-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, s+e99bfMnZcvHg8xfIYUw9QIIacAE5ykeChfOHQsVqADM3Ugzx5BIA3iHR/druKf /4mT1DYvw9Q1Sz51TyNVLw== 0000021847-95-000081.txt : 19950804 0000021847-95-000081.hdr.sgml : 19950804 ACCESSION NUMBER: 0000021847-95-000081 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950531 FILED AS OF DATE: 19950803 SROS: NASD 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: 95558663 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 N-30D 1 COLONIAL MUNICIPAL INCOME TRUST SEMI ANNUAL REPORT LETTER FROM THE PRESIDENT Dear Shareholder: Following is Colonial Municipal Income Trust's semi-annual report for the six months ended May 31, 1995. Your Fund is designed to provide investors with a high level of tax-exempt income and an attractive relative total return through investments in rated and non-rated municipal bonds. Rated bonds are selected for their relative value and expected return. This characteristic may have a positive impact on the Fund's net asset value and total return. Non-rated bonds, on the other hand, are perceived by investors as being somewhat more volatile because they have not been rated by the major bond rating agencies. These bonds may therefore provide superior yields to rated bonds of similar quality. FUND PERFORMANCE (11/30/94 - 5/31/95) Distributions declared per share(1) $0.294 - ------------------------------------------------------------------------------- Annualized distribution rate on 5/31/95, based on net asset value 7.61% - ------------------------------------------------------------------------------- Taxable-equivalent distribution rate on 5/31/95, based on net asset value(2) 12.60% - ------------------------------------------------------------------------------- Six-month total return, based on net asset value and assuming reinvestment of all distributions 6.75% - ------------------------------------------------------------------------------- Six-month total return, based on 5/31/95 NYSE closing market price, assuming reinvestment of all distributions 8.02% - ------------------------------------------------------------------------------- Net asset value per share on 5/31/95 $7.33 - ------------------------------------------------------------------------------- NYSE market price per share on 5/31/95 $7.000 - -------------------------------------------------------------------------------
ECONOMIC/MARKET OVERVIEW The U.S. economy may be coming in for the "soft landing" that has been the Federal Reserve Board's goal for the last two years. Annualized gross domestic product (GDP) for the first three months of 1995 was 2.8%, down significantly from the annualized GDP of 5.1% for the final quarter of 1994. This weakness in the U.S. economy, which translated into lower interest rates, had a favorable impact on the municipal bond market. As the pace of economic growth diminished, interest rates moved lower and prices in the municipal bond market improved. The non-rated bonds that are the Fund's primary focus tend to reflect the fiscal strength of the corporations that issue them. Therefore, at a time when corporate profits are historically high, non-rated bonds have been a source of attractive returns. SUPPLY AND DEMAND Although interest rates have declined in recent months, there has not been a significant increase in refinancing activity. At the same time, the new issue supply of municipal bonds remains limited. Colonial management believes that the supply of new issue bonds may go as low as $114 billion by the end of 1995, down from a high of $292 billion in 1993. INVESTMENT STRATEGY Although the Fund maintains a diversified portfolio, certain high yield sectors, including paper and airlines, have recently been a focus due to high levels of profitability. On May 31, the Fund owned 129 individual issues in 32 public sectors. More than 65% of the securities in the portfolio were non-rated, and more than 30% were rated. The rated bonds included some higher-yielding, lower-rated securities. During the semiannual period there was a decrease in non-rated and higher-yielding rated investments, with a corresponding increase in investments in bonds rated AAA, AA, and A. While higher-yielding bonds may offset price declines during periods of rising interest rates, when interest rates decline, higher quality bonds may offer greater potential for capital appreciation. As expected, interest rates have moved lower during 1995. Although there may be periods of consolidation when rates move slightly higher, we believe the overall interest rate trend will continue to favor municipal bonds. [PHOTO OF JOHN A. McNEICE, JR. PRESIDENT] Sincerely, /s/ John A. McNeice, Jr. - ------------------------ John A. McNeice, Jr. President July 15, 1995 (1) A portion of the Fund's income may be subject to the alternative minimum tax. (2) The taxable-equivalent distribution rate is based on the maximum federal income tax rate of 39.6%. INVESTMENT PORTFOLIO (UNAUDITED, IN THOUSANDS) MAY 31, 1995
MUNICIPAL BONDS - 98.6% PAR VALUE - --------------------------------------------------------------------------------- AGRICULTURE/FORESTRY/FISHING - 0.5% AGRICULTURE - CROPS LA Port New Orleans Industrial Development Continental Grain Co., Series 1993, 7.500% 07/01/13 ................................ $ 1,000 $ 1,039 - --------------------------------------------------------------------------------- CERTIFICATES OF PARTICIPATION - 1.2% CA Statewide Communities Development Corp., 5.000% 10/01/23 (a) ........................... 2,000 1,790 MA Health and Educational Facilities, Independent Living Bonds, Series 1993-A, 8.100% 07/01/18 ................................ 700 700 ------- 2,490 - --------------------------------------------------------------------------------- CONSTRUCTION - 1.1% BUILDING CONSTRUCTION IN Hammond Sewer & Solid Waste Disposal, American Maize Products Co., Series A, 8.000% 12/01/24 ................................ 2,000 2,153 - --------------------------------------------------------------------------------- FINANCE/INSURANCE/REAL ESTATE - 0.5% REAL ESTATE MD Baltimore, Economic Development, Park Charles Project, Series 1986, 8.000% 01/01/10 ................................ 910 960 - --------------------------------------------------------------------------------- GENERAL OBLIGATION - 2.7% AZ Apache County School District Number 010 Round Valley Project of 1987, Series 1990-C, 9.875% 07/01/05 ................................ 2,000 2,242 CA State of California, 5.750% 03/01/19 ................................ 2,000 1,935 PR Commonwealth of Puerto Rico, 5.375% 07/01/22 ................................ 1,250 1,191 ------- 5,368 - --------------------------------------------------------------------------------- HEALTH - 33.3% HOSPITAL - 10.0% AL Alabama Special Care Facilities Authority, Montgomery Healthcare, Series 1989, 11.000% 10/01/19 ............................... 2,280 2,246 DE State Economic Development, Riverside Hospital, Series 1992-A, 9.500% 01/01/22 ................................ 910 1,023 GA Clayton Hospital Authority, The Woodlands Foundation, Inc., Series 1991 A, 9.800% 05/01/21 (b) ........................... 1,500 1,050 ID State Health Facilities Authority, IHC Hospitals, Inc., 7.920% 02/15/21 ................................ 2,750 3,049 IL Health Facilities Authority, Edgewater Medical Center, Series A, 9.250% 07/01/24 ................................ 2,250 2,275 MI State Hospital Finance Authority: Detroit Osteopathic Hospital C, Series 1987-A, 7.500% 11/01/10 ................................ 950 931 Saratoga Community Hospital Obligation, Series 1992, 8.750% 06/01/10 ................................ 535 572 MO Hannibal Industrial Development, Medical Systems of Northeast Missouri, Series 1992, 9.500% 03/01/22 ................................ 2,000 2,330 NC Lincoln County, 9.000% 05/01/07 ................................ 560 622 NJ Health Care Facilities Financing Authority, Raritan Bay Medical Center, 7.250% 07/01/27 ................................ 1,000 991 VA Dickenson County Industrial Development, Volunteer Health Care Systems, Inc., Series 1988-A, 10.750% 06/01/18 (b) .......................... 5,500 1,650 VT Educational & Health Buildings Financing Agency, 7.750% 01/01/13 ................................ 1,090 1,059 WA Washington State Health Care Facility, Grays Harbor Community Hospital, Series 1993: 7.200% 07/01/03 ................................ 385 408 8.025% 07/01/20 ................................ 1,770 1,870 ------- 20,076 ------- HUMAN SERVICES PROVIDERS - 0.6% TN Shelby County, Health, Education, & Housing Facilities Board, Open Arms Development Center: Series 1992-A, 9.750% 08/01/19 ................................ 535 617 Series 1992-C, 9.750% 08/01/19 ................................ 545 629 ------- 1,246 ------- NURSING HOME - 22.7% AZ Tucson Industrial Development, Authority, Villa Maria Care Center, 10.125% 11/01/21 ............................... 510 485
See notes to investment portfolio. 2 INVESTMENT PORTFOLIO - CONTINUED
MUNICIPAL BONDS - CONT. PAR VALUE - --------------------------------------------------------------------------------- HEALTH - CONT NURSING HOME - CONT. CO Health Facility, American Housing Foundation I, Series 1990, 10.250% 12/01/20 ............................ $ 1,500 $ 1,614 DE State Economic Development Authority, 12.000% 04/01/25 ............................ 2,325 2,560 DE Sussex County, Health Care Facility, Delaware Health Corp., Series 1994-A, 7.600% 01/01/24 ............................ 1,000 950 FL Flagler County Industrial, Redevelopment Authority, South Florida Properties, Series 1988, 10.500% 12/01/18 ........................... 1,485 1,487 IA Finance Authority Health Care Facility, Mercy Health Initiatives, Series 1989, 9.950% 07/01/19 ............................. 2,000 1,960 IN Gary Industrial Economic Development, West Side Health Care Center, Series 1987-A, 11.500% 10/01/17 ............................ 2,500 2,375 IN Michigan City Health Facilities, Metropolitan Health Foundation, Inc., Project, 10.000% 11/01/22 (b) ....................... 4,500 3,150 KS Halstead Industrial Health Care Project, 10.250% 08/01/13 ............................ 1,355 1,402 KY Jefferson County First Mortgage, Kentucky Iowa, Inc., Project, Series 1990, 10.250% 01/01/20 ............................ 1,000 1,039 KY Lexington-Fayette Urban County Government, First Mortgage, AHF Kentucky-Iowa, Inc., Project, Series 1990, 10.250% 01/01/20 ............................ 1,000 1,039 MA Boston, St. Joseph Nursing Care Center, Inc., 10.000% 01/01/20 (c) ....................... 1,980 2,190 MA State Industrial Finance Agency: GF/Massachusetts Inc., Series 1994, 8.300% 07/01/23 ............................. 1,000 956 Mary Ann Morse Nursing Home, Series 1991-I, 10.000% 01/01/21 ............................ 1,200 1,529 MI Cheboygan County Economic Development Corp., Metro Health Foundation Project, 10.000% 11/01/22 (b) ....................... 2,440 1,708 MO Grove Industrial Development Authority, First Mortgage Health Care Facility, Heritage Manor GR Series 1988, 10.250% 11/01/13 ............................ 545 518 MO Saint Louis County Industrial Development Authority, 10.250% 12/01/16 ............................ 1,915 1,956 MO Springfield Industrial Development Authority, 10.250% 12/01/10 ............................ 1,275 1,326 NJ Economic Development Authority Geriatric and Medical Service, Inc., Series A, 10.500% 05/01/04 ............................ 850 925 NM Clovis Industrial Development, Retirement Ranches Project: 10.750% 04/01/19 ............................ 195 212 10.750% 04/01/19 ............................ 1,980 2,156 NM Espanola, First Mortgage Medical Facilities Pilot Development, Southwest Series 1988, 10.250% 05/01/13 ............................ 920 920 NM Silver City First Leasehold Mortgage Medical Facilities, RC Development, Series 1988, 10.250% 11/01/13 ............................ 965 965 OH Lucas County, Villa North Nursing Home, Series 1988-B, 10.500% 06/01/18 ............................ 2,500 2,250 OH Montgomery County, Grafton Oaks Project, 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 1,970 PA Nursing Home, Series 1988, 10.250% 11/01/18 ............................ 1,485 1,544 PA Philadelphia Authority for Industrial Development, First Mortgage, The Care Pavilion, Series 1988, 10.250% 02/01/18 ............................ 975 1,009
See notes to investment portfolio. 3 INVESTMENT PORTFOLIO - CONTINUED
MUNICIPAL BONDS - CONT. PAR VALUE - --------------------------------------------------------------------------------- HEALTH - CONT NURSING HOME - CONT TN New Tazewell Health Education and Housing Facilities Board Industrial New Tazewell, Series 1987, 10.000% 06/01/17 ............................. $ 1,660 $ 1,722 VA Beach Development Authority, Beverly Enterprises, Series 1985, 10.000% 04/01/10 ............................. 1,915 2,152 ------- 45,475 - --------------------------------------------------------------------------------- HOUSING - 16.2% ASSISTED LIVING/SENIOR - 1.5% MN Roseville, Care Institute, Inc., Series 1993, 7.750% 11/01/23 ............................. 1,630 1,469 TX Bell County Health Facilities Development Corp., Care Institutions, Inc., 9.000% 11/01/24 ............................. 1,500 1,584 ------- 3,053 ------- MULTI-FAMILY - 12.4% CT Church Street Housing Authority, South Apartments, Section 8, Series 1983, 11.000% 03/01/01 (b) ........................ 1,995 798 FL Clear Water, Hampton Apartments, 8.250% 05/01/24 ............................. 2,500 2,628 FL Hialeah Housing Authority, Series 1991, 9.500% 11/01/21 ............................. 1,000 1,043 FL State Housing Finance Agency, Windsong Apartments, Series 1993-C, 9.250% 01/01/19 ............................. 830 837 FL West Palm Beach Housing, Inc., Multi-family Housing, Cypress Run, 10.500% 03/15/19 (b) ........................ 2,040 714 IL Chicago Multi-Family Housing Michigan Boulevard Garden Apartment, Rehabilitation Section 8, Series 1985, 12.000% 01/01/00 ............................. 515 525 MN White Bear Lake, Birch Lake Townhouse Project: Series 1989-A, 10.250% 07/15/19 ............................. 1,770 1,779 Series 1989-B, (d) 07/15/19 (e) ........................ 730 1,060 NC Durham Urban Development Authority, Durham Hosiery Mill Project, 7.500% 08/01/29 ............................. 1,000 1,079 NC Eastern Carolina Regional Housing Authority, Jacksonville New River Apartments, 8.250% 09/01/14 ............................. 2,000 2,022 PA Montgomery County Industrial Living Facility, Series 1993-A, 8.250% 05/01/23 ............................. 820 798 PA Philadelphia Redevelopment Authority, Multi-family Housing, School Lane House Apartments, Series 1988, 9.375% 10/01/18 ............................. 2,500 1,875 Pass Through Certificates, Series 1993-A, 8.500% 12/01/16 (f) ........................ 4,248 4,376 SC State Housing Finance and Development, Multi-family Housing Finance Revenue, Westbridge Apartments, Series A, 9.500% 09/01/20 ............................. 2,200 2,244 TX Galveston Pass Health Facilities Center, Pass Through Certificates, 8.000% 08/01/23 ............................. 1,000 1,024 VA Alexandria Redevelopment & Housing Authority, Courthouse Commons Apartments, Series 1990-A, 10.000% 01/01/21 ............................ 1,000 1,010 VA Roanoke Redevelopment & Housing Authority, First Mortgage, Mountain Ridge, 9.250% 11/01/22 ............................. 1,000 1,021 ------- 24,833 ------- SINGLE FAMILY - 2.3% IL Development Finance Authority, Retirement Housing Redevelopment, Regency Park at Lincolnwood, (d) 07/15/25 .......................... 22,000 2,722 KY 1986 County Single Family Mortgage Revenue, Class A, 9.000% 09/01/16 ............................. 30 31 MN Washington County Housing & Redevelopment Authority, Cottages of Aspen Project, 9.250% 06/01/22 ............................. 1,105 1,111 PA Allegheny County, Residential Financial Authority, Single-family Mortgage, Series 1987-G, 9.500% 12/01/18 ............................. 710 741 ------- 4,605 - ---------------------------------------------------------------------------------
See notes to investment portfolio. 4 INVESTMENT PORTFOLIO - CONTINUED
MUNICIPAL BONDS - CONT. PAR VALUE - -------------------------------------------------------------------------------- MANUFACTURING - 8.3% APPAREL - 1.2% VA Halifax County Industrial Development, Craddock-Terry Inc., Series 1989, 10.000% 12/01/19 ....................... $ 1,030 $ 1,116 VA Pittsylvania County Industrial Development, Craddock-Terry Inc., Series 1989, 10.000% 12/01/19 ....................... 1,105 1,193 ------- 2,309 ------- ELECTRONIC & ELECTRIC EQUIPMENT - 0.6% SD Rapid City Economic Development, Corporate Headquarters, Series 1985, 11.875% 11/01/10 ....................... 1,245 1,289 ------- FOOD & KINDRED PRODUCTS - 0.5% IA Ellsworth Industrial Development, Bagel Works Project, Series 1990, 7.500% 01/15/12 ....................... 945 923 ------- MEASURING & ANALYZING INSTRUMENTS - 0.4% MN Brooklyn Park, TL Systems Corp., Series 1991, 10.000% 09/01/16 ....................... 820 843 ------- PAPER PRODUCTS - 5.6% GA Rockdale County Development, Solid Waste Disposal Bonds, Visy Paper, Inc., Series 1993, 7.400% 01/01/08 ....................... 5,000 5,094 MI State Strategic Fund, Blue Water Fiber Project, Series 1994, 8.000% 01/01/12 ....................... 2,000 1,910 MI Strategic Fund Limited, Great Lakes Pulp & Fiber Project, 10.250% 12/01/16 ....................... 4,000 4,215 ------- 11,219 - -------------------------------------------------------------------------------- MINING - 0.8% METAL MINING CO Mesa County Industrial Development, Joy Technologies, Inc., Series 1992, 8.500% 09/15/06 ....................... 1,000 1,063 OH Cuyahoga County, Joy Technologies, Inc., 8.750% 09/15/07 ....................... 550 592 ------- 1,655 - -------------------------------------------------------------------------------- POLLUTION CONTROL REVENUE - 5.1% IL Bryant Pollution Control Revenue, Central Illinois Light Co. Project, 5.900% 08/01/23 ....................... 2,000 1,975 LA St. Charles Parish Pollution Control Revenue, Union Carbide Project, 7.350% 11/01/22 ....................... 2,000 2,113 SC York County Industrial Revenue, Hoechst Celanese Corp., 5.700% 01/01/24 ....................... 5,000 4,719 WV Weirton Pollution Control, Weirton Steel Corp., Series 1989, 8.625% 11/01/14 ....................... 1,400 1,481 ------- 10,288 - -------------------------------------------------------------------------------- PUBLIC ADMINISTRATION - 0.1% ECONOMIC PROGRAMS MI Saginaw County Economic Development Corp., 9.000% 12/01/00 ....................... 207 228 - -------------------------------------------------------------------------------- PUBLIC FACILITIES IMPROVEMENT - 2.5% IL Metropolitan Pier and Exposition Authority, McCormick Place Expansion Project, (d) 06/15/14 (a) .................. 5,000 1,612 MN Mille Lacs Capital Improvement Infrastructure, Band of Chippewa, Series 1992-A, 9.250% 11/01/12 ....................... 1,140 1,285 TX Dallas-Fort Worth International Airport American Airlines, Inc., Series 1990, 7.500% 11/01/25 ....................... 2,000 2,095 ------- 4,992 - -------------------------------------------------------------------------------- PUBLIC INFRASTRUCTURE - 6.8% AIRPORT - 2.6% CO Denver City & County Airport, Denver International Airport, Series 1991-D, 7.750% 11/15/21 ....................... 3,000 3,214 IN Airport Authority, 7.100% 01/15/17 ....................... 2,000 2,112 ------- 5,326 ------- TURNPIKE/TOLL ROAD/BRIDGE - 4.2% CA San Joaquin Hills Transcorridor Agency Senior Toll Road: Current Interest Bonds, Series 1993, 5.000% 01/01/33 ....................... 2,000 1,570 Series 1993-CABS, (d) 01/01/25 ....................... 45,000 5,737 MA State Industrial Finance Agency, Series 1990, 9.000% 10/01/20 ....................... 970 1,054 ------- 8,361 - --------------------------------------------------------------------------------
See notes to investment portfolio. 5 INVESTMENT PORTFOLIO - CONTINUED
MUNICIPAL BONDS - CONT. PAR VALUE - -------------------------------------------------------------------------------- REFUNDED/ESCROW/SPECIAL OBLIGATIONS - 6.2% AL Marshall County Health Care Authority, Hospital, Guntersville-Arab Medical Center, Series 1988, 10.250% 10/01/13 ....................... $ 1,500 $ 1,744 AL Marshall County Hospital Board, Boaz-Albertville Medical Center, 8.875% 01/01/05 ....................... 2,645 2,873 DC Hospital, Washington Hospital Center Corp. Series 1990 A, 8.750% 01/01/15 ....................... 750 899 DE New Castle County Single Family Mortgage, Series 1987, 10.250% 11/01/05 ....................... 415 426 DE Wilmington, Riverside Hospital, Series 1988-A, 10.000% 10/01/03 ....................... 200 240 IA Montgomery County Public Hospital, Series 1987: 9.400% 12/01/05 ....................... 350 414 9.400% 12/01/06 ....................... 375 443 9.500% 12/01/12 ....................... 675 801 MA Municipal Wholesale Electric Power Supply System, Series 1985-B, 13.000% 07/01/18 ....................... 5 5 PA Washington County Hospital Authority, Washington Hospital, Series 1987, 9.500% 07/01/17 ....................... 2,600 2,886 SC Charleston County Baker Hospital, Series 1986, 9.250% 10/01/11 ....................... 1,500 1,641 ------- 12,372 - -------------------------------------------------------------------------------- RETAIL TRADE - 0.5% APPAREL & ACCESSORY STORES - 0.2% MA State Industrial Finance Agency, House of Bianchi, Inc., 8.750% 06/01/18 ....................... 330 344 ------- MISCELLANEOUS RETAIL - 0.3% OH Lake County Economic Development, North Madison Properties, Series 1993, 8.819% 09/01/11 ....................... 710 741 - -------------------------------------------------------------------------------- SERVICES - 2.1% HOTELS, CAMPS & LODGING MN Burnsville Commercial Development, Holiday Inn Project, 10.600% 06/01/06 ....................... 2,500 2,584 MN Minneapolis Commercial Development, Hometel Associates, Ltd., Series 1988, 10.500% 06/01/03 ....................... 1,500 1,524 ------- 4,108 - -------------------------------------------------------------------------------- SOLID WASTE - 2.0% LAND FILL - 0.6% MA State Industrial Finance Agency, Peabody Monofill Associates, Inc., Project, 9.000% 09/01/05 ....................... 1,140 1,200 ------- MISCELLANEOUS DISPOSAL - 0.6% MA Boston, Industrial Development Financing, Solid Waste Disposal, 10.500% 01/01/11 ....................... 1,000 1,133 ------- RECYCLING - 0.8% GA Fulton County Development Authority, 10.500% 12/01/07 ....................... 1,575 1,662 - -------------------------------------------------------------------------------- TAX ALLOCATION - 0.8% IL Development Finance Authority, City of Marion Project, Series 1991, 9.625% 09/15/21 ....................... 1,500 1,528 - -------------------------------------------------------------------------------- TRANSPORTATION/COMMUNICATION/ELECTRIC/ GAS & SANITATION - 0.5% Air transportation NY New York City Industrial Development Agency, American Airlines, 6.900% 08/01/24 ....................... 1,000 1,034 - -------------------------------------------------------------------------------- UTILITY - 3.1% CO-GENERATION - 0.5% FL Martin County Industrial Development Authority, Indian to Co-generation Project, 7.875% 12/15/25 ....................... 1,000 1,097 ------- MUNICIPAL ELECTRIC - 2.6% MN Southern Minnesota Municipal Power Agency, Series 1994A, (d) 01/01/25 ....................... 18,000 3,172 SC State Public Service Authority, Series A, 6.250% 01/01/22 (g) ................... 2,000 2,042 ------- 5,214 - --------------------------------------------------------------------------------
See notes to investment portfolio. 6 INVESTMENT PORTFOLIO - CONTINUED
MUNICIPAL BONDS - CONT. PAR VALUE - -------------------------------------------------------------------------------- WATER & SEWER - 3.3% LA Public Facility Belmont Water Authority, 9.000% 03/15/24 ....................... $ 790 $ 821 MA State Industrial Finance Agency, Environmental Service Project, Series 1994 A, 8.750% 11/01/21 ....................... 1,000 1,015 MS V Lakes Utility District, 8.250% 07/15/24 ....................... 500 509 NJ Economic Development Authority, Hills Development Co. Series 1988, 10.500% 09/01/08 ....................... 2,100 2,181 OH State Water Development Pollution Collateralized Control, The Cleveland Electric Illumination, Series 1987A-1, 9.750% 11/01/22 ....................... 2,000 2,140 ------- 6,666 - -------------------------------------------------------------------------------- OTHER - 1.0% VA Prince Edward County Industrial Development, Craddock-Terry, Inc., Series 1989, 10.000% 12/01/19 ....................... 1,895 2,047 - -------------------------------------------------------------------------------- Total investments (cost $203,665) (h)................... 197,877 - -------------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS - 0.4% - -------------------------------------------------------------------------------- VARIABLE RATE DEMAND NOTES (I) NY New York City Water and Sewer Series G, 4.400% 06/15/24 ....................... 900 900 - -------------------------------------------------------------------------------- OTHER ASSETS & LIABILITIES, NET - 1.0% ................. 1,947 - -------------------------------------------------------------------------------- NET ASSETS - 100.0% .................................... $200,724 - -------------------------------------------------------------------------------- Notes to investment portfolio: (a) These securities, or a portion thereof, with a total market value of $3,402, are being used to collaterize the delayed delivery purchase indicated in note (g) below. (b) This issuer is in default of certain debt covenants. Income is not being accrued. (c) 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, 1995. (d) Zero coupon bond. (e) Accrued interest accumulates in the value of the security and is payable at redemption. (f) This is a restricted security which was acquired at a cost of $4,740. This security represents 2.2% of the Fund's net assets at May 31, 1995. (g) This security has been purchased on a delayed delivery basis, for settlement at a future date beyond customary settlement time. (h) Cost for federal income tax purposes is the same. (i) 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, 1995.
See notes to financial statements. 7 FINANCIAL STATEMENTS STATEMENT OF ASSETS & LIABILITIES (UNAUDITED) May 31,1995 (in thousands except for per shares amounts) - -------------------------------------------------------------------------------- ASSETS Investments at value (cost $203,665)....................... $197,877 Short-term obligations..................................... 900 -------- 198,777 Receivable for: Interest................................................ $4,827 Investments sold........................................ 27 Other...................................................... 318 5,172 ------ -------- Total assets................................ 203,949 LIABILITIES Payable for: Investments bought..................................... 1,938 Distributions.......................................... 1,273 Accrued: Management fees......................................... 11 Deferred Trustees fees.................................. 3 ------ Total liabilities........................... 3,225 -------- NET ASSETS AT VALUE FOR 27,367 shares of beneficial interest outstanding................ $200,724 ======== Net asset value per share.................................. 7.33 ======== COMPOSITION OF NET ASSETS Capital paid in......................................... $255,575 Undistributed net investment income..................... 292 Accumulated net realized loss........................... (49,355) Net unrealized depreciation............................. (5,788) -------- $200,724 ========
STATEMENT OF OPERATIONS Six months ended May 31, 1995 (in thousands) - -------------------------------------------------------------------------------- INVESTMENT INCOME Interest................................................... $ 8,604 EXPENSES Management fee............................................. 659 Transfer agent............................................. 58 Bookkeeping fee............................................ 27 Audit fee.................................................. 23 Custodian fee.............................................. 11 Trustees fees.............................................. 7 Legal fee.................................................. 45 Reports to shareholders.................................... 4 Other...................................................... 61 895 ------ -------- Net investment income........................... 7,709 -------- NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS Net realized loss.......................................... (2,652) Net unrealized appreciation during the period............................................. 8,125 -------- Net gain....................................... 5,473 -------- Net increase in net assets from operations................. $ 13,182 --------
See notes to financial statements. 8 FINANCIAL STATEMENTS - CONTINUED STATEMENT OF CHANGES IN NET ASSETS (in thousands) - ---------------------------------------------------------------------------------------------
(unaudited) Six months ended Year ended May 31 November 30 ----------- ----------- 1995 1994 ----------- ----------- INCREASE (DECREASE) IN NET ASSETS Operations Net investment income ..................................... $ 7,709 $ 16,650 Net realized loss ......................................... (2,652) (5,234) Net unrealized appreciation (depreciation) ................ 8,125 (14,182) --------- --------- Net increase (decrease) from operations ............. 13,182 (2,766) Distributions From net investment income ................................ (8,055) (15,888) --------- --------- 5,127 (18,654) Fund share transactions Value of distributions reinvested ......................... 153 806 --------- --------- Total increase (decrease) ..................... 5,280 (17,848) NET ASSETS Beginning of period ....................................... 195,444 213,292 --------- --------- End of period (including undistributed net investment income of $292 and $638, respectively)..... $ 200,724 $ 195,444 ========= ========= NUMBER OF FUND SHARES Issued for distributions reinvested ....................... 21 105 Outstanding at Beginning of period .................................... 27,346 27,241 --------- --------- End of period .......................................... 27,367 27,346 ========= =========
See notes to financial statements. 9 NOTES TO FINANCIAL STATEMENTS (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, 1995 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 The Fund is a Massachusetts business trust, registered under the Investment Company Act of 1940, as amended, as a non-diversified, closed-end, management investment company. The Fund may issue an unlimited number of shares. The following significant accounting policies are consistently followed by the Fund in the preparation of its financial statements and conform to generally accepted accounting principles. - -------------------------------------------------------------------------------- SECURITY VALUATION AND TRANSACTIONS Debt securities generally are valued by a pricing service based upon market transactions for normal institutional-size 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 or sold. Cost is determined and gains and 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. - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- 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 weekly 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. 10 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Obligations of the plan will be paid solely out of the Fund's assets. - -------------------------------------------------------------------------------- NOTE 4. PORTFOLIO INFORMATION During the six months ended May 31, 1995, purchases and sales of investments, other than short-term obligations, were $32,002,532 and $30,992,587, respectively. Unrealized appreciation (depreciation) at May 31,1995, based on cost of investments for both financial statement and federal income tax purposes was: Gross unrealized appreciation............. $ 9,481,322 Gross unrealized depreciation............. (15,269,340) ------------ Net unrealized depreciation............ $ (5,788,018) ============
- -------------------------------------------------------------------------------- CAPITAL LOSS CARRYFORWARDS At November 30, 1994 capital loss carryforwards available (to the extent provided in regulations) to offset future realized gains were approximately as follows:
YEAR OF CAPITAL LOSS EXPIRATION CARRYFORWARD ---------- ------------ 1995................ $5,901,000 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 ----------- $46,533,000 ===========
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 SPECIAL SHAREHOLDERS MEETING On February 15, 1995, a special meeting of shareholders was held and a new Management Agreement between the Fund and Colonial Management Associates, Inc. was approved that became effective upon the completion of the merger of The Colonial Group, Inc. and Apple Merger Corporation, a subsidiary of Liberty Financial Companies, Inc. on March 24, 1995. Out of the shares of beneficial interest outstanding on December 9, 1994, 16,884,554 voted for the new Management Agreement, 408,926 voted against and 464,096 abstained. Of the shares of beneficial interest outstanding that abstained, 216,877 represented broker non-votes. - -------------------------------------------------------------------------------- NOTE 6. RESULTS OF ANNUAL SHAREHOLDER MEETING On April 28, 1995, the Annual Meeting of Shareholders (Meeting) was held to elect seven Trustees and to ratify the selection of Price Waterhouse LLP as independent accountants for the fiscal year ending November 30, 1995. On February 1, 1995, the record date for the Meeting, the Fund had outstanding 27,346,098 shares of beneficial interest. The votes cast at the Meeting were as follows: 11 NOTES TO FINANCIAL STATEMENTS - CONTINUED - -------------------------------------------------------------------------------- Election of seven Trustees:
FOR AGAINST ---------- ------- Robert J. Birnbaum 20,255,535 493,131 James E. Grinnell 20,255,535 493,131 William D. Ireland, Jr. 20,255,535 493,131 Richard W. Lowry 20,255,535 493,131 William E. Mayer 20,255,535 493,131 George L. Shinn 20,255,535 493,131 Robert L. Sullivan 20,255,535 493,131
The Board of Trustees also consists of Tom Bleasdale, Lora S. Collins, John A. McNeice, Jr., James L. Moody, Jr., John J. Neuhauser, and Sinclair Weeks, Jr. Ratification of the selection of Price Waterhouse LLP as independent accountants:
FOR AGAINST ABSTAIN ---------- ------- ------- 20,187,399 195,497 365,770
12 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 ----------- --------------------------------------------------------- 1995 1994 1993 1992 1991 1990 ----------- --------------------------------------------------------- Net asset value - Beginning of period ...... $ 7.150 $ 7.830 $ 7.890 $ 8.060 $ 8.370 $ 8.650 -------- -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income ...................... 0.281 0.609 0.639 0.636 0.682 0.751 Net realized and unrealized gain (loss) on investments ............................. 0.193 (0.707) (0.063) (0.170) (0.279) (0.311) -------- -------- -------- -------- -------- -------- Total from investment operations ........... 0.474 (0.098) 0.576 0.466 0.403 0.440 Less distributions declared to shareholders -------- -------- -------- -------- -------- -------- From net investment income ................. (0.294) (0.582) (0.632) (0.636) (0.713) (0.720) In excess of net investment income ......... -- -- (0.004) -- -- -- -------- -------- -------- -------- -------- -------- Total distributions declared to shareholders (0.294) (0.582) (0.636) (0.636) (0.713) (0.720) -------- -------- -------- -------- -------- -------- Net asset value - End of period ............ $ 7.330 $ 7.150 $ 7.830 $ 7.890 $ 8.060 $ 8.370 -------- -------- -------- -------- -------- -------- Total return based on net asset value (a) .. 6.75%(b) (1.18)% 7.42% 6.00% 4.97% 5.27% -------- -------- -------- -------- -------- -------- Total return based on market value ......... 8.02%(b) (10.06)% 11.56% 1.82% 17.77% (12.27)% -------- -------- -------- -------- -------- -------- Ratios to average net assets: Expenses ................................... 0.90%(c) 0.90% 0.87% 0.87% 0.87% 0.86% Net investment income ...................... 7.70%(c) 8.12% 8.03% 7.99% 8.29% 8.92% Portfolio turnover ......................... 32%(c) 24% 21% 10% 12% 20% Net assets at end of period ($000) ......... $200,724 $195,444 $213,292 $213,420 $216,394 $223,091 (a) Total return at net asset value assuming all distributions reinvested. (b) Not annualized. (c) Annualized.
13 QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) - -----------------------------------------------------------------------------------------
THREE MONTHS ENDED ----------------------------------------------- MAY 31, 1995 FEBRUARY 28, 1995 ----------------------------------------------- (000) PER SHARE (000) PER SHARE ------- --------- ------ --------- Total investment income............ $4,310 $ 0.157 $4,294 $0.157 Net investment income.............. $3,848 $ 0.140 $3,861 $0.141 Net realized and unrealized gain (loss)........... $ (468) $(0.017) $5,941 $0.210 Market value per share: High............................ $ 7.375 $7.375 Low............................. $ 7.000 $6.375
THREE MONTHS ENDED ------------------------------------------------------------------------------------------------- NOVEMBER 30, 1994 AUGUST 31, 1994 MAY 31, 1994 FEBRUARY 28, 1994 ------------------------------------------------------------------------------------------------- (000) PER SHARE (000) PER SHARE (000) PER SHARE (000) PER SHARE --------- ----------- --------- ------------ --------- ------------ --------- ------------ Total investment income..... $ 4,901 $ 0.180 $4,369 $ 0.160 $ 4,483 $ 0.164 $ 4,736 $ 0.173 Net investment income....... $ 4,363 $ 0.160 $3,932 $ 0.144 $ 4,049 $ 0.148 $ 4,306 $ 0.158 Net realized and unrealized loss........... $(7,998) $(0.291) $( 427) $(0.014) $(6,691) $(0.245) $(4,300) $(0.158) Market value per share: High..................... $ 7.125 $ 7.500 $ 8.375 $ 8.500 Low...................... $ 6.000 $ 7.000 $ 7.250 $ 7.875
At May 31, 1995, there were 5,493 shareholder accounts. 14 DIVIDEND REINVESTMENT PLAN (UNAUDITED) - -------------------------------------------------------------------------------- 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. The aggregate market value of the shares may constitute income to shareholders for federal income tax purposes. 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 semi-annually, 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 uncertificated form, although participants have the right to receive certificates for whole shares held in their account. Though the Trust has no plans to issue additional shares other than pursuant to the Plan, if participants in the Plan desire to exercise any rights that may be issued or granted with respect to shares, they should request that certificates for whole shares be 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 administrator. 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, including requests for information, 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. - -------------------------------------------------------------------------------- ABOUT OUR COVER... [CAPITOL GRAPHIC] The symbol on the cover of this Report represents the Fund's primary investment focus on municipal bonds. - -------------------------------------------------------------------------------- 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. CUSTODIAN, TRANSFER AGENT, REGISTRAR AND DIVIDEND DISBURSING AGENT State Street Bank and Trust Company P.O. Box 8200 Boston, MA 02266-8200 1-800-426-5523 15 [LOGO] COLONIAL MUTUAL FUNDS [CAPITAL PHOTO] COLONIAL MUNICIPAL INCOME TRUST ---------------------------------------- SEMIANNUAL REPORT May 31, 1995 [LOGO] COLONIAL MUTUAL FUNDS Printed on recycled paper IT-03061B-0595 COLONIAL INVESTMENT SERVICES, INC. copyright 1995 -----END PRIVACY-ENHANCED MESSAGE-----