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 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.

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

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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 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. 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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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	14.43	28,303	N/A
August 2006	N/A	14.66	27,975	N/A
September 2006	N/A	14.90	27,405	N/A
October 2006	N/A	14.96	27,499	N/A
November 2006	N/A	15.20	26,605	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

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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 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

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