1. Organization and Significant Accounting Policies (continued)
(j) Interest Expense
2. Investment Manager/Sub-Adviser
3. Investments in Securities
October 31, 2007 (unaudited)
PIMCO Municipal Income Funds Notes to Financial Statements
Relates to the Funds’ liability in connection with floating rate notes held by third parties in conjunction with Inverse Floater
Each Fund has entered into an Investment Management Agreement (collectively the ‘‘Agreements’’) with the Investment
Manager. Subject to the supervision by each Fund’s Board of Trustees, the Investment Manager is responsible for managing,
either directly or through others selected by it, each Fund’s investment activities, business affairs and administrative matters.
Pursuant to the Agreements, the Investment Manager receives an annual fee, payable monthly, at an annual rate of 0.65% of
each Fund’s average daily net assets, inclusive of net assets attributable to any preferred shares that may be outstanding. In
order to reduce each Fund’s expenses, the Investment Manager has contractually agreed to waive a portion of its investment
management fee for each Fund at the annual rate of 0.10% of each Fund’s average daily net assets, including net assets
attributable to any preferred shares that may be outstanding through June 30, 2008 and waive 0.05% of its investment
management fee 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 is responsible for
making all investment decisions for the Funds. The Investment Manager, not the Funds, pays a portion of the fees it receives
to the Sub-Adviser in return for its services.
For the six months ended October 31, 2007, purchases and sales of investments, other than short-term securities and U.S.
government obligations, were: