-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G7o3lP3Hi/HvViZF1Kw3G+2havaeuezMjhLlO3+fovfE1lGVNOx0BG5UJH4mSb8f fOQBul/pQUNRqRa4Wpv7dw== 0000021832-96-000041.txt : 19960807 0000021832-96-000041.hdr.sgml : 19960807 ACCESSION NUMBER: 0000021832-96-000041 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960531 FILED AS OF DATE: 19960806 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONIAL MUNICIPAL INCOME TRUST CENTRAL INDEX KEY: 0000809844 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04992 FILM NUMBER: 96604351 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 N-30D 1 [COLONIAL LOGO] COLONIAL MUNICIPAL INCOME TRUST SEMIANNUAL REPORT MAY 31,1996 COLONIAL MUNICIPAL INCOME TRUST HIGHLIGHTS DECEMBER 1, 1995 - MAY 31, 1996 INVESTMENT OBJECTIVE: Colonial Municipal Income Trust seeks to provide high current income, generally exempt from federal income taxes, by investing primarily in medium and lower quality municipal securities. POLICY CHANGE: At a meeting held on February 17, 1995, the Trustees approved a policy change to allow the segregation of high-quality debt securities, in addition to cash and cash equivalents, for futures trading. THE FUND IS DESIGNED TO OFFER: - Potential for high tax-free income - Experienced professional management - Expert credit analysis PORTFOLIO MANAGER COMMENTARY: "Despite recent adverse conditions in the bond market, we continue to take a long-range outlook and to maintain our `big picture' strategy which is based on the fundamental prospects of the companies in which the Trust invests. While we believe that the tax-exempt bond market may continue to experience lower prices in the months ahead, we remain confident that our approach will continue to provide attractive returns for investors." - --Peter Andersen COLONIAL MUNICIPAL INCOME TRUST PERFORMANCE Distributions declared per share (1) $0.255 Six-month total return, assuming reinvestment of all distributions - - NAV 0.32% - - Market Price 5.60% Price per share - - NAV $ 7.24 - - Market Price $ 6.88
(1) A portion of the Fund's income may be subject to the alternative minimum tax.
TOP FIVE SECTORS QUALITY BREAKDOWN (as of 5/31/96) (as of 5/31/96) - -------------------------------------------------------------------------------- Nursing........... 20.55% AAA 4.7% Housing........... 11.34% AA 2.5% Hospital.......... 9.39% A 5.2% Paper............. 8.36% BBB 18.1% Manufacturing..... 5.16% BB 2.4% B .7% NON-RATED: 62.2% OTHER 4.2%
2 PRESIDENT'S MESSAGE TO FUND SHAREHOLDERS [PHOTO OF HAROLD W. COGGER, PRESIDENT] I am pleased to present your Fund's semiannual report for the period ended May 31, 1996. First, however, I would like to extend my thanks to President John A. McNeice, Jr., who has retired after a career with Colonial that spanned 40 years. We look forward to his continued involvement on the executive committee of the board of directors at our parent company, Liberty Financial Companies, Inc. In my new position, I am directing Colonial's focus on the delivery of superior investment performance over the long term. To achieve this mission, we will continue to seek the optimal combination of talented people and effective investment disciplines. The receipt of your semiannual report is a good time to reflect on market conditions and the performance of your Fund during the past 6 months. Falling interest rates and minimal inflation helped the economy grow at a comfortable pace throughout 1995 and created a positive environment for financial investments. The stock market received additional impetus from strong growth of corporate profits. Currently, while there may be some market volatility, we expect moderate growth and low inflation to continue. Earnings should continue to make progress but at a slower pace than in 1995. Opportunities are not confined to the U.S., as we anticipate growth in certain foreign markets. With over 12 years of service at Colonial and more than 25 years in the industry, I am enthusiastic about-- and dedicated to achieving-- Colonial's mission of providing you with competitive investment returns. In my new role, I look forward to communicating with you about your Colonial investment. We appreciate the opportunity to help you meet your investment goals. Respectfully, /s/ Harold W. Cogger - -------------------- Harold W. Cogger President July 11, 1996 Because market conditions change frequently, there can be no assurance that the trends described here will continue, come to pass, or affect Fund performance. 3 INVESTMENT PORTFOLIO MAY 31, 1996 (UNAUDITED, IN THOUSANDS)
MUNICIPAL BONDS - 95.4% PAR VALUE - ----------------------------------------------------------------------------- EDUCATION - 2.6% EDUCATION - 0.5% CT HEFA University of New Haven, 6.625% 07/01/16 $1,000 $ 981 ------ SCHOOL DISTRICT GENERAL OBLIGATION - 1.1% AZ Apache County School District, Number 010 Round Valley Project of 1987, Series 1990-C, 9.875% 07/01/05 2,000 2,185 ------ STUDENT LOAN - 1.0% SD Student Loan Financial Corp., 6.550% 08/01/20 2,000 2,000 ------ - ----------------------------------------------------------------------------- HEALTH - 30.6% HOSPITAL - 9.3% AL Special Care Facilities Authority, Montgomery Healthcare, Series 1989, 11.000% 10/01/19 2,280 2,326 DE State Economic Development Authority, Riverside Hospital, Series 1992 A, 9.500% 01/01/22 905 1,178 GA Clayton Hospital Authority, The Woodlands Foundation, Inc., Series 1991 A, 9.750% 05/01/21 1,500 1,275 ID State Health Facilities Authority, IHC Hospitals, Inc., 8.190% 02/15/21 2,750 2,894 IL Health Facilities Authority, Edgewater Medical Center, Series A, 9.250% 07/01/24 2,250 2,421 MO Hannibal Industrial Development, Medical Systems of Northeast Missouri, Series 1992, 9.500% 03/01/22 2,000 2,283 NJ Health Care Facilities Financing Authority, Raritan Bay Medical Center, 7.250% 07/01/27 1,000 1,002
4 Investment Portfolio/May 31, 1996 - -------------------------------------------------------------------------------- VA Dickenson County Industrial Development Authority, Volunteer Healthcare Systems, Inc., Series 1, 10.750% 06/01/18 (a) $5,500 $ 1,650 VT Educational & Health Buildings Financing Agency, Springfield Hospital, Series A, 7.750% 01/01/13 1,050 1,122 WA State Health Care Facility, Grays Harbor Community Hospital, Series 1993, 7.200% 07/01/03 385 402 8.025% 07/01/20 1,770 1,863 ------- 18,416 ------- INTERMEDIATE CARE FACILITIES - 1.0% MA State Health & Educational Facilities Authority, Corp. for Independent Living, 8.100% 07/01/18 695 683 TN Shelby County Health, Education & Housing Facilities Board, Open Arms Development Center: Series 1992-A, 9.750% 08/01/19 530 600 Series 1992-C, 9.750% 08/01/19 540 612 ------- 1,895 ------- NURSING HOME - 20.3% CO Health Facility, American Housing Foundation I, Series 1990, 10.250% 12/01/20 1,500 1,661 DE State Economic Development Authority, 12.000% 04/01/25 2,275 2,500 DE Sussex County, Healthcare Facility, Delaware Health Corp., Series 1994-A, 7.600% 01/01/24 1,000 963 FL Flagler County Industrial Development Authority, South Florida Properties, Series 1988, 10.500% 12/01/18 1,470 1,479 IA State Finance Authority, Care Initiatives Project, Series 1996, 9.250% 07/01/25 2,000 2,137
5 Investment Portfolio/May 31, 1996
- ------------------------------------------------------------------------------ MUNICIPAL BONDS - CONT. PAR VALUE - ------------------------------------------------------------------------------ HEALTH - CONT. NURSING HOME - CONT. IN Gary Industrial Economic Development, West Side Health Care Center, Series 1987 A, 11.500% 10/01/17 $2,500 $2,450 IN Michigan City Health Facilities, Metropolitan Health Foundation, Inc. Project, 10.000% 11/01/22 4,500 3,150 KS Halstead Industrial Health Care Project, 10.250% 08/01/13 1,330 532 KY Jefferson County First Mortgage, Kentucky Iowa, Inc. Project, Series 1990, 10.250% 01/01/20 990 1,030 KY Lexington-Fayette Urban County Government, First Mortgage, AHF Kentucky-Iowa, Inc. Project, Series 1990, 10.250% 01/01/20 990 1,030 MA Boston, St. Joseph Nursing Care Center, Inc., Series 1990, 10.000% 01/01/20 (b) 1,960 2,149 MA State Industrial Finance Agency, GF/Massachusetts, Inc., Series 1994, 8.300% 07/01/23 1,000 971 MI Cheboygan County Economic Development Corp., Metro Health Foundation Project, Series 1993, 10.000% 11/01/22 2,440 1,708 MO Grove Industrial Development Authority, First Mortgage Health Care Facility, Heritage Manor GR, Series 1988, 10.250% 11/01/13 530 477 MO Saint Louis County Industrial Development Authority, 10.250% 12/01/16 1,890 1,930 MO Springfield Industrial Development Authority, 10.250% 12/01/10 1,235 1,274 NJ Economic Development Authority, Geriatric and Medical Service, Inc., Series A, 10.500% 05/01/04 790 857
6 Investment Portfolio/May 31, 1996 - -------------------------------------------------------------------------------- NM Clovis Industrial Development, Retirement Ranches Project, 10.750% 04/01/19 $2,160 $ 2,368 OH Lucas County, Gericare, Inc., Series 1988 B, 10.500% 06/01/18 2,500 2,488 OH Montgomery County, Grafton Oaks Limited Partners, Series 1986, 9.750% 12/01/16 1,480 1,406 OK Muskogee County Economic Development Authority Health Facilities, Heartway Corp., Series 1989 A-3, 10.250% 03/01/19 1,970 1,477 PA Philadelphia Authority For Industrial Development: First Mortgage, The Care Pavilion, Series 1988, 10.250% 02/01/18 975 994 RHA/Philadelphia Project, 10.250% 11/01/18 1,470 1,519 TN New Tazewell Health Education and Housing Facilities Board, New Tazewell, Series 1987, 10.000% 06/01/17 1,640 1,686 VA Beach Development Authority, Beverly Enterprises, Series 1985, 10.000% 04/01/10 1,860 2,058 ------- 40,294 ------- - ------------------------------------------------------------------------------ HOUSING - 14.6% ASSISTED LIVING/SENIOR - 2.8% IL State Development Finance Authority, Care Institute, Inc., 8.250% 06/01/25 1,500 1,528 MN Roseville, Care Institute, Inc., Series 1993, 7.750% 11/01/23 1,630 1,559 PA Montgomery County Industrial Development Authority, Assisted Living Facility, Series 1993-A, 8.250% 05/01/23 820 830
7 Investment Portfolio/May 31, 1996
- ------------------------------------------------------------------------------ MUNICIPAL BONDS - CONT. PAR VALUE - ------------------------------------------------------------------------------ HOUSING - CONT. ASSISTED LIVING/SENIOR - CONT. TX Bell County Health Facilities Development Corp., Care Institutions, Inc., 9.000% 11/01/24 $1,500 $1,598 ------ 5,515 ------ MULTI-FAMILY - 11.4% FL Clearwater Housing Authority, Hampton Apartments, Series 1994, 8.250% 05/01/24 2,500 2,594 FL Hialeah Housing Authority, Series 1991, 9.500% 11/01/21 1,000 1,031 FL State Housing Finance Agency, Windsong Apartments, Series 1993 C, 9.250% 01/01/19 830 829 FL West Palm Beach Housing, Inc., Cypress Run, 10.500% 03/15/19 (a) 2,040 1,081 IL Chicago, Michigan Boulevard Garden Apartment Rehabilitation Project, Series 1985, 12.000% 01/01/00 435 440 MN Washington County Housing & Redevelopment Authority, Cottages of Aspen, Series 1992, 9.250% 06/01/22 1,095 1,115 MN White Bear Lake, Birch Lake Townhomes Project: Series 1989-A, 10.250% 07/15/19 1,770 1,768 Series 1989 B, (c) 07/15/19 730 1,151 NC Durham, Durham Hosiery Mill Project, Series 1987, 7.500% 08/01/29 1,000 1,060 NC Eastern Carolina Regional Housing Authority, New River Apartments, Jacksonville, Series 1994, 8.250% 09/01/14 1,980 1,985 Pass Through Certificates, Series 1993-A, 8.500% 12/01/16 (d) 4,248 4,328
8 Investment Portfolio/May 31, 1996 - -------------------------------------------------------------------------------- SC State Housing Finance and Development, Multi-family Housing Finance Revenue, Westbridge Apartments, Series A, 9.500% 09/01/20 $2,200 $ 2,225 TX Galveston Pass Health Facilities Center, Pass Through Certificates, 8.000% 08/01/23 1,000 1,006 VA Alexandria Redevelopment & Housing Authority, Courthouse Commons Apartments, Series 1990-A, 10.000% 01/01/21 1,000 1,004 VA Roanoke Redevelopment & Housing Authority, First Mortgage, Mountain Ridge, 9.250% 11/01/22 1,000 950 ------- 22,567 ------- SINGLE-FAMILY - 0.4% KY 1986 County Single-family Mortgage Revenue, Class A, 9.000% 09/01/16 30 31 PA Allegheny County, Residential Financial Authority, Single-family Mortgage, Series 1987-G, 9.500% 12/01/18 710 733 ------- 764 ------- - ------------------------------------------------------------------------------ OTHER - 4.4% PUBLIC FACILITIES IMPROVEMENT - 0.9% CA Statewide Communities Development Corp., J. Paul Getty Trust Center, 5.000% 10/01/23 2,000 1,715 ------- REFUNDED/ESCROW/SPECIAL OBLIGATION - 3.5% AL Marshall County Hospital Board, Boaz-Albertville Medical Center, 8.875% 01/01/05 2,645 2,770 MA State Industrial Finance Agency, Mary Ann Morse Nursing Home, Inc., Series 1990, 9.000% 10/01/20 960 1,132 Series 1991 I, 10.000% 01/01/21 1,200 1,476 MI State Hospital Finance Authority, Detroit Osteopathic Hospital, Series 1987 A, 7.500% 11/01/10 950 1,014
9 Investment Portfolio/May 31, 1996
- ------------------------------------------------------------------------------ MUNICIPAL BONDS - CONT. PAR VALUE - ------------------------------------------------------------------------------ OTHER -CONT. REFUNDED/ESCROW/SPECIAL OBLIGATION - CONT. NC Lincoln County, Lincoln County Hospital, 9.000% 05/01/07 $ 530 $ 636 ------ 7,028 ------ OTHER REVENUE - 21.9% AMUSEMENTS & RECREATION - 0.6% MN Mille Lacs Capital Improvement Infrastructure, Band of Chippewa, Series 1992-A, 9.250% 11/01/12 1,115 1,235 ------ CHEMICALS - 3.4% LA St. Charles Parish Pollution Control Revenue, Union Carbide Project, 7.350% 11/01/22 2,000 2,115 SC York County Industrial Revenue, Hoechst-Celanese Corp., 5.700% 01/01/24 5,000 4,631 ------ 6,746 ------ HOTELS/CAMPS/LODGING - 2.0% MN Burnsville Commercial Development, Holiday Inn Project, 10.600% 06/01/06 2,500 2,565 MN Minneapolis Commercial Development, Hometel Associates Ltd., Series 1988, 10.500% 06/01/03 1,500 1,515 ------ 4,080 ------ MANUFACTURING - 5.1% CO Mesa County Industrial Development, Joy Technologies, Inc., Series 1992, 8.500% 09/15/06 1,000 1,051 MA State Industrial Finance Agency, House of Bianchi, Inc., 8.750% 06/01/18 330 337 MN Brooklyn Park, TL Systems Corp., Series 1991, 10.000% 09/01/16 810 998 OH Cuyahoga County, Joy Technologies, Inc., Series 1992, 8.750% 09/15/07 550 586
10 Investment Portfolio/May 31, 1996 - -------------------------------------------------------------------------------- VA Halifax County Industrial Development, Craddock-Terry, Inc., Series 1989, 10.000% 12/01/19 $1,020 $ 1,096 VA Pittsylvania County Industrial Development, Craddock-Terry, Inc., Series 1989, 10.000% 12/01/19 1,095 1,169 VA Prince Edward County Industrial Development, Craddock-Terry, Inc., Series 1989, 10.000% 12/01/19 1,880 2,008 WA Pilchuck Development Public Corp. 6.000% 08/01/23 1,500 1,399 WV Weirton Pollution Control, Weirton Steel Corp., Series 1989, 8.625% 11/01/14 1,400 1,468 ------- 10,112 ------- MISCELLANEOUS RETAIL - 0.4% OH Lake County, North Madison Properties, Series 1993, 8.819% 09/01/11 710 732 ------- OTHER REVENUE - 2.1% IN Hammond, American Maize Products Co., Series 1994, 8.000% 12/01/24 2,000 2,183 LA Port New Orleans Industrial Development, Continental Grain Co., Series 1993, 7.500% 07/01/13 1,000 1,027 MD Baltimore, Park Charles Project, Series 1986, 8.000% 01/01/10 875 900 ------- 4,110 ------- PAPER PRODUCTS - 8.3% GA Rockdale County Development, Solid Waste Disposal Bonds, Visy Paper, Inc., Series 1993, 7.400% 01/01/08 5,000 5,037 MI State Strategic Fund, Blue Water Fiber Project, Series 1994, 8.000% 01/01/12 2,000 1,770
11 Investment Portfolio/May 31, 1996
- ------------------------------------------------------------------------------ MUNICIPAL BONDS - CONT. PAR VALUE - ------------------------------------------------------------------------------ OTHER REVENUE - CONT. PAPER PRODUCTS - CONT. MI State Strategic Fund, Great Lakes Pulp & Fibre Project, Series 1994, 10.250% 12/01/16 $4,000 $ 3,490 NY New York City Industrial Development Agency, Visy Paper, Inc., Series 1995, 7.950% 01/01/28 2,200 2,225 SC Darlington County, Industrial Development Authority, SONOCO Products Co. Project, 6.125% 06/01/25 2,000 1,942 WA Walla Walla Public Corp., Ponderosa Fibres Project, 9.125% 01/01/26 2,000 1,933 ------- 16,397 ------- - ------------------------------------------------------------------------------ RESOURCE RECOVERY - 3.4% CO-GENERATION - 1.5% FL Martin County Industrial Development Authority, Indiantown Co-generation Project, Series 1994 A, 7.875% 12/15/25 1,000 1,110 MD State Energy Financing Administration, AES Warrior Co-generation Project, 7.400% 09/01/19 1,750 1,785 ------- 2,895 ------- LAND FILL - 0.6% MA State Industrial Finance Agency, Peabody Monofill Associates, Inc., Series 1995, 9.000% 09/01/05 1,140 1,188 ------- MISCELLANEOUS DISPOSAL - 0.5% MA Boston Industrial Development Finance Authority, Jet-A-Way, Inc., 10.500% 01/01/11 1,000 1,111 ------- RECYCLING - 0.8% GA Fulton County Development Authority, Very, Inc., 10.500% 12/01/07 1,515 1,588 -------
12 Investment Portfolio/May 31, 1996 - -------------------------------------------------------------------------------- TAX-BACKED - 2.1% SALES & EXCISE TAX - 2.1% IL Development Finance Authority, City of Marion Project, Series 1991, 9.625% 09/15/21 $ 1,485 $1,496 IL Metropolitan Pier & Exposition Authority, McCormick Project: (e) 06/15/14 5,000 1,669 (e) 06/15/15 3,000 934 ------ 4,099 ------ - -------------------------------------------------------------------------------- TRANSPORTATION - 7.5% AIR TRANSPORTATION - 4.1% IN Indianapolis Airport Authority: Federal Express Project, 7.100% 01/15/17 2,000 2,073 United Airlines Project, Series A, 6.500% 11/15/31 2,000 1,923 TX Alliance Airport Authority: American Airlines Project, 7.500% 12/01/29 1,000 1,052 Federal Express Corp., Series 1996, 6.375% 04/01/21 1,000 966 TX Dallas-Fort Worth International Airport, American Airlines, Inc., Series 1990, 7.500% 11/01/25 2,000 2,112 ------ 8,126 ------ AIRPORT - 1.7% CO Denver City & County Airport, Denver International Airport, Series 1991-D, 7.750% 11/15/21 3,000 3,300 ------ TURNPIKE/TOLLROAD/BRIDGE - 1.7% CA San Joaquin Hills Transcorridor, Agency Senior Toll Road, Series 1993: (e) 01/01/25 10,000 1,450 5.000% 01/01/33 2,480 1,975 ------ 3,425 ------
13 Investment Portfolio/May 31, 1996
- ------------------------------------------------------------------------------ MUNICIPAL BONDS - CONT. PAR VALUE - ------------------------------------------------------------------------------ UTILITY - 8.3% INDIVIDUAL POWER PRODUCER - 2.2% PA Economic Development Finance Authority, Colver Project, Series D: 7.125% 12/01/15 $ 500 $ 511 7.150% 12/01/18 3,750 3,830 -------- 4,341 -------- INVESTOR OWNED - 2.8% IL Bryant Pollution Control Revenue, Central Illinois Light Co. Project, 5.900% 08/01/23 2,000 1,915 NY State Energy Research & Development Authority, Consolidated Edison Co., Series 1991 A, 7.500% 01/01/26 1,500 1,609 OH State Water Development Pollution Collateralized Control, The Cleveland Electric Illumination, Series 1987-A-1, 9.750% 11/01/22 2,000 2,085 -------- 5,609 -------- JOINT POWER AUTHORITY - 1.1% MN Southern Minnesota Municipal Power Agency, Series 1994A, (e) 01/01/25 12,000 2,115 -------- WATER & SEWER - 2.2% LA Public Facility Belmont Water Authority, 9.000% 03/15/24 790 809 MA State Industrial Finance Agency, Massachusetts Environmental Services, Series 1994 A, 8.750% 11/01/21 1,000 1,004 MS V Lakes Utility District, 8.250% 07/15/24 500 504 NJ State Economic Development Authority, Hills Development Co., 10.500% 09/01/08 2,100 2,158 -------- 4,475 -------- TOTAL MUNICIPAL BONDS (cost of $192,851) (f) 189,044 --------
14 Investment Portfolio/May 31, 1996
- ------------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS - 4.1% PAR VALUE - ------------------------------------------------------------------------------- VARIABLE RATE DEMAND NOTES (g) ID State Health Facilities Authority, St. Lukes Regional Medical Facility, Series 1995, 3.70% 05/01/22 $1,600 $ 1,600 MI Flint Hospital Building Authority, Hurley Medical Center, Series 1995 B, 3.75% 07/01/15 1,750 1,750 NM Farmington, Arizona Public Service Co., Four Corners Project, Series 1994 B, 3.70% 09/01/24 3,700 3,700 NY Niagara Mohawk, Series 1985-A, 3.80% 07/01/15 1,100 1,100 -------- TOTAL SHORT-TERM OBLIGATIONS 8,150 -------- OTHER ASSETS & LIABILITIES, NET - 0.5% 977 - ------------------------------------------------------------------------------- NET ASSETS - 100% $198,171 --------
NOTES TO INVESTMENT PORTFOLIO: - -------------------------------------------------------------------------------- (a) This issuer is in default of certain debt covenants. Income is not being accrued. (b) This is a restricted security which was acquired at a cost of $1,980. This security represents 1.1% of the Fund's net assets at May 31, 1996. (c) Accrued interest accumulates in the value of the security and is payable at redemption. (d) Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At May 31, 1996 the value of this security amounted to $4,328 or 2.2% of net assets. (e) Zero coupon bond. (f) Cost for federal income tax purposes is the same. (g) Variable rate demand notes are considered short-term obligations. Interest rates change periodically on specified dates. These securities are payable on demand and are secured by either letters of credit or other credit support agreements from banks. The rates listed are as of May 31, 1996. See notes to financial statements. STATEMENT OF ASSETS & LIABILITIES MAY 31, 1996 (UNAUDITED) (in thousands except for per share amount) ASSETS Investments at value (cost $192,851) $ 189,044 Short-term obligations 8,150 ----------- 197,194 Receivable for: Interest $ 5,233 Investments sold 45 Other 43 5,321 ------------ ----------- Total Assets 202,515 LIABILITIES Payable for: Investments purchased 3,000 Distributions 1,163 Accrued: Deferred Trustees Fees 2 Other 179 ------------ Total Liabilities 4,344 ----------- NET ASSETS at value for 27,367 shares of beneficial interest outstanding $ 198,171 ----------- Net asset value per share $ 7.24 ----------- COMPOSITION OF NET ASSETS Capital paid in $ 249,674 Undistributed net investment income 398 Accumulated net realized loss (48,094) Net unrealized depreciation (3,807) ----------- $ 198,171 -----------
See notes to financial statements. 16 STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MAY 31, 1996 (UNAUDITED) (in thousands) INVESTMENT INCOME Interest $ 7,893 EXPENSES Management fee $ 661 Transfer agent 64 Bookkeeping fee 27 Trustees fee 11 Custodian fee 9 Audit fee 23 Legal fee 34 Reports to shareholders 5 Other 194 1,028 ------------ ----------- Net Investment Income 6,865 ----------- NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS Net realized gain Net unrealized 81 depreciation during the period (6,462) ------------ Net Loss (6,381) ----------- Net Increase in Net Assets from Operations $ 484 -----------
See notes to financial statements. 17 STATEMENT OF CHANGES IN NET ASSETS
(Unaudited) Six months ended Year ended (in thousands) May 31 November 30 ---------------- ----------- INCREASE (DECREASE) IN NET ASSETS 1996 1995 Operations: $ 6,865 $ 14,955 Net investment income 80 (7,350) Net realized gain (loss) (6,462) 16,568 --------- --------- Net unrealized appreciation (depreciation) 483 24,173 Net Increase from Operations Distributions: From net investment income (6,978) (15,104) Fund Share Transactions: Value of distributions reinvested -- 158 --------- --------- Total Increase (Decrease) (6,495) 9,222 NET ASSETS Beginning of period 204,666 195,444 --------- --------- End of period (including undistributed net investment income of $398 and $511, respectively) $198,171 $204,666 --------- --------- NUMBER OF FUND SHARES Issued for distributions reinvested -- 21 Outstanding at Beginning of period 27,367 27,346 --------- --------- End of period 27,367 27,367 --------- ---------
See notes to financial statements. 18 NOTES TO FINANCIAL STATEMENTS MAY 31, 1996 (UNAUDITED) NOTE 1. INTERIM FINANCIAL STATEMENTS In the opinion of management of Colonial Municipal Income Trust (the Fund), the accompanying financial statements contain all normal and recurring adjustments necessary for the fair presentation of the financial position of the Fund at May 31, 1996, and the results of its operations, the changes in its net assets and the financial highlights for the six months then ended. NOTE 2. ACCOUNTING POLICIES ORGANIZATION: The Fund is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end, management investment company. The Fund's objective is to provide high current income, generally exempt from federal income taxes. The Fund may issue an unlimited number of shares. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies that are consistently followed by the Fund in the preparation of its financial statements. SECURITY VALUATION AND TRANSACTIONS: Debt securities are valued by a pricing service based upon market transactions for normal, institutional-size trading units of similar securities. When management deems it appropriate, an over-the-counter or exchange bid quotation is used. Short-term obligations with a maturity of 60 days or less are valued at amortized cost. Portfolio positions which cannot be valued as set forth above are valued at fair value under procedures approved by the Trustees. Security transactions are accounted for on the date the securities are purchased, sold or mature. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. The Fund may trade securities on other than normal settlement terms. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. FEDERAL INCOME TAXES: Consistent with the Fund's policy to qualify as a regulated investment company and to distribute all of its taxable and tax-exempt income, no federal income tax has been accrued. 19 Notes to Financial Statements/May 31, 1996 NOTE 2. ACCOUNTING POLICIES - CONT. INTEREST INCOME, DEBT DISCOUNT AND PREMIUM: Interest income is recorded on the accrual basis. Original issue discount is accreted to interest income over the life of a security with a corresponding increase in the cost basis; market discount is not accreted. Premium is amortized against interest income with a corresponding decrease in the cost basis. DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders are recorded on the ex-date. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. Reclassifications are made to the Fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES MANAGEMENT FEE: Colonial Management Associates, Inc. (the Adviser) is the investment Adviser of the Fund and furnishes accounting and other services and office facilities for a monthly fee equal to 0.65% annually of the Fund's average weekly net assets. BOOKKEEPING FEE: The Adviser provides bookkeeping and pricing services for $18,000 per year plus 0.0233% of the Fund's average net assets over $50 million. OTHER: The Fund pays no compensation to its officers, all of whom are employees of the Adviser. The Fund's Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Fund's assets. NOTE 4. PORTFOLIO INFORMATION INVESTMENT ACTIVITY: During the six months ended May 31, 1996, purchases and sales of investments, other than short-term obligations, were $15,331,523 and $17,412,253, respectively. Unrealized appreciation (depreciation) at May 31, 1996, based on cost of investments for both financial statement and federal income tax purposes was approximately: Gross unrealized appreciation $ 6,719,000 Gross unrealized depreciation (10,526,000) ------------ Net unrealized depreciation $ (3,807,000) ------------
CAPITAL LOSS CARRYFORWARDS: At November 30, 1995, capital loss carryforwards available (to the extent provided in regulations) to offset future realized gains were approximately as follows: 20 Notes to Financial Statements/May 31, 1996
Year of Capital loss expiration carryforward ---------- ----------- 1996 $ 2,850,000 1997 2,498,000 1998 6,551,000 1999 6,352,000 2000 9,103,000 2001 7,977,000 2002 5,301,000 2003 7,499,000 ----------- $48,131,000 -----------
Expired capital loss carryforwards, if any, are recorded as a reduction of capital paid in. To the extent loss carryforwards are used to offset any future realized gains, it is unlikely that such gains would be distributed since they may be taxable to shareholders as ordinary income. OTHER: There are certain risks arising from geographic concentration in any state. Certain revenue or tax related events in a state may impair the ability of certain issuers of municipal securities to pay principal and interest on their obligations. The Fund may focus its investments in certain industries, subjecting it to greater risk than a fund that is more diversified. NOTE 5. RESULTS OF ANNUAL SHAREHOLDER MEETING On April 30, 1996, the Annual Meeting of Shareholders was held to elect four Trustees and to ratify the selection of Price Waterhouse LLP as independent accountants for the fiscal year ending November 30, 1996. On March 1, 1996, the record date of the Meeting, the Fund had outstanding 27,367,005 shares of beneficial interest. The votes cast at the Meeting were as follows: Election of four Trustees:
FOR AGAINST ABSTAIN ---------- ------- --------- Robert J. Birnbaum 21,496,766 678,477 5,191,762 Tom Bleasdale 21,502,413 672,830 5,191,762 James E. Grinnell 21,503,348 671,895 5,191,762 James L. Moody, Jr 21,508,703 666,539 5,191,762
The Board of Trustees also consists of Lora S. Collins, William T. Ireland, Richard W. Lowry, William E. Mayer, John J. Neuhauser, George L. Shinn, Robert L. Sullivan and Sinclair Weeks, Jr. Ratification of the selection of Price Waterhouse LLP as independent accountants: FOR AGAINST ABSTAIN ---------- ------- ------- 21,493,771 313,997 367,475 21 FINANCIAL HIGHLIGHTS Selected per share data, total return, ratios and supplemental data throughout each period are as follows:
(Unaudited) Six months ended May 31 Year ended November 30 -------- ------------------------- 1996 1995 1994 Net asset value - Beginning of period $ 7.480 $ 7.150 $ 7.830 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.251 0.547 0.609 Net realized and unrealized gain (loss) (0.236) 0.335 (0.707) -------- -------- -------- Total from Investment Operations 0.015 0.882 (0.098) -------- -------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.255) (0.552) (0.582) In excess of net investment income -- -- -- -------- -------- -------- Total Distributions Declared to Shareholders (0.255) (0.552) (0.582) -------- -------- -------- Net asset value - End of period $ 7.240 $ 7.480 $ 7.150 -------- -------- -------- Market price per share $ 6.875 $ 6.750 $ 6.750 -------- -------- -------- Total return - based on market value (a) 5.60%(b) 8.04% (10.06)% -------- -------- -------- RATIOS TO AVERAGE NET ASSETS Expenses 1.01%(c)(d) 0.98%(c) 0.90% Net investment income 6.76 (c)(d) 7.47%(c) 8.12% Portfolio turnover 16%(d) 24% 24% Net assets at end of period (000) $198,171 $204,666 $195,444
(a) Total return at market value assuming all distribution reinvested and excluding brokerage commissions. (b) Not annualized. (c) The benefits derived from custody credits and directed brokerage arrangements had no impact. Prior year ratios are net of benefits received, if any. (d) Annualized. 22 FINANCIAL HIGHLIGHTS - CONT.
Year ended November 30 ------------------------------------------ 1993 1992 1991 $ 7.890 $ 8.060 $ 8.370 -------- -------- -------- 0.639 0.636 0.682 (0.063) (0.170) (0.279) -------- -------- -------- 0.576 0.466 0.403 -------- -------- -------- (0.632) (0.636) (0.713) (0.004) -- -- -------- -------- -------- (0.636) (0.636) (0.713) -------- -------- -------- $ 7.830 $ 7.890 $ 8.060 -------- -------- -------- $ 8.000 $ 7.875 $ 8.375 -------- -------- -------- 11.56% 1.82% 17.77% -------- -------- -------- 0.87% 0.87% 87.00% 8.03% 7.99% 8.29% 21% 10% 12% $213,292 $213,420 $216,394
23 DIVIDEND REINVESTMENT PLAN The Trust generally distributes net investment income monthly and capital gains annually. Under the Trust's Dividend Reinvestment and Cash Purchase Plan (the "Plan") shareholders may elect to have all distributions reinvested automatically in additional shares of the Trust. Shareholders not making such election will receive all distributions in cash paid by check mailed directly to the record holder by the dividend paying agent. Shareholders participating in the Plan will receive distributions in the form of shares of the Trust. If the market price of the shares on the distribution payment date is equal to or greater than the net asset value, Plan participants will be issued shares at the higher of net asset value or 95% of the market price. For shares issued at a discount from market value, the difference between market value and issue price may represent taxable income at the time of issuance. Any portion of the discount includable in income will increase the basis of the shares issued. If net asset value exceeds the market price, or the distribution is payable only in cash, shares will be bought in the open market for the accounts of Plan participants. If the market price surpasses the net asset value before such purchasing is completed, the average per share price paid may exceed the net asset value of the shares, resulting in the acquisition of fewer shares than if the distribution had been in newly-issued shares. Participants in the Plan have the option of making additional cash payments to the Plan administrator semiannually, for investment in the Trust's shares. Such payments may be made in any amount from $100 to $500. The administrator will use all funds received from participants (as well as any dividends and distributions received in cash) to purchase Trust shares in the open market semiannually. Interest will not be paid on any uninvested cash payments. All Plan accounts receive monthly written confirmations of all transactions. Shares purchased under the Plan are ordinarily held in uncertified form, although participants have the right to receive certificates for whole shares issued to them. Each shareholder's proxy includes shares purchased pursuant to the Plan. The automatic reinvestment of distributions does not relieve participants of any income tax payable on the distributions. Participants may recognize capital gain or ordinary income for federal income tax purposes in an amount equal to the market value of shares received under the Plan. Fees and expenses of the Plan other than brokerage charges will be paid by the Trust. No brokerage charges are incurred on shares issued directly by the Trust. Participants will bear a pro-rata share of brokerage charges incurred on open market purchases. A Plan participant may terminate his or her participation by written notice to the Plan agent. The Plan may be amended or terminated on 90 days written notice to the Plan participants. Upon withdrawal by any participant or any termination of the Plan, certificates for whole shares will be issued and cash payments will be made for any fractional shares. All correspondence concerning the Plan should be directed to State Street Bank and Trust Company, the Trust's dividend disbursing agent and administrator of the Plan, at P.O. Box 8200, Boston, Massachusetts 02266-8200. 24 THIS PAGE INTENTIONALLY LEFT BLANK 25 THIS PAGE INTENTIONALLY LEFT BLANK 26 IMPORTANT INFORMATION ABOUT THIS REPORT The Transfer Agent for Colonial Municipal Income Trust is: State Street Bank and Trust Company P.O. Box 8200 Boston, MA 02266-8200 1-800-426-5523 Colonial Municipal Income Trust mails one shareholder report to each shareholder address. If you would like more than one report, please call our Literature Department at 1-800-248-2828 and additional reports will be sent to you. This report has been prepared for shareholders of Colonial Municipal Income Trust. 27 [COLONIAL FUNDS LOGO] Mutual Funds for Planned Portfolios TRUSTEES ROBERT J. BIRNBAUM Trustee (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief Operating Officer, New York Stock Exchange, Inc.) TOM BLEASDALE Trustee (formerly Chairman of the Board and Chief Executive Officer, Shore Bank & Trust Company) LORA S. COLLINS Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel JAMES E. GRINNELL Private Investor (formerly Senior Vice President-Operations, The Rockport Company) WILLIAM D. IRELAND, JR. Trustee (formerly Chairman of the Board, Bank of New England-Worcester) RICHARD W. LOWRY Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood Corporation) WILLIAM E. MAYER Dean, College of Business and Management, University of Maryland (formerly Dean, Simon Graduate School of Business, University of Rochester; Chairman and Chief Executive Officer, C.S. First Boston Merchant Bank; and President and Chief Executive Officer, The First Boston Corporation) JAMES L. MOODY, JR. Chairman of the Board, Hannaford Bros. Co. (formerly Chief Executive Officer, Hannaford Bros. Co.) JOHN J. NEUHAUSER Dean, Boston College School of Management GEORGE L. SHINN Financial Consultant (formerly Chairman, Chief Executive Officer and Consultant, The First Boston Corporation) ROBERT L. SULLIVAN Management Consultant (formerly Management Consultant, Saatchi and Saatchi Consulting Ltd. and Principal and International Practice Director, Management Consulting, Peat Marwick Main & Co.) SINCLAIR WEEKS, JR. Chairman of the Board, Reed & Barton Corporation COLONIAL INVESTMENT SERVICES, INC., Distributor (C) 1996 One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750 IT-03/337C-0596 M (7/96) -----END PRIVACY-ENHANCED MESSAGE-----