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 811-21078

PIMCO New York Municipal Income Fund II
(Exact name of registrant as specified in charter)

1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices)             (Zip code)

Lawrence G. Altadonna - 1345 Avenue of the Americas, New York, New York 10105
(Name and address of agent for service)

Registrant's telephone number, including area code: 212-739-3371

Date of fiscal year end:
May 31, 2007

Date of reporting period: November 30, 2006

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. § 3507.


ITEM 1. REPORT TO SHAREHOLDERS

 

 

PIMCO Municipal Income Fund II
PIMCO California Municipal Income Fund II
PIMCO New York Municipal Income Fund II

 

 

Semi-Annual Report
November 30, 2006

 

          

 

 

      Contents      
         
  Letter to Shareholders   1  
         
  Performance & Statistics   2-4  
         
  Schedules of Investments   5-26  
         
  Statements of Assets and Liabilities   28  
         
  Statements of Operations   29  
         
  Statements of Changes in Net Assets   30-31  
         
  Statements of Cash Flows   32-33  
         
  Notes to Financial Statements   34-40           
         
  Financial Highlights   42-47  
         
  Matters Relating to the Trustees Consideration      
  of the Investment Management and Portfolio      
  Management Agreements   48-50  
         
  Annual Shareholder Meetings Results/      
  Corporate Changes   51  

 

 


       

PIMCO Municipal Income Funds II Letter to Shareholders

 

April 15, 2007

 

Dear Shareholder:

We are pleased to provide you with the semi-annual report for PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and PIMCO New York Municipal Income Fund II (collectively, the “Funds”) for the six months ended November 30, 2006.

During the period, the bond market rallied as the economy slowed and expectations grew that the Federal Reserve (the “Fed”) might begin easing. In fact, the Fed left rates unchanged at 5.25% at its last four meetings. This came after 17 consecutive increases in short-term interest rates over two years. The apparent end of the Fed’s tightening cycle proved to be a positive for the Funds’ performance during the reporting period.

For specific information on the Funds’ performance, please review the following pages.

If you have any questions regarding the information provided, we encourage you to contact your financial advisor or call the Funds’ shareholder servicing agent at (800) 331-1710. In addition, a wide range of information and resources can be accessed on our Web site, www.allianzinvestors.com/closedendfunds.

Together with Allianz Global Investors Fund Management LLC, the Funds’ investment manager, and Pacific Investment Management Company LLC (“PIMCO”), the Funds’ sub-adviser, we thank you for investing with us.

 

Sincerely,


Hans W. Kertess
Chairman of the Board of Trustees


Brian S. Shlissel
President & Chief Executive Officer

 

 

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 1


PIMCO Municipal Income Fund II Performance & Statistics
November 30, 2006 (unaudited)
         
¢  For the six months ended November 30, 2006, PIMCO Municipal Income Fund II returned 6.65% on net asset value (NAV) and 13.17% on market price, compared with 6.25% and 8.22%, respectively, for the Lipper Analytical General Municipal Debt Funds (Leveraged) average.

¢  Municipal bonds, as measured by the Lehman Municipal Bond Index, underperformed the taxable bond market, as measured by the Lehman

     
       Aggregate Bond Index, returning 4.53% and 5.94%, respectively, for the six-month period.

¢  Municipal bond yields declined across all maturities during the reporting period. For example, 10-, 20- and 30-year AAA General Obligation yields declined by 46, 54 and 62 basis points, respectively. Note that when bond yields decline, bond prices rise, and vice versa.

     
¢  Tobacco securitization sector holdings were beneficial to performance during the reporting period as yields on tobacco municipals continued to decline on further positive legal rulings.

¢  Exposure to non-callable zero coupon municipals proved positive for performance.

         
Total Return(1):  
Market Price
Net Asset Value (“NAV”)
Six Months   13.17%   6.65%
1 Year   10.47%   11.88%
Commencement of Operations (6/28/02) to 11/30/06   8.31%   8.42%


Common Share Market Price/NAV Performance:
Commencement of Operations (6/28/02) to 11/30/06

  Market Price/NAV:  
Market Price $15.90
NAV $15.25
Premium to NAV 4.26%
Market Price Yield(2) 4.91%
     


Moody
s Ratings
(as a % of total investments)


(1) Past performance is no guarantee of future results. Total return is calculated by subtracting the value of an investment in the Fund at the beginning of each specified period from the value at the end of the period and dividing the remainder by the value of the investment at the beginning of the period and expressing the result as a percentage. The calculation assumes that all income dividends and capital gain distributions have been reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total return does not reflect broker commissions or sales charges. Total return for a period more than one year represents the average annual total return.

An investment in the Fund involves risk, including the loss of principal. Total 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.

(2) Market Price Yield is determined by dividing the annualized current monthly per share dividend payable to common shareholders by the market price per common share at November 30, 2006.

2 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO California Municipal Income Fund II Performance & Statistics
November 30, 2006 (unaudited)
         

¢  For the six months ended November 30, 2006, PIMCO California Municipal Income Fund II returned 6.71% on net asset value (NAV) and 13.83% on market price, compared with 6.27% and 7.27%, respectively, for the Lipper Analytical California Municipal Debt Funds average.

¢  California municipal bonds, as measured by the Lehman California Municipal Bond Index, outperformed the broader national municipal market, as measured by the Lehman Municipal Bond Index, for the six-

     

       month reporting period, returning 4.77% and 4.53%, respectively.

¢  California state AAA municipal bond yields declined across all maturities during the reporting period. For example, 5-, 10-, and 30-year General Obligation yields declined by 27, 48 and 63 basis points, respectively. Note that when bond yields decline, bond prices rise, and vice versa.

¢  Tobacco securitization sector holdings were beneficial to performance during the reporting period as yields on tobacco municipals continued

     

       to decline on further positive legal rulings.

¢  Exposure to non-callable zero coupon municipals proved positive for performance.

¢  Interest rate hedging strategies that benefit Fund performance when longer-term Treasuries lag longer-term municipals hindered performance as longer-term Treasuries outperformed longer-term municipals during the reporting period.

         
Total Return(1):  
Market Price
Net Asset Value (NAV)
Six Months   13.83%   6.71%
1 Year   10.78%   11.53%
Commencement of Operations (6/28/02) to 11/30/06   8.47%   7.95%

Common Share Market Price/NAV Performance:
Commencement of Operations (6/28/02) to 11/30/06

  Market Price/NAV:  
Market Price $16.18
NAV $15.12
Premium to NAV 7.01%
Market Price Yield(2) 5.19%
     


Moody
s Ratings
(as a % of total investments)

 

(1) Past performance is no guarantee of future results. Total return is calculated by subtracting the value of an investment in the Fund at the beginning of each specified period from the value at the end of the period and dividing the remainder by the value of the investment at the beginning of the period and expressing the result as a percentage. The calculation assumes that all income dividends have been reinvested at prices obtained under the Funds dividend reinvestment plan. Total return does not reflect broker commissions or sales charges. Total return for a period more than one year represents the average annual total return.

An investment in the Fund involves risk, including the loss of principal. Total 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.

(2) Market Price Yield is determined by dividing the annualized current monthly per share dividend payable to common shareholders by the market price per common share at November 30, 2006.

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 3


PIMCO New York Municipal Income Fund II Performance & Statistics
November 30, 2006 (unaudited)
         

¢  For the six months ended November 30, 2006, PIMCO New York Municipal Income Fund II returned 6.44% on net asset value and 14.32% on market price, compared with 5.84% and 7.97%, respectively, for the Lipper Analytical New York Municipal Debt Funds average.

¢  New York municipal bonds, as measured by the Lehman New York Municipal Bond Index, underperformed the broader national municipal market, as measured by the Lehman Municipal Bond Index,

       for the six-month reporting period, returning 4.36% and 4.53%, respectively.

¢  New York insured AAA municipal bond yields declined across all maturities during the reporting period. For example, 5-, 10-, and 30-year General Obligation yields declined by 27, 48 and 63 basis points, respectively. Note that when bond yields decline, bond prices rise, and vice versa.

¢  Tobacco securitization sector holdings were beneficial to performance

       during the reporting period as yields on tobacco municipals continued to decline on further positive legal rulings.

¢  Exposure to non-callable zero coupon municipals proved positive for performance.

¢  Interest rate hedging strategies that benefit Fund performance when longer-term Treasuries lag longer-term municipals hindered performance as longer-term Treasuries outperformed longer-term municipals during the reporting period.

         
Total Return(1):  
Market Price
Net Asset Value (NAV)
Six Months   14.32%   6.44%
1 Year   7.78%   11.89%
Commencement of Operations (6/28/02) to 11/30/06   7.71%   7.98%


Common Share Market Price/NAV Performance:
Commencement of Operations (6/28/02) to 11/30/06

  Market Price/NAV:  
Market Price $15.74
NAV $15.19
Premium to NAV 3.62%
Market Price Yield(2) 5.05%
 


Moody
s Ratings
(as a % of total investments)


(1) Past performance is no guarantee of future results. Total return is calculated by subtracting the value of an investment in the Fund at the beginning of each specified period from the value at the end of the period and dividing the remainder by the value of the investment at the beginning of the period and expressing the result as a percentage. The calculation assumes that all income dividends have been reinvested at prices obtained under the Funds dividend reinvestment plan. Total return does not reflect broker commissions or sales charges. Total return for a period more 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.

(2) Market Price Yield is determined by dividing the annualized current monthly per share dividend payable to common shareholders by the market price per common share at November 30, 2006.

4 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
 MUNICIPAL BONDS & NOTES—94.8%
 
     
    Alabama—4.0%  
     
$10,000   Birmingham Baptist Medical Centers Special Care Facs.  
     
       Financing Auth. Rev., 5.00%, 11/15/30, Ser. A  
Baa1/NR
  $ 10,379,500
    Birmingham Waterworks & Sewer Board Rev., Ser. B (MBIA),  
     
1,145      5.00%, 1/1/27  
Aaa/AAA
    1,208,044
10,000      5.00%, 1/1/37  
Aaa/AAA
    10,479,200
18,000      5.25%, 1/1/33, (Pre-refunded @ $100, 1/1/13) (g)  
NR/NR
    19,372,680
1,750   Huntsville Health Care Auth. Rev., 5.75%, 6/1/32, Ser. B  
A2/NR
    1,905,540
16,580   Jefferson Cnty. Sewer Rev., 4.75%, 2/1/38, Ser. B,  
     
       (Pre-refunded @ $100, 8/1/12) (FGIC) (a)  
Aaa/AAA
    17,608,126
       
    60,953,090
    Alaska—0.2%  
     
3,550   State Housing Finance Corp. Rev., 5.25%, 6/1/32, Ser. C (MBIA)  
Aaa/AAA
    3,651,601
               
    Arizona—2.5%  
     
1,300   Health Facs. Auth. Hospital System Rev., 5.75%, 12/1/32  
NR/BBB
    1,395,849
33,000   Salt River Project Agricultural Improvement & Power Dist. Rev.,  
     
       5.00%, 1/1/37, Ser. A (g)  
Aa1/AA
    35,541,330
       
    36,937,179
    Arkansas—0.1%  
     
13,000   Arkansas Dev. Finance Auth. Rev., zero coupon, 7/1/46 (AMBAC)  
Aaa/AAA
    2,162,030
               
    California—2.2%  
     
9,610   Alameda Corridor Transportation Auth. Rev.,  
     
       zero coupon, 10/1/16, Ser. A (AMBAC)  
Aaa/AAA
    6,563,342
    Golden State Tobacco Securitization Corp.,  
     
       Tobacco Settlement Rev., Ser. 2003-A-1,  
     
3,300  
       6.25%, 6/1/33
 
Baa3/BBB
    3,714,645
9,000  
       6.75%, 6/1/39
 
Baa3/BBB
    10,385,550
1,000   Rancho Cucamonga Community Facs. Dist., Special Tax,  
     
       6.30%, 9/1/23, Ser. A  
NR/NR
    1,067,740
4,000   Southern California Public Power Auth., Transmission Project Rev.,  
     
       zero coupon, 7/1/13  
Aa3/A+
    3,113,240
    Univ. of California Rev.,  
     
4,430      4.75%, 5/15/37, Ser. C (MBIA)  
Aaa/AAA
    4,607,244
2,900      4.75%, 5/15/38, Ser. B  
Aa3/AA-
    2,986,043
       
    32,437,804
    Colorado—5.2%  
     
30,000   Dawson Ridge Dist. No. 1, GO, zero coupon, 10/1/22, Ser. A  
Aaa/NR
    15,566,100
5,000   Denver City & Cnty., CP, 5.50%, 12/1/25, Ser. B,  
     
       (Pre-refunded @ $101, 12/1/10) (AMBAC) (a)  
Aaa/AAA
    5,410,850
    E-470 Public Highway Auth. Rev., Ser. B (MBIA),  
     
20,000      zero coupon, 9/1/35  
Aaa/AAA
    5,098,800
15,000      zero coupon, 9/1/37  
Aaa/AAA
    3,450,000
    Health Facs. Auth. Rev.,  
     
25,000      Catholic Health Initiatives, 5.50%, 3/1/32  
Aa2/AA
    26,694,000
18,305      Exempla, Inc., 5.625%, 1/1/33, Ser. A  
A1/A-
    19,486,405
6,500      Retirement Facs. Rev., Liberty Height, zero coupon, 7/15/22  
Aaa/AAA
    3,402,295
       
    79,108,450

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 5


PIMCO Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
    District of Columbia—1.2%  
     
$17,500   Washington D.C. Convention Center Auth. Tax Rev.,  
     
       4.75%, 10/1/28 (AMBAC)  
Aaa/AAA
  $ 17,696,875
       
     
    Florida—4.0%  
     
6,520   Brevard Cnty. Health Facs. Auth. Rev., 5.00%, 4/1/34  
A2/A
    6,831,395
    Highlands Cnty. Health Facs. Auth. Rev.,  
     
2,830   Adventist, 5.00%, 11/15/31, Ser. C  
A2/A+
    2,969,321
8,000   Adventist Health System, 6.00%, 11/15/31, Ser. A,  
     
       (Pre-refunded @ $101, 11/15/11) (a)  
A2/A+
    8,940,960
2,335   Hillsborough Cnty. Industrial Dev. Auth., Pollution Control Rev.,  
     
       Tampa Electric Co. Project, 5.50%, 10/1/23  
Baa2/BBB-
    2,479,046
635   Hillsborough Cnty. Industrial Dev. Auth. Rev., Health Fac. Project,  
     
       5.625%, 8/15/23  
Baa2/BBB
    664,617
7,135   Jacksonville Health Facs. Auth. Rev., 5.25%, 11/15/32, Ser. A  
Aa2/AA
    7,615,970
11,500   Lakeland Hospital System Rev., Regional Health System,  
     
       5.50%, 11/15/32, (Pre-refunded @ $101, 11/15/12) (a)  
A2/NR
    12,765,690
3,000   Leesburg Hospital Rev., Lessburg Regional Medical  
     
       Center Project, 5.50%, 7/1/32  
Baa1/BBB+
    3,156,870
    Orange Cnty. Health Facs. Auth. Rev., Adventist Health System,  
     
2,550      5.625%, 11/15/32  
A2/A+
    2,797,325
5,000      6.25%, 11/15/24  
A2/A+
    5,623,550
5,000   Sumter Landing Community Dev. Dist. Rev., 4.75%,  
     
       10/1/35, Ser. A (MBIA) (g)  
NR/AAA
    5,182,050
1,500   Winter Springs Water & Sewer Rev., zero coupon,  
     
       10/1/29 (FGIC)  
Aaa/AAA
    564,285
       
    59,591,079
    Georgia—0.7%  
     
4,000   Atlanta Water & Wastewater Rev., 5.00%, 11/1/39,  
     
       Ser. A (MBIA)  
Aaa/AAA
    4,194,560
1,500   Grantor Trust Gov’t, CP, 4.75%, 6/1/28, Ser. A (MBIA)  
Aaa/AAA
    1,627,140
9,600   Richmond Cnty. Dev. Auth. Rev., zero coupon, 12/1/21  
Aaa/NR
    5,217,216
       
    11,038,916
    Hawaii—1.3%  
     
19,170   Honolulu City & Cnty. Wastewater System Rev.,  
     
       First Board Resolution, 4.75%, 7/1/28 (FGIC)  
Aaa/NR
    19,669,378
               
    Illinois—19.9%  
     
    Central Lake Cnty. Water Agcy. Rev., Ser. A (AMBAC),  
     
3,610      5.125%, 5/1/28  
Aaa/NR
    3,845,047
8,150      5.125%, 5/1/32  
Aaa/NR
    8,649,758
5,050   Chicago, GO, 5.125%, 1/1/29, Ser. A (FGIC)  
Aaa/AAA
    5,227,659
    Chicago, Lake Shore East, Special Assessment,  
     
3,162      6.625%, 12/1/22  
NR/NR
    3,448,066
6,700      6.75%, 12/1/32  
NR/NR
    7,316,199
    Chicago Board of Education School Reform, GO (FGIC),  
     
15,535      zero coupon, 12/1/16, Ser. A  
Aaa/AAA
    10,479,756
5,000      zero coupon, 12/1/28, Ser. A  
Aaa/AAA
    1,957,750
4,500      zero coupon, 12/1/31  
Aaa/AAA
    1,527,795

6 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
    Illinois—(continued)  
     
    Chicago City Colleges, GO (FGIC),  
     
$32,670      zero coupon, 1/1/37  
Aaa/AAA
  $ 8,851,283
29,145      zero coupon, 1/1/38  
Aaa/AAA
    7,537,771
32,670      zero coupon, 1/1/39  
Aaa/AAA
    8,089,746
7,000   Chicago Midway Airport Rev., 5.00%, 1/1/31, Ser. B (MBIA)  
Aaa/AAA
    7,199,360
5,000   Cicero, GO, 5.25%, 12/1/31 (MBIA)  
Aaa/AAA
    5,399,850
10,000   City of Springfield Rev., 5.00%, 3/1/35 (MBIA)  
Aaa/AAA
    10,709,600
    Dev. Finance Auth. Retirement Housing Rev., Regency Park,  
     
10,000      zero coupon, 7/15/23  
NR/AAA
    4,956,800
134,650      zero coupon, 7/15/25  
NR/AAA
    60,778,317
    Health Facs. Auth. Rev.,  
     
5,000      Condell Medical Center Rev., 5.50%, 5/15/32  
Baa2/NR
    5,261,100
20,100      Elmhurst Memorial Healthcare, 5.625%, 1/1/28  
A2/NR
    21,642,675
    Metropolitan Pier & Exposition Auth. Rev. (MBIA),  
     
60,000      zero coupon, 12/15/30  
Aaa/AAA
    21,945,600
50,000      zero coupon, 12/15/33  
Aaa/AAA
    16,002,500
2,460      zero coupon, 6/15/38  
Aaa/AAA
    643,290
4,500   Schaumburg, GO, 5.00%, 12/1/41, Ser. B (FGIC)  
Aaa/AAA
    4,751,550
10,000   State, GO, 5.00%, 3/1/34, Ser. A  
Aa3/AA
    10,583,900
68,470   State Sports Facs. Auth. Rev., zero coupon, 6/15/30 (AMBAC)  
Aaa/AAA
    64,292,645
       
    301,098,017
    Indiana—0.5%  
     
    Brownsburg 1999 School Building Corp. Rev., Ser. A,  
     
       (Pre-refunded @ $100, 9/15/13) (FSA) (a),  
     
1,000  
       5.00%, 9/15/25
 
Aaa/AAA
    1,087,240
2,000  
       5.25%, 3/15/25
 
Aaa/AAA
    2,204,380
4,125   Fort Wayne Pollution Control Rev., 6.20%, 10/15/25  
Caa1/B-
    4,240,335
500   State Bank Rev., Hendricks, 5.25%, 4/1/30, Ser. D (AMBAC)  
Aaa/AAA
    532,625
       
    8,064,580
    Iowa—3.8%  
     
2,300   Higher Education Loan Auth. Rev., Grandview College,  
     
       5.10%, 10/1/36  
NR/NR
    2,371,645
46,000   Tobacco Settlement Auth. of Iowa Rev., zero coupon,  
     
       6/1/34, Ser. B  
Baa3/BBB
    45,321,500
8,850   Tobacco Settlement Auth. Rev., 5.60%, 6/1/35, Ser. B,  
     
       (Pre-refunded @ $101, 6/1/11) (a)  
Baa3/AAA
    9,626,145
       
    57,319,290
    Kansas—0.2%  
     
2,800   Univ. of Kansas, Hospital Auth. Health Facs. Rev.,  
     
       5.625%, 9/1/32, (Pre-refunded @ $100, 9/1/12) (a)  
NR/A
    3,022,124
               
    Kentucky—0.3%  
     
2,500   Economic Dev. Finance Auth. Hospital Facs. Rev.,  
     
       Catholic Healthcare Partners, 5.25%, 10/1/30  
Aa3/AA-
    2,643,450
1,945   St. Luke’s Hospital, 6.00%, 10/1/19  
A3/A
    2,194,368
       
    4,837,818

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 7


PIMCO Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
    Louisiana—4.6%  
     
$20,400   Public Facs. Auth. Rev., Ochsner Clinic Foundation,  
     
       5.50%, 5/15/32, Ser. B  
A3/NR
  $ 21,707,640
    Tobacco Settlement Financing Corp. Rev.,  
     
8,000      5.875%, 5/15/39, Ser. 2001-B (g)  
Baa3/BBB
    8,611,120
36,395      5.875%, 5/15/39, Ser. 2001-B  
Baa3/BBB
    39,175,214
       
    69,493,974
    Maryland—0.1%  
     
1,000   State Health & Higher Educational Facs. Auth. Rev.,  
     
       Adventist Healthcare, 5.75%, 1/1/25, Ser. A  
Baa2/NR
    1,077,230
               
    Massachusetts—3.7%  
     
14,500   Bay Transportation Auth., Special Assessment,  
     
       4.75%, 7/1/34, Ser. A (g)  
NR/NR
    15,047,520
1,300   Bay Transportation Auth. Rev., General Transportation System,  
     
       4.75%, 3/1/21, Ser. A (MBIA)  
Aaa/AAA
    1,329,692
    State College Building Auth. Project Rev., Ser. B (XLCA),  
     
5,560      5.50%, 5/1/28  
Aaa/AAA
    6,778,863
7,645      5.50%, 5/1/33  
Aaa/AAA
    9,460,917
5,000      5.50%, 5/1/39  
Aaa/AAA
    6,301,700
4,295   State Turnpike Auth. Rev., 4.75%, 1/1/34, Ser. A (AMBAC)  
Aaa/AAA
    4,359,812
12,050   State Water Res. Auth. Rev., 4.75%, 8/1/37, Ser. A (FSA)  
Aaa/AAA
    12,148,569
       
    55,427,073
    Michigan—2.4%  
     
    Detroit City School Dist., GO, Ser. A (a),  
     
8,500      5.00%, 5/1/32, (Pre-refunded @ $100, 5/1/13) (FGIC)  
Aaa/AAA
    9,205,415
1,750      5.125%, 5/1/31, (Pre-refunded @ $100, 5/1/12) (FSA)  
Aaa/AAA
    1,881,758
2,500   Detroit Water Supply System Rev., 5.00%, 7/1/30, Ser. A (FGIC)  
Aaa/AAA
    2,613,000
    State Hospital Finance Auth. Rev.,  
     
5,000      Ascension Health, 5.25%, 11/15/26, Ser. B  
Aa2/AA
    5,326,150
       Oakwood Group, Ser. A,  
     
13,500  
          5.75%, 4/1/32
 
A2/A
    14,526,270
1,925  
          6.00%, 4/1/22
 
A2/A
    2,115,517
       
    35,668,110
    Minnesota—0.0%  
     
280   City of Minneapolis, Tax Allocation, Grant Park Project,  
     
       5.35%, 2/1/30  
NR/NR
    284,855
               
    Mississippi—0.3%  
     
3,605   Business Finance Corp., Pollution Control Rev., 5.875%, 4/1/22  
Ba1/BBB-
    3,617,401
1,000   Dev. Bank Special Obligation, Projects & Equipment  
     
       Acquisitions Rev., 5.00%, 7/1/24 (AMBAC)  
Aaa/AAA
    1,056,500
       
    4,673,901
    Missouri—0.2%  
     
905   Hanley Road & North of Folk Ave. Transportation Dist. Rev.,  
     
       5.00%, 10/1/25  
NR/NR
    916,792
1,500   St. Louis Parking Facs. Rev., Downtown Parking Fac.,  
     
       6.00%, 2/1/28  
NR/NR
    1,568,010
       
    2,484,802

8 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
    Nevada—1.7%          
    Clark Cnty., GO (FGIC),          
$ 1,450      5.00%, 6/1/31   Aaa/AAA   $ 1,510,856
1,950      5.00%, 6/1/31, (Pre-refunded @ $100, 6/1/11) (a)   Aaa/AAA     2,068,852
    Reno Transportation Project Rev., (Pre-refunded @ $100,          
       6/1/12) (AMBAC) (a),          
3,960          5.125%, 6/1/27   Aaa/AAA     4,272,642
2,000          5.125%, 6/1/32   Aaa/AAA     2,157,900
3,500          5.125%, 6/1/37   Aaa/AAA     3,776,325
7,570          5.25%, 6/1/41   Aaa/AAA     8,214,510
3,290   Truckee Meadows Water Auth. Rev., 5.125%, 7/1/30,          
       Ser. A (FSA)   Aaa/AAA     3,468,450
              25,469,535
    New Hampshire—0.2%          
    Health & Education Facs. Auth. Rev., Catholic Medical Center,          
360      6.125%, 7/1/32   Baa1/BBB+     398,088
2,640      6.125%, 7/1/32, (Pre-refunded @ $101, 6/1/12) (a)   Baa1/BBB+     2,991,120
              3,389,208
    New Jersey—2.4%          
    Camden Cnty. Improvement Auth. Rev., Cooper Health System,          
       (Pre-refunded @ $102, 2/15/07) (a),          
20          5.875%, 2/15/15  
Baa3/BBB
    20,483
40          6.00%, 2/15/27  
Baa3/BBB
    40,976
    Economic Dev. Auth., Kapkowski Landfill Project,  
     
4,000      5.75%, 10/1/21  
Baa3/NR
    4,497,360
11,405      5.75%, 4/1/31  
Baa3/NR
    12,786,944
    Economic Dev. Auth. Rev.,          
       Arbor Glen,          
525          6.00%, 5/15/28   NR/NR     544,404
225          6.00%, 5/15/28, Ser. A, (Pre-refunded @ $102, 5/15/09) (a)   NR/NR     241,702
250   Seashore Gardens, 5.375%, 11/1/36   NR/NR     252,545
3,500   State Educational Facs. Auth. Rev., 6.00%, 7/1/25, Ser. D   NR/NR     3,850,000
    Tobacco Settlement Financing Corp. Rev.,          
1,285      6.00%, 6/1/37  
Baa3/BBB
    1,405,225
3,095      6.125%, 6/1/42  
Baa3/BBB
    3,403,448
6,150      6.25%, 6/1/43  
Baa3/BBB
    6,904,113
2,500      6.75%, 6/1/39  
Baa3/BBB
    2,877,175
       
    36,824,375
    New Mexico—0.3%  
     
5,000   Farmington Pollution Control Rev., 5.80%, 4/1/22  
Baa2/BBB
    5,049,550
               
    New York—3.8%          
1,200   Erie Cnty. Industrial Dev. Agcy., Orchard Park Rev.,          
       6.00%, 11/15/36   NR/NR     1,283,388
10,000   Liberty Dev. Corp. Rev., 5.25%, 10/1/35 (g)  
Aa3/AA-
    11,952,600
4,750   New York City Municipal Water Finance Auth.,          
       Water & Sewer System Rev., 5.00%, 6/15/37, Ser. D (g)  
Aa2/AA+
    5,076,135
    Metropolitan Transportation Auth. Rev.,          
10,600      5.00%, 11/15/30, Ser. A (FSA)   Aaa/AAA     11,213,104
10,000      5.25%, 11/15/32, Ser. B   A2/A     10,807,800

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 9


PIMCO Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
    New York—(continued)  
     
$ 7,000   New York City Municipal Water Finance Auth.,  
     
       Water & Sewer System Rev., 5.00%, 6/15/39, Ser. A  
Aa2/AA+
  $ 7,423,010
6,700   State Dormitory Auth. Rev., Sloan-Kettering Center Memorial,  
     
       5.00%, 7/1/34, Ser. 1  
Aa2/AA
    7,048,065
2,000   State Environmental Facs. Corp. Rev., 5.00%, 6/15/28  
Aaa/AAA
    2,132,820
       
    56,936,922
    North Carolina—0.0%  
     
550   North Carolina Medical Care Commission Rev.,  
     
       Salemtowne, 5.10%, 10/1/30  
NR/NR
    560,131
               
    Ohio—0.5%  
     
7,500   Lorain Cnty. Hospital Rev., Catholic Healthcare,  
     
       5.375%, 10/1/30  
Aa3/AA-
    7,958,475
               
    Oklahoma—0.5%  
     
6,500   Tulsa Cnty. Industrial Auth. Rev., Legacy Apartments,  
     
       4.90%, 11/20/46 (FHA-GNMA)  
Aaa/NR
    6,811,740
               
    Pennsylvania—2.3%  
     
    Allegheny Cnty. Hospital Dev. Auth. Rev., Ser. B,  
     
530      9.25%, 11/15/15  
Ba3/B+
    633,430
1,000      9.25%, 11/15/22  
Ba3/B+
    1,195,150
5,700      9.25%, 11/15/30  
Ba3/B+
    6,814,635
4,500   Cumberland Cnty. Auth. Retirement Community Rev.,  
     
       Wesley Affiliated Services, 7.25%, 1/1/35, Ser. A,  
     
       (Pre-refunded @ $101, 1/1/13) (a)  
NR/NR
    5,413,860
    Montgomery Cnty. Higher Education & Health Auth. Hospital Rev.,  
     
       Abington Memorial Hospital, Ser. A,  
     
5,000  
          5.125%, 6/1/27
 
NR/A
    5,269,000
3,750  
          5.125%, 6/1/32
 
NR/A
    3,936,525
3,000   Philadelphia, GO, 5.25%, 9/15/25 (FSA)  
Aaa/AAA
    3,171,300
5,000   Philadelphia Auth. Industrial Dev. Lease Rev.,  
     
       5.25%, 10/1/30, Ser. B (FSA)  
Aaa/AAA
    5,310,400
500   Pittsburgh & Allegheny Cnty. Public Auditorium Auth. Rev.,  
     
       5.00%, 2/1/29 (AMBAC)  
Aaa/AAA
    516,305
2,500   Radnor Township School Dist., GO, 5.00%, 2/15/35, Ser. B,  
     
       (Partially pre-refunded @ $100, 8/15/15) (FSA) (a)  
Aaa/NR
    2,689,525
       
    34,950,130
    Puerto Rico—0.3%  
     
4,200   Electric Power Auth., Power Rev., 5.125%, 7/1/29, Ser. NN  
A3/BBB+
    4,470,564
               
    Rhode Island—4.4%  
     
62,000   Tobacco Settlement Financing Corp. Rev., 6.25%,  
     
       6/1/42, Ser. A  
Baa3/BBB
    66,169,500
               
    South Carolina—5.3%  
     
27,745   Greenville Cnty. School Dist. Rev., Building Equity Sooner  
     
       Tomorrow, 5.50%, 12/1/28, (Pre-refunded @ $101,  
     
       12/1/12) (a)  
Aaa/AA-
    30,817,759
18,120   Jobs Economic Dev. Auth. Rev., Bon Secours Health System,  
     
       5.625%, 11/15/30  
A3/A-
    19,406,339

10 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
    South Carolina—(continued)  
     
    Lexington Cnty., Health Services Dist. Hospital Rev.,  
     
$15,000      5.50%, 11/1/32  
A2/A
  $ 16,232,550
3,500      5.50%, 5/1/37  
A2/A
    3,793,825
5,000      5.75%, 11/1/28  
A2/A
    5,513,700
3,250   Tobacco Settlement Rev. Management Auth. Rev.,  
     
       6.375%, 5/15/28, Ser. B  
Baa3/BBB
    3,500,510
1,180   Transportation Infrastructure Rev., 5.00%, 10/1/29, Ser. A,  
     
       (Pre-refunded @ $100, 10/1/11) (AMBAC) (a)  
Aaa/NR
    1,256,782
       
    80,521,465
    Tennessee—0.3%  
     
3,750   Knox Cnty. Health Educational & Housing Facs.,  
     
       Board Hospital Facs. Rev., 5.25%, 10/1/30  
Aa3/AA-
    3,973,125
               
    Texas—10.8%  
     
    Arlington Independent School Dist., GO (PSF-GTD),  
     
10      5.00%, 2/15/24  
Aaa/AAA
    10,254
990      5.00%, 2/15/24, (Pre-refunded @ $100, 2/15/09) (a)  
Aaa/AAA
    1,021,264
4,480   Aubrey Independent School Dist., GO,  
     
       5.50%, 2/15/33 (PSF-GTD)  
Aaa/NR
    5,005,907
6,500   Brazos Cnty. Health Facs. Dev. Corp., Franciscan Services  
     
       Corp. Rev., 5.375%, 1/1/32  
NR/A-
    6,927,115
2,700   Comal Cnty. Health Facs. Dev., McKenna Memorial Hospital  
     
       Project Rev., 6.25%, 2/1/32  
Baa3/BBB-
    2,945,646
5,000   Dallas Area Rapid Transit Rev., 5.00%, 12/1/31 (AMBAC)  
Aaa/AAA
    5,221,800
20,000   Frisco Independent School Dist., GO, zero coupon,  
     
       8/15/34 (PSF-GTD)  
Aaa/NR
    5,911,200
    Harris Cnty.,  
     
19,750      GO, 5.125%, 8/15/31, (Pre-refunded @ $100, 8/15/12) (a)  
Aa1/AA+
    21,308,275
5,250      Health Facs. Dev. Corp. Rev., St. Luke’s Episcopal Hospital,  
NR/AAA
    5,655,982
           5.375%, 2/15/26, Ser. A, (Pre-refunded @ $100, 8/15/11) (a)  
     
25,000      Senior Lien Toll Road Rev., 5.00%, 8/15/30 (FSA)  
Aaa/AAA
    26,286,500
7,500   Keller Independent School Dist., GO, 4.875%,  
     
       8/15/31 (PSF-GTD)  
Aaa/AAA
    7,644,525
3,170   Little Elm Independent School Dist., GO, 5.30%, 8/15/29,  
     
       Ser. A (PSF-GTD)  
NR/AAA
    3,431,018
6,250   North Dallas Thruway Auth. Rev., 4.75%, 1/1/29 (FGIC)  
Aaa/AAA
    6,334,688
5,000   Quinlan Independent School Dist., GO, 5.10%,  
     
       2/15/32 (PSF-GTD)  
Aaa/NR
    5,250,600
2,000   Sabine River Auth. Rev., 5.20%, 5/1/28  
Baa2/BBB-
    2,101,700
    State, GO,  
     
10,025      4.75%, 4/1/35, Ser. A (g)  
Aa1/AA
    10,451,263
17,500      4.75%, 4/1/36  
Aa1/AA
    18,262,650
    State Turnpike Auth. Central Turnpike System Rev., Ser. A (AMBAC),  
     
10,000      zero coupon, 8/15/19  
Aaa/AAA
    5,973,800
8,880      5.00%, 8/15/42  
Aaa/AAA
    9,281,731

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 11


PIMCO Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
    Texas—(continued)  
     
    State Water Financial Assistance, GO,  
     
$ 3,250      5.00%, 8/1/36  
Aa1/AA
  $ 3,411,200
1,650      5.25%, 8/1/35  
Aa1/AA
    1,757,646
8,000   Wichita Falls Water & Sewer Rev., 5.00%, 8/1/27 (AMBAC)  
Aaa/AAA
    8,360,560
       
    162,555,324
    Utah—3.1%  
     
44,150   Utah Transit Auth. Rev., 4.75%, 6/15/35, Ser. B (FSA) (g)  
NR/NR
    46,093,483
       
     
    Virginia—0.5%  
     
    Fredericksburg Industrial Dev. Auth., Medicorp Health System  
     
       Rev., Ser. B,  
     
2,500  
       5.125%, 6/15/33
 
A3/NR
    2,598,000
4,000          5.25%, 6/15/27  
A3/NR
    4,187,160
       
    6,785,160
    Washington—0.3%  
     
5,000   Tacoma Sewer Rev., 5.00%, 12/1/31, Ser. A (FGIC)  
Aaa/AAA
    5,224,100
       
     
    Wisconsin—0.7%  
     
    Badger Tobacco Asset Securitization Corp.,  
     
1,125      6.00%, 6/1/17  
Baa3/BBB
    1,210,219
8,170      6.125%, 6/1/27  
Baa3/BBB
    8,760,119
    State Health & Educational Facs. Auth. Rev.,  
     
       Froedert & Community Health Oblig.,  
     
90          5.375%, 10/1/30  
NR/AA-
    95,628
910          5.375%, 10/1/30, (Pre-refunded @ $101, 10/1/11) (a)  
NR/AA-
    985,593
       
    11,051,559
 
    Total Municipal Bonds & Notes (cost—$1,283,260,482)  
    1,431,492,522
 
 VARIABLE RATE NOTES (d)—4.8%
 
     
    Alabama—0.5%  
     
4,450   Jefferson Cnty. Sewer Rev., 11.23%, 2/1/36, Ser. 352 (FGIC) (b)  
Aaa/NR
    5,450,805
1,400   Montgomery Special Care Facs., Financing Auth. Rev.,  
     
       10.04%, 11/15/29, Ser. 435 (MBIA) (b)  
Aaa/NR
    1,604,960
       
    7,055,765
    Colorado—0.2%  
     
2,250   Denver City & Cnty. Airport Rev., 10.04%, 11/15/25,  
     
       Ser. 425 (FSA) (b)  
Aaa/NR
    2,630,812
               
    Florida—0.4%  
     
1,782   Orange Cnty. School Board, CP, 10.04%, 8/1/24,  
     
       Ser. 328 (MBIA) (b)  
Aaa/NR
    2,201,305
3,241   State Governmental Utilities Auth. Rev., 10.04%, 10/1/29,  
     
       Ser. 327 (AMBAC) (b)  
Aaa/NR
    3,906,053
       
    6,107,358

12 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
    Illinois—0.6%  
     
    Chicago, GO (b),  
     
$ 1,780      10.67%, 1/1/28, Ser. 332 (MBIA)  
Aaa/NR
  $ 2,160,920
2,200      12.54%, 1/1/40, Ser. 426 (FGIC)  
Aaa/NR
    2,922,590
1,288   Cook Cnty., GO, 10.04%, 11/15/28, Ser. 403 (FGIC) (b)  
Aaa/NR
    1,586,365
2,000   State, GO, 11.29%, 4/1/27, Ser. 783 (FSA) (b)  
Aaa/NR
    2,702,200
       
    9,372,075
    Massachusetts—1.5%  
     
1,400   Boston Water & Sewer Community Rev., 10.08%, 11/1/28,  
     
       Ser. 434 (FGIC) (b)  
Aaa/NR
    1,616,580
2,200   State, GO, 11.34%, 11/1/30, Ser. 785 (FGIC-TCRS) (b)  
Aaa/NR
    3,169,650
    State Turnpike Auth. Rev. (b),  
     
7,366      10.08%, 1/1/37, Ser. 334 (MBIA)  
Aaa/NR
    8,105,178
3,000      10.08%, 1/1/37, Ser. 489 (MBIA)  
NR/AAA
    3,301,050
5,668      10.08%, 1/1/39, Ser. 335 (AMBAC)  
Aaa/NR
    6,517,115
       
    22,709,573
    Nevada—0.2%  
     
2,200   State, GO, 10.04%, 5/15/28, Ser. 344 (FGIC) (b)  
Aaa/NR
    2,384,250
               
    Ohio—0.1%  
     
1,580   Hamilton Cnty. Sales Tax Rev., 10.04%, 12/1/27,  
     
       Ser. 356 (MBIA) (b)  
Aaa/NR
    1,780,186
               
    Pennsylvania—0.5%  
     
3,050   Philadelphia Auth. Industrial Dev. Rev., Doubletree,  
     
       6.50%, 10/1/27, (Pre-refunded @ $102, 2/1/07) (a)  
NR/NR
    3,124,054
    Philadelphia School Dist., GO (MBIA) (b),  
     
1,670      8.79%, 4/1/27, Ser. 345  
Aaa/NR
    1,814,539
2,677      8.79%, 4/1/27, Ser. 496  
NR/AAA
    2,908,694
       
    7,847,287
    Texas—0.7%  
     
2,460   Denton Utility System Rev., 10.67%, 12/1/29,  
     
       Ser. 428 (MBIA) (b)  
Aaa/NR
    2,762,211
1,100   Houston Airport System Rev., 10.04%, 7/1/25, Ser. 404 (FGIC) (b)  
Aaa/NR
    1,198,835
    Houston Water & Sewer System Rev. (b),  
     
2,200      10.04%, 12/1/28, Ser. 427 (FSA)  
Aaa/NR
    2,667,500
3,070      11.29%, 12/1/30, Ser. 495 (FGIC)  
NR/AAA
    4,026,612
       
    10,655,158
    Washington—0.1%  
     
1,820   Central Puget Sound Regional Transit Auth. Sales Tax & Motor  
     
       Rev., 8.80%, 2/1/28, Ser. 360 (FGIC) (b)  
Aaa/NR
    2,033,213
 
    Total Variable Rate Notes (cost—$56,572,705)  
    72,575,677

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 13


PIMCO Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
             
(000)
                         Value
 U.S. TREASURY BILLS (e)—0.4%          
$6,040   4.71%-4.98%, 12/14/06 (cost—$6,029,541)       $ 6,029,541 
 
    Total Investments before options written (cost—$1,345,862,728)—100.0%         1,510,097,740 
 
 OPTIONS WRITTEN (f)—(0.0)%          
Contracts              
    Call Options—(0.0)%          
    U.S. Treasury Notes 10 yr. Futures, Chicago Board of Trade,          
590      strike price $110, expires 2/23/07 (premiums received—$246,989)         (322,656)
 
    Total Investments net of options written (cost—$1,345,615,739)—100.0%       $ 1,509,775,084 

14 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06 | See accompanying notes to Financial Statements


PIMCO California Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
 CALIFORNIA MUNICIPAL BONDS & NOTES—96.3%
 
     
$ 2,000   ABC Unified School Dist., GO, zero coupon, 8/1/23, Ser. B (FGIC)  
Aaa/AAA
  $ 986,280
1,000   Alpine Union School Dist., GO, zero coupon, 8/1/24, Ser. B (FSA)  
Aaa/AAA
    491,820
8,115   Anaheim City School Dist., GO, 5.00%, 8/1/26,  
     
       (Pre-refunded @ $101, 8/1/11) (FGIC)(a)  
Aaa/AAA
    8,731,415
    Assoc. of Bay Area Gov’ts Finance Auth. Rev., Odd Fellows Home,  
     
5,300      5.20%, 11/15/22  
NR/A+
    5,616,145
26,000      5.35%, 11/15/32  
NR/A+
    27,712,620
23,000   Bakersfield, CP, zero coupon, 4/15/21  
NR/AAA
    12,626,080
2,000   Bay Area Gov’t. Assoc. Lease Rev., 5.00%, 7/1/32,  
     
       Ser. 2002-1 (AMBAC)  
Aaa/AAA
    2,110,880
1,945   Bay Area Gov’t. Assoc., Windmere Ranch Dist. 99-1,  
     
       Special Assessment, 6.30%, 9/2/25  
NR/NR
    2,097,449
1,085   Capistrano Unified School Dist., Community Fac. Dist.,  
     
       Special Tax, 5.70%, 9/1/20, (Pre-refunded @ $102, 9/1/09) (a)  
NR/NR
    1,166,787
1,090   Cathedral City Cove Improvements Dist. 04-02,  
     
       Special Assessment, 5.00%, 9/2/30  
NR/NR
    1,115,789
2,300   Ceres Unified School Dist., GO, zero coupon, 8/1/27 (FGIC)  
Aaa/AAA
    747,247
    Chula Vista Community Facs. Dist., Special Tax,  
     
3,000      5.125%, 9/1/36  
NR/NR
    3,086,670
1,825      6.15%, 9/1/26  
NR/NR
    1,958,115
4,380      6.20%, 9/1/33  
NR/NR
    4,698,995
    Chula Vista, Special Tax, (Pre-refunded @ $102, 9/1/10) (a),  
     
1,160      6.05%, 9/1/25  
NR/NR
    1,282,693
2,500      6.10%, 9/1/32  
NR/NR
    2,768,775
    Clovis Unified School Dist., GO, Ser. B (FGIC),  
     
2,000      zero coupon, 8/1/23  
Aaa/AAA
    986,280
3,535      zero coupon, 8/1/25  
Aaa/AAA
    1,589,689
2,500      zero coupon, 8/1/27  
Aaa/AAA
    1,025,700
1,410   Community College Financing Auth. Lease Rev.,  
     
       5.00%, 8/1/27, Ser. A (AMBAC)  
Aaa/AAA
    1,496,348
    Corona-Norco Unified School Dist., Public Financing Auth.,  
     
       Special Tax, Ser. A,  
     
1,110          5.10%, 9/1/25 (AMBAC)  
Aaa/AAA
    1,167,920
210          5.55%, 9/1/15  
NR/NR
    215,158
305          5.65%, 9/1/16  
NR/NR
    312,924
160          5.75%, 9/1/17  
NR/NR
    164,624
530          6.00%, 9/1/20  
NR/NR
    547,045
1,000          6.00%, 9/1/25  
NR/NR
    1,032,660
4,150          6.10%, 9/1/32  
NR/NR
    4,299,566
10,000   Coronado Community Dev. Agcy., Tax Allocation,  
     
       4.875%, 9/1/35 (AMBAC)(g)  
NR/NR
    10,142,700
2,800   Cotati Redev. Agcy., Tax Allocation, 5.00%, 9/1/31,  
     
       Ser. A (MBIA)  
Aaa/AAA
    2,909,816
3,000   Dinuba Financing Auth. Lease Rev., 5.10%, 8/1/32 (MBIA)  
Aaa/AAA
    3,187,140
    Educational Facs. Auth. Rev.,  
     
3,475      Loyola Marymount Univ., zero coupon, 10/1/34 (MBIA)  
Aaa/NR
    1,043,786
2,000      Woodbury Univ., 5.00%, 1/1/36  
Baa3/BBB-
    2,072,480

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 15


PIMCO California Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
$ 4,520   Elk Grove Unified School Dist., Community Facs. Dist. No. 1  
     
       Special Tax, 4.75%, 12/1/33 (MBIA)  
Aaa/AAA
  $ 4,718,292
    Empire Union School Dist., Special Tax (AMBAC),  
     
1,560      zero coupon, 10/1/30  
Aaa/AAA
    548,012
1,265      zero coupon, 10/1/32  
Aaa/AAA
    404,964
1,000   Escondido Union School Dist., GO, zero coupon, 8/1/27 (FSA)  
Aaa/AAA
    410,280
2,440   Eureka Union School Dist., GO, zero coupon, 8/1/27 (FSA)  
Aaa/AAA
    1,001,083
    Foothill Eastern Corridor Agcy. Toll Road Rev.,  
     
7,100      zero coupon, 1/1/25, Ser. A  
Aaa/AAA
    3,332,101
3,270      zero coupon, 1/1/26, Ser. A  
Aaa/AAA
    1,468,982
1,500      zero coupon, 1/15/27 (MBIA-IBC)  
Aaa/AAA
    1,456,020
3,780      zero coupon, 1/1/28, Ser. A  
Aaa/AAA
    1,548,590
17,860      zero coupon, 1/1/30, Ser. A  
Aaa/AAA
    6,662,316
400   Franklin-McKinley School Dist., GO, 5.00%, 8/1/27, Ser. B,  
     
       (Pre-refunded @ $100, 8/1/13) (FSA)(a)  
Aaa/AAA
    436,820
1,440   Fremont Community Facs. Dist. No. 1, Special Tax,  
     
       5.30%, 9/1/30  
NR/NR
    1,482,293
    Golden State Tobacco Securitization Corp. Rev.,  
     
10,000      5.00%, 6/1/35, Ser. A (FGIC)(g)  
Aaa/AAA
    10,684,100
45,000      5.00%, 6/1/38, Ser. A (FGIC)(g)  
Aaa/AAA
    48,011,400
12,485      5.00%, 6/1/45, Ser. A (AMBAC-TCRS)(g)  
Aaa/AAA
    13,283,665
6,000      5.00%, 6/1/45, Ser. A (FGIC-TCRS)(g)  
Aaa/AAA
    6,383,820
11,700      6.25%, 6/1/33, Ser. 2003-A-1  
Baa3/BBB
    13,170,105
36,200      6.75%, 6/1/39, Ser. 2003-A-1  
Baa3/BBB
    41,772,990
    Health Facs. Finance Auth. Rev.,  
     
2,115      5.375%, 11/1/20 (CA Mtg. Ins.)  
NR/A+
    2,249,091
4,000      Adventist Health System, 5.00%, 3/1/33  
NR/A
    4,140,480
565      Catholic Healthcare West, 5.00%, 7/1/28,  
     
   
         (Partially pre-refunded @ $101, 7/1/08) (a)
 
A3/A
    577,537
       Paradise VY Estates (CA Mtg. Ins.),  
     
5,500          5.125%, 1/1/22  
NR/A+
    5,827,470
3,875          5.25%, 1/1/26  
NR/A+
    4,127,262
1,750   Huntington Beach Community Facs. Dist., Special Tax,  
     
       6.30%, 9/1/32  
NR/NR
    1,805,177
    Industry Urban Dev. Agcy., Tax Allocation (MBIA),  
     
1,045      Transportation Dist. 2, 4.75%, 5/1/21  
Aaa/AAA
    1,066,558
1,035      Transportation Dist. 3, 4.75%, 5/1/21  
Aaa/AAA
    1,056,352
200   Infrastructure & Economic Dev. Bank Rev., Bay Area Toll Bridges,  
     
       5.00%, 7/1/36, (Pre-refunded @ $100, 1/1/28) (AMBAC)(a)  
Aaa/AAA
    230,466
7,000   Irvine Improvement Board Act 1915, Special Assessment,  
     
       5.70%, 9/2/26  
NR/NR
    7,223,230
1,000   Irvine Unified School Dist., Special Tax, 5.125%, 9/1/36, Ser. A  
NR/NR
    1,030,460
1,900   Jurupa Unified School Dist., GO, zero coupon, 5/1/27 (FGIC)  
Aaa/AAA
    779,532
2,450   Kings Canyon JT Unified School Dist., GO, zero coupon,  
     
       8/1/27 (FGIC)  
Aaa/AAA
    1,005,186
5,300   Livermore-Amador Valley Water Management Agcy. Rev.,  
     
       5.00%, 8/1/31, Ser. A (AMBAC)  
Aaa/AAA
    5,550,372
5,935   Long Beach Unified School Dist., GO, 5.00%, 8/1/27,  
     
       Ser. C (MBIA)  
Aaa/NR
    6,175,902

16 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO California Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
    Los Angeles, CP (MBIA),  
     
$ 9,895      5.00%, 2/1/27  
Aaa/AAA
  $ 10,403,108
2,685      5.00%, 10/1/27, Ser. AU  
Aaa/AAA
    2,831,655
7,200   Los Angeles, Wastewater System Rev., 5.00%, 6/1/30,  
     
       Ser. A (FGIC)  
Aaa/AAA
    7,580,664
    Los Angeles Dept. of Power & Water Rev., Ser. A (g),  
     
15,000      4.75%, 7/1/30 (FSA)  
Aaa/AAA
    15,731,550
30,000      5.00%, 7/1/35 (FSA)  
Aaa/AAA
    32,248,200
16,950      5.125%, 7/1/41 (FGIC-TCRS)  
Aaa/AAA
    17,768,007
1,000   Manhattan Beach Unified School Dist., GO, zero coupon,  
     
       9/1/25 (FGIC)  
Aaa/AAA
    448,100
    Manteca Redev. Agcy., Tax Allocation,  
     
10,000      5.00%, 10/1/36 (AMBAC)(g)  
NR/NR
    10,690,600
7,295      5.00%, 10/1/32 (FSA)  
Aaa/AAA
    7,760,275
    Manteca Unified School Dist., Special Tax (MBIA),  
     
2,365      zero coupon, 9/1/25  
Aaa/AAA
    1,050,084
5,330      5.00%, 9/1/29, Ser. C  
Aaa/AAA
    5,597,779
4,000   Merced Cnty., CP, Juvenile Justice Correctional Fac.,  
     
       5.00%, 6/1/32 (AMBAC)  
Aaa/NR
    4,187,320
    Modesto Elementary School Dist. Stanislaus Cnty., GO, Ser. A (FGIC),      
2,615      zero coupon, 8/1/23  
Aaa/AAA
    1,279,075
2,705      zero coupon, 8/1/24  
Aaa/AAA
    1,263,127
2,000      zero coupon, 5/1/27  
Aaa/AAA
    821,220
2,150   Modesto High School Dist. Stanislaus Cnty., GO, zero coupon,  
     
       8/1/26, Ser. A (FGIC)  
Aaa/AAA
    922,758
1,000   Modesto Public Financing Auth. Lease Rev.,  
     
       5.00%, 9/1/29 (AMBAC)  
Aaa/AAA
    1,030,000
2,385   Monrovia Financing Auth. Lease Rev., Hillside Wilderness  
     
       Preserve, 5.125%, 12/1/31 (AMBAC)  
Aaa/AAA
    2,566,904
    Montebello Unified School Dist., GO,  
     
1,500      zero coupon, 8/1/24 (FGIC)  
Aaa/AAA
    706,515
1,485      zero coupon, 8/1/24 (FSA)  
Aaa/AAA
    699,450
2,830      zero coupon, 8/1/25 (FGIC)  
Aaa/AAA
    1,272,651
2,775      zero coupon, 8/1/27 (FGIC)  
Aaa/AAA
    1,138,527
4,700   Moreno Valley Unified School Dist. Community Facs. Dist.,  
     
       Special Tax, 5.20%, 9/1/36  
NR/NR
    4,843,491
2,400   Morgan Hill Unified School Dist., GO, zero coupon, 8/1/23 (FGIC)  
Aaa/AAA
    1,210,872
1,500   Mountain View-Whisman School Dist., GO, 5.00%, 6/1/27,  
     
       Ser. D, (Pre-refunded @ $101, 6/1/12) (MBIA)(a)  
Aaa/AAA
    1,629,360
1,800   Murrieta Redev. Agcy., Tax Allocation, 5.00%, 8/1/32 (MBIA)  
Aaa/AAA
    1,912,716
3,245   Newark Unified School Dist., GO, zero coupon, 8/1/26,  
     
       Ser. D (FSA)  
Aaa/AAA
    1,379,385
19,805   Oakland, GO, 5.00%, 1/15/32, Ser. A (FGIC)(g)  
NR/NR
    20,767,523
    Oakland Redev. Agcy., Tax Allocation, Ser. A,  
     
       (Pre-refunded @ $100, 3/1/13) (a),  
     
1,395  
          5.25%, 9/1/27
 
NR/A
    1,531,501
2,185  
          5.25%, 9/1/33
 
NR/A
    2,405,248

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 17


PIMCO California Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
$  1,000   Orange Cnty. Community Facs. Dist., Special Tax,  
     
       No. 01-1-Ladera Ranch, 6.00%, 8/15/25, Ser. A,  
     
       (Pre-refunded @ $101, 8/15/10) (a)  
NR/AAA
  $ 1,097,960
12,000   Orange Cnty. Sanitation Dist., CP, 5.25%, 2/1/30 (FGIC)  
Aaa/AAA
    12,999,480
    Palmdale Community Redev. Agcy., Tax Allocation (AMBAC),  
     
1,230      zero coupon, 12/1/30  
Aaa/AAA
    434,005
1,230      zero coupon, 12/1/31  
Aaa/AAA
    414,547
1,225      zero coupon, 12/1/32  
Aaa/AAA
    394,266
1,750   Paramount Unified School Dist., GO, zero coupon,  
     
       9/1/23, Ser. B (FSA)  
Aaa/AAA
    859,950
    Perris Public Financing Auth. Rev., Tax Allocation,  
     
1,190      4.75%, 10/1/23, Ser. B (MBIA)  
Aaa/AAA
    1,254,284
780      5.375%, 10/1/20, Ser. C  
NR/BBB+
    831,948
1,800      5.625%, 10/1/31, Ser. C  
NR/BBB+
    1,946,754
10,000   Placentia-Yorba Linda Unified School Dist., CP,  
     
       5.00%, 10/1/32 (FGIC)(g)  
Aaa/AAA
    10,744,400
10,150   Placer Union High School Dist., GO, zero coupon, 8/1/33 (FSA)  
Aaa/AAA
    3,164,872
    Poway Unified School Dist., Special Tax,  
     
       Community Facs. Dist. No. 6,  
     
2,700          5.125%, 9/1/28  
NR/NR
    2,782,755
2,300          5.125%, 9/1/28, Area B  
NR/NR
    2,370,495
1,500          5.50%, 9/1/25  
NR/NR
    1,548,405
3,000          5.60%, 9/1/33  
NR/NR
    3,097,830
1,000          6.05%, 9/1/25, Area A  
NR/NR
    1,069,370
5,500          6.125%, 9/1/33, Area A  
NR/NR
    5,873,065
       Community Facs. Dist. No. 10,  
     
1,000          5.65%, 9/1/25  
NR/NR
    1,023,290
2,200          5.70%, 9/1/32  
NR/NR
    2,248,928
2,000   Rancho Cucamonga Community Facs. Dist., Special Tax,  
     
       6.375%, 9/1/31, Ser. A  
NR/NR
    2,136,500
1,500   Richmond Wastewater Rev., zero coupon, 8/1/30 (FGIC)  
Aaa/AAA
    553,395
3,510   Riverside, CP, 5.00%, 9/1/33 (AMBAC)  
Aaa/AAA
    3,704,735
    Riverside Unified School Dist., Community Facs.,  
     
       Dist. No. 15 Special Tax, Ser. A,  
     
1,000          5.15%, 9/1/25  
NR/NR
    1,030,780
1,000          5.25%, 9/1/30  
NR/NR
    1,030,810
1,000          5.25%, 9/1/35  
NR/NR
    1,030,730
    Rocklin Unified School Dist., GO (FGIC),  
     
5,000      zero coupon, 8/1/24  
Aaa/AAA
    2,355,050
4,000      zero coupon, 8/1/25  
Aaa/AAA
    1,798,800
4,000      zero coupon, 8/1/26  
Aaa/AAA
    1,716,760
4,500      zero coupon, 8/1/27  
Aaa/AAA
    1,846,260
    Roseville Redev. Agcy., Tax Allocation (MBIA),  
     
3,730      5.00%, 9/1/27  
Aaa/AAA
    3,951,040
3,365      5.00%, 9/1/32  
Aaa/AAA
    3,555,526
2,115      5.00%, 9/1/33  
Aaa/AAA
    2,233,652
    Sacramento City Financing Auth. Rev., Ser. A,  
     
4,500      5.00%, 12/1/32 (FSA)  
Aaa/AAA
    4,764,555
4,610      North Natomas CFD No. 2, 6.25%, 9/1/23  
NR/NR
    4,791,588

18 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO California Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
$12,490   Sacramento Cnty. Airport System Rev.,          
       5.00%, 7/1/32, Ser. A (FSA)   Aaa/AAA   $ 13,082,526
14,350   Sacramento Cnty. Sanitation Dist. Rev., 5.00%, 12/1/35,          
       (Pre-refunded @ $100, 12/1/14) (AMBAC) (g)   Aaa/AAA     15,373,586
    San Diego Cnty. Water Auth. Water Rev., CP, Ser. A (MBIA),          
8,285      5.00%, 5/1/28   Aaa/AAA     8,792,291
8,000      5.00%, 5/1/29   Aaa/AAA     8,485,760
    San Diego Community Facs. Dist. No. 3, Special Tax, Ser. A,          
1,200      5.60%, 9/1/21   NR/NR     1,231,692
800      5.70%, 9/1/26   NR/NR     820,640
2,300      5.75%, 9/1/36   NR/NR     2,362,514
    San Diego Public Facs. Financing Auth. Lease Rev.,          
1,000      5.00%, 5/15/29, Ser. A (FGIC)   Aaa/AAA     1,037,810
1,500      Fire & Life Safety Facs., 5.00%, 4/1/32 (MBIA)   Aaa/AAA     1,568,265
14,000   San Diego Public Facs. Financing Auth. Water Rev.,          
       5.00%, 8/1/32 (MBIA)   Aaa/AAA     14,737,800
7,775   San Diego Unified School Dist., GO,          
       5.00%, 7/1/27, Ser. D (FGIC) (g)   NR/NR     8,328,036
    San Francisco City & Cnty. Airport Community, International          
       Airport Rev., Ser. 2 (MBIA),          
5,585  
          4.50%, 5/1/28
  Aaa/AAA     5,634,260
11,585  
          5.00%, 5/1/32
  NR/NR     12,234,918
8,715  
          5.00%, 5/1/32, (Pre-refunded @ $100, 5/1/12) (a)
  NR/NR     9,384,573
10,405   San Joaquin Hills Transportation Corridor Agcy. Toll Road Rev.,          
       zero coupon, 1/1/25   Aaa/AAA     4,883,171
    San Jose, Libraries & Parks, GO,          
14,970      5.00%, 9/1/32 (MBIA)(g)   NR/NR     15,816,404
10,190      5.125%, 9/1/31  
Aa1/AA+
    10,756,360
9,150   San Jose Unified School Dist., GO, 5.00%, 8/1/27, Ser. A (FSA) (g)   NR/NR     9,715,012
    San Juan Unified School Dist., GO (FSA),          
1,770      zero coupon, 8/1/23   Aaa/AAA     872,858
6,105      zero coupon, 8/1/26   Aaa/AAA     2,620,205
4,835   San Mateo Foster City School Dist., GO, 5.10%, 8/1/31,          
       (Pre-refunded @ $101, 8/1/11) (FGIC)(a)   Aaa/AAA     5,222,912
2,300   San Mateo Union High School Dist., GO, zero coupon,          
       9/1/20 (FGIC)   Aaa/AAA     1,301,087
1,730   San Rafael City High School Dist., GO,          
       5.00%, 8/1/27, Ser. B (FSA)   Aaa/AAA     1,821,638
3,280   San Rafael Elementary School Dist., GO,          
       5.00%, 8/1/27, Ser. B (FSA)   Aaa/AAA     3,453,742
    Santa Clara Unified School Dist., GO (MBIA),          
2,755      5.00%, 7/1/25   Aaa/AAA     2,907,352
2,895      5.00%, 7/1/26   Aaa/AAA     3,053,849
3,040      5.00%, 7/1/27   Aaa/AAA     3,198,962
1,260   Santa Cruz Cnty., Rev., 5.25%, 8/1/32   A3/NR     1,353,101
    Santa Margarita Water Dist., Special Tax,          
2,000      6.00%, 9/1/30   NR/NR     2,136,620
3,000      6.25%, 9/1/29   NR/NR     3,213,840

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 19


PIMCO California Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
$  2,000   Santa Monica Community College Dist., GO, zero coupon,          
       8/1/26, Ser. C (MBIA)   Aaa/AAA   $ 783,020
    Saugus Hart School Facs. Financing Auth., Special Tax,          
       Community Facs. Dist. 00-1,          
1,140          6.10%, 9/1/32   NR/NR     1,180,561
2,225          6.125%, 9/1/33   NR/NR     2,304,121
1,000   Shasta Union High School Dist., GO, zero coupon, 8/1/24 (FGIC)   Aaa/AAA     471,010
2,745   South Tahoe JT Powers Parking Financing Auth. Rev.,          
       7.00%, 12/1/27, Ser. A   NR/NR     2,781,756
1,800   Southern Mono Health Care Dist., GO, zero coupon,          
       8/1/26 (MBIA)   Aaa/AAA     757,836
    State Public Works Board Lease Rev., UCLA Replacement Hospital,          
9,605      5.00%, 10/1/22, Ser. A (FSA)   Aaa/AAA     10,170,542
2,095      5.00%, 4/1/26   Aa2/AA-     2,245,002
1,710   State Univ. Rev., 5.00%, 11/1/33, Ser. A (AMBAC)   Aaa/AAA     1,799,091
    Statewide Community Dev. Auth. Rev.,          
3,555      Bentley School, 6.75%, 7/1/32   NR/NR     3,870,080
9,700      Health Fac., Jewish Home, 5.50%, 11/15/33 (CA St. Mtg.)   NR/A+     10,605,107
2,770      Kaiser Permanente, 5.50%, 11/1/32, Ser. A   A3/A+     2,965,451
3,000      Live Oak School, 6.75%, 10/1/30   NR/NR     3,165,510
500      Peninsula Project, 5.00%, 11/1/29   NR/NR     503,865
1,170   Statewide Community Dev. Auth., Wildwood Elementary          
       School, CP, 6.10%, 11/1/15   NR/NR     1,172,913
    Statewide Financing Auth., Tobacco Settlement Rev.,          
1,740      5.625%, 5/1/29  
Baa3/NR
    1,825,260
20,000      6.00%, 5/1/37 (g)   NR/NR     21,583,400
7,750   Tamalpais Union High School Dist., GO, 5.00%, 8/1/27 (FSA)   Aaa/AAA     8,177,490
    Tobacco Securitization Agcy. Rev.,          
4,500      Alameda Cnty., 6.00%, 6/1/42  
Baa3/NR
    4,861,350
       Fresno Cnty.,          
4,045          5.625%, 6/1/23   Baa3/BBB     4,087,877
10,000          6.00%, 6/1/35   Baa3/BBB     10,803,000
7,000      Gold Cnty., zero coupon, 6/1/33      NR/BBB     1,551,060
1,800      Stanislaus Funding, 5.875%, 6/1/43, Ser. A  
Baa3/NR
    1,911,096
8,000   Tobacco Securitization Auth. of Southern California Rev.,          
       5.00%, 6/1/37, Ser. A1   Baa3/BBB     8,165,200
995   Tracy Community Facs. Dist., Special Tax,          
       No. 99-2 South Macarthur Area, 6.00%, 9/1/27   NR/NR     1,026,571
    Univ. Rev. (g),          
5,500      4.75%, 5/15/35, Ser. F (FSA)   NR/NR     5,720,055
5,000      4.75%, 5/15/35, Ser. G (FGIC)   NR/NR     5,200,050
5,650      4.75%, 5/15/38 Ser. B   Aa3/AA-     5,817,636
10,000      5.00%, 9/1/27, Ser. O, (Pre-refunded @ $101, 9/1/10) (FGIC)   NR/NR     10,504,500
10,000   Ventura Cnty. Community College Dist., GO,          
       5.00%, 8/1/27, Ser. A (MBIA)   Aaa/AAA     10,664,800
1,555   Ventura Unified School Dist., GO, 5.00%, 8/1/32, Ser. F (FSA)   Aaa/AAA     1,640,230
2,000   Vernon Electric System Rev., Malburg Generating Station,          
       5.50%, 4/1/33, (Pre-refunded @ $100, 4/1/08) (a)  
Aaa/NR
    2,054,280

20 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO California Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
    Victor Elementary School Dist., GO, Ser. A (FGIC),  
     
$ 1,125      zero coupon, 8/1/24  
Aaa/AAA
  $ 529,886
2,410      zero coupon, 8/1/26  
Aaa/AAA
    1,034,348
1,000   Vista Unified School Dist., GO, zero coupon, 8/1/26, Ser. A (FSA)  
Aaa/AAA
    429,190
    West Contra Costa Univ. School Dist., GO, Ser. A (MBIA),  
     
2,740      5.00%, 8/1/26  
Aaa/AAA
    2,851,902
2,690      5.00%, 8/1/28  
Aaa/AAA
    2,798,488
1,890      5.00%, 8/1/31  
Aaa/AAA
    1,964,750
3,375   Westlands Water Dist. Rev., CP, 5.00%, 9/1/34 (MBIA)  
Aaa/AAA
    3,562,245
2,000   William S. Hart JT School Financing Auth. Rev., 5.625%, 9/1/34  
NR/BBB+
    2,143,860
2,110   Yuba City Unified School Dist., GO, zero coupon, 9/1/25 (FGIC)  
Aaa/AAA
 
 
954,205
 
    Total California Municipal Bonds & Notes (cost—$839,355,945)  
    905,387,332
 
 OTHER MUNICIPAL BONDS & NOTES—2.6%  
     
    Iowa—1.7%  
     
16,100   Tobacco Settlement Auth. of Iowa Rev.,  
     
       zero coupon, 6/1/34, Ser. B  
Baa3/BBB
 
 
15,862,525
               
    New York—0.4%  
     
3,250   State Dormitory Auth. Rev. Hospital, 6.25%, 8/15/15 (FHA)  
Aa2/AAA
 
 
3,709,420
               
    Puerto Rico—0.5%  
     
2,000   Electric Power Auth., Power Rev., 5.125%, 7/1/29, Ser. NN  
A3/BBB+
    2,128,840
2,505   Public Building Auth. Rev., Gov’t Facs.,  
     
       5.00%, 7/1/36, Ser. I (GTD)  
Baa3/BBB
 
 
2,632,104
       
 
 
4,760,944
 
    Total Other Municipal Bonds & Notes (cost—$23,117,849)  
    24,332,889
 
 CALIFORNIA VARIABLE RATE NOTES (b)(c)(d)—0.2%  
     
1,500   Modesto Public Financing Auth. Lease Rev.,  
     
       10.20%, 9/1/29, Ser. 354 (AMBAC) (cost—$1,159,460)  
Aaa/NR
    1,725,000
 
 OTHER VARIABLE RATE NOTES (d)—0.6%  
     
    Puerto Rico—0.6%  
     
5,300   Public Finance Corp. Rev.,  
     
       5.75%, 8/1/27, Ser. A (cost—$5,607,158)  
Ba1/BBB-
    5,761,365
 
 U.S. TREASURY BILLS (e)—0.3%  
     
3,200   4.71%-4.98%, 12/14/06 (cost—$3,194,458)  
 
 
3,194,458

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 21


PIMCO California Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Contracts
                 Value
 OPTIONS PURCHASED (f)—0.0%  
    Put Options—0.0%      
    Eurodollar Futures, Chicago Mercantile Exchange,      
204      strike price $92, expires 3/19/07   $ 1,275 
245      strike price $92.25, expires 3/19/07     1,531 
 
    Total Options Purchased (cost—$4,265)     2,806 
 
    Total Investments before options written (cost—$872,439,135)—100.0%     940,403,850 
 
 OPTIONS WRITTEN (f)—(0.0)%  
    Call Options—(0.0)%      
300   U.S. Treasury Notes 10 yr. Futures, Chicago Board of Trade,      
    strike price $110, expires 2/23/07 (premiums received—$125,587)     (164,063)
 
    Total Investments net of options written (cost—$872,313,548)—100.0%   $ 940,239,787 

22 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06 | See accompanying notes to Financial Statements


PIMCO New York Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
 NEW YORK MUNICIPAL BONDS & NOTES—90.0%
 
     
    Buffalo Municipal Water Finance Auth., Water System Rev.,  
     
       Ser. B, (Pre-refunded @ $100, 7/1/12) (FSA)(a),  
     
$      250      5.00%, 7/1/27  
Aaa/AAA
  $ 269,090
1,000      5.125%, 7/1/32  
Aaa/AAA
    1,082,650
2,400   Erie Cnty. Industrial Dev. Agcy., Orchard Park Rev.,  
     
       6.00%, 11/15/36  
NR/NR
    2,566,776
10,000   Erie Cnty. Tobacco Asset Securitization Corp. Rev.,  
     
       6.50%, 7/15/32, (Pre-refunded @ $101, 7/15/10) (a)  
Ba1/AAA
    11,075,600
2,500   Liberty Dev. Corp. Rev., 5.25%, 10/1/35 (g)  
Aa3/AA-
    2,988,150
    Metropolitan Transportation Auth. Rev.,  
     
1,850      5.00%, 11/15/30, Ser. A (FSA)  
Aaa/AAA
    1,957,004
10,000      5.25%, 11/15/31, Ser. E  
A2/A
    10,709,900
7,000   Metropolitan Transportation Auth. Service Contract Rev.,  
     
       5.35%, 7/1/31, Ser. B  
A1/AAA
    7,540,050
4,130   Mortgage Agcy. Rev., 4.75%, 10/1/27, Ser. 128 (g)  
Aa1/NR
    4,280,291
4,000   New York City, GO, 5.00%, 3/1/33, Ser. I  
A1/AA-
    4,193,920
    New York City Health & Hospital Corp. Rev., Ser. A,  
     
1,100      5.375%, 2/15/26  
A2/A-
    1,155,495
2,000      5.45%, 2/15/26  
A2/A-
    2,116,420
    New York City Industrial Dev. Agcy. Rev.,  
     
1,000      Eger Harbor, 4.95%, 11/20/32 (GNMA)  
NR/AA+
    1,043,200
1,500      Staten Island Univ. Hospital, 5.00%, 7/1/27  
Aa2/NR
    1,600,155
1,230      United Jewish Appeal Fed., 6.45%, 7/1/32  
B2/NR
    1,305,940
    New York City Municipal Water Finance Auth.,  
     
       Water & Sewer System Rev.,  
     
7,500          4.50%, 6/15/33, Ser. C (g)  
NR/NR
    7,627,875
3,055          4.75%, 6/15/37, Ser. D (MBIA-IBC)  
Aaa/AAA
    3,113,198
5,000          5.00%, 6/15/32, Ser. A (g)  
Aa2/AA+
    5,211,450
15,000          5.125%, 6/15/34, Ser. A (g)  
Aa2/AA+
    15,921,000
10,000   New York City Transitional Finance Auth. Rev.,  
     
       5.00%, 11/1/27, Ser. B  
Aa1/AAA
    10,574,900
7,785   New York City Trust for Cultural Res. Rev.,  
     
       5.00%, 2/1/34 (FGIC)(g)  
NR/NR
    8,299,822
3,600   Port Auth. New York & New Jersey Rev.,  
     
       5.00%, 4/15/32, Ser. 125 (FSA)  
Aaa/AAA
    3,838,824
7,500   State Dormitory Auth. Lease Rev., State Univ. Dormitory Facs.,  
     
       5.00%, 7/1/32, (Pre-refunded @ $100, 7/1/12) (a)  
Aa3/AA-
    8,053,050
    State Dormitory Auth. Rev.,  
     
2,600      Catholic Health of Long Island, 5.10%, 7/1/34  
Baa1/BBB
    2,714,348
7,490      Court Facs., 5.50%, 5/15/31 (AMBAC)(g)  
NR/NR
    9,394,707
2,000      Kaleida Health Hospital, 5.05%, 2/15/25 (FHA)  
NR/AAA
    2,103,220
5,300      Lenox Hill Hospital, 5.50%, 7/1/30  
Ba2/NR
    5,491,330
       Long Island Univ. (Radian),  
     
1,320          5.25%, 9/1/28  
Aa3/AA
    1,392,006
80          5.25%, 9/1/28, (Pre-refunded @ $102, 9/1/09) (a)  
Aa3/AA
    85,207
8,850      North General Hospital, 5.00%, 2/15/25  
NR/AA-
    9,296,128
5,000      Rochester Hospital, 5.00%, 12/1/35 (Radian)(g)  
NR/NR
    5,339,350
5,000      Saint Barnabas Hospital, 5.00%, 2/1/31, Ser. A (AMBAC-FHA)  
Aaa/AAA
    5,260,900

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 23


PIMCO New York Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
$ 1,500      Sloan-Kettering Center Memorial, 5.00%, 7/1/34, Ser. 1  
Aa2/AA
  $ 1,577,925
8,600      State Personal Income Tax, 5.00%, 3/15/32,  
     
   
         (Pre-refunded @ $100, 3/15/13) (a)
 
Aa3/AAA
    9,326,012
1,250      Student Housing Corp., 5.125%, 7/1/34 (FGIC)  
Aaa/AAA
    1,355,500
4,270      Teachers College, 5.00%, 7/1/32 (MBIA)  
Aaa/NR
    4,518,429
2,000      Yeshiva Univ., 5.125%, 7/1/34 (AMBAC)  
Aaa/NR
    2,168,800
2,000   State Environmental Facs. Corp. Rev., State Clean  
     
       Water & Drinking Rev., 5.125%, 6/15/31  
Aaa/AAA
    2,140,240
6,100   State Urban Dev. Corp. Personal Income Tax Rev.,  
     
       5.00%, 3/15/33, Ser. C-1, (Pre-refunded @ $100, 3/15/13) (a)  
Aa3/AAA
    6,614,962
    Tobacco Settlement Asset Backed, Inc. Rev., Ser. 1,  
     
25,000      5.00%, 6/1/34  
NR/BBB
    25,626,500
25,000      5.75%, 7/15/32, (Pre-refunded @ $100, 7/15/12) (a)  
Aaa/AAA
    27,801,750
10,000      6.375%, 7/15/39, (Pre-refunded @ $101, 7/15/09) (a)  
Aaa/AAA
    10,805,000
    Triborough Bridge & Tunnel Auth. Rev. (FGIC-TCRS),  
     
710      5.00%, 1/1/32  
Aaa/AAA
    747,942
3,990      5.00%, 1/1/32, (Pre-refunded @ $100, 1/1/12) (a)  
Aaa/AAA
    4,269,659
2,000   Warren & Washington Cntys. Industrial Dev. Agcy. Fac. Rev.,  
     
       Glens Falls Hospital, 5.00%, 12/1/35, Ser. A (FSA)  
Aaa/AAA
    2,122,140
750   Westchester Cnty. Industrial Dev. Agcy. Continuing Care  
     
       Retirement Rev., Kendal on Hudson, 6.50%, 1/1/34  
NR/NR
    809,888
 
    Total New York Municipal Bonds & Notes (cost—$241,225,511)  
    257,486,703
 
 OTHER MUNICIPAL BONDS & NOTES—6.0%  
     
    California—3.0%  
     
    Alameda Unified School Dist., Alameda Cnty., GO, Ser. A (FSA),  
     
3,500      zero coupon, 8/1/24  
Aaa/AAA
    1,648,535
3,000      zero coupon, 8/1/25  
Aaa/AAA
    1,349,100
5,000   California Cnty., Tobacco Securitization Agcy. Rev.,  
     
       zero coupon, 6/1/28  
Baa3/NR
    4,248,500
3,130   Covina Valley Unified School Dist., GO,  
     
       zero coupon, 6/1/25, Ser. B (FGIC)  
Aaa/AAA
    1,417,671
       
    8,663,806
    Colorado—0.1%  
     
210   Dawson Ridge Dist. No. 1, GO, zero coupon, 10/1/22, Ser. A  
Aaa/NR
    108,963
               
    Puerto Rico—2.9%  
     
5,675   Children’s Trust Fund, Tobacco Settlement Rev.,  
     
       5.625%, 5/15/43  
Baa3/BBB
    5,957,728
1,500   Commonwealth Highway & Transportation Auth. Rev.,  
     
       5.25%, 7/1/38, Ser. D, (Pre-refunded @ $100, 7/1/12) (a)  
Baa3/AAA
    1,633,395
750   Electric Power Auth., Power Rev., 5.125%, 7/1/29, Ser. NN  
A3/BBB+
    798,315
       
    8,389,438
 
    Total Other Municipal Bonds & Notes (cost—$15,591,426)  
    17,162,207

24 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO New York Municipal Income Fund II Schedule of Investments
November 30, 2006 (unaudited)
Principal
     
     
Amount
     
Credit Rating
     
(000)
              
(Moody’s/S&P)
        Value
 NEW YORK VARIABLE RATE NOTES (b)(d)—2.9%          
$ 5,595   Long Island Power Auth. Electric System Rev.,          
   
         11.38%, 12/1/26, Ser. 339 (MBIA-IBC)
 
Aaa/NR
  $ 6,573,060 
1,300   State Urban Dev. Corp. Rev., 10.457%, 3/15/35   NR/AAA  
 
1,758,575 
 
    Total New York Variable Rate Notes (cost—$6,935,001)         8,331,635 
 
 OTHER VARIABLE RATE NOTES (d)—0.7%          
    Puerto Rico—0.7%          
1,900   Public Finance Corp. Rev., 5.75%, 8/1/27, Ser. A          
       (cost—$2,010,113)   Ba1/BBB-     2,065,395 
 
 U.S. TREASURY BILLS (e)—0.4%          
1,050   4.743%-4.98%, 12/14/06 (cost—$1,048,181)      
 
1,048,181 
 
    Total Investment before options written (cost—$266,810,232)—100.0%     286,094,121 
 
 OPTIONS WRITTEN (f)—(0.0)%          
Contracts              
    Call Options—(0.0)%          
100   U.S. Treasury Notes 10 yr. Futures, Chicago Board of Trade,          
    strike price $110, expires 2/23/07 (premiums received—$41,863)     (54,688)
 
    Total Investments net of options written (cost—$266,768,369)—100.0%  
$
286,039,433 

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 25


PIMCO Municipal Income Funds II Schedules of Investments
November 30, 2006 (unaudited)

 

 
 
Notes to the Schedules of Investments:
(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 (payment date) and/or whose interest rates vary with changes in a designated base rate (such as the prime interest rate).

(b)

144A Security — Security exempt from registration, under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, typically only to qualified institutional buyers. Unless otherwise indicated, these securities are not considered to be illiquid.

(c)

Inverse Floater — The interest rate shown bears an inverse relationship to the interest rate on another security or the value of an index.

(d)

Variable Rate Notes — Instruments whose interest rates change on specified date (such as a coupon date or interest payment date) and/or whose interest rates vary with changes in a designated base rate (such as the prime interest rate). The interest rate disclosed reflects the rate in effect on November 30, 2006.

(e)

All or partial amount segregated as collateral for futures contracts and/or transactions in options written.

(f)

Non-income producing.

(g)

Residual Interest Bonds held in trust — Securities represent underlying bonds transferred to a separate securitization trust established in a tender option bond transaction in which the Funds acquired the residual interest certificates. These securities serve as collateral in a financing transaction.

 

Glossary:
AMBAC — insured by American Municipal Bond Assurance Corp.
CA Mtg. Ins. — insured by California Mortgage Insurance
CA St. Mtg. — insured by California State Mortgage
CP — Certificates of Participation
FGIC — insured by Financial Guaranty Insurance Co.
FHA — insured by Federal Housing Administration
FSA — insured by Financial Security Assurance, Inc.
GNMA — insured by Government National Mortgage Association
GO — General Obligation Bond
GTD — Guaranteed
IBC — Insurance Bond Certificate
MBIA — insured by Municipal Bond Investors Assurance
NR — Not Rated
PSF — Public School Fund
Radian — insured by Radian Guaranty, Inc.
TCRS — Temporary Custodian Receipts
XLCA — insured by XL Capital Assurance

 

 

26 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06 | See accompanying notes to Financial Statements


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PIMCO Municipal Income Funds II Statements of Assets and Liabilities
November 30, 2006 (unaudited)

 

              California        New York   
         
Municipal II
       
Municipal II
       
Municipal II
Assets:                        
Investments, at value (cost—$1,345,862,728, $872,439,135                        
   and $266,810,232, respectively)   $ 1,510,097,740     $ 940,403,850     $ 286,094,116  
Cash                 1,757,162  
Interest receivable     18,348,485       13,108,743       4,690,018  
Receivable for investments sold     70,000              
Receivable for variation margin on futures contracts                 61,891  
Prepaid expenses and other assets     2,260,930       34,299       447,271  
   Total Assets     1,530,777,155       953,546,892       293,050,458  
 
Liabilities:                        
Payable for floating rate notes     115,540,000       220,964,559       41,028,367  
Dividends payable to common and preferred shareholders     4,274,866       2,210,996       718,481  
Payable to custodian for cash overdraft     3,997,287       3,264,878        
Payable for variation margin on futures contracts     2,887,122       1,584,025       409,000  
Interest payable     1,541,177       2,823,670       540,236  
Investment management fees payable     573,228       294,891       102,306  
Options written, at value (premiums received—                        
   $246,989, $125,587, and $41,863)     322,656       164,063       54,688  
Accrued expenses and other payables     195,251       1,071,415       177,988  
   Total Liabilities     129,331,587       232,378,497       43,031,066  
Preferred shares ($0.00001 par value and $25,000 net                        
   asset and liquidation value per share applicable to                        
   an aggregate of 20,200, 10,400 and 3,600 shares                        
   issued and outstanding, respectively)     505,000,000       260,000,000       90,000,000  
Net Assets Applicable to Common Shareholders   $ 896,445,568     $ 461,168,395     $ 160,019,392  
 
Composition of Net Assets Applicable to                        
   Common Shareholders:                        
Common Stock:                        
   Par value ($0.00001 per share)     $588       $305       $105  
   Paid-in-capital in excess of par     836,079,259       433,305,444       149,537,929  
Dividends in excess of net investment income     (2,985,953 )     (1,334,907 )     (764,946 )
Accumulated net realized loss     (96,962,272 )     (38,285,558 )     (8,119,467 )
Net unrealized appreciation of investments, futures                        
   contracts and options written     160,313,946       67,483,111       19,365,771  
Net Assets Applicable to Common Shareholders   $ 896,445,568     $ 461,168,395     $ 160,019,392  
Common Shares Outstanding     58,795,859       30,492,654       10,536,914  
Net Asset Value Per Common Share     $15.25       $15.12       $15.19  

28 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06 | See accompanying notes to Financial Statements


PIMCO Municipal Income Funds II Statements of Operations
For the six months ended November 30, 2006 (unaudited)

 

              California        New York   
         
Municipal II
       
Municipal II
       
Municipal II
Investment Income:                        
Interest   $ 37,822,138     $ 22,774,683     $ 7,238,296  
 
Expenses:                        
Investment management fees     4,479,579       2,304,736       800,708  
Interest expense     2,154,893       4,073,443       782,729  
Auction agent fees and commissions     644,894       337,454       117,544  
Custodian and accounting agent fees     115,274       47,450       93,714  
Trustees’ fees and expenses     53,489       28,666       14,870  
New York Stock Exchange listing fees     27,328       14,025       12,305  
Audit and tax services     18,822       16,417       6,718  
Transfer agent fees     14,751       17,751       14,947  
Legal fees     12,568       8,222       2,928  
Insurance expense     12,958       7,072       3,134  
Shareholder communications     10,390       9,058       6,692  
Investor relations     4,575       3,294       915  
Miscellaneous     28,605       15,331       9,309  
   Total expenses     7,578,126       6,882,919       1,866,513  
   Less: investment management fees waived     (1,033,749 )     (531,862 )     (184,779 )
            custody credits earned on cash balances
    (110,197 )     (42,197 )     (41,866 )
   Net expenses     6,434,180       6,308,860       1,639,868  
 
Net Investment Income     31,387,958       16,465,823       5,598,428  
 
Realized and Change in Unrealized Gain (Loss):                        
Net realized gain (loss) on:                        
   Investments     (242,074 )     (401,998 )     350,653  
   Futures contracts     (9,805,664 )     (8,601,221 )     (1,111,356 )
   Options written     713,526       229,426       162,362  
Net change in unrealized appreciation/depreciation of:                        
   Investments     63,316,429       34,311,806       7,931,987  
   Futures contracts     (20,600,836 )     (8,598,772 )     (1,712,148 )
   Options written     (75,667 )     (38,476 )     (12,825 )
Net realized and change in unrealized gain on investments,                        
   futures contracts and options written     33,305,714       16,900,765       5,608,673  
Net Increase in Net Assets Resulting from Investment                        
   Operations     64,693,672       33,366,588       11,207,101  
Dividends on Preferred Shares from Net Investment                        
   Income     (8,456,935 )     (3,975,584 )     (1,446,119 )
Net Increase in Net Assets Applicable to Common                        
   Shareholders Resulting from Investment Operations   $ 56,236,737     $ 29,391,004     $ 9,760,982  

See accompanying notes to Financial Statements | 11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 29


PIMCO Municipal Income Funds II 
Statements of Changes in Net Assets
 
Applicable to Common Shareholders

   
Municipal II
   
Six Months
       
   
ended
       
   
November 30, 2006
 
Year ended
       
(unaudited)
     
May 31, 2006
Investment Operations:                
Net investment income   $ 31,387,958     $           62,797,656  
Net realized gain (loss) on investments, futures contracts and options written     (9,334,212 )     (15,393,416 )
Net change in unrealized appreciation/depreciation of investments, futures                
 contracts and options written     42,639,926       16,506,689  
Net increase in net assets resulting from investment operations     64,693,672       63,910,929  
 
Dividends to Preferred Shares from Net investment income:     (8,456,935 )     (13,697,379 )
Net increase in net assets applicable to common shareholders                
   resulting from investment operations     56,236,737       50,213,550  
 
Dividends to Common Shareholders from Net investment income:     (24,665,597 )     (55,835,634 )
 
Capital Share Transactions:                
Reinvestment of dividends     2,042,646       6,163,881  
Total increase in net assets applicable to common shareholders     33,613,786       541,797  
 
Net Assets Applicable to Common Shareholders:                
Beginning of period     862,831,782       862,289,985  
End of period (including dividends in excess of net investment                
   income of $(2,985,953) and $(1,251,379); $(1,334,907) and $(1,032,143);                
   $(764,946) and $(733,605); respectively)   $ 896,445,568     $ 862,831,782  
 
Common Shares Issued in Reinvestment of Dividends:     137,787       417,928  

30 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06 | See accompanying notes to Financial Statements


California Municipal II
 
New York Municipal II
Six Months
         
Six Months
       
ended
         
ended
       
November 30, 2006
 
Year ended
 
November 30, 2006
 
Year ended
(unaudited)
     
May 31, 2006
          
(unaudited)
     
May 31, 2006
$ 16,465,823     $           32,096,363     $      5,598,428     $           11,187,579  
  (8,773,793 )     (2,003,450 )     (598,341 )     143,004  
                             
  25,674,558       3,500,999       6,207,014       1,000,321  
  33,366,588       33,593,912       11,207,101       12,330,904  
                             
  (3,975,584 )     (6,356,144 )     (1,446,119 )     (2,367,860 )
                             
  29,391,004       27,237,768       9,760,982       9,963,044  
                             
  (12,793,003 )     (28,205,349 )     (4,183,650 )     (9,597,690 )
                             
                             
  1,191,526       2,750,671       353,850       910,722  
  17,789,527       1,783,090       5,931,182       1,276,076  
                             
                             
  443,378,868       441,595,778       154,088,210       152,812,134  
                             
                             
$ 461,168,395     $ 443,378,868     $ 160,019,392     $ 154,088,210  
                             
  80,775       187,096       23,876       61,504  

See accompanying notes to Financial Statements | 11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 31


PIMCO California Municipal Income Fund II Statement of Cash Flows
For the six months ended November 30, 2006 (unaudited)
Cash Flows used for Operating Activities:            
   Purchases of long-term investments   $ (65,485,710 )
   Proceeds from sales of long-term investments     40,093,288  
   Interest received     16,989,411  
   Net cash provided by options written     363,979  
   Operating expenses paid     (2,264,234 )
   Net cash paid for futures transactions     (15,295,092 )
   Net increase in short-term investments     6,089,568  
Net cash used for operating activities     (19,508,790 )
 
Cash Flows from Financing Activities:        
   Proceeds from issuance of floating rate notes     21,361,564  
   Cash dividends paid (excluding reinvestment of dividends of $1,191,526)     (15,573,825 )
Net provided by financing activities*     5,787,739  
 
Net decrease in cash     (13,721,051 )
Cash at beginning of period     10,456,173  
Cash at end of period     (3,264,878 )
 
Reconciliation of Net Increase (Decrease) in Net Assets From Investment        
   Operations to Net Cash Used for Operating Activities:        
Net increase in net assets resulting from investment operations     33,366,588  
Decrease in payable for investments purchased     (1,483,300 )
Decrease in receivable for investments sold     130,000  
Decrease in interest receivable     98,810  
Increase in premium on options written     125,587  
Increase in prepaid expenses     (8,714 )
Decrease in Investment Management fees payable     (3,268 )
Increase in variation margin payable on futures contracts     1,526,840  
Decrease in variation margin receivable on futures contracts     378,062  
Decrease in net unrealized appreciation on options written     38,476  
Decrease in accrued expenses     (16,835 )
Net increase in investments     (53,661,036 )
 
Net cash used for operating activities   $ (19,508,790 )

*      Supplemental Disclosure
        
Non-cash financing activity not included consists of interest expense on floating rate notes issued of $4,073,443.

 

32 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO New York Municipal II Fund Statement of Cash Flows
For the six months ended November 30, 2006 (unaudited)
Cash Flows provided by Operating Activities:        
   Purchases of long-term investments       $ (8,559,073 )
   Proceeds from sales of long-term investments     8,905,187  
   Interest, dividends, and facility and other fee income received     6,059,803  
   Net cash provided by options written     210,661  
   Operating expenses paid     (808,986 )
   Net cash provided by futures transactions     (2,399,816 )
   Net decrease in short-term investments     2,304,867  
Net cash provided by operating activities     5,712,643  
 
Cash Flows from Financing Activities*:        
   Cash dividends paid (excluding reinvestment of dividends of $353,850)     (5,291,043 )
 
Net increase in cash     421,600  
Cash at beginning of period     1,335,562  
Cash at end of period     1,757,162  
 
Reconciliation of Net Increase (Decrease) in Net Assets From Investment        
   Operations to Net Cash Provided by Operating Activities:        
Net increase in net assets resulting from investment operations     11,207,101  
Increase in interest receivable     (154,602 )
Increase in premium on options written     41,863  
Decrease in prepaid expenses     2,792  
Decrease in investment management fees payable     (1,059 )
Decrease in variation margin payable on futures contracts     423,689  
Decrease in net unrealized appreciation on options written     12,825  
Decrease in accrued expenses     (46,580 )
Net increase in investments     (5,773,386 )
 
Net cash provided by operating activities   $ 5,712,643  

*      Supplemental Disclosure
        
Non-cash financing activity not included consists of interest expense on floating rate notes issued of $782,729.

 

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 33


PIMCO Municipal Income Funds II Notes to Financial Statements
November 30, 2006 (unaudited)

 

1. Organization and Significant Accounting Policies
PIMCO Municipal Income Fund II (“Municipal II”), PIMCO California Municipal Income Fund II (“California Municipal II”) and PIMCO New York Municipal Income Fund II (“New York Municipal II”), collectively referred to as the “Funds”, were organized as Massachusetts business trusts on March 29, 2002. Prior to commencing operations on June 28, 2002, the Funds had no operations other than matters relating to their organization and registration as non-diversified, closed-end management investment companies registered under the Investment Company Act of 1940 and the rules and regulations thereunder, as amended. Allianz Global Investors Fund Management LLC (the “Investment Manager”), serves as the investment manager and is an indirect, wholly-owned subsidiary of Allianz Global Investors of America L.P. (“Allianz Global”). Allianz Global is an indirect majority-owned subsidiary of Allianz SE, a publicly traded insurance and financial services company. The Funds have an unlimited amount of $0.00001 par value common stock authorized.

Under normal market conditions, Municipal II invests substantially all of its assets in a portfolio of municipal bonds, the interest from which is exempt from federal income taxes. Under normal market conditions, California Municipal II invests substantially all of its assets in municipal bonds which pay interest that is exempt from federal and California state income taxes. Under normal market conditions, New York Municipal II invests substantially all of its assets in municipal bonds which pay interest that is exempt from federal, New York State and New York City income taxes. The Funds will seek to avoid bonds generating interest income which could potentially subject individuals to alternative minimum tax. The issuers’ abilities to meet their obligations may be affected by economic and political developments in a specific state or region.

The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

In the normal course of business the Funds enter into contracts that contain a variety of representations which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds based upon events that have not been asserted. However, the Funds expect the risk of any loss to be remote.

In July 2006, the Financial Accounting Standards Board issued interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109” (the “Interpretation”). The Interpretation establishes for all entities, including pass-through entities such as the Funds, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006, and is to be applied to all open tax years as of the date of effectiveness. The Funds’ management has recently begun to evaluate the application of the Interpretation, and is not in a position at this time to estimate the significance of its impact, if any, on the Funds’ financial statements. On December 22, 2006, the Securities & Exchange Commission announced that it would not object if a fund implements the Interpretation in its NAV calculation as late as its last NAV calculation in the first required financial statement reporting period for its fiscal year beginning after December 15, 2006. Consequently, the Fund will be required to comply with the Interpretation by November 30, 2007.

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, the Funds are in the process of reviewing the SFAS 157 against their current valuation policies to determine future applicability.

The following is a summary of significant accounting policies consistently followed by the Funds:

(a) Valuation of Investments
Portfolio securities and other financial instruments for which market quotations are readily available are stated at market value. Portfolio securities and other financial instruments for which market quotations are not readily available or if a development/event occurs that may significantly impact the value of a security are fair-valued, in good faith, pursuant to guidelines established by the Board of Trustees. The Funds’ investments are valued daily using prices supplied by an independent pricing service or dealer quotations, or by using the last sale price on the exchange that is the primary market for such securities, or the last quoted mean price for those securities for which the over-the-counter market is the primary

34 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO Municipal Income Funds II Notes to Financial Statements
November 30, 2006 (unaudited)

 

1. Organization and Significant Accounting Policies (continued)

(a) Valuation of Investments (continued)
market or for listed securities in which there were no sales. Independent pricing services use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Exchange traded options and futures are valued at the settlement price determined by the relevant exchange. Short-term securities maturing in 60 days or less are valued at amortized cost, if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term to maturity exceeded 60 days. The prices used by the Funds to value securities may differ from the value that would be realized if the securities were sold and the differences could be material to the financial statements. The Funds’ net asset values are determined daily as of the close of regular trading (normally, 4:00 p.m. Eastern time) on the New York Stock Exchange (“NYSE”) on each day the NYSE is open for business.

(b) Investment Transactions and Investment Income
Investment transactions are accounted for on the trade date. Realized gains and losses on investments are determined on the identified cost basis. Interest income is recorded on an accrual basis. Original issue discounts or premiums on debt securities purchased are accreted or amortized daily to non-taxable interest income. Market discount, if any, is accreted daily to taxable income.

(c) Federal Income Taxes
The Funds intend to distribute all of their taxable income and to comply with the other requirements of the U.S. Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. Accordingly, no provision for U.S. federal income taxes is required.

(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 considered either temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal income tax treatment; temporary differences do not require reclassification. To the extent dividends and/or distributions exceed current and accumulated earnings and profits for federal income tax purposes; they are reported as dividends and/or distributions of paid-in capital.

(e) Futures Contracts
A futures contract is an agreement between two parties to buy and sell a financial instrument at a set price on a future date. Upon entering into such a contract, the Funds are required to pledge to the broker an amount of cash or securities, equal to the minimum “initial margin” requirements of the exchange. Pursuant to the contracts, the Funds agree to receive from or pay to the broker an amount of cash or securities equal to the daily fluctuation in the value of the contracts. Such receipts or payments are known as “variation margin” and are recorded by the Funds as unrealized appreciation or depreciation. When the contracts are closed, the Funds record a realized gain or loss equal to the difference between the value of the contracts at the time they were opened and the value at the time they were closed. Any unrealized appreciation or depreciation recorded is simultaneously reversed. The use of futures transactions involves the risk of an imperfect correlation in the movements in the price of futures contracts, interest rates and the underlying hedged assets, and the possible inability of counterparties to meet the terms of their contracts.

(f) Option Transactions
The Funds may purchase and write (sell) put and call options on securities for hedging purposes, risk management purposes or as part of its investment strategy. The risk associated with purchasing an option is that the Funds pay a premium whether or not the option is exercised. Additionally, the Funds bear the risk of loss of premium and change in market value should the counterparty not perform under the contract. Put and call options purchased are accounted for in the same manner as portfolio securities. The cost of securities acquired through the exercise of call options is increased by the premiums paid. The proceeds from 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 marked to market to reflect the current market value of the option written. These liabilities are reflected as options written in the Statements of Assets and Liabilities. 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

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 35


PIMCO Municipal Income Funds II Notes to Financial Statements
November 30, 2006 (unaudited)

 

1. Organization and Significant Accounting Policies (continued)

(f) Option Transactions (continued)
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 purchased transactions, as a realized loss. If a call option written by the Funds 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 written by the Funds 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 a written option could result in the Funds purchasing a security at a price different from the current market value.

(g) Inverse Floating Rate Transactions — Residual Interest Municipal Bonds (“RIBs”) / Residual Interest Tax Exempt Bonds (“RITEs”)
The Funds invest in RIBs and RITEs (“Inverse Floaters’) whose interest rates bear an inverse relationship to the interest rate on another security or the value of an index. In these transactions, the Funds sell a fixed rate municipal bond (“Fixed Rate Bond”) to a broker who places the Fixed Rate Bond in a special purpose trust (“Trust”) from which floating rate bonds (“Floating Rate Notes”) and Inverse Floaters are issued. The Funds simultaneously or within a short period of time purchase the Inverse Floaters from the broker. The Inverse Floaters held by the Funds provide the Funds with the right to: (1) cause the holders of the Floating Rate Notes to tender their notes at par, and (2) cause the broker to transfer the Fixed-Rate Bond held by the Trust to the Funds, thereby collapsing the Trust. Pursuant to Statement of Financial Accounting Standards No. 140 (”FASB Statement No. 140”), the Funds account for the transaction described above as a secured borrowing by including the Fixed-Rate Bond in their Schedules of Investments, and account for the Floating Rate Notes as a liability under the caption “Payable for floating rate notes” in the Funds’ “Statements of Assets and Liabilities”. The Floating Rate Notes have interest rates that generally reset weekly and their holders have the option to tender their notes to the broker for redemption at par at each reset date.

The Funds may also invest in inverse floaters without transferring a fixed rate municipal bond into a special purpose trust, which are not accounted for as secured borrowings.

The Inverse Floaters are created by dividing the income stream provided by the underlying bonds to create two securities, one short-term and one long-term. The interest rate on the short-term component is reset by an index or auction process typically every 7 to 35 days. After income is paid on the short-term securities at current rates, the residual income from the underlying bond (s) goes to the long-term securities. Therefore, rising short-term rates result in lower income for the long-term component and visa versa. The longer-term bonds may be more volatile and less liquid than other municipal bonds of comparable maturity. Investments in Inverse Floaters typically will involve greater risk than an in investment in Fixed Rate Bonds. The Funds may also invest in Inverse Floaters for the purpose of increasing leverage.

The Funds’ investment policies and restrictions expressly permit investments in Inverse Floaters. The Funds’ restrictions on borrowings do not apply to the secured borrowings deemed to have occurred for accounting purposes pursuant to FASB Statement No. 140. Inverse Floaters held by the Funds are exempt from registration under Rule 144A of the Securities Act of 1933.

(h) When-Issued/Delayed-Delivery Transactions
When-issued or delayed-delivery basis transactions involve a commitment to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. When delayed-delivery purchases are outstanding, the Funds will set aside and maintain until the settlement date in a designated account, liquid assets in an amount sufficient to meet the purchase price. When purchasing a security on a delayed-delivery basis, the Funds assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations, consequently, such fluctuations are taken into account when determining its net asset value. The Funds may dispose of or renegotiate a delayed-delivery transaction after it is entered into, and may sell when-issued securities before they are delivered, which may result in a realized gain or loss. When a security on a delayed-delivery basis is sold, the Funds do not participate in future gains and losses with respect to the security.

(i) Custody Credits Earned on Cash Balances
The Funds benefit from an expense offset arrangement with their custodian bank whereby uninvested cash balances earn credits which reduce monthly custodian and accounting agent expenses. Had these cash balances been invested in income producing securities, they would have generated income for the Funds.

(j) Interest Expense
Relates to the Fund’s liability in connection with floating rate notes held by third parties in conjunction with Inverse Floater transactions. Interest expense is recorded as incurred.

36 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO Municipal Income Funds II Notes to Financial Statements
November 30, 2006 (unaudited)

 

2. Investment Manager/Sub-Adviser
Each Fund has entered into an Investment Management Agreement (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, the Fund’s investment activities, business affairs and other administrative matters. Pursuant to the Agreements, the Investment Manager receives an annual fee, payable monthly, at the 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 0.15% of each Fund’s average daily net assets, including net assets attributable to any preferred shares that may be outstanding, from the commencement of operations through June 30, 2007, and for a declining amount thereafter through June 30, 2009.

The Investment Manager has retained its affiliate, Pacific Investment Management Company LLC (the “Sub-Adviser”) to manage each Fund’s investments. Subject to the supervision of the Investment Manager, the Sub-Adviser makes all investment decisions 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, at the maximum annual rate of 0.50% of each Funds’ average daily net assets, inclusive of net assets attributable to any preferred shares that may be outstanding. The Sub-Adviser has contractually agreed to waive a portion of the fees it is entitled to receive from the Investment Manager, such that the Sub-Adviser will receive 0.26% of each Fund’s average daily net assets, including net assets attributable to any preferred shares that may be outstanding, from the commencement of the Funds’ operations through June 30, 2007, and will receive an increasing amount not to exceed 0.50% of each Fund’s average daily net assets, including net assets attributable to any preferred shares that may be outstanding thereafter through June 30, 2009.

3. Investments in Securities
For the six months ended November 30, 2006, purchases and sales of investments, other than short-term securities, were:

      California             New York    
  Municipal II   Municipal II  
 
 
 
  Municipal II  
 
Purchases
$95,366,027
  $63,993,442           $8,552,637  
Sales
 59,510,747
  39,963,288           8,905,187  
 
(a) Futures contracts outstanding at November 30, 2006:                          
 
           
Market
     
Unrealized
           
Value
 
Expiration
 
Appreciation
Fund Type   Contracts  
(000)
 
Date
 
(Depreciation)
 
Municipal II Long: Financial Future Euro—90 day       23         $ 5,464         6/18/07       $ (5,175 )
         Financial Future Euro—90 day   23       5,475     9/17/07     4,888  
         Financial Future Euro—90 day   23       5,482     12/17/07     12,075  
         Financial Future Euro—90 day   23       5,487     3/17/08     16,962  
         U.S. Treasury Notes 5 yr. Futures   4,689       497,767     3/30/07     2,620,985  
  Short: U.S. Treasury Bond Futures   (4,933 )     564,212     3/21/07     (3,947,908 )
         U.S. Treasury Notes 10 yr. Futures   (1,862 )     203,307     3/21/07     (931,000 )
                        $ (2,229,173 )
 
California Municipal II Long: Financial Future Euro—90 day   261     $ 62,004     6/18/07   $ 500  
         Financial Future Euro—90 day   251       59,747     9/17/07     115,138  
         Financial Future Euro—90 day   261       62,213     12/17/07     198,825  
         Financial Future Euro—90 day   261       62,262     3/17/08     254,287  
         U.S. Treasury Notes 5 yr. Futures   1,200       127,388     3/30/07     667,735  
  Short: U.S. Treasury Bond Futures   (2,381 )     272,327     3/21/07     (1,370,094 )
         U.S. Treasury Notes 10 yr. Futures   (1,076 )     117,486     3/21/07     (319,437 )
                        $ (453,046 )
 
New York Municipal II Long: U.S. Treasury Notes 5 yr. Futures   233     $ 24,734     3/30/07   $ 139,078  
  Short: U.S. Treasury Bond Futures   (368 )     42,090     3/21/07     (354,585 )
         U.S. Treasury Notes 10 yr. Futures   (384 )     41,928     3/21/07     (114,000 )
                        $ (329,507 )

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 37


PIMCO Municipal Income Funds II Notes to Financial Statements
November 30, 2006 (unaudited)

 

3. Investments in Securities (continued)

(b) Transactions in options written for the six months ended November 30, 2006:

 
 
Contracts
     
Premiums
Municipal II:              
Options outstanding, May 31, 2006      
$
 
Options written   5,811       988,770  
Options expired   (3,724 )     (536,131 )
Options terminated in closing purchase transactions        (1,497 )     (205,650 )
Options outstanding, November 30, 2006   590    
$
     246,989  
               
California Municipal II:              
Options outstanding, May 31, 2006      
$
 
Options written   1,997       363,978  
Options expired   (1,222 )     (173,138 )
Options terminated in closing purchase transactions   (475 )     (65,253 )
Options outstanding, November 30, 2006   300    
$
125,587  
               
New York Municipal II:              
Options outstanding, May 31, 2006      
$
 
Options written   1,287       210,661  
Options expired   (846 )     (121,953 )
Options terminated in closing purchase transactions   (341 )     (46,845 )
Options outstanding, November 30, 2006   100    
$
41,863  

4. Income Tax Information
The cost of investments for federal income tax purposes and gross unrealized appreciation and gross unrealized depreciation of investments at November 30, 2006 were:

     
Gross
 
Gross
  Net
  Cost of  
Unrealized
 
Unrealized
 
Unrealized
 
Investments
 
Appreciation
 
Depreciation
  Appreciation
Municipal II $1,345,862,728            $164,235,012            $      —            $164,235,012
California Municipal II
872,439,135
  67,966,174   1,459   67,964,715
New York Municipal II
266,810,232
  19,283,884     19,283,884

Municipal II has issued 4,040 shares of Preferred Shares Series A, 4,040 shares of Preferred Shares Series B, 4,040 shares of Preferred Shares Series C, 4,040 shares of Preferred Shares Series D and 4,040 shares of Preferred Shares Series E, each with a net asset and liquidation value of $25,000 per share plus accrued dividends.

California Municipal II has issued 2,080 shares of Preferred Shares Series A, 2,080 shares of Preferred Shares Series B, 2,080 shares of Preferred Shares Series C, 2,080 shares of Preferred Shares Series D and 2,080 shares of Preferred Shares Series E, each with a net asset and liquidation value of $25,000 per share plus accrued dividends.

New York Municipal II has issued 1,800 shares of Preferred Shares Series A and 1,800 shares of Preferred Shares Series B, each with a net asset and liquidation value of $25,000 per share plus accrued dividends.

Dividends and distributions of net realized long-term capital gains, if any, are accumulated daily at an annual rate (typically re-set every seven days) through auction procedures.

 

38 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO Municipal Income Funds II Notes to Financial Statements
November 30, 2006 (unaudited)

 

5. Auction Preferred Shares
For the six months ended November 30, 2006, the annualized dividend rates ranged from:

    High   Low   At November 30, 2006
Municipal II:
                                         
   Series A   3.75%   3.00%   3.25%
   Series B   3.80%   3.00%   3.35%
   Series C   3.55%   3.00%   3.39%
   Series D   4.00%   3.15%   3.55%
   Series E   4.00%   3.15%   3.20%
             
California Municipal II:            
   Series A   3.80%   2.00%   2.95%
   Series B   3.40%   2.11%   2.50%
   Series C   3.90%   2.75%   3.20%
   Series D   3.50%   2.20%   3.35%
   Series E   3.50%   2.50%   3.30%
             
New York Municipal II:            
   Series A   3.84%   2.90%   3.30%
   Series B   3.90%   2.75%   3.30%

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 triggering the mandatory redemption of Preferred Shares at their liquidation value.

Preferred Shares, which are entitled to one vote per share, generally vote separately as a class to elect two Trustees and on any matters affecting the rights of the Preferred Shares.

6. Subsequent Common Dividend Declarations
On December 1, 2006, the following dividends were declared to common shareholders payable December 29, 2006 to shareholders of record on December 11, 2006:

Municipal II $0.07 per common share
California Municipal II $0.07 per common share
New York Municipal II                                                             $0.06625 per common share

On January 3, 2007 the following dividends were declared to common shareholders payable February 1, 2007 to shareholders of record on January 16, 2007:

Municipal II $0.065 per common share
California Municipal II $0.07 per common share
New York Municipal II                                                             $0.06625 per common share

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 39


PIMCO Municipal Income Funds II Notes to Financial Statements
November 30, 2006 (unaudited)

 

7. Legal Proceedings
In June and September 2004, the Investment Manager, certain of its affiliates (including Allianz Global Investors Distributors LLC and PEA Capital LLC) and Allianz Global, agreed to settle, without admitting or denying the allegations, claims brought by the Securities and Exchange Commission (the “Commission”), the New Jersey Attorney General and the California Attorney General alleging violations of federal and state securities laws with respect to certain open-end funds for which the Investment Manager serves as investment adviser. Two settlements (with the Commission and New Jersey) related to an alleged “market timing” arrangement in certain open-end funds sub-advised by PEA Capital LLC. Two settlements (with the Commission and California) related to the alleged use of cash and fund portfolio commissions to finance “shelf-space” arrangements with broker-dealers for open-end funds. The Investment Manager and its affiliates agreed to pay a total of $68 million to settle the claims related to market timing and $20.6 million to settle the claims related to shelf space. In addition to monetary payments, the settling parties agreed to undertake certain corporate governance, compliance and disclosure reforms related to market timing brokerage commissions, revenue sharing and shelf space arrangements, and consented to cease and desist orders and censures. None of the settlements allege that any inappropriate activity took place with respect to the Funds.

Since February 2004, the Investment Manager and certain of its affiliates and their employees have been named as defendants in fifteen lawsuits filed in various jurisdictions. Eleven of those lawsuits concern market timing and have been transferred to and consolidated for pre-trial proceedings in a multi-district litigation proceeding in the U.S. District Court for the District of Maryland; the other four lawsuits concern revenue sharing and have been consolidated into a single action in the U.S. District Court for the District of Connecticut. The lawsuits generally relate to the same allegations that are the subject of the regulatory proceedings discussed above. The lawsuits seek, among other things, unspecified compensatory damages plus interest and, in some cases, punitive damages, the rescission of investment advisory contracts, the return of fees paid under those contracts, restitution, and waiver of or return of certain sales charges paid by open-end fund shareholders.

The Investment Manager and the Sub-Adviser believe that these matters are not likely to have a material adverse effect on the Funds or on their ability to perform their respective investment advisory activities relating to the Funds.

The foregoing speaks only as of the date hereof.

40 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


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PIMCO Municipal Income Fund II Financial Highlights
For a share of common stock outstanding throughout each period:
    Six Months                     For the period
   
ended
                    June 28, 2002*
    November 30, 2006  
Year ended May 31,
  through
    (unaudited)  
2006
 
2005
 
2004
  May 31, 2003
Net asset value, beginning of period       $14.71             $14.81             $14.01             $14.66            
$14.33
**
Investment Operations:                              
Net investment income   0.53     1.08     1.11     1.17     0.93      
Net realized and unrealized gain (loss)                              
   on investments, futures contracts,                              
   options written, swaps and foreign                              
   currency transactions   0.57     0.01     0.84     (0.77 )   0.53  
Total from investment operations   1.10     1.09     1.95     0.40     1.46  
Dividends and Distributions on                              
   Preferred Shares from:                              
Net investment income   (0.14 )   (0.23 )   (0.14 )   (0.08 )   (0.08 )
Net realized gains                   (0.01 )
Total dividends and distributions on                              
   preferred shares   (0.14 )   (0.23 )   (0.14 )   (0.08 )   (0.09 )
Net increase in net assets applicable                              
   to common shareholders resulting                              
   from investment operations   0.96     0.86     1.81     0.32     1.37  
Dividends and Distributions to                              
   Common Shareholders from:                              
Net investment income   (0.42 )   (0.96 )   (1.01 )   (0.97 )   (0.84 )
Net realized gains                   (0.09 )
Total dividends and distributions                              
   to common shareholders   (0.42 )   (0.96 )   (1.01 )   (0.97 )   (0.93 )
Capital Share Transactions:                              
Common stock offering costs charged                              
   to paid-in capital in excess of par                   (0.02 )
Preferred shares offering costs/                              
   underwriting discounts charged                              
   to paid-in capital in excess of par                   (0.09 )
Total capital share transactions                   (0.11 )
Net asset value, end of period   $15.25     $14.71     $14.81     $14.01     $14.66  
Market price, end of period   $15.90     $14.45     $15.02     $13.31     $14.80  
Total Investment Return (1)   13.17%     2.63%     21.00%     (3.69)%     5.19%  
RATIOS/SUPPLEMENTAL DATA:                              
Net assets applicable to common                              
   shareholders, end of period (000)   $896,446     $862,832     $862,290     $812,670     $846,885  
Ratio of expenses to average net                              
   assets, including interest                              
   expense (2)(3)(5)   1.52%
#
  1.30%     1.05%     1.08%    
0.97%
#
Ratio of expenses to average net    
                   
   assets, excluding interest    
                   
   expense (2)(3)(4)(5)   1.01%
#
  1.05%     1.02%     1.03%    
0.95%
#
Ratio of net investment income    
                   
   to average net assets (2)(5)   7.25%
#
  7.31%     7.71%     8.16%    
6.99%
#
Preferred shares asset coverage                              
   per share   $69,365     $67,701     $67,676     $65,224     $66,920  
Portfolio turnover   4%     14%     8%     26%     22%  

 


42 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06 | See accompanying notes to Financial Statements


PIMCO Municipal Income Fund II Financial Highlights

 

 

*

Commencement of operations.

 
**

Initial public offering price of $15.00 per share less underwriting discount of $0.675 per share.

 
# Annualized.
   
(1)     

Total investment return is calculated assuming a purchase of a share of common stock at the current market price on the first day of each period and a sale of a share of common stock 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 Fund’s dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges. Total investment return for a period of less than one year is not annualized.

 
(2)

Calculated on the basis of income and expenses applicable to both common and preferred shares relative to the average net assets of common shareholders.

 
(3)

Inclusive of expenses offset by custody credits earned on cash balances at the custodian bank. (See note 1(i) in Notes to Financial Statements).

 
(4)

Interest expense relates to the liability for floating rate notes issued in connection with inverse floater transactions.

 
(5)

During the fiscal periods indicated above, the Investment Manager waived a portion of its investment management fee. The effect of such waivers relative to the average net assets of common shareholders was 0.23% (annualized), 0.24%, 0.24%, 0.25% and 0.23% (annualized) for the six months ended April 30, 2006, for the years ended May 31, 2006, May 31, 2005, May 31, 2004 and for the period June 28, 2002 (commencement of operations) through May 31, 2003, respectively.

 

See accompanying notes to Financial Statements | 11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 43


PIMCO California Municipal Income Fund II Financial Highlights
For a share of common stock outstanding throughout each period:
   
Six Months
                   
For the period
   
ended
                   
June 28, 2002*
   
November 30, 2006
 
Year ended May 31,
 
through
   
(unaudited)
 
2006
  2005  
2004
 
May 31, 2003
Net asset value, beginning                          
 
   of period   $14.58     $14.61     $13.53     $14.66    
$14.33
**
Investment Operations:                          
 
Net investment income       0.54             1.05             1.05             1.13            
0.87
     
Net realized and unrealized                          
 
   gain (loss) on investments,                          
 
   futures contracts, options                          
 
   written, swaps and foreign                          
 
   currency transactions   0.55     0.06     1.13     (1.26 )  
0.46
 
Total from investment operations   1.09     1.11     2.18     (0.13 )  
1.33
 
Dividends on Preferred                          
 
   Shares from:                          
 
Net Investment Income:   (0.13 )   (0.21 )   (0.12 )   (0.07 )  
(0.07
)
Net increase (decrease) in net                          
 
   assets applicable to common                          
 
   shareholders resulting from                          
 
   investment operations   0.96     0.90     2.06     (0.20 )  
1.26
 
Dividends to Common                          
 
   Shareholders from:                          
 
Net Investment Income:   (0.42 )   (0.93 )   (0.98 )   (0.93 )  
(0.81
)
Capital Share Transactions:                          
 
Common stock offering                          
 
   costs charged to paid-in                          
 
   capital in excess of par                  
(0.02
)
Preferred shares offering costs/                          
 
   underwriting discounts charged                          
 
   to paid-in capital in excess of par                  
(0.10
)
Total capital share transactions                  
(0.12
)
Net asset value, end of period   $15.12     $14.58     $14.61     $13.53    
$14.66
 
Market price, end of period   $16.18     $14.62     $14.76     $13.27    
$14.78
 
Total Investment Return (1)   13.83%     5.50%     19.14%     (3.92)%    
4.23%
 
RATIOS/SUPPLEMENTAL                          
 
   DATA:                          
 
Net assets applicable to                          
 
   common shareholders,                          
 
   end of period (000)   $461,168     $443,379     $441,596     $407,659    
$439,970
 
Ratio of expenses to average                          
 
   net assets, including                          
 
   interest expense (2)(3)(5)   2.88%
#
  2.02%     1.36%     1.60%    
1.10%
#
Ratio of expenses to average                          
 
   net assets, excluding                          
 
   interest expense (2)(3)(4)(5)   1.02%
#
  1.06%     1.06%     1.07%    
0.97%
#
Ratio of net investment income                          
 
   to average net assets (2)(5)   7.34%
#
  7.24%     7.37%     8.05%    
6.51%
#
Preferred shares asset                          
 
   coverage per share   $69,330     $67,620     $67,451     $64,191    
$67,301
 
Portfolio turnover   6%     12%     5%     20%    
39%
 

44 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06 | See accompanying notes to Financial Statements


PIMCO California Municipal Income Fund II Financial Highlights

 

 

*

Commencement of operations.

 
**

Initial public offering price of $15.00 per share less underwriting discount of $0.675 per share.

 
# Annualized.
   
(1)     

Total investment return is calculated assuming a purchase of a share of common stock at the current market price on the first day of each period and a sale of a share of common stock 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 Fund’s dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges. Total investment return for a period of less than one year is not annualized.

 
(2)

Calculated on the basis of income and expenses applicable to both common and preferred shares relative to the average net assets of common shareholders.

 
(3)

Inclusive of expenses offset by custody credits earned on cash balances at the custodian bank. (See note 1(i) in Notes to Financial Statements).

 
(4)

Interest expense relates to the liability for floating rate notes issued in connection with inverse floater transactions.

 
(5)

During the periods indicated above, the Investment Manager waived a portion of its investment management fee. The effect of such waivers relative to the average net assets of common shareholders was 0.23% (annualized), 0.24%, 0.24%, 0.24% and 0.23% (annualized) for the six months ended November 30, 2006, for the years ended May 31, 2006, May 31, 2005, May 31, 2004 and for the period June 28, 2002 (commencement of operations) through May 31, 2003, respectively.

 

See accompanying notes to Financial Statements | 11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 45


PIMCO New York Municipal Income Fund II Financial Highlights
For a share of common stock outstanding throughout each period:
   
Six Months
                   
For the period
   
ended
                   
June 28, 2002*
   
November 30, 2006
 
Year ended May 31,
 
through
   
(unaudited)
 
2006
  2005  
2004
 
May 31, 2003
Net asset value, beginning                          
 
   of period   $14.66     $14.62     $13.54     $14.45    
$14.33
**
Investment Operations:                          
 
Net investment income       0.54             1.07             1.07             1.06            
0.86
     
Net realized and unrealized                          
 
   gain (loss) on investments,                          
 
   futures contracts, options                          
 
   written, swaps and foreign                          
 
   currency transactions   0.53     0.11     1.12     (0.97 )  
0.28
 
Total from investment operations   1.07     1.18     2.19     0.09    
1.14
 
Dividends on Preferred                          
 
   Shares from:                          
 
Net Investment Income:   (0.14 )   (0.23 )   (0.13 )   (0.07 )  
(0.08
)
Net increase in net assets                          
 
   applicable to common                          
 
   shareholders resulting from                          
 
   investment operations   0.93     0.95     2.06     0.02    
1.06
 
Dividends to Common                          
 
   Shareholders from:                          
 
Net Investment Income:   (0.40 )   (0.91 )   (0.98 )   (0.93 )  
(0.81
)
Capital Share Transactions:                          
 
Common stock offering costs                          
 
   charged to paid-in capital                          
 
   in excess of par                  
(0.03
)
Preferred shares offering costs/                          
 
   underwriting discounts                          
 
   charged to paid-in capital in                          
 
   excess of par                  
(0.10
)
Total capital share transactions                  
(0.13
)
Net asset value, end of period   $15.19     $14.66     $14.62     $13.54    
$14.45
 
Market price, end of period   $15.74     $14.14     $14.80     $13.05    
$14.71
 
Total Investment Return (1)   14.32%     1.65%     21.45%     (5.15)%    
3.76%
 
RATIOS/SUPPLEMENTAL                          
 
   DATA:                          
 
Net assets applicable to                          
 
   common shareholders,                          
 
   end of period (000)   $160,019     $154,088     $152,812     $140,958    
$149,606
 
Ratio of expenses to average                          
 
   net assets, including                          
 
   interest expense (2)(3)(5)   2.20%
#
  1.89%     1.25%     1.16%    
1.02%
#
Ratio of expenses to average    
                   
   net assets, excluding    
                   
   interest expense (2)(3)(4)(5)   1.15%
#
  1.13%     1.14%     1.15%    
1.02%
#
Ratio of net investment income    
                   
   to average net assets (2)(5)   7.17%
#
  7.29%     7.53%     7.58%    
6.41%
#
Preferred shares asset                          
 
   coverage per share   $69,440     $67,785     $67,439     $64,148    
$66,552
 
Portfolio turnover   4%     26%     11%     14%    
27%
 

46 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06 | See accompanying notes to Financial Statements


PIMCO New York Municipal Income Fund II Financial Highlights

 

 

*

Commencement of operations.

 
**

Initial public offering price of $15.00 per share less underwriting discount of $0.675 per share.

 
# Annualized
   
(1)     

Total investment return is calculated assuming a purchase of a share of common stock at the current market price on the first day of each period and a sale of a share of common stock 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 Fund’s dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges. Total investment return for a period of less than one year is not annualized.

 
(2)

Calculated on the basis of income and expenses applicable to both common and preferred shares relative to the average net assets of common shareholders.

 
(3)

Inclusive of expenses offset by custody credits earned on cash balances at the custodian bank. (See note 1(i) in Notes to Financial Statements).

 
(4)

Interest expense relates to the liability for floating rate notes issued in connection with inverse floater transactions.

 
(5)

During the periods indicated above, the Investment Manager waived a portion of its investment management fee. The effect of such waivers relative to the average net assets of common shareholders was 0.24% (annualized), 0.24%, 0.24%, 0.24% and 0.23% (annualized) for the six months ended November 30, 2006, for the years ended May 31, 2006, May 31, 2005, May 31, 2004 and for the period June 28, 2002 (commencement of operations) through May 31, 2003, respectively.

 

See accompanying notes to Financial Statements | 11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 47


PIMCO Municipal Income Funds II  Matters Relating to the Trustees
  Consideration of the Investment
  Management and Portfolio Management
  Agreements (unaudited)

The Investment Company Act of 1940 requires that both the full Board of Trustees (the “Trustees”) and a majority of the non-interested (“Independent”) Trustees, voting separately, approve the Funds’ Management Agreements (the “Advisory Agreements”) with the Investment Manager and Portfolio Management Agreements (the “Sub-Advisory Agreements”, and together with the Advisory Agreements, the “Agreements”) between the Investment Manager and the Sub-Adviser. The Trustees met on June 20 and 21, 2006 (the “contract review meeting”) for the specific purpose of considering whether to approve the Advisory Agreements and the Sub-Advisory Agreements. The Independent Trustees were assisted in their evaluation of the Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately from Fund management during the contract review meeting (the “Meeting”).

Based on their evaluation of factors that they deemed to be material, including those factors described below, the Board of Trustees, including a majority of the Independent Trustees, concluded that the Fund’s Advisory Agreements and the Sub-Advisory Agreements should be approved for a one-year period commencing July 1, 2006.

In connection with their deliberations regarding the continuation of the Agreements, the Trustees, including the Independent Trustees, considered such information and factors as they believed, in light of the legal advice furnished to them and their own business judgment, to be relevant. As described below, the Trustees considered the nature, quality, and extent of the various investment management, administrative and other services performed by the Investment Manager and the Sub-Adviser under the Agreements.

In connection with the Meeting, the Trustees received and relied upon materials provided by the Investment Manager which included, among other items: (i) information provided by Lipper Inc. on the total return investment performance (based on net assets) of the Funds for various time periods and the investment performance of a group of funds with substantially similar investment classifications/objectives, (ii) information provided by Lipper Inc. on the Funds’ management fees and other expenses and the management fees and other expenses of comparable funds identified by Lipper Inc., (iii) information regarding the investment performance and management fees of comparable portfolios of other clients of the Sub-Adviser, including institutional separate account and other clients, (iv) an estimate of the profitability to the Investment Manager from its relationship with the Funds for the twelve months ended March 31, 2006, (v) descriptions of various functions performed by the Investment Manager and the Sub-Adviser for the Funds, such as portfolio management, compliance monitoring and portfolio trading practices, and (vi) information regarding the overall organization of the Investment Manager and the Sub-Adviser, including information regarding senior management, portfolio managers and other personnel providing investment management, administrative and other services to the Funds.

The Trustees’ conclusions as to the continuation Agreements were based on a comprehensive consideration of all information provided to the Trustees and not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations are described below, although individual Trustees may have evaluated the information presented differently from one another, giving different weights to various factors.

As part of their review, the Trustees examined the Investment Manager’s and the Sub-Adviser’s abilities to provide high quality investment management and other services to the Funds. The Trustees considered the investment philosophy and research and decision-making processes of the Sub-Adviser; the experience of key advisory personnel of the Sub-Adviser responsible for portfolio management of the Funds; the ability of the Investment Manager and the Sub-Adviser to attract and retain capable personnel; the capability and integrity of the senior management and staff of the Investment Manager and the Sub-Adviser; and the level of skill required to manage the Funds. In addition, the Trustees reviewed the quality of the Investment Manager’s and the Sub-Adviser’s services with respect to regulatory compliance and compliance with the investment policies of the Funds; the nature and quality of certain administrative services the Investment Manager is responsible for providing to the Funds; and conditions that might affect the Investment Manager’s or the Sub-Adviser’s ability to provide high quality services to the Funds in the future under the Agreements, including each organization’s respective business reputation, financial condition and operational stability. Based on the foregoing, the Trustees concluded that the Sub-Adviser’s investment process, research capabilities and philosophy were well suited to the Funds given their investment objectives and policies, and that the Investment Manager and the Sub-Adviser would be able to continue to meet any reasonably foreseeable obligations under the Agreements.

Based on information provided by Lipper Inc., the Trustees also reviewed each Fund’s total return investment performance as well as the performance of comparable funds identified by Lipper Inc. In the course of their deliberations, the Trustees took into account information provided by the Investment Manager in connection with the Meeting, as well as during

48 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO Municipal Income Funds II   Matters Relating to the Trustees
  Consideration of the Investment
  Management and Portfolio Management
  Agreements (unaudited) (continued)

investment review meetings conducted with portfolio management personnel during the course of the year regarding each the Fund’s performance.

In assessing the reasonableness of each Fund’s fees under the Agreements, the Trustees considered, among other information, the Fund’s management fee and the total expense ratio as a percentage of average net assets attributable to common shares and the management fee and total expense ratios of comparable funds identified by Lipper Inc.

For each of the Funds, the Trustees specifically took note of how each Fund compared to its Lipper Inc. peers as to performance and management fee expenses. The Trustees noted that while the Funds are not charged a separate administration fee, it was not clear whether the peer funds in the Lipper Inc. categories were charged such a fee by their investment managers. Thus, the Trustees, at the recommendation of the Investment Manager, considered the total expenses of the Funds comparatively to the total expenses of the peer funds, recognizing that the fees for management and administrative services would be subsumed within the total expense ratio.

The Trustees noted that Municipal II had outperformed its peer median and average group for the one-year and three-year periods ended April 30, 2006. The Trustees also noted that Municipal II’s expense ratio (after taking into account waivers) was below the median and average for its peer group.

The Trustees noted that California Municipal II outperformed its peer median and average group for the one-year and three-year periods ended April 30, 2006. The Trustees also noted that California Municipal II’s expense ratio (after taking into account waivers) including the effect of preferred shares was significantly below the average and median for its peer group and excluding the effect of preferred shares was slightly above the average and median for its peer group.

The Trustees noted that New York Municipal II outperformed its peer median and average group for the one-year and three-year periods ended April 30, 2006. The Trustees also noted that New York Municipal II’s expense ratio (after taking into account waivers) including the effect of preferred shares was significantly below the average and median for its peer group and excluding the effect of preferred shares was slightly above the average and median for its peer group.

After reviewing these and related factors, the Trustees concluded, within the context of their overall conclusions regarding the Agreements, that they were satisfied with the Investment Manager’s and the Sub-Adviser’s responses and efforts relating to investment performance and the comparative positioning of each Fund with respect to the management fee paid to the Investment Manager.

The Trustees also considered the management fees charged by the Sub-Adviser to other clients, including institutional separate accounts with investment strategies similar to those of the Funds. Regarding the institutional separate accounts, they noted that the management fees paid by the Funds are generally higher than the fees paid by these clients of the Sub-Adviser, but were advised that the administrative burden for the Investment Manager and the Sub-Adviser with respect to the Funds are also relatively higher, due in part to the more extensive regulatory regime to which the Funds are subject in comparison to institutional separate accounts. The Trustees noted that the management fees paid by the Funds are generally higher than the fees paid by the open-end funds but were advised that there are additional portfolio management challenge in managing the Funds, such as the use of leverage and meeting a regular dividend.

The Trustees also took into account that the Funds have preferred shares outstanding, which increases the amount of fees received by the Investment Manager and the Sub-Adviser under the Agreements (because the fees are calculated based on the Fund’s total managed assets, including assets attributable to preferred shares and other forms of leverage outstanding). In this regard, the Trustees took into account that the Investment Manager and the Sub-Adviser have a financial incentive for the Funds to continue to have preferred shares outstanding, which may create a conflict of interest between the Investment Manager and the Sub-Adviser, on one hand, and the Fund’s common shareholders, on the other. In this regard, the Trustees considered information provided by the Investment Manager and the Sub-Adviser indicating that each Fund’s use of leverage through preferred shares continues to be appropriate and in the interests of the Fund’s common shareholders.

Based on a profitability analysis provided by the Investment Manager, the Trustees also considered the estimated profitability of the Investment Manager from its relationship with each Fund and determined that such profitability was not excessive.

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 49


PIMCO Municipal Income Funds II  Matters Relating to the Trustees
  Consideration of the Investment
  Management and Portfolio Management
  Agreements (unaudited) (continued)

The Trustees also took into account that, as closed-end investment companies, the Funds do not currently intend to raise additional assets, so the assets of the Funds will grow (if at all) only through the investment performance of each Fund. Therefore, the Trustees did not consider potential economies of scale as a principal factor in assessing the fee rates payable under the Agreements.

Additionally, the Trustees considered so-called “fall-out benefits” to the Investment Manager and the Sub-Adviser, such as reputational value derived from serving as Investment Manager and Sub-Adviser to the Funds.

After reviewing these and other factors described herein, the Trustees concluded, within the context of their overall conclusions regarding the Agreements, that the fees payable under the Agreements represent reasonable compensation in light of the nature and quality of the services being provided by the Investment Manager and Sub-Adviser to the Funds.

50 PIMCO Municipal Income Funds II Semi-Annual Report | 11.30.06


PIMCO Municipal Income Funds II   Annual Shareholder Meetings
  Results/Corporate Changes (unaudited)

Annual Shareholder Meetings Results:
The Funds held their annual meetings of shareholders on December 20, 2006. Common/Preferred shareholders of each fund voted to re-elect both Robert E. Connor and Hans W. Kertess* as Class I Trustees and elect William B. Ogden IV as Class I Trustee to serve until 2009.

The resulting vote count is indicated below:          
 
        Withheld  
    Affirmative                 Authority      
Municipal II          
Re-election of Robert E. Connor   51,909,255   749,519  
Re-election of Hans W. Kertess*   18,470   175  
Election of William B. Ogden IV   51,952,770   706,004  
 
California Municipal II          
Re-election of Robert E. Connor   26,458,623   227,141  
Re-election of Hans W. Kertess*   7,848   4  
Election of William B. Ogden IV   26,475,675   210,089  
 
New York Municipal II          
Re-election of Robert E. Connor   9,104,152   186,534  
Re-election of Hans W. Kertess*   1,669   28  
Election of William B. Ogden IV   9,095,503   195,183  

Messrs. Paul Belica, Jack J. Dalessandro, John C. Maney and R. Peter Sullivan III continue to serve as Trustees of the Funds.

 

* Preferred Shares Trustee

 

Corporate changes:
On September 12, 2006, the Fund’s Board of Trustees appointed William B. Ogden IV as a class I Trustee. On October 10, 2006, David C. Flattum, an interested Trustee, resigned. On December 12, 2006, the Fund’s Board of Trustees appointed John C. Maney, as a Class III (interested) Trustee.

 

 

11.30.06 | PIMCO Municipal Income Funds II Semi-Annual Report 51


[This page intentionally left blank.]


Trustees and Principal Officers
Hans W. Kertess   Brian S. Shlissel
   Trustee, Chairman of the Board of Trustees      President & Chief Executive Officer
Paul Belica   Lawrence G. Altadonna
   Trustee      Treasurer, Principal Financial & Accounting Officer
Robert E. Connor   Thomas J. Fuccillo
   Trustee      Vice President, Secretary & Chief Legal Officer
John J. Dalessandro II   Youse E. Guia
   Trustee      Chief Compliance Officer
John C. Maney   Kathleen Chapman
   Trustee      Assistant Secretary
William B. Ogden IV   William Healey
   Trustee      Assistant Secretary
R. Peter Sullivan III   Richard Kirk
   Trustee      Assistant Secretary
    Lagan Srivastava
       Assistant Secretary

Investment Manager
Allianz Global Investors 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

Custodian & Accounting Agent

State Street Bank & Trust Co.
225 Franklin Street
Boston, MA 02110

Transfer Agent, Dividend Paying Agent and Registrar

PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017

Legal Counsel

Ropes & Gray LLP
One International Place
Boston, MA 02210-2624

This report, including the financial information herein, is transmitted to the shareholders of PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and PIMCO New York Municipal Income Fund II for their information. It is not a prospectus, circular or representation intended for use in the purchase of shares of the Funds or any securities mentioned in this report.

The financial information included herein is taken from the records of the Funds without examination by an independent registered public accounting firm, who did not express an opinion hereon.

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 Fund may purchase shares of its common stock in the open market.

The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarter of its fiscal year on Form N-Q. The Funds’ Form N-Qs are available on the SEC’s website at www.sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.

A description of the policies and procedures that the Funds have adopted to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities held during the twelve months ended June 30, 2006 is available (i) without charge upon request by calling the Funds’ shareholder servicing agent at (800) 331-1710; (ii) on the Funds’ website at www.allianzinvestors.com/closedendfunds; and (iii) on the Securities and Exchange Commission website at sec.gov.

Information on the Funds is available at www.allianzinvestors.com/closedendfunds or by calling the Funds’ shareholder servicing agent at (800) 331-1710.


 





ITEM 2.

CODE OF ETHICS

Not required in this filing.

   
ITEM 3.

AUDIT COMMITTEE FINANCIAL EXPERT

Not required in this filing
   
ITEM 4.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Not required in this filing
   
ITEM 5.

AUDIT COMMITTEE OF LISTED REGISTRANT

Not required in this filing
   
ITEM 6.

SCHEDULE OF INVESTMENTS

Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this form.

   
ITEM 7.

DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not required in this filing
   
ITEM 8.

PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not required in this filing
   
ITEM 9.

PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED COMPANIES.

   
      Total Number   
      of Shares Purchased  Maximum Number of 
  Total Number  Average  as Part of Publicly  Shares that May yet Be 
  of Shares  Price Paid  Announced Plans or  Purchased Under the Plans 
Period  Purchased  Per Share  Programs  or Programs 
July 2006  N/A  14.41  4,797  N/A 
August 2006  N/A  14.65  4,726  N/A 
September 2006  N/A  14.92  4,597  N/A 
October 2006  N/A  14.98  4,777  N/A 
November 2006  N/A  15.13  4,979  N/A 
   
ITEM 10.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   
There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board of Trustees since the Fund last provided disclosure in response to this item. The Nominating Committee Charter governing the affairs of the Nominating Committee of the Board is posted on the Allianz Global Investors website at www.allianzinvestors.com. 
   
ITEM 11. 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) In December 2006, subsequent to the Registrant’s fiscal half year, the principal executive and financial officers became aware of matters relating to the Registrant’s purchase of certain inverse floating rate obligations that required enhancements to certain controls. The Registrant’s management determined that controls relating to the review and analysis of the relevant contractual terms and conditions of transfers of securities in connection with the purchase of certain inverse floating rate obligations were not effective in identifying whether these transfers qualified for sale accounting under the provisions of Statement of Financial Accounting Standards No. 140 (“SFAS 140”). The Registrant’s management has taken such further actions as are necessary to revise its controls and procedures in order to increase the effectiveness of these controls and procedures in identifying such transactions that require accounting treatment under SFAS 140.

   
ITEM 12. EXHIBITS
   
(a) (1) Exhibit 99.Cert. - Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 
   
(b)  Exhibit 99.906 Cert. - Certification pursuant to Section 906 of the Sarbanes- Oxley Act of 2002





Signature

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PIMCO New York Municipal Income Fund II

By /s/ Brian S. Shlissel
Brian S. Shlissel, President & Chief Executive Officer

Date: May 22, 2007

By /s/ Lawrence G. Altadonna
Lawrence G. Altadonna, Treasurer, Principal Financial & Accounting Officer

Date: May 22, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By /s/ Brian S. Shlissel
Brian S. Shlissel, President & Chief Executive Officer

Date: May 22, 2007

By /s/ Lawrence G. Altadonna
Lawrence G. Altadonna, Treasurer, Principal Financial & Accounting Officer

Date: May 22, 2007