-----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, KsvK67H/kDHKa9LTEgjtlP/cyM27g8kpaz+hzXiPRaWcdtfa+QDvoOvppOoMATDZ MyHBalQ6EpLpUdfh+sG2Fw== 0000021847-96-000015.txt : 19960209 0000021847-96-000015.hdr.sgml : 19960209 ACCESSION NUMBER: 0000021847-96-000015 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951130 FILED AS OF DATE: 19960208 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: 96513336 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 N-30D 1 COLONIAL MUNICIPAL INCOME TRUST ANNUAL REPORT COLONIAL MUNICIPAL INCOME TRUST ANNUAL REPORT NOVEMBER 30, 1995 COLONIAL MUNICIPAL INCOME TRUST HIGHLIGHTS DECEMBER 1, 1994 - NOVEMBER 30, 1995 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: "We remain confident about the long-term prospects for this market, despite recent developments that may have a negative impact on the municipal bond market, including discussions about tax-reform. If demand remains strong and supply continues to decline, the municipal bond market should continue to be a source of attractive returns for investors." COLONIAL MUNICIPAL INCOME TRUST PERFORMANCE Distributions declared per share $0.552 - ---------------------------------------------------------------- 12-month total return, assuming reinvestment of all distributions - - NAV 12.96% - - Market Price 8.04% - ---------------------------------------------------------------- Price per share - - NAV $7.48 - - Market Price $6.75
QUALITY BREAKDOWN (as of 11/30/95) .................................. AAA .................... 5.0% AA ..................... 2.6% A ...................... 4.5% BBB .................... 19.3% BB ..................... 2.9% B ...................... 0.7% Non-rated .............. 62.9% Other .................. 2.1%
[CHART] 2 PRESIDENT'S MESSAGE TO FUND SHAREHOLDERS In general, conditions in the municipal bond market were favorable during the 12 months ended November 30, 1995. Although there were some tax reform related concerns, for the most part these questions were overlooked by the market. The downward move in interest rates had the biggest impact on municipal bond prices during the fiscal year. From the beginning to the end of the period, long-term interest rates, as measured by the 30-year Treasury bond, declined from 8.00% to 6.14%. We took advantage of declining interest rates by upgrading the credit quality of the portfolio. As interest rates moved lower, the difference in yields available from higher and lower quality bonds narrowed, allowing us to improve quality without sacrificing income or returns. Another factor that influenced the market's performance was the favorable supply/demand dynamic. The supply of municipal bonds has been declining for several years, and this trend is expected to continue. From January through November 1995, approximately $136 billion in new issue bonds were issued, a decline of 11.8% from calendar 1994. At the same time, demand remained strong, despite ongoing tax reform discussions in Washington. The combination of declining supply and continued interest in municipal bonds has enhanced the value of these securities. Although we avoid large bets in individual issues, some investments made notable contributions to performance. Among the Fund's non-rated holdings, T.L. Systems, a manufacturer of medical instruments and measuring devices, produced a total return of 34% when that company was acquired by Bosch Company. Rated investments included bonds issued by the San Joaquin Hills Transportation Corridor Agency, which realized a price gain after the successful resolution of concerns raised about the highway project's environmental impact. In the months ahead, tax reform will remain a source of concern. However, barring a radical change in the tax code, the combination of low supply and strong demand for these securities should continue to provide support for municipal bond prices. Respectfully, /s/ JOHN A. MCNEICE, JR. - ------------------------ John A. McNeice, Jr. President January 12, 1996 3 INVESTMENT PORTFOLIO NOVEMBER 30, 1995 (IN THOUSANDS)
MUNICIPAL BONDS - 96.3% 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 $ 1,035 ---------- - ------------------------------------------------------------------------------- CERTIFICATES OF PARTICIPATION - 1.3% CA Statewide Communities Development Corp., 5.000% 10/01/23 2,000 1,873 MA State Health and Educational Facilities, Independent Living Bonds, Series 1993-A, 8.100% 07/01/18 695 705 ---------- 2,578 ---------- - ------------------------------------------------------------------------------- CONSTRUCTION - 1.1% Building Construction IN Hammond Sewer & Solid Waste Disposal, American Maize Products Co., Series A, 8.000% 12/01/24 2,000 2,230 ---------- - ------------------------------------------------------------------------------- FINANCE, INSURANCE & REAL ESTATE - 0.5% Real Estate MD Baltimore, Economic Development, Park Charles Project, Series 1986, 8.000% 01/01/10 895 961 ---------- - ------------------------------------------------------------------------------- GENERAL OBLIGATION - 2.1% AZ Apache County School District, Number 010, Round Valley Project of 1987, Series 1990-C, 9.875% 07/01/05 2,000 2,235 CA State of California, 5.750% 03/01/19 2,000 2,008 ---------- 4,243 ---------- - ------------------------------------------------------------------------------- HEALTH - 31.7% Hospitals - 10.0% AL Alabama Special Care Facilities Authority, Montgomery Healthcare, Series 1989, 11.000% 10/01/19 2,280 2,246
4 Investment Portfolio/November 30, 1995 - ------------------------------------------------------------------------------- DE State Economic Development, Riverside Hospital, Series 1992 A, 9.500% 01/01/22 $ 905 $ 1,042 GA Clayton Hospital Authority, The Woodlands Foundation Inc., Series 1991 A, 9.750% 05/01/21(a) 1,500 1,275 ID State Health Facilities Authority, IHC Hospitals, Inc., 8.190% 02/15/21 2,750 3,169 IL Health Facilities Authority, Edgewater Medical Center, Series A, 9.250% 07/01/24 2,250 2,374 MI State Hospital Finance Authority: Detroit Osteopathic Hospital, Series 1987-A, 7.500% 11/01/10 950 970 Sarotoga Community Hospital, Series 1992, 8.750% 06/01/10 535 576 MO Hannibal Industrial Development, Medical Systems of Northeast Missouri, Series 1992, 9.500% 03/01/22 2,000 2,338 NC Lincoln County, Lincoln County Hospital, 9.000% 05/01/07 560 702 NJ State Health Care Facilities Financing Authority, Raritan Bay Medical Center, 7.250% 07/01/27 1,000 1,006 VA Dickenson County Industrial Development, Volunteer Healthcare Systems Inc., Series 1988 A, 10.750% 06/01/18(a) 5,500 1,210 VT State Educational & Health Buildings Financing Agency, Springfield Hospital, 7.750% 01/01/13 1,090 1,136 WA State Health Care Facility, Grays Harbor Community Hospital, Series 1993: 7.200% 07/01/03 385 414 8.025% 07/01/20 1,770 1,923 ---------- 20,381 ----------
5 Investment Portfolio/November 30, 1995 - -------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE - ------------------------------------------------------------------------------- HEALTH - CONT. 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 $ 530 $ 620 Series 1992-C, 9.750% 08/01/19 540 632 ---------- 1,252 ---------- Nursing Homes - 21.1% AZ Tucson Industrial Development Authority, Villa Maria Care Center, 10.125% 11/01/21 500 469 CO State Health Facility, American Housing Foundation I, Series 1990, 10.250% 12/01/20 1,500 1,682 DE State Economic Development Authority, 12.000% 04/01/25 2,320 2,587 DE Sussex County, Healthcare Facility, Delaware Health Corp., Series 1994-A, 7.600% 01/01/24 1,000 978 FL Flagler County Industrial Redevelopment Authority, South Florida Properties, Series 1988, 10.500% 12/01/18 1,470 1,479 IA State Finance Authority Healthcare Facility, Mercy Health Initiatives, Series 1989, 9.950% 07/01/19 2,000 2,040 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(a) 4,500 3,150 KS Halstead Industrial Health Care Project, 10.250% 08/01/13 1,330 931 KY Jefferson County First Mortgage, Kentucky-Iowa, Inc. Project, Series 1990, 10.250% 01/01/20 1,000 1,050
6 Investment Portfolio/November 30, 1995 - ------------------------------------------------------------------------------- KY Lexington-Fayette Urban County Government, First Mortgage, AHF Kentucky-Iowa, Inc. Project, Series 1990, 10.250% 01/01/20 $ 1,000 $ 1,050 MA Boston, St. Joseph Nursing Care Center, Inc., 10.000% 01/01/20(b) 1,980 2,195 MA State Industrial Finance Agency: Mary Ann Morse Nursing Home, Series 1991- I, 10.000% 01/01/21 1,200 1,528 GF/Massachusetts Inc., Series 1994, 8.300% 07/01/23 1,000 986 MI Cheboygan County Economic Development Corp., Metro Health Foundation Project, 10.000% 11/01/22(a) 2,440 1,708 MO Grove Industrial Development Authority, First Mortgage Health Care Facility, Heritage Manor GR, Series 1988, 10.250% 11/01/13 545 491 MO Saint Louis County Industrial Development Authority, 10.250% 12/01/16 1,890 1,944 MO Springfield Industrial Development Authority, 10.250% 12/01/10 1,255 1,296 NJ State Economic Development Authority Geriatric and Medical Service, Inc., Series A, 10.500% 05/01/04 850 923 NM Clovis Industrial Development, Retirement Ranches Project, 10.750% 04/01/19 2,175 2,417 OH Lucas County, Villa North Nursing Home, Series 1988-B, 10.500% 06/01/18 2,500 2,450 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 1,773
7 Investment Portfolio/November 30, 1995 - -------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE - ------------------------------------------------------------------------------- HEALTH - CONT. Nursing Homes - Cont. PA Philadelphia Authority for Industrial Development, First Mortgage: The Care Pavilion, Series 1988, 10.250% 02/01/18 $ 975 $ 1,006 RHA/PA Nursing Home, Series 1988, 10.250% 11/01/18 1,470 1,528 TN New Tazewell Health Education and Housing Facilities Board, New Tazewell, Series 1987, 10.000% 06/01/17 1,660 1,708 VA Virginia Beach Development Authority, Beverly Enterprises, Series 1985, 10.000% 04/01/10 1,915 2,154 --------- 43,304 --------- - ------------------------------------------------------------------------------- HOUSING - 14.3% Assisted Living/Senior - 2.7% IL State Development Finance Authority, Care Institute, Inc., 8.250% 06/01/25 1,500 1,545 MN Roseville, Care Institute, Inc., Series 1993 7.750% 11/01/23 1,630 1,516 PA Montgomery County Industrial Development Authority, Assisted Living Facility, Series 1993-A, 8.250% 05/01/23 820 829 TX Bell County Health Facilities Development Corp., Care Institution, Inc., 9.000% 11/01/24 1,500 1,607 --------- 5,497 --------- Multi-family - 11.2% FL Clearwater, Hampton Apartments, 8.250% 05/01/24 2,500 2,656 FL Hialeah Housing Authority, Series 1991, 9.500% 11/01/21 1,000 1,050 FL State Housing Finance Agency, Windsong Apartments, Series 1993-C, 9.250% 01/01/19 830 843 FL West Palm Beach Housing, Inc., Multi-family Housing, Cypress Run, 10.500% 03/15/19(a) 2,040 979
8 Investment Portfolio/November 30, 1995 - ------------------------------------------------------------------------------- IL Chicago Multi-family Housing, Michigan Boulevard Garden Apartments, Rehabilitation Section 8, Series 1985, 12.000% 01/01/00 $ 480 $ 490 MN Washington County Housing & Redevelopment Authority, Cottages of Aspen Project, 9.250% 06/01/22 1,100 1,132 MN White Bear Lake, Birch Lake Townhomes Project: Series 1989-A, 10.250% 07/15/19 1,770 1,790 Series 1989-B, (c) 07/15/19 730 1,151 NC Durham Urban Development Authority, Durham Hosiery Mill Project, 7.500% 08/01/29 1,000 1,094 NC Eastern Carolina Regional Housing Authority, Jacksonville New River Apartments, 8.250% 09/01/14 2,000 2,038 Resolution Trust Corp., Pass Through Certificates, Series 1993-A, 8.500% 12/01/16(d) 4,248 4,391 SC State Housing Finance and Development, Multi-family Housing Finance Revenue, Westbridge Apartments, Series A, 9.500% 09/01/20 2,200 2,255 TX Galveston Health Facilities Center, Pass Through Certificates, 8.000% 08/01/23 1,000 1,042 VA Alexandria Redevelopment & Housing Authority, Courthouse Commons Apartments, Series 1990-A, 10.000% 01/01/21 1,000 1,016 VA Roanoke Redevelopment & Housing Authority, First Mortgage, Mountain Ridge, 9.250% 11/01/22 1,000 1,030 -------- 22,957 -------- Single-family - 0.4% KY 1986 County Single-family Mortgage Revenue, Class A, 9.000% 09/01/16 30 31
9 Investment Portfolio/November 30, 1995 - -------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE - ------------------------------------------------------------------------------- HOUSING - CONT. Single-family - Cont. PA Allegheny County, Residential Financial Authority, Single-family Mortgage, Series 1987-G, 9.500% 12/01/18 $ 710 $ 740 -------- 771 -------- - ----------------------------------------------------------------------------- MANUFACTURING - 9.7% Apparel - 2.1% VA Halifax County Industrial Development, Craddock-Terry Inc., Series 1989, 10.000% 12/01/19 1,020 1,108 VA Pittsylvania County Industrial Development, Craddock-Terry Inc., Series 1989, 10.000% 12/01/19 1,095 1,182 VA Prince Edward County Industrial Development, Craddock-Terry, Inc., Series 1989, 10.000% 12/01/19 1,880 2,029 -------- 4,319 -------- Electronic & Electric Equipment - 0.6% SD Rapid City Economic Development Corporate Headquarters, Series 1985, 11.875% 11/01/10 1,245 1,291 -------- Measuring & Analyzing Instruments - 0.5% MN Brooklyn Park, TL Systems Corp., Series 1991, 10.000% 09/01/16 810 964 -------- Paper Products - 6.5% GA Rockdale County Development, Solid Waste Disposal Bonds, Visy Paper Inc., Series 1993, 7.400% 01/01/08 5,000 5,188 MI State Strategic Fund, Blue Water Fiber Project, Series 1994, 8.000% 01/01/12 2,000 1,928 MI Strategic Fund Limited, Great Lakes Pulp & Fibre Project, 10.250% 12/01/16 4,000 4,215 SC Darlington County, Industrial Development Authority, SONOCO Products Co. Project, 6.125% 06/01/25 2,000 2,070 -------- 13,401 --------
10 Investment Portfolio/November 30, 1995 - ----------------------------------------------------------------------------- MINING - 0.8% Metal Mining CO Mesa County Industrial Development, Joy Technologies Inc., Series 1992, 8.500% 09/15/06 $ 1,000 $ 1,075 OH Cuyahoga County, Joy Technologies, Inc., 8.750% 09/15/07 550 598 -------- 1,673 -------- - ----------------------------------------------------------------------------- POLLUTION CONTROL REVENUE - 5.2% IL Bryant Pollution Control Revenue, Central Illinois Light Co. Project, 5.900% 08/01/23 2,000 2,048 LA St. Charles Parish Pollution Control Revenue, Union Carbide Project, 7.350% 11/01/22 2,000 2,165 SC York County Industrial Revenue, Hoechst Celanese Corp., 5.700% 01/01/24 5,000 4,975 WV Weirton Pollution Control, Weirton Steel Corp., Series 1989, 8.625% 11/01/14 1,400 1,491 -------- 10,679 -------- - ----------------------------------------------------------------------------- PUBLIC FACILITIES IMPROVEMENT - 2.0% IL Metropolitan Pier & Exposition Authority, McCormick Place Expansion Project: (e) 06/15/15 3,000 983 (e) 06/15/14 5,000 1,731 MN Mille Lacs Capital Improvement Infrastructure, Band of Chippewa, Series 1992-A, 9.250% 11/01/12 1,115 1,267 -------- 3,981 -------- - ----------------------------------------------------------------------------- PUBLIC INFRASTRUCTURE - 11.7% Airports - 4.7% CO Denver City & County Airport, Denver International Airport, Series 1991-D, 7.750% 11/15/21 3,000 3,349 IN Indianapolis Airport Authority, United Airlines Project, Series A, 6.500% 11/15/31 2,000 2,015
11
Investment Portfolio/November 30, 1995 - ----------------------------------------------------------------------------- MUNICIPAL BONDS - CONT. PAR VALUE - ----------------------------------------------------------------------------- PUBLIC INFRASTRUCTURE - CONT. Airports - Cont. IN State Airport Authority, 7.100% 01/15/17 $ 2,000 $ 2,175 TX Dallas-Fort Worth International Airport American Airlines, Inc., Series 1990, 7.500% 11/01/25 2,000 2,140 -------- 9,679 -------- Turnpikes/Toll Roads/Bridges - 7.0% CA Foothill Eastern Transportation Corridor Agency, State Toll Road, Senior Lien, Series A: (e) 01/01/29 18,000 2,115 6.000% 01/01/34 2,000 1,955 CA San Joaquin Hills Transcorridor Agency Senior Toll Road, Series 1993: (e) 01/01/25 45,000 7,031 5.000% 01/01/33 2,480 2,089 MA State Industrial Finance Agency, Series 1990, 9.000% 10/01/20 960 1,104 -------- 14,294 -------- - ----------------------------------------------------------------------------- REFUNDED/ESCROW/SPECIAL OBLIGATION - 1.4% AL Marshall County Hospital Board, Boaz-Albertville Medical Center, 8.875% 01/01/05 2,645 2,832 -------- - ----------------------------------------------------------------------------- RETAIL TRADE - 0.5% Apparel & Accessory Stores - 0.2% MA State Industrial Finance Agency, House of Bianchi Inc., 8.750% 06/01/18 330 349 -------- Miscellaneous Retail - 0.3% OH Lake County Economic Development, North Madison Properties, Series 1993, 8.819% 09/01/11 710 754 -------- - ----------------------------------------------------------------------------- SERVICES - 2.0% Hotels, Camps & Lodging MN Burnsville Commercial Development, Holiday Inn Project, 10.600% 06/01/06 2,500 2,570
12 Investment Portfolio/November 30, 1995 - ----------------------------------------------------------------------------- MN Minneapolis Commercial Development, Hometel Associates, Ltd., Series 1988, 10.500% 06/01/03 $ 1,500 $ 1,518 -------- 4,088 -------- - ----------------------------------------------------------------------------- SOLID WASTE - 3.0% Land Fills - 1.6% MA State Industrial Finance Agency, Peabody Monofill Associates, Inc. Project, 9.000% 09/01/05 1,140 1,221 WA Walla Walla Public Corp., Ponderosa Fibers Project, 9.125% 01/01/26 2,000 2,088 -------- 3,309 -------- Miscellaneous Disposal - 0.6% MA Boston, Industrial Development Financing, Solid Waste Disposal, 10.500% 01/01/11 1,000 1,136 -------- Recycling - 0.8% GA Fulton County Development Authority Industrial, 10.500% 12/01/07 1,515 1,600 -------- - ----------------------------------------------------------------------------- TAX ALLOCATION - 0.7% IL State Development Finance Authority, City of Marion Project, Series 1991, 9.625% 09/15/21 1,485 1,543 -------- - ----------------------------------------------------------------------------- TRANSPORTATION, COMMUNICATION, ELECTRIC, GAS & SANITARY SERVICES - 0.5% Air Transportation NY New York City Industrial Development Agency, American Airlines, 6.900% 08/01/24 1,000 1,064 -------- - -----------------------------------------------------------------------------
13
Investment Portfolio/November 30, 1995 - ----------------------------------------------------------------------------- MUNICIPAL BONDS - CONT. PAR VALUE - ----------------------------------------------------------------------------- UTILITY - 4.0% Co-Generation - 1.4% FL Martin County Industrial Development Authority, Indiantown Co-generation Project, 7.875% 12/15/25 $ 1,000 $ 1,143 MD State Energy Financing Administration, AES Warrior Co-generation Project, 7.400% 09/01/19 1,750 1,831 -------- 2,974 -------- Individual Power Producer - 0.8% PA State Economic Development Finance Authority, Colver Project, Series D, 7.150% 12/01/18 1,500 1,584 -------- Municipal Electric - 1.8% MN Southern Minnesota Municipal Power Agency, Series 1994A, (e) 01/01/25 18,000 3,622 -------- - ----------------------------------------------------------------------------- WATER & SEWER - 3.3% LA Public Facility Belmont Water Authority, 9.000% 03/15/24 790 832 MA State Industrial Finance Agency, Environmental Service Project, Series 1994 A, 8.750% 11/01/21 1,000 1,036 MS Five Lakes Utility District, 8.250% 07/15/24 500 519 NJ State Economic Development Authority, Hills Development Co., Series 1988, 10.500% 09/01/08 2,100 2,194 OH State Water Development Pollution Collateralized Control, The Cleveland Electric Illumination Co., Series 1987-A-1, 9.750% 11/01/22 2,000 2,125 -------- 6,706 -------- TOTAL MUNICIPAL BONDS (cost of $194,396)(f) 197,051 --------
14 Investment Portfolio/November 30, 1995 - -----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 1.9% PAR VALUE - ----------------------------------------------------------------------------- VARIABLE RATE DEMAND NOTES(g) AL Columbia Industrial Development Board, Alabama Power Co. Project, Series C, 4.000% 10/01/22 $ 400 $ 400 CA State Pollution Control Finance Authority, Series B, 3.450% 10/01/11 400 400 CA State Pollution Control Finance Authority, Honey Lake Power, 3.750% 09/01/18 200 200 IL State Development Finance Authority, Ulhich Children's Home Project, 3.900% 04/01/07 1,700 1,700 IL State Health Facilities Authority, Franciscan Sisters Health Center, 4.100% 01/01/18 700 700 NY New York City Water and Sewer, Series G, 3.700% 06/15/24 100 100 WY Green River, 3.900% 06/01/07 400 400 -------- TOTAL SHORT-TERM OBLIGATIONS 3,900 -------- OTHER ASSETS & LIABILITIES, NET - 1.8% 3,715 - ----------------------------------------------------------------------------- NET ASSETS - 100% $204,666 --------
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 respresents 1.1% of the Fund's net assets at November 30, 1995. (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 year end, the value of this security amounted to $4,391 or 2.1% 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 November 30, 1995. See notes to financial statements. 15 STATEMENT OF ASSETS & LIABILITIES NOVEMBER 30, 1995 (in thousands except for per share amount) ASSETS Investments at value (cost $194,396) $ 197,051 Short-term obligations 3,900 --------- 200,951 Receivable for: Interest $ 4,702 Investments sold 180 Other 85 4,967 --------- --------- Total Assets 205,918 LIABILITIES Payable for: Distributions 1,163 Accrued: Deferred Trustees Fees 2 Other 87 --------- Total Liabilities 1,252 --------- NET ASSETS at value for 27,367 shares of beneficial interest outstanding $ 204,666 --------- Net asset value per share $ 7.48 --------- COMPOSITION OF NET ASSETS Capital paid in $ 249,674 Undistributed net investment income 511 Accumulated net realized loss (48,174) Net unrealized appreciation 2,655 --------- $ 204,666 ---------
See notes to financial statements. 16 STATEMENT OF OPERATIONS FOR THE YEAR ENDED NOVEMBER 30, 1995 (in thousands) INVESTMENT INCOME Interest $ 16,915 EXPENSES Management fee $ 1,301 Transfer agent 123 Bookkeeping fee 53 Trustees fee 18 Custodian fee 18 Audit fee 47 Legal fee 268 Reports to shareholders 11 Other 121 1,960 -------- -------- Net Investment Income 14,955 -------- NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS Net realized loss (7,350) Net unrealized appreciation during the period 16,568 -------- Net Gain 9,218 -------- Net Increase in Net Assets from Operations $ 24,173 --------
See notes to financial statements. 17 STATEMENT OF CHANGES IN NET ASSETS
(in thousands) Year ended November 30 ------------------------ INCREASE (DECREASE) IN NET ASSETS 1995 1994 Operations: Net investment income $ 14,955 $ 16,650 Net realized loss (7,350) (5,234) Net unrealized appreciation (depreciation) 16,568 (14,182) --------- --------- Net Increase (Decrease) from Operations 24,173 (2,766) Distributions: From net investment income (15,104) (15,888) --------- --------- 9,069 (18,654) Fund Share Transactions: Value of distributions reinvested 153 806 --------- --------- Total Increase (Decrease) 9,222 (17,848) NET ASSETS Beginning of period 195,444 213,292 --------- --------- End of period (including undistributed net investment income of $511 and $638, respectively) $ 204,666 $ 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. 18 NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 1995 NOTE 1. ACCOUNTING POLICIES - -------------------------------------------------------------------------------- ORGANIZATION: Colonial Municipal Income Trust (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 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 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. 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 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 carryovers) under income tax regulations. NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES - -------------------------------------------------------------------------------- MANAGEMENT FEE: Colonial Management Associates, Inc. (the Adviser) is the in- vestment Adviser of the Fund and furnishes accounting and other services and office 19 Notes to Financial Statements/November 30, 1995 - -------------------------------------------------------------------------------- NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES - CONT. - -------------------------------------------------------------------------------- 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 3. PORTFOLIO INFORMATION - -------------------------------------------------------------------------------- INVESTMENT ACTIVITY: During the year ended November 30, 1995, purchases and sales of investments, other than short-term obligations, were $47,321,402 and $51,365,902, respectively. Unrealized appreciation (depreciation) at November 30, 1995, based on cost of investments for both financial statement and federal income tax purposes was approximately: Gross unrealized appreciation $12,069,000 Gross unrealized depreciation (9,414,000) ----------- Net unrealized appreciation $ 2,655,000 -----------
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:
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. 20 FINANCIAL HIGHLIGHTS Selected data for a share outstanding throughout each period are as follows:
Year ended November 30 --------------------------------------------------------------- 1995 1994 1993 1992 1991 ------ ------ ------ ------ ------ Net asset value - Beginning of period $ 7.150 $ 7.830 $ 7.890 $ 8.060 $ 8.370 -------- -------- -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.547 0.609 0.639 0.636 0.682 Net realized and unrealized gain (loss) 0.335 (0.707) (0.063) (0.170) (0.279) -------- ------- -------- -------- -------- Total from Investment Operations 0.882 (0.098) 0.576 0.466 0.403 -------- ------- -------- -------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.552) (0.582) (0.632) (0.636) (0.713) In excess of net investment income -- -- (0.004) -- -- -------- ------- -------- -------- -------- Total Distributions Declared to Shareholders (0.552) (0.582) (0.636) (0.636) (0.713) -------- ------- -------- -------- -------- Net asset value - End of period $ 7.480 $ 7.150 $ 7.830 $ 7.890 $ 8.060 ======== ======== ======== ======== ======== Market price per share $ 6.750 $ 6.750 $ 8.000 $ 7.875 $ 8.375 ======== ========= ======== ======== ======== Total return - based on market value (a) 8.04% (10.06)% 11.56% 1.82% 17.77% ======== ========= ======== ======== ======== RATIOS TO AVERAGE NET ASSETS Expenses 0.98%(b) 0.90% 0.87% 0.87% 0.87% Net investment income 7.47%(b) 8.12% 8.03% 7.99% 8.29% Portfolio turnover 24% 24% 21% 10% 12% Net assets at end of period (000) $204,666 $195,444 $213,292 $213,420 $216,394
(a) Total return at market value assuming all distributions reinvested and excluding brokerage commissions. (b) The benefits derived from custody credits and directed brokerage arrangements had no impact. Prior year ratios are net of benefits received, if any. - -------------------------------------------------------------------------------- Federal income tax information (unaudited) All of the distributions will be treated as exempt income for federal income tax purposes. 21 REPORT OF INDEPENDENT ACCOUNTANTS TO THE SHAREHOLDERS AND TRUSTEES OF COLONIAL MUNICIPAL INCOME TRUST In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Colonial Municipal Income Trust at November 30, 1995, the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with generally accepted accounting principles. These financial statements and the financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of portfolio positions at November 30, 1995 by correspondence with the custodian, provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP Boston, Massachusetts January 12, 1996 22 QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED ------------------------------------------------------------------------------------------- NOVEMBER 30, 1995 AUGUST 31, 1995 MAY 31, 1995 FEBRUARY 28, 1995 (000) Per Share (000) Per Share (000) Per Share (000) Per Share ----- --------- ----- --------- ----- --------- ----- --------- Total investment income $4,471 $0.163 $3,840 $0.140 $4,310 $0.157 $4,294 $0.157 Net investment income $3,856 $0.141 $3,390 $0.125 $3,848 $0.140 $3,861 $0.141 Net realized and unrealized gain (loss) $4,516 $0.168 $(771) $(0.026) $(468) $(0.017) $5,941 $0.210 Market value per share: High $7.125 $6.875 $7.375 $7.375 Low $6.750 $6.375 $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 $0.143 $4,049 $0.148 $4,306 $0.158 Net realized and unrealized gain (loss) $(7,998) $(0.291) $(427) $(0.013) $(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 November 30, 1995 there were 5,172 shareholder accounts.
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. 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 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 MUTUAL 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. (C)1996 One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750 IT-02/604B-1195 (1/96) [Printed on recycled paper LOGO] -----END PRIVACY-ENHANCED MESSAGE-----