,985
------------
WASHINGTON--0.9% 14,022,535
4,500 Seattle GO, Ser. 348, 8.53%, 12/15/28 ------------
Total Variable Rate Notes (cost-$50,364,539) Aa1/NR 4,757,760
------------
57,219,724
------------
4.30.03 PIMCO Municipal Income Funds Annual Report 11
PIMCO MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
SHORT-TERM VARIABLE RATE DEMAND NOTES (B)(D)--1.6%
CALIFORNIA--0.2%
$ 1,200 Los Angeles Dept. Water & Power Waterworks Rev., Ser. B-2,
1.35%, 5/1/03 Aa2/AA $ 1,200,000
------------
COLORADO--0.3%
1,675 Housing & Fin. Auth., 1.35%, 5/7/03 (LOC: Landesbank Hessen) Aaa/AAA 1,675,000
------------
MICHIGAN--0.3%
1,500 Detroit Sewer Disp. Rev., Ser. A, 1.35%, 5/7/03 (MBIA) Aaa/AAA 1,500,000
------------
NEW JERSEY--0.2%
1,100 State Educational Fac. Auth. Rev., Princeton Univ., Ser. B.,
1.15%, 5/1/03 Aaa/AAA 1,100,000
------------
RHODE ISLAND--0.1%
700 State Indl. Fac. Rev., Exxon Mobil Corp., 1.30%, 5/1/03 Aaa/AAA 700,000
------------
TEXAS--0.2%
1,000 Gulf Coast Waste Disp. Auth., Amoco Oil Co., Ctl. Rev.,
1.30%, 5/1/03 Aa1/AA+ 1,000,000
------------
VIRGINIA--0.3%
1,635 Loudoun Cnty. Indl. Dev. Auth. Rev., Howard Hughes Medical Inst.
Ser. A, 1.30%, 5/1/03 Aaa/AAA 1,635,000
------------
Total Short-Term Variable Rate Demand Notes (cost-$8,810,000) 8,810,000
------------
U.S. TREASURY BILLS (F)--0.6%
1,385 1.13%, 5/8/03 Aaa/AAA 1,384,701
1,850 0.94%-1.14%, 5/15/03 Aaa/AAA 1,849,203
------------
Total U.S. Treasury Bills (cost-$3,233,883) 3,233,904
------------
TOTAL INVESTMENTS, BEFORE CALL OPTIONS WRITTEN (cost-$529,500,961+)--100.1% 536,729,779
------------
CALL OPTIONS WRITTEN (G)--(0.1)%
Contracts
------------
U.S. Treasury Bond Futures, Chicago Board of Trade:
(157) Strike price $114, expires 6/20/03 (171,719)
(255) Strike price $116, expires 6/20/03 (127,500)
(255) Strike price $116, expires 8/22/03 (326,719)
------------
Total call options written (premiums received-$521,190) (625,938)
------------
TOTAL INVESTMENTS, NET OF CALL OPTIONS WRITTEN (cost-$528,979,772)--100.0% $536,103,841
------------
12 PIMCO Municipal Income Funds Annual Report 4.30.03 | SEE ACCOMPANYING NOTES
TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
+ The cost basis of portfolio securities for federal income tax purposes is
$529,500,961. Aggregate gross unrealized appreciation for securities in
which there is an excess of value over tax cost is $30,848,525; aggregate
gross unrealized depreciation for securities in which there is an excess
of tax cost over value is $17,565,836; net unrealized appreciation for
federal income tax purposes is $7,228,818.
12 PIMCO Municipal Income Funds Annual Report 4.30.03 SEE ACCOMPANYING NOTES
TO FINANCIAL STATEMENTS
PIMCO CALIFORNIA MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
CALIFORNIA MUNICIPAL BONDS & NOTES--86.0%
$ 1,000 ABAG Fin. Auth. for Nonprofit Corps., CP, 5.375%, 2/15/19 NR/BBB+ $ 1,008,450
1,000 ABAG Fin. Auth. for Nonprofit Corps., Ser. A, Rev.,
5.375%, 11/15/25 NR/A+ 1,050,770
2,745 ABC Unified School Dist., GO, zero coupon, 8/1/26-8/1/27
(FGIC) Aaa/AAA 795,039
1,385 Alvord Unified School Dist., GO, Ser. C, 5.375%, 8/1/29 (FSA) Aaa/NR 1,474,900
1,650 Apple Valley, CP, 5.375%, 6/1/21 NR/A+ 1,755,254
2,000 Baldwin Park Monrovia School Facs., Grant Financing Auth.,
5.00%, 10/1/36 (AMBAC) Aaa/AAA 2,055,160
400 Beverly Hills Public Fin. Auth. Lease, Rev., 5.65%, 6/1/15
(MBIA) Aaa/AAA 409,316
6,405 Campbell Union High School Dist., GO, 5.50%, 8/1/30 (FSA) Aaa/NR 6,904,846
2,250 Capistrano Unified School Dist., Community Fac. Dist., Special
Tax, 5.75%, 9/1/29 NR/NR 2,252,003
8,250 Carson Improvement Board Act 1915, Special Assessment,
6.35%-6.375%, 9/2/23-9/2/31 NR/NR 8,555,965
5,250 Central JT Powers Health Fin. Auth., CP, 5.75%, 2/1/31 Baa1/BBB+ 5,278,088
2,750 Contra Costa Cnty. Public Fin. Auth., Tax Allocation Rev.,
5.125%, 8/1/19 NR/BBB 2,819,438
2,750 CSUCI Fin. Auth. Rev., Ser. A, 5.00%, 9/1/31 (MBIA) Aaa/AAA 2,802,305
3,635 Cucamonga Cnty. Water Dist., CP, 5.125%, 9/1/35 (FGIC) Aaa/AAA 3,790,178
1,000 Educational Fac. Auth. Rev., 5.75%, 12/1/30 Baa3/NR 1,033,290
25,215 El Monte, CP, 4.75%-5.25%, 6/1/30-1/1/34 (AMBAC) Aaa/AAA 25,867,461
10,000 Foothill Eastern Corridor Agcy., Toll Road Rev., zero coupon,
1/15/33-1/15/34 Baa3/BBB- 1,649,850
9,170 Fremont Community Fac. Dist., Special Tax., 6.00%-6.30%,
9/1/18-9/1/31 NR/NR 9,395,819
10,000 Golden State Tobacco Securitization Corp., Tobacco Settlement
Rev., Ser. 2003-A-1, 6.75%, 6/1/39 A3/A 8,846,300
Health Fac. Fin. Auth. Rev.,
5,315 5.125%, 7/1/18 NR/A- 5,358,902
4,000 Ser. A, 5.00%, 7/1/18-7/1/28 Baa2/BBB 3,787,380
3,000 Ser. B, 5.25%, 10/1/14 A3/A 3,156,900
14,000 La Quinta Redev. Agcy., Tax Allocation,
5.00%-5.125%, 9/1/21-9/2/32 (AMBAC) Aaa/AAA 14,623,290
1,585 Lincoln Public Fin. Auth. Rev., 6.125%, 9/2/27 NR/NR 1,621,629
845 Los Angeles Community Redev. Agcy., Tax Allocation, Ser. B,
5.875%-6.00%, 9/1/26-9/1/31 NR/NR 827,133
6,250 Los Angeles Cnty. Metropolitan Transportation Auth. Rev., Sales
Tax Rev., Ser. B, 4.75%, 7/1/28 Aaa/AAA 6,257,125
3,250 Los Angeles Unified School Dist., GO, Ser. E, 5.125%, 7/1/21 Aaa/AAA 3,448,445
13,000 Los Angeles Water & Power Rev., Ser. A-A-1, 5.25%, 7/1/21
(FSA) Aaa/AAA 13,873,470
1,000 Menifee Union School Dist., Special Tax, 6.40%, 9/1/31 NR/NR 1,020,760
2,665 Merced Irrigation Dist. Elec. Syst. Rev., 6.50%, 9/1/22 Baa3/NR 2,789,988
4.30.03 PIMCO Municipal Income Funds Annual Report 13
PIMCO CALIFORNIA MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
CALIFORNIA MUNICIPAL BONDS & NOTES (CONTINUED)
$3,500 Metropolitan Water Dist., Waterworks Rev., Ser. A,
5.00%, 7/1/26 Aa2/AA $ 3,589,355
5,820 Montclair Redev. Agcy., Tax Allocation, 5.30%, 10/1/30 (MBIA) Aaa/AAA 6,132,534
5,910 Murrieta Valley, Yuma Unified School Dist., Special Tax,
6.30%-6.50%, 9/1/18-9/1/31 NR/NR 6,076,876
1,080 Palm Springs Community Redev. Agcy., Tax Allocation,
5.50%, 8/1/21 NR/A- 1,151,572
1,010 Pomona Unified School Dist., GO, Ser. A, 6.10%, 2/1/19 (MBIA) Aaa/AAA 1,235,876
1,690 Rancho Etiwanda Public Fac., Special Tax, 6.375%, 9/1/24 NR/NR 1,752,648
2,770 Rancho Mirage Redev. Agcy., Tax Allocation,
5.50%-5.625%, 4/1/24-4/1/33 Baa1/BBB+ 2,916,818
8,305 Riverside Cnty., CP, 5.125%, 11/1/30 (MBIA) Aaa/AAA 8,706,796
1,000 Riverside Cnty. Pub. Financing., Tax Allocation, Ser. A,
5.625%, 10/1/33 Baa2/BBB- 1,026,850
1,850 Riverside Improvement Board Act 1915, Special Assessment,
6.15%-6.375%, 9/2/19-9/2/26 NR/NR 1,891,143
575 Roseville, Woodcreek Community Fac. Dist., Special Tax,
6.375%, 9/1/27 NR/NR 598,494
2,000 Sacramento Health Fac. Rev., Ser. A, 5.30%, 1/1/24 NR/A+ 2,059,060
6,910 Sacramento, Special Tax, 5.70%-6.15%, 9/1/21-9/1/26 NR/NR 7,014,696
545 San Diego Cnty., CP, 5.25%, 10/1/28 A2/NR 558,739
6,000 San Diego Cnty., Water Auth. Rev., CP, Ser. A,
4.75%-5.00%, 5/1/28-5/1/32 Aaa/AAA 6,036,890
3,330 San Francisco Bay Area Rapid Transit Dist. Rev.,
5.125%, 7/1/36 (AMBAC) Aaa/AAA 3,459,037
4,250 San Francisco City & Cnty. Airport., Community Int'l Airport
Rev., 4.50%, 5/1/26 (MBIA) Aaa/AAA 4,178,217
4,280 San Francisco City & Cnty. Redev. Agcy., Community Facs. Dist.,
Special Tax, 6.25%, 8/1/33 NR/NR 4,297,377
720 San Francisco City & Cnty. Redev. Agcy. Rev., Special Tax,
Ser. B, 6.125%, 8/1/31 NR/NR 720,605
5,065 San Joaquin Cnty., CP, 5.00%, 9/1/20 (MBIA) Aaa/AAA 5,361,303
San Joaquin Hills Transportation Corridor Agcy., Toll Road Rev.,
Ser. A,
5,000 zero coupon, 1/15/19 Baa3/BBB- 3,841,700
5,000 5.50%, 1/15/28 Baa3/BBB- 4,823,000
240 San Jose Improvement Board Act 1915, Special Assessment,
Ser. 24Q, 5.60%, 9/2/17 NR/NR 247,308
5,000 San Jose Unified School Dist., Santa Clara Cnty., GO, Ser. D,
5.125%, 8/1/25 (FSA) Aaa/NR 5,205,800
26,450 San Juan Unified School Dist., GO, zero coupon, 8/1/22-8/1/26
(FSA) Aaa/AAA 8,802,460
600 Santa Ana Financing. Auth., Ser. C, Rev., 5.60% 9/1/19 NR/BBB 644,796
1,815 Santa Clara CP, 5.00%, 2/1/32 (AMBAC) Aaa/AAA 1,871,356
14 PIMCO Municipal Income Funds Annual Report 4.30.03
PIMCO CALIFORNIA MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
CALIFORNIA MUNICIPAL BONDS & NOTES (CONCLUDED)
$ 1,435 Santa Maria JT Union High School Dist., GO, Ser. A,
5.25%, 8/1/25 (FSA) Aaa/AAA $ 1,536,211
State, GO,
11,000 4.75%-5.375%, 10/1/25-12/1/28 A1/A+ 11,203,000
5,000 5.00%, 4/1/27 (AMBAC) Aaa/AAA 5,137,200
5,000 State, Public Works Board Lease Rev., Ser. B, 5.00%, 9/1/21 Aaa/AAA 5,190,000
Statewide Community Dev. Auth., CP,
15,000 5.375%, 4/1/30 NR/BBB 14,412,150
8,000 6.50%, 7/1/20 Baa2/BBB 8,570,480
Statewide Community Dev. Auth., Rev.,
9,900 6.625%, 10/1/31-11/1/31 NR/NR 10,075,840
2,550 6.75%, 6/1/28 NR/NR 2,622,905
15,250 Ser. A, 5.125%, 10/1/30 NR/A+ 15,105,125
4,000 Ser. B, 5.50%, 8/15/34 A2/A+ 4,090,040
10,800 Tobacco Securitization Auth. Rev., Ser. A,
5.25%-5.375%, 6/1/31-6/1/41 A1/A 7,780,470
6,865 Tustin Unified School Dist., Special Tax,
5.50%-5.625%, 9/1/22-9/1/32 NR/NR 6,844,456
7,000 University Rev., Ser. O, 5.125%, 9/1/31 Aaa/AAA 7,275,590
3,750 West Kern Cnty. Water Dist., CP, 5.625%, 6/1/31 Baa2/NR 3,878,775
------------
Total California Municipal Bonds & Notes (cost-$333,557,025) 342,433,002
------------
OTHER MUNICIPAL BONDS & NOTES--2.5%
LOUISIANA--0.3%
1,750 Tobacco Settlement Finance Corp., Ser. 2001-B,
5.875%, 5/15/39 A1/A 1,371,055
PUERTO RICO--2.2%
3,050 Commonwealth, GO, 5.50%, 7/1/12 NR/AAA 3,547,546
5,000 Electric Power Auth. Power Rev., 5.25%, 7/1/29 (FSA) Aaa/AAA 5,235,950
------------
Total Other Municipal Bonds & Notes (cost-$10,116,823) 10,154,551
------------
CALIFORNIA VARIABLE RATE NOTES (B)--8.3%
10,003 Los Angeles Wastewater Syst. Rev., Ser. 318. 8.41%, 6/1/28
(FGIC) (c) A1/AA- 10,504,425
22,500 State, GO, RITES-PA Ser. 898-R, 8.44%, 6/1/09 (c)(e) A2/A 22,719,600
------------
Total California Variable Rate Notes (cost-$31,793,546) 33,224,025
------------
CALIFORNIA SHORT-TERM VARIABLE RATE DEMAND NOTES (B)(D)--2.7%
700 Bay Area Toll Auth., Toll Bridge Rev., 1.30%, 5/8/03
(AMBAC) VMIG1/A1+ 700,000
1,100 East Bay Muni. Util. Dist. Water Syst. Rev., Ser. A,
1.30%, 5/7/03 (FSA) VMIG1/A1+ 1,100,000
1,600 Health Facs. Financing Auth. Rev., Ser. B, 1.35%, 5/1/03
(AMBAC) VMIG1/A1+ 1,600,000
4.30.03 PIMCO Municipal Income Funds Annual Report 15
PIMCO CALIFORNIA MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
CALIFORNIA SHORT-TERM VARIABLE RATE DEMAND NOTES (B)(D) (CONCLUDED)
$ 2,650 Infrastructure & Economic Dev. Bank Insured Rev., Ser. B
1.35%, 5/1/03 (AMBAC) Aaa/A1+ $ 2,650,000
800 Irvine Ranch Water Dist., Ser. B, 1.30%, 5/1/03
(LOC: Helaba) NR/A1+ 800,000
Metropolitan Water Dist. Southern California Waterworks Rev.,
1,950 Ser. C1, 1.30%, 5/1/03 (LOC: Lloyds TSB Bank plc) VMIG1/A1+ 1,950,000
1,150 Ser. C2, 1.20%, 5/1/03 (LOC: Lloyds TSB Bank plc) VMIG1/A1+ 1,150,000
500 Pollution Control Financing Auth., Pollution Control Rev., 1.20%,
5/1/03 VMIG1/A1+ 500,000
------------
Total California Short-Term Variable Rate Demand Notes (cost-$10,450,000) 10,450,000
------------
U.S. TREASURY BILLS (F)--0.6%
2,450 0.95%-1.14%, 5/8/03-5/15/03 (cost-$2,449,184) AAA/AAA 2,449,197
------------
TOTAL INVESTMENTS, BEFORE CALL OPTIONS WRITTEN (cost-$388,366,578++)--100.1% 398,710,775
------------
CALL OPTIONS WRITTEN (G)--(0.1)%
Contracts
---------
U.S. Treasury Bond Futures, Chicago Board of Trade,
(118) Strike price $114, expires 6/20/03 (129,062)
(116) Strike price $116, expires 6/20/03 (58,000)
(116) Strike price $116, expires 8/22/03 (148,625)
------------
Total Call Options Written (premiums received-$267,012) (335,687)
------------
TOTAL INVESTMENTS, NET OF CALL OPTIONS WRITTEN (cost-$388,099,566)--100.0% $398,375,088
------------
--------------------------------------------------------------------------------
++ The cost basis of portfolio securities for federal income tax purposes is
$388,366,578. Aggregate gross unrealized appreciation for securities in
which there is an excess of value over tax cost is $14,504,748; aggregate
gross unrealized depreciation for securities in which there is an excess
of tax cost over value is $4,160,551; net unrealized appreciation for
federal income tax purposes is $10,344,197.
16 PIMCO Municipal Income Funds Annual Report 4.30.03 SEE ACCOMPANYING NOTES
TO FINANCIAL STATEMENTS
PIMCO NEW YORK MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
NEW YORK MUNICIPAL BONDS & NOTES--86.3%
$3,265 Albany Indl. Dev. Agcy. Civic Fac. Rev., Ser. A, 5.30%, 4/1/29 Baa2/NR $ 3,315,379
Long Island Power Auth. Elec. Syst. Rev.,
6,300 Ser. A, 5.50%, 12/1/29 Baa1/A- 6,381,459
1,000 Ser. L, 5.375%, 5/1/33 (e) Baa1/A- 1,018,510
Metropolitan Transportation Auth., NY Service Contract, Ser. A,
6,040 5.00%, 7/1/25 (FGIC) Aaa/AAA 6,236,723
8,150 5.00%, 7/1/30 (AMBAC) Aaa/AAA 8,360,188
1,375 Ser. A, 5.125%, 1/1/29 A3/AA- 1,406,680
2,500 Monroe Tobacco Asset Securitization Corp. Rev.,
6.375%, 6/1/35 A3/A- 2,301,175
5,000 New York City, GO, Ser. J, 5.125%, 5/15/29 (MBIA) Aaa/AAA 5,120,500
2,000 New York City Indl. Dev. Agcy. Rev., 6.00%, 11/1/28 NR/NR 1,211,200
New York City Muni. Water Fin. Auth., Water & Sewer Syst.,
Rev.,
7,605 Ser. A, 4.75%, 6/15/31 (FGIC) Aaa/AAA 7,640,667
7,000 Ser. A, 5.125%, 6/15/21 (AMBAC) Aaa/AAA 7,317,660
5,000 Ser. C, 5.125%, 6/15/33 Aa2/AA 5,152,050
5,000 Ser. D, 5.25%, 6/15/25 Aa2/AA 5,266,050
3,250 New York City Transitional Fin. Auth., Rev.,
Ser. B, 4.75%, 11/15/23 Aa2/AA+ 3,267,322
2,000 Port Auth. of New York & New Jersey Rev., 5.00%, 7/15/28 A1/AA- 2,026,380
6,550 State Dormitory Auth. Lease Rev., Ser. 1, 4.75%, 1/15/29 (FSA) Aaa/AAA 6,583,143
1,535 State Dormitory Auth. Rev., FHA-Mortgage Nursing Home Rev.,
5.40%-5.50%, 2/1/31-2/1/41 (MBIA) Aaa/AAA 1,619,917
7,000 State Dormitory Auth. Rev., FHA-NY & Presbyterian Hosp.,
4.75%, 8/1/27 (AMBAC) Aaa/AAA 7,096,250
8,000 State Dormitory Auth. Rev., Lenox Hill Hosp. Oblig. Group,
5.50%, 7/1/30 A3/NR 8,266,640
5,000 State Dormitory Auth. Rev., Memorial Sloan-Kettering Center,
Ser. 1, 5.00%, 7/1/34 Aa2/AA 5,044,100
8,500 State Dormitory Auth. Rev., Mental Health Services Fac.
Improvement, Ser D, 2/15/25 (MBIA) Aaa/AAA 8,550,660
7,325 State Dormitory Auth. Rev., Mount Sinai Health, Ser. A,
6.50%-6.625%, 7/1/18-7/1/25 Baa3/BB 7,482,575
845 State Dormitory Auth. Rev., New York Univ., Ser 2,
5.50%, 7/1/20-7/1/21 (AMBAC) Aaa/AAA 925,030
State Dormitory Auth. Rev., State Univ., Ser B. (FSA)
1,045 Ser. B, 4.75%, 5/15/28 Aaa/AAA 1,049,326
1,270 4.75%, 5/15/28 (Pre-refunded @ 101, 5/15/08) (a) Aaa/AAA 1,425,677
1,275 State Dormitory Auth. Rev., Winthrop Univ. Hosp. Assoc.,
Ser. A, 5.25%, 7/1/31 (AMBAC) Aaa/AAA 1,335,308
5,000 State Thruway Auth. General Rev., Ser. E, 4.75%, 1/1/19 Aa3/AA- 5,143,350
4,000 State Urban Dev. Corp., Correctional & Youth Facs. Services,
Ser. A, 5.50%, 1/1/17 NR/AA- 4,411,480
3,975 State Urban Dev. Corp. Rev., Ser B, 4.75%, 1/1/28 (AMBAC) Aaa/AAA 4,005,210
4.30.03 PIMCO Municipal Income Funds Annual Report 17
PIMCO NEW YORK MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Principal
Amount Credit Rating*
(000) (Moody's/S&P) Value**
NEW YORK MUNICIPAL BONDS & NOTES (CONCLUDED)
$ 3,125 Tobacco Trust II Rev., 5.625%-5.75%, 6/1/35-6/1/43 A3/A- $ 2,550,747
7,000 Triborough Bridge & Tunnel Auth. Rev., Ser. A,
5.00%, 1/1/27-1/1/32 Aa3/AA- 7,149,660
------------
Total New York Municipal Bonds & Notes (cost-$134,646,508) 138,661,016
------------
OTHER MUNICIPAL BONDS & NOTES--1.3%
LOUISIANA--0.4%
750 Tobacco Settlement Finance Corp., Ser. 2001-B,
5.875%, 5/15/39 A3/A 587,595
------------
PUERTO RICO--0.9%
1,500 Commonwealth Hwy. & Transportation Auth Rev., Ser. D,
5.25%, 7/1/38 Baa1/A 1,528,275
------------
Total Other Municipal Bonds & Notes (cost-$2,237,156) 2,115,870
------------
NEW YORK VARIABLE RATE NOTES (B)--7.2%
5,173 New York City Transitional Fin. Auth. Rev., Ser. 362
7.81%, 5/1/03 (c) Aa2/NR 5,233,949
Tobacco Trust II Rev., RITES,
4,000 9.396%, 12/1/09, 886-A (c) A1/A 2,537,280
6,500 9.646%, 12/1/09, 886-B 9 (c) A1/A 3,835,260
------------
Total New York Variable Rate Notes (cost-$15,470,277) 11,606,489
------------
NEW YORK SHORT-TERM VARIABLE RATE DEMAND NOTES (B)(D)--2.4%
2,000 Nassau Cnty. Interim Fin. Auth. Rev., Ser. B., 1.30%,
5/7/03 (FSA) VMIG1/A-1+ 2,000,000
300 New York State Thruway Auth. Rev., 1.35%, 5/1/03, (FGIC) VMIG1/A-1+ 300,000
1,600 State Dormitory Auth. Rev., Cornell Univ., Ser. B, 1.30%, 5/1/03 VMIG1/A-1+ 1,600,000
------------
Total New York Short-Term Variable Rate Demand Notes (cost-$3,900,000) 3,900,000
------------
OTHER SHORT-TERM VARIABLE RATE DEMAND NOTES (B)(D)--2.3%
ILLINOIS--0.9%
1,000 Chicago Metropolitan Water Reclamation District, GO, Ser. A,
1.30%, 5/7/03 VMIG1/A-1+ 1,000,000
1,400 Joliet Regional Port Dist., Exxon Project, 1.11%,5/1/03 P-1/A-1+ 1,400,000
------------
2,400,000
NEVADA--0.4% ------------
600 Clark Cnty. School Dist. GO, Ser. A, 1.30%, 5/1/03 (FSA) VMIG1/A-1+ 600,000
------------
TEXAS--0.4%
235 Gulf Coast Waste Disp. Auth., Exxon Project, 1.30%, 5/1/03 VMIG1/A-1+ 235,000
400 Harris County Industrial Development Corp., 1.28%, 5/1/03 NR/A-1+ 400,000
------------
Total Other Short-Term Variable Rate Demand Notes (cost-$3,635,000) 3,635,000
------------
U.S. TREASURY BILLS (F)--0.6%
975 0.936%-1.141%, 5/8/03-5/15/03, (cost-$974,676) AAA/AAA 974,682
------------
TOTAL INVESTMENTS, BEFORE CALL OPTIONS WRITTEN (cost-$160,863,618+++)-100.1% $160,893,057
------------
18 PIMCO Municipal Income Funds Annual Report 4.30.03
PIMCO NEW YORK MUNICIPAL INCOME FUND SCHEDULE OF INVESTMENTS
April 30, 2003
Value**
CALL OPTIONS WRITTEN (G)--(0.1)%
Contracts
---------
U.S. Treasury Bond Futures, Chicago Board of Trade:
(61) Strike price $116, expires 6/20/03 $ (30,500)
(61) Strike price $116, expires 6/20/03 (78,157)
(47) Strike price $114, expires 8/22/03 (51,406)
------------
Total call options written (premiums received-$130,794) (160,063)
------------
TOTAL INVESTMENTS, NET OF CALL OPTIONS WRITTEN (cost-$160,732,822)--100.0% $160,732,994
------------
--------------------------------------------------------------------------------
+++ The cost basis of portfolio securities for federal income tax purposes is
$160,863,618. Aggregate gross unrealized appreciation for securities in
which there is an excess of value over tax cost is $6,603,415; aggregate
gross unrealized depreciation for securities in which there is an excess
of tax cost over value is $6,577,626; net unrealized depreciation for
federal income tax purposes is $25,789.
--------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS:
* Unaudited
** Long-term debt securities are valued by an independent pricing service
authorized by the Board of Trustees.
(a) Pre-refunded bonds are collateralized by U.S. Government or other
eligible securities which are held in escrow and used to pay
principal and interest and retire the bonds at the earliest
refunding date.
(b) Variable Rate Notes are 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) 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.
At April 30, 2003, these securities amounted to $57,219,724 or 10.7%
of total investments, $33,224,025 or 8.3% of total investments and
$11,606,489 or 7.2% of total investments, respectively, for
Municipal, California Municipal and New York Municipal.
(d) Maturity date shown is date of next call.
(e) Security deemed illiquid.
(f) All or partial principal amount segregated as initial margin on
financial futures contracts.
(g) Non-income producing securities.
--------------------------------------------------------------------------------
GLOSSARY:
ABAG-Association of Bay Area Government
AMBAC - insured by American Municipal Bond Assurance Corp.
CP - Certificates of Participation
FGIC - insured by insured Financial Guaranty Insurance Co.
FHA - insured by Federal Housing Administration
FNMA - Federal National Mortgage Association
FSA - insured by Financial Security Assurance, Inc.
GO - General Obligation Bonds
LOC - Letter of Credit
MBIA - insured by Municipal Bond Investors Assurance
NR - Not Rated
RITES - Residual Interest Tax Exempt Securities
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 4.30.03 PIMCO Municipal Income
Funds Annual Report 19
PIMCO MUNICIPAL INCOME FUNDS STATEMENTS OF ASSETS AND LIABILITIES
April 30, 2003
California New York
Municipal Municipal Municipal
--------------- --------------- -------------
ASSETS:
Investments, at value (cost-$529,500,961, $388,366,578
and $160,863,618, respectively) $ 536,729,779 $ 398,710,775 $160,893,057
-------------------------------------------------------- ------------- ------------- ------------
Cash -- -- 4,372
-------------------------------------------------------- ------------- ------------- ------------
Interest receivable 10,640,310 5,698,581 3,047,697
-------------------------------------------------------- ------------- ------------- ------------
Receivable for investments sold/called 10,200 -- 3,425,327
-------------------------------------------------------- ------------- ------------- ------------
Receivable for options written/sold 164,950 -- 24,743
-------------------------------------------------------- ------------- ------------- ------------
Prepaid expenses 38,864 34,460 7,045
-------------------------------------------------------- ------------- ------------- ------------
Total Assets 547,584,103 404,443,816 167,402,241
-------------------------------------------------------- ------------- ------------- ------------
LIABILITIES:
Due to custodian 85,665 18,793 --
-------------------------------------------------------- ------------- ------------- ------------
Payable for investments purchased 6,067,711 -- 5,019,400
-------------------------------------------------------- ------------- ------------- ------------
Dividends payable to common and preferred shareholders 1,977,055 1,387,337 548,387
-------------------------------------------------------- ------------- ------------- ------------
Payable for variation margin on futures contracts 812,627 620,625 239,969
-------------------------------------------------------- ------------- ------------- ------------
Options written, at value (premium received--$521,190,
$267,012, and $130,794, respectively) 625,938 335,687 160,063
-------------------------------------------------------- ------------- ------------- ------------
Investment management fees payable 197,623 147,899 59,384
-------------------------------------------------------- ------------- ------------- ------------
Accrued expenses 129,561 102,125 51,959
-------------------------------------------------------- ------------- ------------- ------------
Total Liabilities 9,896,180 2,612,466 6,079,162
-------------------------------------------------------- ------------- ------------- ------------
PREFERRED SHARES ($25,000 NET ASSET AND LIQUIDATION
VALUE PER SHARE APPLICABLE TO AN AGGREGATE OF
8,000, 6,000 AND 2,520, SHARES ISSUED AND
OUTSTANDING, RESPECTIVELY) 200,000,000 150,000,000 63,000,000
-------------------------------------------------------- ------------- ------------- ------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS $ 337,687,923 $ 251,831,350 $ 98,323,079
-------------------------------------------------------- ------------- ------------- ------------
COMPOSITION OF NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS:
Common stock (no par value):
Paid-in capital $ 341,724,662 $ 252,190,716 $103,319,615
-------------------------------------------------------- ------------- ------------- ------------
Undistributed net investment income 5,257,063 2,860,275 718,920
-------------------------------------------------------- ------------- ------------- ------------
Accumulated net realized loss on investments (17,116,754) (14,005,257) (5,919,213)
-------------------------------------------------------- ------------- ------------- ------------
Net unrealized appreciation of investments, futures
contracts and options written 7,822,952 10,785,616 203,757
-------------------------------------------------------- ------------- ------------- ------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS $ 337,687,923 $ 251,831,350 $ 98,323,079
-------------------------------------------------------- ------------- ------------- ------------
Common Shares Outstanding 24,070,651 17,771,167 7,288,809
-------------------------------------------------------- ------------- ------------- ------------
NET ASSET VALUE PER COMMON SHARE $ 14.03 $ 14.17 $ 13.49
-------------------------------------------------------- ------------- ------------- ------------
20 PIMCO Municipal Income Funds Annual Report 4.30.03 SEE ACCOMPANYING NOTES
TO FINANCIAL STATEMENTS
PIMCO MUNICIPAL INCOME FUNDS STATEMENTS OF OPERATIONS
For the year ended April 30, 2003
California New York
Municipal Municipal Municipal
-------------- --------------- --------------
INTEREST INCOME:
Interest $ 31,647,447 $ 22,344,239 $ 8,632,312
--------------------------------------------------------- ------------- ------------- ------------
EXPENSES:
Investment management fees 3,534,549 2,610,024 1,067,210
--------------------------------------------------------- ------------- ------------- ------------
Auction agent fees and commissions 527,269 391,535 163,687
--------------------------------------------------------- ------------- ------------- ------------
Custodian and accounting agent fees 141,440 116,647 74,187
--------------------------------------------------------- ------------- ------------- ------------
Audit and tax service fees 71,584 64,220 44,098
--------------------------------------------------------- ------------- ------------- ------------
Legal fees 65,240 42,075 6,964
--------------------------------------------------------- ------------- ------------- ------------
Reports to shareholders 47,595 29,240 13,639
--------------------------------------------------------- ------------- ------------- ------------
New York Stock Exchange listing fees 44,337 42,019 42,289
--------------------------------------------------------- ------------- ------------- ------------
Trustees' fees and expenses 43,223 31,401 12,716
--------------------------------------------------------- ------------- ------------- ------------
Transfer agent fees 34,472 33,258 28,086
--------------------------------------------------------- ------------- ------------- ------------
Insurance expense 14,066 10,726 5,719
--------------------------------------------------------- ------------- ------------- ------------
Miscellaneous 13,706 11,170 9,092
--------------------------------------------------------- ------------- ------------- ------------
Total expenses 4,537,481 3,382,315 1,467,687
--------------------------------------------------------- ------------- ------------- ------------
Less: investment management fees waived (1,087,554) (803,084) (328,372)
--------------------------------------------------------- ------------- ------------- ------------
expense offset (38,840) (78,255) (51,967)
--------------------------------------------------------- ------------- ------------- ------------
Net expenses 3,411,087 2,500,976 1,087,348
--------------------------------------------------------- ------------- ------------- ------------
NET INVESTMENT INCOME 28,236,360 19,843,263 7,544,964
--------------------------------------------------------- -------------- -------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
---------------------------------------------------------
Investments 1,455,029 538,832 (26,464)
--------------------------------------------------------- -------------- -------------- -------------
Futures contracts (18,571,783) (14,434,166) (5,927,520)
--------------------------------------------------------- -------------- -------------- -------------
Net change in unrealized appreciation of investments,
future contracts and options written 11,056,671 15,066,673 2,557,403
--------------------------------------------------------- -------------- -------------- -------------
Net realized and unrealized gain (loss) on investments,
future contracts and options written (6,060,083) 1,171,339 (3,396,581)
--------------------------------------------------------- -------------- -------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM INVESTMENT
OPERATIONS 22,176,277 21,014,602 4,148,383
--------------------------------------------------------- -------------- -------------- -------------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
---------------------------------------------------------
Net investment income (2,299,781) (1,716,314) (718,510)
--------------------------------------------------------- -------------- -------------- -------------
Net realized gains (114,138) -- --
--------------------------------------------------------- -------------- -------------- -------------
Total dividends and distributions from preferred shares (2,413,919) (1,716,314) (718,510)
--------------------------------------------------------- -------------- -------------- -------------
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON
SHAREHOLDERS RESULTING FROM INVESTMENT OPERATIONS $ 19,762,358 $ 19,298,288 $ 3,429,873
--------------------------------------------------------- -------------- -------------- -------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 4.30.03 PIMCO Municipal
Income Funds Annual Report 21
PIMCO MUNICIPAL INCOME FUNDS STATEMENTS OF CHANGES IN NET ASSETS
APPLICABLE TO COMMON SHAREHOLDERS
Municipal
----------------------------------
For the period
June 29, 2001*
Year ended through
April 30, 2003 April 30, 2002
-------------- --------------
INVESTMENT OPERATIONS:
Net investment income $ 28,236,360 $ 21,651,169
-------------------------------------------------------------------- ------------- -------------
Net realized gain (loss) on investments and futures contracts (17,116,754) 1,524,327
-------------------------------------------------------------------- ------------- -------------
Net change in unrealized appreciation/depreciation of investments,
futures contracts and options written 11,056,671 (3,233,719)
-------------------------------------------------------------------- ------------- -------------
Net increase in net assets resulting from investment operations 22,176,277 19,941,777
-------------------------------------------------------------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income (2,299,781) (2,110,712)
-------------------------------------------------------------------- ------------- -------------
Net realized gains (114,138) (63,733)
-------------------------------------------------------------------- ------------- -------------
Total dividends and distributions on preferred shares (2,413,919) (2,174,445)
-------------------------------------------------------------------- ------------- -------------
Net increase in net assets applicable to common shareholders
resulting from investment operations 19,762,358 17,767,332
-------------------------------------------------------------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income (23,364,852) (16,855,166)
-------------------------------------------------------------------- ------------- -------------
Net realized gains (907,918) (438,493)
-------------------------------------------------------------------- ------------- -------------
Total dividends and distributions to common shareholders (24,272,770) (17,293,659)
-------------------------------------------------------------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from the sale of common stock -- 339,359,250
-------------------------------------------------------------------- ------------- -------------
Preferred shares underwriting discount charged to paid-in capital -- (2,000,000)
-------------------------------------------------------------------- ------------- -------------
Common stock and preferred shares offering costs charged to
paid-in capital -- (1,045,700)
-------------------------------------------------------------------- ------------- -------------
Reinvestment of dividends and distributions 3,495,385 1,815,722
-------------------------------------------------------------------- ------------- -------------
Net increase in capital share transactions 3,495,385 338,129,272
-------------------------------------------------------------------- ------------- -------------
Total increase (decrease) in net assets applicable to common
shareholders (1,015,027) 338,602,945
-------------------------------------------------------------------- ------------- -------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period 338,702,950 100,005
-------------------------------------------------------------------- ------------- -------------
End of period (including undistributed net investment of $5,257,063
and $2,685,291, $2,860,275 and $1,101,271, and $718,920 and
$428,915, respectively) $ 337,687,923 $ 338,702,950
-------------------------------------------------------------------- ------------- -------------
COMMON SHARES ISSUED AND REINVESTED:
Issued -- 23,690,000
-------------------------------------------------------------------- ------------- -------------
Issued in reinvestment of dividends and distributions 243,737 130,247
-------------------------------------------------------------------- ------------- -------------
NET INCREASE 243,737 23,820,247
-------------------------------------------------------------------- ------------- -------------
* Commencement of operations.
22 PIMCO Municipal Income Funds Annual Report 4.30.03 SEE ACCOMPANYING NOTES
TO FINANCIAL STATEMENTS
California New York
Municipal Municipal
----------------------------------- ----------------------------------
For the period For the period
June 29, 2001* June 29, 2001*
Year ended through Year ended through
April 30, 2003 April 30, 2002 April 30, 2003 April 30, 2002
---------------- ---------------- ---------------- ---------------
$ 19,843,263 $ 14,674,043 $ 7,544,964 $ 5,907,450
------------- ------------- ------------ ------------
(13,895,334) (109,923) (5,953,984) 449,411
------------- ------------- ------------ ------------
15,066,673 (4,281,057) 2,557,403 (2,353,646)
------------- ------------- ------------ ------------
21,014,602 10,283,063 4,148,383 4,003,215
------------- ------------- ------------ ------------
(1,716,314) (1,586,830) (718,510) (635,639)
------------- ------------- ------------ ------------
-- -- -- (54,140)
------------- ------------- ------------ ------------
(1,716,314) (1,586,830) (718,510) (689,779)
------------- ------------- ------------ ------------
19,298,288 8,696,233 3,429,873 3,313,436
------------- ------------- ------------ ------------
(16,367,945) (11,985,942) (6,536,786) (4,842,896)
------------- ------------- ------------ ------------
-- -- -- (360,504)
------------- ------------- ------------ ------------
(16,367,945) (11,985,942) (6,536,786) (5,203,400)
------------- ------------- ------------ ------------
-- 250,401,000 -- 102,137,250
------------- ------------- ------------ ------------
-- (1,500,000) -- (630,000)
------------- ------------- ------------ ------------
-- (888,423) -- (419,314)
------------- ------------- ------------ ------------
2,219,123 1,859,011 1,017,328 1,114,687
------------- ------------- ------------ ------------
2,219,123 249,871,588 1,017,328 102,202,623
------------- ------------- ------------ ------------
5,149,466 246,581,879 (2,089,585) 100,312,659
------------- ------------- ------------ ------------
246,681,884 100,005 100,412,664 100,005
------------- ------------- ------------ ------------
$ 251,831,350 $ 246,681,884 $ 98,323,079 $100,412,664
------------- ------------- ------------ ------------
-- 17,480,000 -- 7,130,000
------------- ------------- ------------ ------------
155,749 128,751 72,990 79,152
------------- ------------- ------------ ------------
155,749 17,608,751 72,990 7,209,152
------------- ------------- ------------ ------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 4.30.03 PIMCO Municipal
Income Funds Annual Report 23
PIMCO MUNICIPAL INCOME FUNDS NOTES TO FINANCIAL STATEMENTS
April 30, 2003
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PIMCO Municipal Income Fund ("Municipal"), PIMCO California Municipal Income
Fund ("California Municipal") and PIMCO New York Municipal Income Fund ("New
York Municipal"), collectively referred to as the "Funds", were organized as
Massachusetts business trusts on May 10, 2001. Prior to commencing operations
on June 29, 2001, the Funds had no operations other than matters relating to
their organization and registration as non-diversified, 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
6,667 shares of beneficial interest of each Fund at an aggregate purchase price
of $100,005 per Fund to Allianz Dresdner Asset Management of America L.P.,
("ADAM"). PIMCO Advisors Fund Management LLC (the "Investment Manager"),
formerly PIMCO Funds Advisors LLC, 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
no par value common stock authorized.
Municipal, California Municipal and New York Municipal issued 20,600,000,
15,200,000 and 6,200,000 shares of common stock, respectively, in their initial
public offerings. An additional 3,090,000, 2,280,000 and 930,000 shares of
Municipal, California Municipal and New York Municipal, respectively, were
issued in connection with the exercise of the underwriters' over-allotment
option on June 26, 2001. These shares were all issued at $15.00 per share
before an underwriting discount of $0.675 per share. Offering costs of
$710,700, $524,400 and $213,900 (representing $0.03 per share for each Fund),
for Municipal, California Municipal and New York Municipal, respectively, were
offset against the proceeds of the offerings and have been charged to paid-in
capital. The Investment Manager has paid all offering costs (other than the
sales load) and organizational expenses exceeding $0.03 per share for each
Fund.
In addition, the underwriters commission and offering costs associated with the
Funds' issuance of Preferred Shares in the amounts of $2,000,000 and $335,000,
$1,500,000 and $364,023 and $630,000 and $205,414, for Municipal, California
Municipal and New York Municipal, respectively, have been charged to paid-in
capital.
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
that have not yet occurred. However, the Funds expect the risk of loss to be
remote.
The following is a summary of significant accounting policies followed by the
Funds:
(A) VALUATION OF INVESTMENTS
Debt securities are valued daily by an independent pricing service approved by
the Boards of Trustees. Any security or other asset for which market quotations
are not readily available is valued at fair value as determined in good faith
under procedures established by the Boards of Trustees. Municipal invests
substantially all of its assets in a portfolio of municipal bonds, the interest
from which is exempt from federal income taxes. California Municipal 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
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 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.
(B) 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.
24 PIMCO Municipal Income Funds Annual Report 4.30.03
PIMCO MUNICIPAL INCOME FUNDS NOTES TO FINANCIAL STATEMENTS
April 30, 2003
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(C) 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.
(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 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.
(E) EXPENSE OFFSET
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.
(F) 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. Futures transactions involve 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.
Futures contracts outstanding at April 30, 2003 were as follows:
# of Expiration Unrealized
Fund Type Contracts Date Appreciation
-----------------------------------------------------------------------------------------------------------------
Municipal Short: U.S. Treasury 30 Year Bond 885 6/30/03 $ 681,820
Long: U.S. Treasury 30 Year Bond 48 9/30/03 17,062
------------
$ 698,882
============
California Municipal Short: U.S. Treasury 30 Year Bond 662 6/19/03 $ 510,094
============
New York Municipal Long: U.S. Treasury 30 Year Bond 8 9/30/03 $ 2,844
U.S. Treasury 30 Year Bond 259 6/19/03 200,742
------------
$ 203,586
============
(G) 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.
4.30.03 PIMCO Municipal Income Funds Annual Report 25
PIMCO MUNICIPAL INCOME FUNDS NOTES TO FINANCIAL STATEMENTS
April 30, 2003
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED)
(G) OPTION TRANSACTIONS (CONCLUDED)
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.
Transactions in options written for the year ended April 30, 2003 were:
Contracts Premiums
--------------------------------------------------------------------------
Municipal:
---------
Options outstanding, April 30, 2002 -- --
Options written 667 $ 521,190
-------- ---------
Options outstanding, April 30, 2003 667 $ 521,190
======== =========
California Municipal:
--------------------
Options outstanding, April 30, 2002 -- --
Options written 350 $ 267,012
-------- ----------
Options outstanding, April 30, 2003 350 $ 267,012
======== ==========
New York Municipal:
------------------
Options outstanding, April 30, 2002 -- --
Options written 169 $ 130,794
-------- ----------
Options outstanding, April 30, 2003 169 $ 130,794
======== ==========
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 of 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 each Fund and each 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 0.20% of the
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, 2006, 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 0.37% 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 0.25% 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, 2006, and will receive an increasing amount (not to exceed 0.37% of
each Fund's average daily
26 PIMCO Municipal Income Funds Annual Report 4.30.03
PIMCO MUNICIPAL INCOME FUNDS NOTES TO FINANCIAL STATEMENTS
April 30, 2003
2. INVESTMENT MANAGER AND SUB-ADVISER (CONCLUDED)
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 $1,359,442, $1,003,855 and
$410,465 in connection with sub-advisory services for Municipal, California
Municipal and New York Municipal, respectively, for the year ended April 30,
2003.
3. INVESTMENTS IN SECURITIES
For the year ended April 30, 2003, purchases and sales of investments, other
than short-term securities, were as follows:
California New York
Municipal Municipal Municipal
-------------------------------------------------------------
Purchases $151,470,189 $53,151,652 $32,382,725
Sales $131,034,760 $58,014,192 $42,039,739
4. INCOME TAX INFORMATION
Municipal:
---------
The tax character of dividends and distributions paid for the periods were:
June 29, 2001
Year Ended through
April 30, 2003 April 30, 2002
---------------- ---------------
Ordinary Income $ 1,424,818 $ 628,190
Tax Exempt Income $25,261,871 $18,839,914
At April 30, 2003, the tax character of distributable earnings of $5,257,063
was composed entirely of tax exempt income.
At April 30, 2003, Municipal had a capital loss carryforward of $12,636,579,
all of which expires in 2011, available as a reduction to the extent provided
in the regulations, of any future net realized gains. To the extent that these
losses are used to offset future realized capital gains, such gains will not be
distributed.
In accordance with U.S. Treasury regulations, Municipal elected to defer
realized capital losses of $3,886,041, arising after October 31, 2002. Such
losses are treated for tax purposes as arising on May 1, 2003.
California Municipal:
--------------------
The tax character of dividends paid for the periods were:
June 29, 2001
Year Ended through
April 30, 2003 April 30, 2002
---------------- ---------------
Ordinary Income $ 392,046 $ 123,015
Tax Exempt Income $17,692,213 $13,449,757
At April 30, 2003, the tax basis of distributable earnings of $2,860,275 was
composed entirely of tax exempt income.
At April 30, 2003, California Municipal had a capital loss carryforward of
$9,874,814, $2,250 of which will expire in 2010 and 9,872,564 of which will
expire in 2011, available as a reduction, to the extent provided in the
regulations, of any future net realized capital gains. To the extent that these
losses are used to offset future realized capital gains, such gains will not be
distributed.
In accordance with U.S. Treasury regulations, California Municipal elected to
defer realized capital losses of $3,689,024, arising after October 31, 2002.
Such losses are treated for tax purposes as arising on May 1, 2003.
4.30.03 PIMCO Municipal Income Funds Annual Report 27
PIMCO MUNICIPAL INCOME FUNDS NOTES TO FINANCIAL STATEMENTS
April 30, 2003
4. INCOME TAX INFORMATION (CONCLUDED)
New York Municipal:
------------------
The tax character of dividends paid for the tax fiscal periods were:
July 1, 2002 July 1, 2001
through through
April 30, 2003 June 30, 2002
---------------- --------------
Ordinary Income $ 22,716 $ 437,768
Tax Exempt Income $5,997,367 $6,690,625
During the year ended April 30, 2003, New York Municipal changed its tax fiscal
year end from June 30 to April 30.
At April 30, 2003, the tax basis of distributable earnings of $718,920 was
composed entirely of tax exempt income.
At April 30, 2003, New York Municipal had a capital loss carryforward of
$4,214,928, all of which expires in 2011, available as a reduction, to the
extent provided in the regulations, of any future net realized capital gains.
To the extent that these losses are used to offset future realized capital
gains, such gains will not be distributed.
In accordance with U.S. Treasury regulations, New York Municipal elected to
defer realized capital losses of $1,526,317, arising after October 31, 2002.
Such losses are treated for tax purposes as arising on May 1, 2003.
5. AUCTION PREFERRED SHARES
Municipal has issued 1,600 shares of Preferred Shares Series A, 1,600 shares of
Preferred Shares Series B, 1,600 shares of Preferred Shares Series C, 1,600
shares of Preferred Shares Series D and 1,600 shares of Preferred Shares Series
E, each with a net asset and liquidation value of $25,000 per share plus
accrued dividends.
California Municipal has issued 2,000 shares of Preferred Shares Series A,
2,000 shares of Preferred Shares Series B and 2,000 shares of Preferred Shares
Series C, each with a net asset and liquidation value of $25,000 per share plus
accrued dividends.
New York Municipal has issued 2,520 shares of Preferred Shares Series A 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 year ended April 30, 2003, the annualized dividend rates ranged from:
High Low At April 30, 2003
-------------------------------------------------------------------
Municipal:
---------
Series A 1.75% 0.70% 1.20%
Series B 1.80% 0.70% 1.20%
Series C 1.65% 0.90% 1.15%
Series D 1.75% 0.70% 0.70%
Series E 1.75% 0.80% 1.20%
California Municipal:
--------------------
Series A 1.50% 0.65% 1.15%
Series B 1.50% 0.64% 1.15%
Series C 1.55% 0.60% 1.15%
New York Municipal:
------------------
Series A 1.55% 0.80% 1.00%
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.
28 PIMCO Municipal Income Funds Annual Report 4.30.03
PIMCO MUNICIPAL INCOME FUNDS NOTES TO FINANCIAL STATEMENTS
April 30, 2003
6. SUBSEQUENT DIVIDEND DECLARATIONS -- COMMON SHAREHOLDERS
On May 1, 2003, the following dividends were declared to common shareholders
payable June 2, 2003 to shareholders of record on May 16, 2003:
Municipal $0.08125 per common share
California Municipal $0.077 per common share
New York Municipal $0.075 per common share
On June 2, 2003, the following dividends were declared to common shareholders
payable July 1, 2003 to shareholders of record on June 13, 2003:
Municipal $0.08125 per common share
California Municipal $0.077 per common share
New York Municipal $0.075 per common share
7. CHANGE IN INVESTMENT POLICY
On December 17, 2002, the Board of Trustees approved a change in the investment
policy of each Fund to invest, under normal market conditions, at least 90% of
each of its "total" assets in municipal bonds to at least 90% of each of its
"net" assets (and not "total" assets.)
4.30.03 PIMCO Municipal Income Funds Annual Report 29
PIMCO MUNICIPAL INCOME FUNDS FINANCIAL HIGHLIGHTS
For a share of common stock outstanding throughout each period:
Municipal
----------------------------------------
For the period
June 29, 2001*
Year ended through
April 30, 2003 April 30, 2002
---------------- --------------------
Net asset value, beginning of period $ 14.22 $ 14.33**
------------------------------------------------------------------- ---------------- --------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 1.19 0.91
------------------------------------------------------------------- ---------------- --------------------
Net realized and unrealized gain (loss) on investments, futures
contracts and options written (0.26) (0.07)
------------------------------------------------------------------- ---------------- --------------------
Total from investment operations 0.93 0.84
------------------------------------------------------------------- ---------------- --------------------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income (0.10) (0.09)
------------------------------------------------------------------- ---------------- --------------------
Net realized gains (0.00)+ (0.00)+
------------------------------------------------------------------- ---------------- --------------------
Total dividends and distributions on preferred shares (0.10) (0.09)
------------------------------------------------------------------- ---------------- --------------------
Net increase in net assets applicable to common shares resulting
from investment operations 0.83 0.75
------------------------------------------------------------------- ---------------- --------------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income (0.98) (0.71)
------------------------------------------------------------------- ---------------- --------------------
Net realized gains (0.04) (0.02)
------------------------------------------------------------------- ---------------- --------------------
Total dividends and distributions to common shareholders (1.02) (0.73)
------------------------------------------------------------------- ---------------- --------------------
CAPITAL SHARE TRANSACTIONS:
Common stock offering costs charged to paid-in capital -- (0.03)
------------------------------------------------------------------- ---------------- --------------------
Preferred shares offering costs/underwriting discounts charged to
paid-in capital -- (0.10)
------------------------------------------------------------------- ---------------- --------------------
Total capital share transactions -- (0.13)
------------------------------------------------------------------- ---------------- --------------------
Net asset value, end of period $ 14.03 $ 14.22
------------------------------------------------------------------- ---------------- --------------------
Market price, end of period $ 14.22 $ 14.70
------------------------------------------------------------------- ---------------- --------------------
TOTAL INVESTMENT RETURN (1) 3.8% 3.1%
------------------------------------------------------------------- ---------------- --------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets applicable to common shareholders, end of period (000) $337,688 $ 338,703
------------------------------------------------------------------- ---------------- --------------------
Ratio of expenses to average net assets (2)(3) 1.00%(5) 0.91%(4)(5)
------------------------------------------------------------------- ---------------- --------------------
Ratio of net investment income to average net assets (2) 8.21%(5) 7.64%(4)(5)
------------------------------------------------------------------- ---------------- --------------------
Preferred shares asset coverage per share $ 67,206 $ 67,332
------------------------------------------------------------------- ---------------- --------------------
Portfolio turnover 27% 38%
------------------------------------------------------------------- ---------------- --------------------
* Commencement of operations.
** Initial public offering price of $15.00 per share less underwriting
discount of $0.675 per share.
+ Less than $0.005 per share.
(1) Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of each period reported. Dividends and
distributions are assumed, for purposes of this calculation, to be
reinvested at prices obtained under the Funds' 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 earning credits from custodian bank. (See
note 1(e) in Notes to Financial Statements).
(4) Annualized.
30 PIMCO Municipal Income Funds Annual Report 4.30.03 SEE ACCOMPANYING
NOTES TO FINANCIAL STATEMENTS
California New York
Municipal Municipal
-------------------------------------------------- --------------------------------------------
For the period For the period
June 29, 2001* June 29, 2001*
Year ended through Year ended through
April 30, 2003 April 30, 2002 April 30, 2003 April 30, 2002
---------------------- ------------------------- ---------------- -------------------------
$14.00 $14.33** $13.92 $14.33**
---------------------- ------------------------- ---------------- -------------------------
1.12 0.83 1.04 0.82
---------------------- ------------------------- ---------------- -------------------------
0.07 (0.25) (0.47) (0.26)
---------------------- ------------------------- ---------------- -------------------------
1.19 0.58 0.57 0.56
---------------------- ------------------------- ---------------- -------------------------
(0.10) (0.09) (0.10) (0.09)
---------------------- ------------------------- ---------------- -------------------------
-- -- -- (0.01)
---------------------- ------------------------- ---------------- -------------------------
(0.10) (0.09) (0.10) (0.10)
---------------------- ------------------------- ---------------- -------------------------
1.09 0.49 0.47 0.46
---------------------- ------------------------- ---------------- -------------------------
(0.92) (0.68) (0.90) (0.67)
---------------------- ------------------------- ---------------- -------------------------
-- -- -- (0.05)
---------------------- ------------------------- ---------------- -------------------------
(0.92) (0.68) (0.90) (0.72)
---------------------- ------------------------- ---------------- -------------------------
-- (0.03) -- (0.03)
---------------------- ------------------------- ---------------- -------------------------
-- (0.11) -- (0.12)
---------------------- ------------------------- ---------------- -------------------------
-- (0.14) -- (0.15)
---------------------- ------------------------- ---------------- -------------------------
$14.17 $14.00 $13.49 $13.92
---------------------- ------------------------- ---------------- -------------------------
$14.15 $14.71 $13.55 $14.20
---------------------- ------------------------- ---------------- -------------------------
2.6% 2.8% 1.8% (0.3)%
---------------------- ------------------------- ---------------- -------------------------
$251,831 $246,682 $98,323 $100,413
---------------------- ------------------------- ---------------- -------------------------
1.03%(6) 0.94%(4)(6) 1.13%(7) 1.04%(4)(7)
---------------------- ------------------------- ---------------- -------------------------
7.89%(6) 7.03%(4)(6) 7.46%(7) 7.07%(4)(7)
---------------------- ------------------------- ---------------- -------------------------
$66,967 $66,109 $64,016 $64,834
---------------------- ------------------------- ---------------- -------------------------
15% 45% 23% 51%
---------------------- ------------------------- ---------------- -------------------------
(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% and 7.89%,
respectively for the year ended April 30, 2003 and 1.21% (annualized) and
(annualized) 7.34% (annualized), respectively, for the period June 29,
2001 (commencement of operations) through April 30, 2002.
(6) 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 1.34% and 7.58%,
respectively for the year ended April 30, 2003 and 1.24% (annualized) and
6.73% (annualized), respectively, for the period June 29, 2001
(commencement of operations) through April 30, 2002.
(7) 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 1.45% and 7.14%,
respectively for the year ended April 30, 2003, 1.34% (annualized) and
6.77% (annualized), respectively, for the period June 29, 2001
(commencement of operations) through April 30, 2002.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 4.30.03 PIMCO Municipal
Income Funds Annual Report 31
PIMCO MUNICIPAL INCOME FUNDS REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Trustees of:
PIMCO Municipal Income Fund, PIMCO California Municipal Income Fund and
PIMCO New York Municipal Income Fund
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets applicable to common shareholders and
the financial highlights present fairly, in all material respects, the
financial position of each of PIMCO Municipal Income Fund, PIMCO California
Municipal Income Fund and PIMCO New York Municipal Income Fund (collectively
hereafter referred to as the "Funds") at April 30, 2003, the results of each of
their operations for the year then ended, and the changes in each of their net
assets applicable to common shareholders and the financial highlights for the
year then ended and for the period June 29, 2001 (commencement of operations)
through April 30, 2002, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at April 30, 2003 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
June 17, 2003
32 PIMCO Municipal Income Funds Annual Report 4.30.03
PIMCO MUNICIPAL INCOME FUNDS TAX INFORMATION (UNAUDITED)
Subchapter M of the Internal Revenue Code of 1986, as amended, requires the
Funds to advise shareholders within 60 days of the Funds' tax year end (April
30, 2003) as to the federal tax status of dividends and distributions received
by shareholders during such tax period. Accordingly, please note that
substantially all dividends paid from net investment income from the Funds
during the tax period ended April 30, 2003 were federally exempt interest
dividends. Although these Funds invested in municipal bonds containing market
discount, whose accretion is taxable. Accordingly, the percentage of dividends
paid from net investment income during the tax period which are taxable were:
Municipal 1.57%
California Municipal 2.17%
New York Municipal 0.38%
Per share dividends for the tax period ended April 30, 2003 were as follows:
Municipal:
---------
Dividends to common shareholders from net investment income $0.9750
Dividends to preferred shareholders from net investment income $287.473
Distributions to common shareholders from net realized gains $0.03783
Distributions to preferred shareholders from net realized gains $14.27
California Municipal:
--------------------
Dividends to common shareholders from net investment income $0.924
Dividends to preferred shareholders from net investment income $286.052
New York Municipal:
------------------
Dividends to common shareholders from net investment income $0.75
Dividends to preferred shareholders from net investment income $225.244
Since the Funds' fiscal year is not the calendar year, another notification
will be sent with respect to calendar year 2003. In January 2004, you will be
advised on IRS Form 1099 DIV as to the federal tax status of the dividends and
distributions received during calendar year 2003. The amount that will be
reported, will be the amount to use on your 2003 federal income tax return and
may differ from the amount which must be reported in connection with each
Fund's tax year ended April 30, 2003. Shareholders are advised to consult with
their tax advisers as to the federal, state and local tax status of the income
received from the Funds. In January 2004, an allocation of interest by state
will be provided which may be of value in reducing a shareholder's state or
local tax liability, if any.
4.30.03 PIMCO Municipal Income Funds Annual Report 33
PIMCO MUNICIPAL INCOME FUNDS DIVIDEND REINVESTMENT PLAN
Pursuant to the Fund's Dividend Reinvestment Plan (the "Plan"), all Common
Shareholders whose shares are registered in their own names will have all
dividends, including any capital gain dividends, reinvested automatically in
additional Common Shares by PFPC Inc., as agent for the Common Shareholders
(the "Plan Agent"), unless the shareholder elects to receive cash. An election
to receive cash may be revoked or reinstated at the option of the shareholder.
In the case of record shareholders such as banks, brokers or other nominees
that hold Common Shares for others who are the beneficial owners, the Plan
Agent will administer the Plan on the basis of the number of Common Shares
certified from time to time by the record shareholder as representing the total
amount registered in such shareholder's name and held for the account of
beneficial owners who are to participate in the Plan. Shareholders whose shares
are held in the name of a bank, broker or nominee should contact the bank,
whose broker or nominee elects not to participate on the investor's behalf),
will be paid in cash by check mailed, in the case of direct shareholder, to the
record holder by PFPC Inc., as the Fund's dividend disbursement agent.
Unless you (or your broker or nominee) elects not to participate in the Plan,
the number of Common Shares you will receive will be determined as follows:
(1) If Common Shares are trading at or above net asset value on the payment
date, the Fund will issue new shares at the greater of (i) the net asset
value per Common Share on the payment date or (ii) 95% of the market
price per Common Share on the payment date; or
(2) If Common Shares are trading below net asset value (minus estimated
brokerage commissions that would be incurred upon the purchase of Common
Shares on the open market) on the payment date, the Plan Agent will
receive the dividend or distribution in cash and will purchase Common
Shares in the open market, on the New York Stock Exchange or elsewhere,
for the participants' accounts. It is possible that the market price for
the Common Shares may increase before the Plan Agent has completed its
purchases. Therefore, the average purchase price per share paid by the
Plan Agent may exceed the market price on the payment date, resulting in
the purchase of fewer shares than if the dividend or distribution had
been paid in Common Shares issued by the Fund. The Plan Agent will use
all dividends and distributions received in cash to purchase Common
Shares in the open market on or shortly after the payment date, but in no
event later than the ex-dividend date for the next distribution. Interest
will not be paid on any uninvested cash payments.
You may withdraw from the Plan at any time by giving notice to the Plan Agent.
If you withdraw or the Plan is terminated, you will receive a certificate for
each whole share in your account under the Plan and you will receive a cash
payment for any fraction of a share in your account. If you wish, the Plan
Agent will sell your shares and send you the proceeds, minus brokerage
commissions.
The Plan Agent maintains all shareholders' accounts in the Plan and gives
written confirmation of all transactions in the accounts, including information
you may need for tax records. The Plan Agent will also furnish each person who
buys Common Shares with written instructions detailing the procedures for
electing not to participate in the Plan and to instead receive distributions in
cash. Common Shares in your account will be held by the Plan Agent in
non-certificated form. Any proxy you receive will include all Common Shares you
have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or
distributions in Common Shares. However, all participants will pay a pro rata
share of brokerage commissions incurred by the Plan Agent when it makes open
market purchases.
Automatically reinvested dividends and distributions are taxed in the same
manner as cash dividends and distributions.
The Fund and the Plan Agent reserve the right to amend or terminate the Plan.
There is no direct service charge to participants in the Plan; however, the
Fund reserves the right to amend the Plan to include a service charge payable
by the participants. Additional information about the Plan may be obtained from
PFPC Inc., 400 Belleview Parkway, Wilmington, DE 19809, telephone number
1-800-331-1710.
OTHER INFORMATION:
Since April 30, 2002, there has been no: (i) material changes in the Funds'
investment objectives or policies; (ii) changes to the Funds' charter or
by-laws; (iii) material changes in the principal risk factors associated with
investment in the Funds; or (iv) change in the person primarily responsible for
the day-to-day management of each Fund's portfolio.
34 PIMCO Municipal Income Funds Annual Report 4.30.03
PIMCO MUNICIPAL INCOME FUNDS BOARD OF TRUSTEES
STEPHEN TREADWAY, TRUSTEE, CHAIRMAN, CHAIRMAN OF THE BOARD
1345 Avenue of the Americas
New York, NY 10105
Age: 55
Trustee since: 2001
Trustee/Director of 51 funds in Fund Complex
Trustee/Director of no funds outside of Fund Complex
Principal Occupation(s) During Past 5 Years: Managing Director of Allianz
Dresdner Asset Management of America L.P.; Managing Director and Chief
Executive Officer of PIMCO Advisors Distributors LLC; Managing Director and
Chief Executive Officer PIMCO Advisors Fund Management; Member of the Board of
Management of Allianz Dresdner Asset Management GmbH. Mr. Treadway serves as a
director/trustee and holds various executive officer positions in connection
with Allianz Dresdner Asset Management of America L.P.'s affiliated open and
closed-end mutual funds.
PAUL BELICA, TRUSTEE
1345 Avenue of the Americas
New York, NY 10105
Age: 81
Trustee since: 2001
Trustee of 15 funds in Fund Complex
Trustee of 2 funds outside of Fund Complex
Principal Occupation(s) During Past 5 Years: Trustee of fourteen open and
closed-end management investment companies affiliated with Allianz Dresdner
Asset Management of America L.P.; Manager, Stratigos Fund, L.L.C., Whistler
Fund, L.L.C., Xanthus Fund, L.L.C., and Wynstone Fund, L.L.C.; Director,
Student Loan Finance Corp., Education Loans, Inc., Goal Funding, Inc., Surety
Loan Funding, Inc.; Formerly, Advisor, Smith Barney, Inc.; Director, The
Central European Value Fund, Inc.; Deck House Inc.
ROBERT E. CONNOR, TRUSTEE
1345 Avenue of the Americas
New York, NY 10105
Age: 68
Trustee since: 2001
Trustee/Director of 16 funds in Fund Complex
Trustee/Director of no funds outside of Fund Complex
Principal Occupation(s) During Past 5 Years: Director/Trustee of fifteen open
and closed-end management investment companies affiliated with Allianz Dresdner
Asset Management of America L.P.; PIMCO Corporate Affairs Consultant; Formerly,
Senior Vice President, Corporate Office, Smith Barney Inc.
JOHN J. DALESSANDRO II, TRUSTEE
1345 Avenue of the Americas
New York, NY 10105
Age: 65
Trustee since: 2001
Trustee of 13 funds in Fund Complex
Trustee of no funds outside of Fund complex
Principal Occupation(s) During Past 5 Years: President and Director, J.J.
Dalessandro II Ltd., registered broker-dealer and member of the New York Stock
Exchange; Trustee of thirteen closed-end management investment companies
affiliated with Allianz Dresdner Asset Management of America L.P.
HANS W. KERTESS, TRUSTEE
1345 Avenue of the Americas
New York, NY 10105
Age: 63
Trustee since: 2001
Trustee of 7 funds in Fund Complex
Trustee of no funds outside of Fund Complex
Principal Occupation(s) During Past 5 Years: Consultant, Dain Raucher Inc;
Trustee of seven closed-end management investment companies affiliated with
Allianz Dresdner Asset Management of America L.P. Formerly, Managing Director,
Salomon Brothers; Managing Director, Dain Rauscher Inc.
R. PETER SULLIVAN III, TRUSTEE
1345 Avenue of the Americas
New York, NY 10105
Age: 61
Trustee since: 2002
Trustee of 7 funds in Fund Complex
Trustee of no funds outside of Fund Complex
Principal Occupation(s) During Past 5 Years: Trustee of seven closed-end
management investment companies affiliated with Allianz Dresdner Asset
Management of America L.P. Formerly, Managing Partner, Bear Wagner Specialists
LLC (formerly, Wagner Stott Mercator LLC), specialist firm on the New York
Stock Exchange.
4.30.03 PIMCO Municipal Income Funds Annual Report 35
PIMCO MUNICIPAL INCOME FUNDS PRIVACY POLICY
OUR COMMITMENT TO YOU
We consider customer privacy to be a fundamental aspect of our relationship
with clients. We are committed to maintaining the confidentiality, integrity,
and security of our current, prospective and former clients' personal
information. We have developed policies designed to protect this
confidentiality, while allowing client needs to be served.
OBTAINING PERSONAL INFORMATION
In the course of providing you with products and services, we may obtain
non-public personal information about you. This information may come from
sources such as account applications and other forms, from other written,
electronic or verbal correspondence, from your transactions, from your
brokerage or financial advisory firm, financial adviser or consultant, and/or
from information captured on our internet web sites.
RESPECTING YOUR PRIVACY
We do not disclose any personal or account information provided by you or
gathered by us to non-affiliated third parties, except as required or permitted
by law. As is common in the industry, non-affiliated companies may from time to
time be used to provide certain services, such as preparing and mailing
prospectuses, reports, account statements and other information, conducting
research on client satisfaction, and gathering shareholder proxies. We may also
retain non-affiliated companies to market our products and enter in joint
marketing agreements with other companies. These companies may have access to
your personal and account information, but are permitted to use the information
solely to provide the specific service or as otherwise permitted by law. We may
also provide your personal and account information to your brokerage or
financial advisory firm and/or to your financial adviser or consultant.
SHARING INFORMATION WITH THIRD PARTIES
We do reserve the right to disclose or report personal information to
non-affiliated third parties in limited circumstances where we believe in good
faith that disclosure is required under law, to cooperate with regulators or
law enforcement authorities, to protect our rights or property, or upon
reasonable request by any mutual fund in which you have chosen to invest. In
addition, we may disclose information about you or your accounts to a
non-affiliated third party at your request or if you consent in writing to the
disclosure.
SHARING INFORMATION WITH AFFILIATES
We may share client information with our affiliates in connection with
servicing your account or to provide you with information about products and
services that we believe may be of interest to you. The information we share
may include, for example, your participation in our mutual funds or other
investment programs, your ownership of certain types of accounts (such as
IRAs), or other data about your accounts. Our affiliates, in turn, are not
permitted to share your information with non-affiliated entities, except as
required or permitted by law.
IMPLEMENTATION OF PROCEDURES
We take seriously the obligation to safeguard your non-public personal
information. We have implemented procedures designed to restrict access to your
non-public personal information to our personnel who need to know that
information to provide products or services to you. To guard your non-public
personal information, physical, electronic, and procedural safeguards are in
place.
36 PIMCO Municipal Income Funds Annual Report 4.30.03
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.
Executive 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.
400 Bellevue Parkway
Wilmington, DE 19809
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, PIMCO California Municipal Income
Fund and PIMCO New York Municipal Income Fund 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 the Funds may purchase
shares of its common stock in the open market.
Daily information on the Funds is available at www.pimcoadvisors.com or by
calling 1-800-331-1710.
[PIMCO ADVISORS LOGO OMITTED]
ITEM 2. CODE OF ETHICS Disclosure requirement not currently effective
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT Disclosure requirement not currently
effective
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES Disclosure requirement not
currently effective
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANT Disclosure requirement not
currently effective
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES Disclosure requirement not currently effective
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) Disclosure requirement not currently effective.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).