-----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, OyROENIXMbC46lcgjHFj6f4AapEijxZF2hKJ8E4tOgcwiasOYFJUcCvRsxy58jic 6uZtA9UR6EcwREKqfVOlzA== 0000950156-01-500260.txt : 20021127 0000950156-01-500260.hdr.sgml : 20021127 20010730110721 ACCESSION NUMBER: 0000950156-01-500260 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010531 FILED AS OF DATE: 20010730 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONIAL MUNICIPAL INCOME TRUST CENTRAL INDEX KEY: 0000809844 FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04992 FILM NUMBER: 01692281 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 N-30D 1 d566731.txt COLONIAL MUNICIPAL INCOME TRUST - 05-31-01 - -------------------------------------------------------- COLONIAL MUNICIPAL INCOME TRUST SEMIANNUAL REPORT - -------------------------------------------------------- MAY 31, 2001 [graphic omitted] PRESIDENT'S MESSAGE DEAR SHAREHOLDER: Toward the end of 2000, it became apparent that the US economy was not going to experience the "soft landing" the Federal Reserve Board (the Fed) had intended. In hopes of re-stimulating the sagging economy, the Fed began reducing short-term interest rates just after the first of the year. We saw five rate cuts during the six-month period ended May 31, 2001, bringing the short-term interest rate down from 6.5% to 4.0%. The aggressive rate cuts created some concern in the markets that the Fed was providing too much economic stimulation, causing some fear that inflationary pressures could surface. However, the weakness in the economy, and in corporate profits, prompted investors to rotate some assets out of the stock market and into the municipal bond market -- a shift which provided support for municipal bond prices. The following report will provide you with information about the fund's performance and the strategies used by portfolio manager Maureen G. Newman and associate portfolio manager Gary Lasman. As always, we thank you for choosing Colonial Municipal Income Trust and for giving us the opportunity to serve your investment needs. Respectfully, /s/ Stephen E. Gibson Stephen E. Gibson President July 12, 2001 - ---------------------------- NOT FDIC MAY LOSE VALUE INSURED NO BANK GUARANTEE - ---------------------------- Because economic and market conditions change, there can be no assurance that the trends described in this report will continue or come to pass. - -------------------------------------------------------------------------------- PORTFOLIO MANAGER'S REPORT - -------------------------------------------------------------------------------- As economic growth slowed and the stock market weakened, investors looked to diversify their portfolios by investing in municipal bonds. The Colonial Municipal Income Trust benefited from this increased demand for municipal bonds, returning 5.03% at NAV for the six-month period ended May 31, 2001. This performance exceeded that of the fund's benchmark, the Lehman Municipal Bond Index, which returned 4.73% for the same period. A strong income stream also helped to boost total return during the period. The fund is leveraged through the use of preferred shares, which pay interest rates comparable to those of short-term securities. Approximately one-third of the fund's assets were raised through the issuance of preferred shares, and that money was invested in long-term municipal bonds which typically pay higher yields. While the issuance of preferred shares provides the possibility of higher tax-exempt income, it also adds price volatility to the portfolio. During the first half of 2001, the Fed aggressively cut interest rates. We feel the bond market probably overreacted to concerns about inflation stemming from these cuts, and that the recent drop in bond prices has created some good opportunities in the bond market. While we do not expect to see inflation return in the months to come, we also do not expect a strong economic rebound in the second half of 2001. We anticipate further rate cuts from the Fed, although not on such an aggressive schedule, and we have positioned the fund to take advantage of lower long-term interest rates as well as some good yield opportunities. /s/ Maureen G. Newman /s/ Gary A. Lasman MAUREEN G. NEWMAN is portfolio manager of Colonial Municipal Income Trust and a senior vice president of Colonial Management Associates, Inc. (CMA). GARY A. LASMAN is associate portfolio manager of Colonial Municipal Income Trust and a vice president of CMA. Tax-exempt investing offers current tax-free income but also involves certain risks. The value of the fund will be affected by interest rate changes and the creditworthiness of issues held in the fund. The municipal bond management team identifies problems and opportunities and reacts quickly to market changes. SIX-MONTH CUMULATIVE TOTAL RETURNS, ASSUMING REINVESTMENT OF ALL DISTRIBUTIONS FOR THE PERIOD ENDED 5/31/01 (%) - -------------------------------- NAV 5.03 - -------------------------------- MARKET PRICE 13.31 - -------------------------------- DISTRIBUTIONS DECLARED PER COMMON SHARE, 12/1/00 - 5/31/011 $0.195 - -------------------------------- (1) A portion of the trust's income may be subject to the alternative minimum tax. The trust may at times purchase tax-exempt securities at a discount from their original issue price. Some or all of this discount may be included in the trust's ordinary income, and any market discount is taxable when distributed. PRICE PER SHARE AS OF 5/31/01 ($) - -------------------------------- NAV 6.15 - -------------------------------- Market price 5.90 - -------------------------------- TOP FIVE INDUSTRY SECTORS AS OF 5/31/01 (%) - -------------------------------- Nursing Homes 10.2 - -------------------------------- Hospitals 9.1 - -------------------------------- Airport 8.1 - -------------------------------- Refunded/Escrowed 6.8 - -------------------------------- Water & Sewer 6.8 Sector breakdowns are calculated as a percentage of net assets. QUALITY BREAKDOWN AS OF 5/31/01 (%) - -------------------------------- AAA 32.7 - -------------------------------- AA 2.4 - -------------------------------- A 3.3 - -------------------------------- BBB 17.6 - -------------------------------- BB 3.0 - -------------------------------- CCC 0.2 - -------------------------------- D 0.1 - -------------------------------- Non-rated 38.7 - -------------------------------- Cash equivalents 2.0 - -------------------------------- Quality breakdowns are calculated as a percentage of total investments, including short-term obligations. Ratings shown in the quality breakdown represent the highest rating assigned to a particular bond by one of the following nationally-recognized rating agencies: Standard & Poor's Corporation, Moody's Investors Service, Inc. or Fitch Investors Service, Inc. Because the trust is actively managed, there can be no guarantee the trust will continue to maintain these quality breakdowns or invest in these sectors in the future. INVESTMENT PORTFOLIO May 31, 2001 (Unaudited)
MUNICIPAL BONDS - 96.4% PAR VALUE - -------------------------------------------------------------------------------------------- EDUCATION - 5.3% EDUCATION - 5.3% CA Loyola Marymount University, 6.000% 10/01/14 $ 1,250,000 $ 639,512 CA Statewide Communities Development Authority, Crossroads School for Arts & Sciences, Series 1998, 6.000% 08/01/28 1,160,000 1,172,922 MA Industrial Finance Agency, St. John's High School, Series 1998, 5.350% 06/01/28 300,000 271,311 MI Southfield Economic Development Corp., Lawrence University, Series 1998 A, 5.400% 02/01/18 750,000 695,775 MN Victoria, Holy Family Catholic High School, Series 1999 A, 5.875% 09/01/29 1,000,000 936,250 VT Educational & Health Buildings Finance Agency: Middlebury College, Series 1999, 5.000% 11/01/38 4,400,000 4,071,936 Norwich University, Series 1998, 5.500% 07/01/21 1,000,000 964,630 WA Higher Education Facilities Authority, Puget Sound University, Series 1998, 5.375% 10/01/30 5,000,000 4,923,400 WV University, Series 2000 A, (a) 04/01/25 750,000 194,670 ------------ 13,870,406 ------------ - -------------------------------------------------------------------------------------------- HEALTHCARE - 24.4% CONGREGATE CARE RETIREMENT - 3.9% CA Statewide Community Development Authority Eskaton Village - Grass Valley, Series 2000, 8.250% 11/15/31 750,000 748,455 KS Manhattan, Meadowlark Hills Retirement Home, Series 1999 A: 6.375% 05/15/20 500,000 478,125 6.500% 05/15/28 1,750,000 1,677,813 KY Economic Development Finance Authority, Christian Church Homes of Kentucky, Inc., Series 1998, 5.500% 11/15/30 200,000 160,902 MA Boston Industrial Development Finance Authority, Springhouse, Inc., Series 1988, 5.875% 07/01/20 500,000 405,000 MA Development Finance Agency, Loomis Community, Series 1999 A, 5.625% 07/01/15 250,000 213,713 MN Columbia Heights, Crest View Corp., Series 1998, 6.000% 03/01/33 745,000 620,213 NH Higher Educational & Health Facilities Authority, Rivermead at Peterborough, Series 1998, 5.750% 07/01/28 500,000 394,375 NJ Economic Development Authority, Seabrook Village, Inc., Series 2000 A, 8.250% 11/15/30 500,000 499,375 PA Chartiers Valley Industrial & Commercial Development Authority, Asbury Health Center, Series 1999, 6.375% 12/01/24 1,000,000 862,500 PA Lancaster Industrial Development Authority, Garden Spot Village, Series 2000 A, 7.625% 05/01/31 325,000 327,438 PAPhiladelphia Authority for Industrial Development, Baptist Home of Philadelphia, Series 1998 A: 5.500% 11/15/18 360,000 286,200 5.600% 11/15/28 500,000 378,750 TN Metropolitan Government, Nashville and Davidson County, Blakeford at Green Hills, Series 1998, 5.650% 07/01/24 575,000 442,031 TX Abilene Health Facilities Development Corp., Sears Methodist Retirement Obligation Group, Series 1998 A, 5.900% 11/15/25 750,000 597,188 Series 1999, 5.875% 11/15/18 500,000 411,250 WI Health & Educational Facilities Authority: Attic Angel Obligated Group, 5.750% 11/15/27 875,000 675,938 Clement Manor, Series 1998, 5.750% 08/15/24 450,000 362,250 United Lutheran Program for Aging, Inc., 5.700% 03/01/28 750,000 590,625 ------------ 10,132,141 ------------ HEALTH SERVICES - 0.1% IL Health Facilities Authority, Midwest Physician Group, Ltd., Series 1998, 5.500% 11/15/19 90,000 71,632 MA Development Finance Agency, Boston Biomedical Research Institute, Series 1999, 5.650% 02/01/19 120,000 111,565 ------------ 183,197 ------------ HOSPITALS - 9.1% AR Conway Health Facilities Board, Conway Regional Medical Center: Series 1999 A, 6.400% 08/01/29 350,000 355,499 Series 1999 B, 6.400% 08/01/29 850,000 863,354 CA Health Facilities Financing Authority, Cedars-Sinai Medical Center, Series 1999 A, 6.125% 12/01/30 650,000 677,307 CO Health Care Facilities Authority, National Jewish Medical & Research Center, Series 1998: 5.375% 01/01/16 1,500,000 1,325,655 5.375% 01/01/23 840,000 702,996 GA Forsyth County Hospital Authority, Georgia Baptist Healthcare System, Series 1998, 6.000% 10/01/08 1,000,000 980,000 IL Health Facilities Authority, Swedish American Hospital, Series 2000, 6.875% 11/15/30 500,000 524,965 Thorek Hospital & Medical Center, 5.375% 08/15/28 500,000 393,185 IL Southwestern Illinois Development Authority, Anderson Hospital, Series 1999: 5.375% 08/15/15 500,000 434,460 5.500% 08/15/20 550,000 473,902 LA Public Facilities Authority, Touro Infirmary, Series 1999: 5.500% 08/15/19 500,000 478,890 5.625% 08/15/29 2,000,000 1,903,600 MA Health & Educational Facilities Authority, Milford- Whitinsville Regional Hospital, Series C, 5.250% 07/15/18 500,000 394,915 MI Dickinson County Healthcare System, Series 1999, 5.700% 11/01/18 585,000 504,878 MI Flint Hospital Building Authority, Hurley Medical Center, Series 1998 A, 5.375% 07/01/20 625,000 508,169 MI Hospital Finance Authority, Detroit Medical Center, Series 1998 A, 5.250% 08/15/28 600,000 453,126 MN St. Paul Housing & Redevelopment Authority, Healtheast Project, Series A, 5.700% 11/01/15 2,000,000 1,522,500 MN Washington County Housing & Redevelopment Authority, Healtheast, Inc., Series 1998, 5.250% 11/15/12 1,250,000 1,009,375 MS Business Finance Corp., Rush Medical Foundation, Inc., Series 1998, 5.625% 07/01/23 1,150,000 914,814 NH Higher Educational & Health Facilities Authority, Littleton Hospital Association, Inc., Series 1998 A: 5.900% 05/01/18 1,175,000 903,531 6.000% 05/01/28 625,000 475,000 OH Belmont County, East Ohio Regional Hospital, Series 1998, 5.700% 01/01/13 1,500,000 1,295,625 OH Highland County Joint Township Hospital District, Series 1999, 6.750% 12/01/29 745,000 651,875 OH Miami County, Upper Valley Medical Center, Inc., Series 1996 A, 6.250% 05/15/16 665,000 633,426 OH Sandusky County Memorial Hospital, Series 1998, 5.150% 01/01/08 270,000 260,410 PA Allegheny County Hospital Development, Ohio Valley General Hospital, Series 1998 A, 5.450% 01/01/28 1,050,000 856,926 PA Pottsville Hospital Authority, Pottsville Hospital & Warne Clinic, Series 1998, 5.625% 07/01/24 755,000 611,950 TX Lufkin Health Facilities Development Corp., Memorial Health Systems of East Texas, Series 1998, 5.700% 02/15/28 750,000 570,090 TX Richardson Hospital Authority, Baylor Richardson Medical Center, Series 1998, 5.625% 12/01/28 850,000 728,348 VT Educational & Health Buildings Authority: Brattleboro Memorial Hospital, 5.375% 03/01/28 500,000 400,775 Springfield Hospital, Series A, 7.750% 01/01/13 1,040,000 1,096,909 WV Hospital Finance Authority, Charlestown Medical Center, Series 2000 A, 6.750% 09/01/30 750,000 792,510 ------------ 23,698,965 ------------ INTERMEDIATE CARE FACILITIES - 1.1% IN Health Facilities Financing Authority, Hoosier Care, Inc., Series 1999 A, 7.125% 06/01/34 1,090,000 957,838 PA Economic Development Financing Authority, Northwestern Human Services, Inc., Series 1998 A, 5.250% 06/01/14 2,150,000 1,837,003 ------------ 2,794,841 ------------ NURSING HOMES - 10.2% AK Juneau, St. Ann's Care Center, Series 1999, 6.875% 12/01/25 1,000,000 933,750 CO Health Facilities Authority: American Housing Foundation, Inc., Series 1990 A, 10.250% 12/01/20 1,500,000 600,000 Volunteers of America Care Facilities, Inc., Series 1998 A: 5.450% 07/01/08 250,000 230,938 5.750% 07/01/20 700,000 570,500 Series 1999 A, 6.000% 07/01/29 350,000 281,750 DE Economic Development Authority, Georgetown Health Center, 12.000% 04/01/25 2,130,000 2,252,006 DE Sussex County, Healthcare Facility, Delaware Health Corporation, Series 1994 A, 7.600% 01/01/24 985,000 886,500 IA Finance Authority, Care Initiatives Project, Series 1996: 9.250% 07/01/25 1,000,000 1,210,000 Series B: 5.750% 07/01/18 2,025,000 1,650,501 IN Gary Industrial Economic Development, West Side Health Care Center, Series 1987 A, 11.500% 10/01/17 2,345,000 2,366,175 IN Health Facilities Financing Authority, Metro Health Indiana, Inc., Series 1998, 6.400% 12/01/33 1,000,000 703,750 IN Michigan City Health Facilities, Metropolitan Health Foundation Inc. Project, 10.000% 11/01/22 4,500,000 1,845,000 KY Jefferson County First Mortgage, AHF Kentucky-Iowa, Inc., Project Series 1990, 10.250% 01/01/20 910,000 819,000 KY Lexington-Fayette Urban County Government, First Mortgage, AHF Kentucky-Iowa, Inc., Project Series 1990, 10.250% 01/01/20 920,000 828,000 MA Development Finance Agency, Alliance Health Care Facilities, Series 1999, 7.100% 07/01/32 1,250,000 1,134,375 MA Industrial Finance Agency: American Health Woodlawn Manor, Inc.: Series A, 7.750% 01/01/28 385,000 335,431 Series B, 10.250% 07/01/27 80,000 74,400 GF/Massachusetts, Inc., Series 1994, 8.300% 07/01/23 930,000 969,525 MI Cheboygan County Economic Development Corp., Metro Health Foundation Project, Series 1993, 10.000% 11/01/22 2,440,000 1,000,400 MN Carlton, Inter-Faith Social Services, Inc., Series 2000: 7.500% 04/01/19 250,000 248,750 7.750% 04/01/29 250,000 251,563 MN Minneapolis, Walker Methodist Senior Services Group, Series 1998 A, 6.000% 11/15/28 500,000 423,750 MN New Hope, North Ridge Care Center, Inc., Series 1999, 5.875% 03/01/29 500,000 413,125 MN Sartell, Foundation for Healthcare, Series 1999 A, 6.625% 09/01/29 2,025,000 1,787,063 NJ Economic Development Authority Geriatric and Medical Service, Inc., Series A, 10.500% 05/01/04 475,000 473,219 OH Montgomery County, Grafton Oaks Limited Partners, Series 1986, 9.750% 12/01/16 1,480,000 1,406,000 TN New Tazewell Health Education and Housing Facilities Board, New Tasewell Project, Series 1987, 10.000% 06/01/17 1,495,000 1,513,852 TX Kirbyville Health Facilities Development Corp., Heartway III Project: Series 1997 A, 10.000% 03/20/18 571,487 517,196 Series 1997 B, 6.000% 03/20/04 100,000 5,000 WA Kitsap County Housing Authority, Martha & Mary Nursing Home, 7.100% 02/20/36 643,000 740,858 ------------ 26,472,377 ------------ - -------------------------------------------------------------------------------------------- HOUSING - 10.4% ASSISTED LIVING/SENIOR - 3.7% DE Kent County, Heritage at Dover, Series 1999, 7.625% 01/01/30 1,250,000 1,117,188 GA Columbus Housing Authority, The Gardens at Calvary, Series 1999, 7.000% 11/15/19 500,000 443,750 IL Clarendon Hills Residential Facilities, Churchill Estate, Series 1998 A: 6.750% 03/01/24 1,050,000 787,500 6.750% 03/01/31 1,365,000 1,023,750 IL Development Finance Authority, Care Institute, Inc., 8.250% 06/01/25 1,480,000 1,517,000 MN Roseville, Care Institute, Inc., Series 1993, 7.750% 11/01/23 1,630,000 1,375,313 NC Medical Care Commission, DePaul Community Facilities Project, Series 1999, 7.625% 11/01/29 1,000,000 968,750 NY Huntington Housing Authority, Gurwin Jewish Senior Center, Series 1999: 5.875% 05/01/19 420,000 361,725 6.000% 05/01/29 650,000 547,625 TX Bell County Health Facilities Development Corp., Care Institutions, Inc., 9.000% 11/01/24 1,480,000 1,568,800 ------------ 9,711,401 ------------ MULTI-FAMILY - 6.5% Charter Municipal Mortgage Acceptance Co., 7.600% 11/30/50 (b) 500,000 526,875 DE Wilmington, Electra Arms Senior Association Project, 6.250% 06/01/28 975,000 788,531 FL Broward County Housing Finance Authority, Chaves Lake Apartment Project, Series 2000, 7.500% 07/01/40 500,000 508,125 FL Clay County Housing Finance Authority, Madison Commons Apartments, Series 2000 A, 7.450% 07/01/40 500,000 508,125 GA Clayton County Housing Authority, Magnolia Park Apartments, Series 1999 A, 6.250% 06/01/30 750,000 676,305 IL Chicago, Michigan Boulevard Garden Apartment Rehabilitation Project, Series 1985, 12.000% 01/01/50 70,000 56,000 MN Washington County Housing & Redevelopment Authority, Cottages of Aspen, Series 1992, 9.250% 06/01/22 1,035,000 1,077,694 MN White Bear Lake, Birch Lake Townhomes Project: Series 1989 A, 10.250% 07/15/19 1,770,000 1,831,950 Series 1989 B, (a) 07/15/19 653,000 261,592 NC Eastern Carolina Regional Housing Authority, New River Apartments - Jacksonville, Series 1994, 8.250% 09/01/14 1,690,000 1,690,000 Resolution Trust Corp., Pass Through Certificates, Series 1993 A, 8.750% 12/01/16 3,462,446 3,478,407 SC Housing Finance and Development Multi-Family Housing Finance Revenue, Westbridge Apartments, Series A, 9.500% 09/01/20 2,075,000 2,075,000 TN Franklin Industrial Development Board, Landings Apartment Project, Series 1996 B, 8.750% 04/01/27 760,000 801,800 TX El Paso County Housing Finance Corp., American Village Communities, Series 2000 C, 8.000% 12/01/32 300,000 299,250 Series 2000 D, 10.000% 12/01/32 300,000 299,250 TX Galveston Health Facilities Center, Driftwood Apartments, 8.000% 08/01/23 (b) 1,000,000 1,028,750 VA Alexandria Redevelopment & Housing Authority, Courthouse Commons Apartments, Series 1990 A, 10.000% 01/01/21 1,000,000 900,000 ------------ 16,807,654 ------------ SINGLE FAMILY - 0.2% AK Housing Finance Corp., Series 1996 A, 6.050% 12/01/17 560,000 580,854 KY County Single Family Mortgage Revenue, Class A, 9.000% 09/01/16 30,000 30,070 ------------ 610,924 ------------ - -------------------------------------------------------------------------------------------- INDUSTRIAL - 4.8% FOOD PRODUCTS - 1.6% IN Hammond, American Maize Products Co., Series 1994, 8.000% 12/01/24 2,000,000 2,052,980 LA Port New Orleans Industrial Development Continental Grain Co., Series 1993, 7.500% 07/01/13 1,000,000 1,023,750 LA Southern Louisiana Port Commission, Cargill, Inc. Project, 5.850% 04/01/17 500,000 516,235 MI Strategic Fund, Michigan Sugar Co., Sebewang Project, Series 1998 A, 6.250% 11/01/15 1,000,000 530,000 ------------ 4,122,965 ------------ FOREST PRODUCTS - 1.1% AL Courtland Industrial Development Board, Champion International Corp., Series 1999, 6.000% 08/01/29 2,000,000 1,948,140 GA Rockdale County Development Authority, Solid Waste Disposal, Visy Paper, Inc., Series 1993, 7.500% 01/01/26 800,000 805,000 ------------ 2,753,140 ------------ MANUFACTURING - 1.3% IL State Development Finance Authority, Armstrong World Industries, Inc. Project, 5.950% 12/01/24 1,000,000 350,000 IL Will-Kankakee Regional Development Authority, Flanders Corp./Precisionaire Project, Series 1997, 6.500% 12/15/17 925,000 869,500 MA State Industrial Finance Agency, House of Bianchi, Inc., 8.750% 06/01/18 235,000 224,719 MN Brooklyn Park, TL Systems Corp., Series 1991, 10.000% 09/01/16 735,000 814,013 NV Henderson Public Improvement Trust, Integrated Coating Technology Corp., Series 2000, 6.625% 11/01/10 203,655 4,073 TX Trinity River Authority, Texas Instruments Project, Series 1996, 6.200% 03/01/20 750,000 776,505 WA Pilchuck Public Development Corp., Goodrich (B.F.) Co. Tramco Project, Series 1993, 6.000% 08/01/23 400,000 390,060 ------------ 3,428,870 ------------ METALS & MINING - 0.3% MD Baltimore County, Bethlehem Steel Corp. Project, Series B, 7.500% 06/01/15 500,000 330,000 NV Department of Business & Industry, Wheeling-Pittsburgh Steel Corp., Series 1999 A, 8.000% 09/01/14 250,000 200,000 VA Greenville County Industrial Development Authority, Wheeling-Pittsburgh Steel Corp., Series 1999 A: 6.375% 04/01/04 70,000 56,000 7.000% 04/01/14 375,000 292,031 ------------ 878,031 ------------ OIL AND GAS - 0.5% WA Pierce County Economic Development Corp., Occidental Petroleum Co., 5.800% 09/01/29 1,500,000 1,375,635 ------------ - -------------------------------------------------------------------------------------------- OTHER - 8.3% OTHER - 0.5% MD Baltimore, Park Charles Project, Series 1986, 8.000% 01/01/15 645,000 658,913 SC Tobacco Settlement Revenue Management Authority, Series 2001 B, 6.375% 05/15/28 800,000 808,008 ------------ 1,466,921 ------------ POOL/BOND BANK - 1.0% IN Indianapolis Local Public Improvement Bond Bank, Series 1999 E, 5.750% 02/01/29 2,000,000 2,004,540 MI State Municipal Bond Authority, Local Government Loan Project, Series 2001 A, 5.375% 11/01/17 550,000 560,742 ------------ 2,565,282 ------------ REFUNDED/ESCROWED (c) - 6.8% CA San Joaquin Hills Transportation Corridor Agency, Series 1993, (a) 01/01/25 10,000,000 2,756,200 FL Clearwater Housing Authority, Hampton Apartments, Series 1994, 8.250% 05/01/24 2,430,000 2,767,163 ID Health Facilities Authority, IHC Hospitals, Inc., 6.650% 02/15/21 2,750,000 3,252,810 IL Health Facilities Authority, Edgewater Medical Center, Series A, 9.250% 07/01/2024 2,195,000 2,562,443 MA Health & Educational Facilities Authority, Corp. for Independent Living, 8.100% 07/01/18 640,000 712,800 MN Mille Lakes Capital Improvement Authority, Mille Lakes Band of Chippewa, Series 1992 A, 9.250% 11/01/12 935,000 1,030,838 NC Lincoln County, Lincoln County Hospital, 9.000% 05/01/07 350,000 406,438 PA Delaware County Authority, Southeastern Pennsylvania Obligated Group, Series 1996: 6.000% 12/15/16 1,400,000 1,525,286 6.000% 12/15/26 500,000 519,935 PA Montgomery County Industrial Development Authority, Assisted Living Facility, Series 1993 A, 8.250% 05/01/23 765,000 834,806 TN Shelby County, Health, Education, and Housing Facilities Board, Open Arms Development Center, Series 1992 A, 9.750% 08/01/19 495,000 640,406 Series 1992 C, 9.750% 08/01/19 500,000 646,875 ------------ 17,656,000 ------------ - -------------------------------------------------------------------------------------------- OTHER REVENUE - 1.7% HOTELS - 0.8% PA Philadelphia Authority for Industrial Development, Doubletree Project, 6.500% 10/01/27 2,000,000 1,997,500 ------------ RECREATION - 0.3% NM Red River Sports Facility, Red River Ski Area Project, Series 1998, 6.450% 06/01/07 830,000 813,400 ------------ RETAIL - 0.6% NJ Economic Development Authority, Glimcher Properties L.P. Project, 6.000% 11/01/28 1,000,000 936,250 OH Lake County, North Madison Properties, Series 1993, 8.819% 09/01/11 710,000 710,000 ------------ 1,646,250 ------------ - -------------------------------------------------------------------------------------------- RESOURCE RECOVERY - 2.2% DISPOSAL - 1.4% CT Development Authority, Sewer Sludge Disposal Facilities, NETCO New Haven, Series 1996, 8.250% 12/01/06 955,000 1,073,181 MA Boston Industrial Development Finance Authority, Jet-A-Way, Inc., 10.500% 01/01/11 800,000 826,000 MA Industrial Finance Agency: Massachusetts Environmental Services, Series 1994 A, 8.750% 11/01/21 975,000 487,500 Peabody Monofill Associates, Inc., Series 1995, 9.000% 09/01/05 810,000 850,500 UT Carbon County, Laidlaw Environmental, Series A, 7.450% 07/01/17 500,000 491,250 ------------ 3,728,431 ------------ RESOURCE RECOVERY - 0.8% MA Industrial Finance Agency, Ogden Hill Project, Series 1998 A, 5.500% 12/01/13 1,000,000 972,720 PA Delaware County Industrial Development Authority, Series A, 6.200% 07/01/19 1,000,000 982,500 ------------ 1,955,220 ------------ - -------------------------------------------------------------------------------------------- TAX-BACKED - 9.5% LOCAL APPROPRIATED - 0.4% CA Compton, Civic Center Project, 5.500% 09/01/15 1,000,000 994,050 ------------ LOCAL GENERAL OBLIGATIONS - 3.1% LA New Orleans, Series 1991, (a) 09/01/15 4,000,000 1,887,640 NY New York City, Series 1998 H, 5.125% 08/01/25 5,000,000 4,907,900 TX Irving Independent School District, Series 1997: (a) 02/15/15 1,500,000 727,500 (a) 02/15/16 1,000,000 454,820 ------------ 7,977,860 ------------ SPECIAL NON-PROPERTY TAX - 3.3% IL Metropolitan Pier & Exposition Authority: McCormick Project: (a) 06/15/14 5,000,000 2,540,750 (a) 06/15/15 3,000,000 1,427,670 Series 1996 A, (a) 12/15/13 5,000,000 2,636,400 PR Commonwealth of Puerto Rico Highway & Transportation Authority, Series 1998 A, 5.000% 07/01/38 2,000,000 1,881,420 ------------ 8,486,240 ------------ SPECIAL PROPERTY TAX - 2.7% CA Orange County Community Facilities District, Ladera Ranch, Series 1999 A, 6.500% 08/15/21 1,000,000 1,041,250 CA Yorba Linda Redevelopment Agency, Series 1998 A, (a) 09/01/24 1,325,000 361,129 FL Heritage Palms Community Development District, Series 1999, 6.250% 11/01/04 995,000 1,002,463 FL Heritage Springs Community Development District, Series 1999 B, 6.250% 05/01/05 565,000 569,238 FL Lexington Oaks Community Development District: Series 1998 A, 6.125% 05/01/19 760,000 744,800 Series 2000 D, 6.700% 05/01/07 400,000 408,500 FL Northern Palm Beach County Improvement District, Series 1999, 5.900% 08/01/19 500,000 480,625 FL Orlando, Conroy Road Interchange Project, Series 1998 A: 5.500% 05/01/10 125,000 122,813 5.800% 05/01/26 500,000 465,000 FL Stoneybrook Community Development District: Series 1998 A, 6.100% 05/01/19 250,000 243,125 Series 1998 B, 5.700% 05/01/08 650,000 643,500 MI Taylor Tax Increment Finance Authority, Series 2001, 5.375% 05/01/17 1,000,000 1,013,380 ------------ 7,095,823 ------------ TRANSPORTATION - 14.2% AIR TRANSPORTATION - 2.8% IN Indianapolis Airport Authority: Federal Express Corp., Series 1994, 7.100% 01/15/17 2,000,000 2,117,740 United Airlines Project, Series A, 6.500% 11/15/31 1,000,000 931,250 KY Kenton County Airport Board, Delta Airlines, Inc., Series 1992 A, 7.500% 02/01/20 2,500,000 2,588,700 NC Charlotte, Special Facilities Revenue, US Airways, Inc., Series 2000, 7.750% 02/01/28 500,000 495,000 PA Philadelphia Authority for Industrial Development, Aero Philadelphia LLC, Series 1999, 5.250% 01/01/09 450,000 423,000 WA Seattle Northwest Air, 7.250% 04/01/30 750,000 736,875 ------------ 7,292,565 ------------ AIRPORT - 8.1% MI Wayne Charter County, Detroit Metropolitan Airport, Series 1998 A, 5.000% 12/01/28 1,250,000 1,165,775 OH Cleveland, Series 2001 A, 5.000% 01/01/31 12,215,000 11,531,082 PA Philadelphia Authority for Industrial Development, Series 1998 A, 5.125% 07/01/28 8,750,000 8,339,888 ------------ 21,036,745 ------------ TOLL FACILITIES - 3.0% CA San Joaquin Hills Transportation Corridor Agency, Series A, (a) 01/15/15 3,000,000 1,484,880 CO Public Highway Authority, Arapahoe County, E470 Series 2000 B: (a) 09/01/18 3,000,000 1,170,750 (a) 09/01/35 8,750,000 700,875 MA Turnpike Authority, Series 1999 A, 5.000% 01/01/39 5,000,000 4,560,300 ------------ 7,916,805 ------------ TRANSPORTATION - 0.3% NV Department of Business & Industry, Las Vegas Monorail Project, Series 2000, 7.375% 01/01/40 750,000 750,938 ------------ - -------------------------------------------------------------------------------------------- UTILITY - 15.6% INDEPENDENT POWER PRODUCER - 3.0% MI Midland County Economic Development Corp., Series 2000, 6.875% 07/23/09 1,000,000 1,026,250 NY Port Authority of New York & New Jersey, KIAC Partners, Series 1996 IV, 6.750% 10/01/11 2,000,000 2,105,000 PA Economic Development Finance Authority, Colver Project, Series D: 7.125% 12/01/15 500,000 516,820 7.150% 12/01/18 2,750,000 2,826,450 PR Commonwealth of Puerto Rico Industrial, Educational, Medical & Environmental Cogeneration Facilities, AES Project, Series 2000, 6.625% 06/01/26 325,000 341,231 VA Pittsylvania County Industrial Development Authority, Multitrade of Pittsyvania, Series 1994 A, 7.450% 01/01/09 1,000,000 973,750 ------------ 7,789,501 ------------ INVESTOR OWNED - 3.1% AZ Pima County Industrial Development Authority, Tucson Electric Power Co., Series A, 6.100% 09/01/25 750,000 689,063 CT Development Authority, Connecticut Light & Power Co., Series 1993 B, 5.950% 09/01/28 300,000 294,807 IL Bryant Pollution Control Revenue, Central Illinois Light Co., Series 1993, 5.900% 08/01/23 2,000,000 2,019,180 LA Calcasieu Parish Industrial Development Board, Entergy Gulf States, Inc., Series 1999, 5.450% 07/01/10 500,000 483,125 LA West Feliciana Parish, Entergy Gulf States, Inc., Series 1999 B, 6.600% 09/01/28 500,000 499,375 MS Business Finance Corp., Systems Energy Resources Project, Series 1998, 5.875% 04/01/22 1,500,000 1,389,375 NV Clark County, Nevada Power Co., Series 1997 A, 5.900% 11/01/32 3,000,000 2,637,360 ------------ 8,012,285 ------------ MUNICIPAL ELECTRIC - 2.7% NY Long Island Power Authority, Series 1998 A, 5.250% 12/01/26 1,550,000 1,530,687 TX Austin, Series 1994: (a) 05/15/17 6,600,000 2,781,306 (a) 05/15/18 5,000,000 1,976,300 WA Seattle, Series 2001: 5.500% 03/01/17 750,000 768,128 ------------ 7,056,421 ------------ WATER & SEWER - 6.8% CA Castaic Lake Water Agency, Series 1999 A: (a) 08/01/25 10,445,000 2,723,743 (a) 08/01/26 10,445,000 2,569,992 LA Public Facility Belmont Water Authority, 9.000% 03/15/24 730,000 584,000 MA Water Resources Authority, Series 1997 D, 5.000% 08/01/24 (d) 10,000,000 9,588,800 MS Five Lakes Utility District, 8.250% 07/15/24 500,000 450,625 TX Houston Water & Sewer System, Series C, (a) 12/01/12 3,000,000 1,690,590 ------------ 17,607,750 ------------ TOTAL MUNICIPAL BONDS (cost of $261,249,864) 250,686,534 ------------ SHORT-TERM OBLIGATIONS - 2.0% - -------------------------------------------------------------------------------------------- VARIABLE RATE DEMAND NOTES - 2.0% (d) AZ Phoenix Industrial Development Authority, Valley of the Sun Y.M.C.A., Series 2001, 2.050% 01/01/31 700,000 700,000 IA State Higher Education Loan Authority, St. Ambrose University, Series 1995, 3.100% 02/01/05 1,100,000 1,100,000 IA Woodbury County, Siouxland Medical Educational Foundation, Series 1996, 3.050% 11/01/16 1,100,000 1,100,000 KS State Development Finance Authority, Series 2000, 2.050% 05/15/26 500,000 500,000 MN Mankato, Bethany Lutheran College, Series 2000 B, 2.050% 11/01/15 400,000 400,000 MN Minneapolis, Series 1999, 2.850% 12/01/18 550,000 550,000 MO St. Charles County Industrial Development Authority, Monsanto Co., Series 1996, 3.000% 07/01/21 200,000 200,000 MS Perry County, Leaf River Forest Project, 2.050% 03/01/02 600,000 600,000 TX Brazos River Authority, Pharmacia Corp., Series 1994, 3.150% 02/01/04 100,000 100,000 ------------ TOTAL SHORT-TERM OBLIGATIONS (cost of $5,250,000) 5,250,000 ------------ TOTAL INVESTMENTS (cost of $266,499,864)(f) 255,936,534 ------------ OTHER ASSETS & LIABILITIES, NET - 1.6% 4,206,433 ------------ NET ASSETS - 100.0% $260,142,967 ------------
NOTES TO INVESTMENT PORTFOLIO: - ------------------------------------------------------------------------------- (a) Zero coupon bond. (b) Denotes a restricted security, which is subject to restrictions on resale under Federal Securities laws. At May 31, 2001, these securities amounted to $1,555,625, which respresents 0.6% of net assets. Additional information on this restricted security held at May 31, 2001, is as follows: ACQUISITION ACQUISITION SECURITY DATE COST - -------------------------------------------------------------------------- Charter Municipal Mortgage Acceptance Co. 07/06/00 $ 500,000 TX Galveston Health Facilities Center 09/28/94 1,000,000 (c) The Trust has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of the principal and interest. (d) This security, or a portion thereof, with a total market value of $9,588,800, is being used to collateralize open future contracts. (e) Variable rate demand notes are considered short-term obligations. Interest rates change periodicallyon specified dates. These securities are payable on demand and are secured by either lettersof credit or other credit support agreements from banks. The rates listed are as of May 31, 2001. (f) Cost for federal income tax purposes is the same. Short futures contracts open at May 31, 2001: PAR VALUE UNREALIZED COVERED BY EXPIRATION DEPRECIATION TYPE CONTRACTS MONTH AT 05/31/01 - ------------------------------------------------------------------------------ Municipal Bond $35,000,000 September $(252,574) Treasury Bond 39,700,000 September (324,647) Treasury Note 19,800,000 September (106,276) --------- $(683,497) --------- ACRONYM NAME - ----------------------------------------------------------------------------- AHF American Housing Foundation See notes to financial statements. - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES - -------------------------------------------------------------------------------- May 31, 2001 (Unaudited) ASSETS Investments, at value (cost of $266,499,864) $255,936,534 Cash 29,092 Receivable for: Investment sold 2,555,054 Interest 4,733,221 Other assets 115,789 ------------ Total Assets 263,369,690 ------------ LIABILITIES Payable for: Investments purchased 1,358,454 Variation margin on futures contracts 782,554 Distributions -- common shares 898,466 Distributions -- preferred shares 22,932 Management fee 141,245 Bookkeeping fee 5,592 Trustees' fee 3,500 Custody fee 455 Deferred Trustees' fee 13,525 ------------ Total Liabilities 3,226,723 ------------ NET ASSETS $260,142,967 ------------ COMPOSITION OF NET ASSETS Auction Preferred shares (3,600 shares issued and outstanding at $25,000 per share) $ 90,000,000 Paid in capital -- common shares 228,185,580 Overdistributed net investment income (1,257,729) Accumulated net realized loss (45,538,057) Net unrealized depreciation on: Investments (10,563,330) Open futures contracts (683,497) ------------ $260,142,967 ------------ Net Assets at value for 27,645,113 common shares of beneficial interest outstanding $170,142,967 ------------ Net asset value per common share $ 6.15 ------------ Net Assets at value including undeclared dividends for 3,600 preferred shares outstanding $ 90,000,000 ------------ See notes to financial statements. - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS - -------------------------------------------------------------------------------- For the Six Months Ended May 31, 2001 (Unaudited) INVESTMENT INCOME Interest Income $8,449,182 EXPENSES Management fee $ 844,702 Bookkeeping fee 33,535 Trustees' fee 6,916 Custody fee 910 Preferred share remarketing commissions 112,320 Other expenses 102,358 ---------- Total Expenses 1,100,741 ---------- Net Investment Income 7,348,441 ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS Net realized loss on: Investments (203,287) Closed futures contracts (888,580) ---------- Net realized loss (1,091,867) Net change in unrealized appreciation/depreciation on: Investments 2,828,083 Open futures contracts 829,702 ---------- Net change in unrealized appreciation/depreciation 3,657,785 ---------- Net Gain 2,565,918 ---------- Increase in Net Assets from Operations $9,914,359 ---------- See notes to financial statements. - -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED MAY 31, NOVEMBER 30, INCREASE (DECREASE) IN NET ASSETS 2001 2000 - ------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 7,348,441 $ 15,235,387 Net realized loss on investments and futures contracts (1,091,867) (12,850,420) Net change in unrealized appreciation/depreciation on investments and futures contracts 3,657,785 634,363 ------------- ------------- Net Increase from Operations 9,914,359 3,019,330 ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income -- common shares (5,390,590) (11,970,087) From net investment income -- preferred shares (1,645,493) (3,778,348) ------------- ------------- Total Distributions to Shareholders (7,036,083) (15,748,435) ------------- ------------- SHARE TRANSACTIONS: Preferred share offering (net of $108,000 commission and offering costs) -- (108,000) ------------- ------------- Total Increase (Decrease) in Net Assets 2,878,276 (12,837,105) NET ASSETS Beginning of period 257,264,691 270,101,796 ------------- ------------- End of period (including overdistributed net investment income of ($1,257,729) and ($1,570,087), respectively) $ 260,142,967 $ 257,264,691 ------------- ------------- NUMBER OF FUND SHARES Common: Outstanding at end of period 27,645,113 27,645,113 ------------- ------------- Preferred: Outstanding at end of period 3,600 3,600 ------------- -------------
See notes to financial statements. - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- May 31, 2001 (Unaudited) NOTE 1. ACCOUNTING POLICIES ORGANIZATION: Colonial Municipal Income Trust (the "Trust") is a Massachusetts business trust, registered under the Investment Company Act of 1940 (the "Act"), as amended, as a diversified, closed-end, management investment company. The Trust's primary investment objective is to provide high current income, generally exempt from federal income taxes, by investing primarily in medium- and lower-quality municipal securities. The Trust's secondary objective is to preserve its capital. The Trust authorized an unlimited number of common shares of beneficial interest and 3,600 Auction Preferred Shares ("APS"). 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 Trust in the preparation of its financial statements. SECURITY VALUATION AND TRANSACTIONS: Debt securities generally 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. Futures contracts are valued based on the difference between the last sale price and the opening price of the contract. Options are valued at the last reported sale price, or in the absence of a sale, the mean between the last quoted bid and asking price. Short-term obligations with a maturity of 60 days or less are valued at amortized cost. Portfolio positions for which market quotations are not readily available 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 Trust 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 Trust to subsequently invest at less advantageous prices. FEDERAL INCOME TAXES: Consistent with the Trust'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. Effective December 1, 2001, the Trust will adopt the provisions of the AICPA Audit and Accounting Guide for Investment Companies and will be required to amortize premium and discount on all debt securities. Upon the effective date, this accounting principle change will not have an impact on total net assets but will result in a reclassification between cost of securities held and net unrealized appreciation/depreciation. The Trust currently has not determined the impact of the adoption of the new accounting policy. DISTRIBUTIONS TO SHAREHOLDERS: Distributions to common and preferred 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 Trust's capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. Distributions to preferred shareholders are recorded daily and are payable at the end of each dividend period. Each dividend payment period for APS is generally seven days. The applicable dividend rate for the APS on May 31, 2001 was 3.10%. For the six months ended May 31, 2001, the Trust paid dividends to Auction Preferred shareholders amounting to $1,645,493, representing an average APS dividend rate of 3.67%. NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES MANAGEMENT FEE: Colonial Management Associates, Inc. (the "Advisor") is the investment advisor of the Trust and furnishes accounting and other services and office facilities for a monthly fee equal to 0.65% annually of the Trust's average weekly net assets. BOOKKEEPING FEE: The Advisor provides bookkeeping and pricing services for a monthly fee equal to $18,000 per year plus 0.0233% annually of the Trust's average net assets over $50 million. OTHER: The Trust pays no compensation to its officers, all of whom are employees of the Advisor. The Trust'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 Trust's assets. NOTE 3. PORTFOLIO INFORMATION INVESTMENT ACTIVITY: For the six months ended May 31, 2001, purchases and sales of investments, other than short-term obligations, were $17,977,567 and $20,507,109, respectively. Unrealized appreciation (depreciation) at May 31, 2001, based on cost of investments for federal income tax purposes was: Gross unrealized appreciation $ 8,605,859 Gross unrealized depreciation (19,169,189) ------------ Net unrealized depreciation $(10,563,330) ============ CAPITAL LOSS CARRYFORWARDS: At November 30, 2000, capital loss carryforwards available (to the extent provided in regulations) to offset future realized gains were approximately as follows: YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD ------------------ ------------------------- 2001 $ 7,979,000 2002 5,301,000 2003 7,499,000 2004 4,000 2005 7,197,000 2007 3,491,000 2008 13,037,000 ----------- $44,508,000 ----------- Expired capital loss carryforwards, if any, are recorded as a reduction of paid in capital. 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 Trust may focus its investments in certain industries, subjecting it to greater risk than a trust that is more diversified. The Trust may purchase or sell municipal and Treasury bond futures contracts and purchase and write options on futures. The Trust will invest in these instruments to hedge against the effects of changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions, for duration management, or when the transactions are economically appropriate to the reduction of risk inherent in the management of the Trust and not for trading purposes. The use of futures contracts and options involves certain risks which include (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out a position due to different trading hours, or the temporary absence of a liquid market for either the instrument or the underlying securities or (3) an inaccurate prediction by the Advisor of the future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Trust's Statement of Assets and Liabilities at any given time. NOTE 4. PREFERRED SHARE OFFERING On July 20, 1999, the Trust offered and currently has outstanding 3,600 APS. The APS are redeemable at the option of the Trust on any dividend payment date at the redemption price of $25,000 per share, plus an amount equal to any dividends accumulated on a daily basis unpaid through the redemption date (whether or not such dividends have been declared). Total proceeds, net of commissions, of $88,875,000, were received upon completion of the offering. Costs incurred by the Trust in connection with the offering of the APS totaling $108,000 and $139,690 for fiscal years 2000 and 1999, respectively, were recorded as a reduction of capital paid in excess of par applicable to common shares. Under the Act, the Trust is required to maintain asset coverage of at least 200% with respect to the APS as of the last business day of each month in which any APS are outstanding. Additionally, the Trust is required to meet more stringent asset coverage requirements under the terms of the APS and in accordance with the guidelines prescribed by the rating agencies. Should these requirements not be met, or should dividends accrued on the APS not be paid, the Trust may be restricted in its ability to declare dividends to common shareholders or may be required to redeem certain of the APS. At May 31, 2001, there were no such restrictions on the Trust. - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected per share data, total return, ratios and supplemental data throughout each period are as follows (common shares unless otherwise noted):
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED NOVEMBER 30, MAY 31, ------------------------------------------------------------------ 2001 2000 1999 1998 1997 1996 - ------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.05 $ 6.51 $ 7.57 $ 7.41 $ 7.41 $ 7.48 -------- -------- -------- -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS Net investment income 0.27 0.55(a) 0.46 0.47 0.51 0.51 Commissions and offering costs - preferred shares -- (0.01) (0.05) -- -- -- Net realized and unrealized gain (loss) on investments and futures contracts 0.09 (0.43) (0.97) 0.18 (0.00)(b) (0.07) -------- -------- -------- -------- -------- -------- Total from Investment Operations 0.36 0.11 (0.56) 0.65 0.51 0.44 -------- -------- -------- -------- -------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income - common shares (0.20) (0.43) (0.42) (0.48) (0.51) (0.51) From net investment income - preferred shares (0.06) (0.14) (0.04) -- -- -- In excess of net investment income - common shares -- -- (0.04) (0.01) -- -- -------- -------- -------- -------- -------- -------- Total Distributions Declared to Shareholders (0.26) (0.57) (0.50) (0.49) (0.51) (0.51) -------- -------- -------- -------- -------- -------- NET ASSET VALUE, END OF PERIOD $ 6.15 $ 6.05 $ 6.51 $ 7.57 $ 7.41 $ 7.41 -------- -------- -------- -------- -------- -------- Market price per share $ 5.90 $ 5.38 $ 5.75 $ 8.13 $ 7.56 $ 7.25 -------- -------- -------- -------- -------- -------- Total return - based on market value (c) 13.31%(d) 0.84% (24.33%) 14.57% 11.67% 15.36% -------- -------- -------- -------- -------- -------- RATIOS TO AVERAGE NET ASSETS Expenses (e) 1.29%(f)(g) 1.33%(g) 1.08%(g) 0.82% 0.86% 0.91% Net investment income (e) 8.64%(f)(g) 6.68%(g) 6.36%(g) 6.20% 6.83% 6.87% Portfolio turnover rate 7%(d) 12% 20% 34% 15% 22% Net assets at end of period (000) - common shares $170,143 $167,265 $180,082 $208,931 $203,533 $202,793 (a) The per share net investment income does not reflect the period's reclassifications of differences between book and tax basis net investment income. (b) Represents less than $0.01 per share. (c) Total return at market value assuming all distributions reinvested and excluding brokerage commissions. (d)Not annualized. (e)The benefits derived from custody credits and directed brokerage arrangements had no impact. (f) Annualized. (g) Ratios reflect net assets available to common shares only, net investment income ratio also reflects a reduction for dividend payments to preferred shareholders.
- -------------------------------------------------------------------------------- DIVIDEND REINVESTMENT PLAN - -------------------------------------------------------------------------------- As a shareholder in the Trust you are eligible to participate in the Dividend Reinvestment Plan. The Trust generally distributes net investment income and net short-term capital gains monthly and net long-term capital gains annually. Under the Trust's Dividend Reinvestment Plan (the "Plan") all distributions are reinvested automatically in additional shares of the Trust, unless the shareholder elects to receive cash or the shares are held in broker or nominee name and a reinvestment service is not provided by the broker or nominee. All cash distributions will be mailed by check directly to the record holder by the dividend paying agent. If the market price of Trust 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. However, if the market price of shares is less than the net asset value, shares will be bought as soon as practicable (but no more than 30 days after the distribution, except as may be required to comply with federal securities laws) in the open market for the accounts of Plan participants. If, during this purchase period, the market price surpasses the net asset value, 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. The aggregate market value of the shares may constitute taxable income to shareholders for federal income tax purposes. All Plan accounts receive monthly written confirmations of all transactions. Shares purchased under the Plan ordinarily are held in uncertificated form, although each participant has the right to receive certificates for whole shares owned by the participant. 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. There is no charge to Plan participants for reinvesting distributions. Fees and expenses of the Plan other than brokerage charges are paid by the Trust. Participants bear a pro-rata share of brokerage charges incurred on open market purchases of shares issued under the Plan. A shareholder may elect not to participate or terminate his or her participation in the Plan by written notice to the Plan administrator. Such notice must be received by the Plan administrator before the dividend record date in order to be effective with respect to that dividend. The Plan may be amended or terminated on 30 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 EquiServe Trust Company, the Trust's dividend disbursing agent and administrator of the Plan, at P.O. Box 1681, Boston, Massachusetts 02105, Attention: Dividend Reinvestment Department. TRANSFER AGENT IMPORTANT INFORMATION ABOUT THIS REPORT The Transfer Agent for Colonial Municipal Income Trust is: EquiServe Trust Company 100 Federal Street Boston, MA 02110 1-800-730-6001 The Colonial Municipal Income Trust mails one shareholder report to each shareholder address. If you would like more than one report, please call 1-800-426-3750 and additional reports will be sent to you. This report has been prepared for shareholders of Colonial Municipal Income Trust. TRUSTEES DOUGLAS A. HACKER Executive Vice President and Chief Financial Officer of UAL, Inc. (formerly Senior Vice President and Chief Financial Officer of UAL, Inc.) JANET LANGFORD KELLY Executive Vice President-Corporate Development and Administration, General Counsel and Secretary, Kellogg Company (formerly Senior Vice President, Secretary and General Counsel, Sara Lee Corporation) RICHARD W. LOWRY Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood Corporation) SALVATORE MACERA Private Investor (formerly Executive Vice President and Director of Itek Corp.) WILLIAM E. MAYER Managing Partner, Park Avenue Equity Partners (formerly Founding Partner, Development Capital LLC; Dean and Professor, College of Business and Management, University of Maryland) CHARLES R. NELSON Van Voorhis Professor, Department of Economics, University of Washington; consultant on econometric and statistical matters (formerly Department Chairman and Director of the Institute for Economic Research) JOHN J. NEUHAUSER Academic Vice President and Dean of Faculties, Boston College (formerly Dean, Boston College School of Management) JOSEPH R. PALOMBO Chief Operations Officer, Mutual Funds, Liberty Financial Companies, Inc.; Executive Vice President and Director of Colonial Management Associates, Inc. and Stein Roe & Farnham Incorporated; Executive Vice President and Chief Administrative Officer of Liberty Funds Group LLC (formerly Vice President of Liberty Mutual Funds, Stein Roe Mutual Funds and All-Star Funds, and Chief Operating Officer, Putnam Mutual Funds) THOMAS E. STITZEL Business Consultant and Chartered Financial Analyst (formerly Professor of Finance, College of Business, Boise State University) THOMAS C. THEOBALD Managing Director, William Blair Capital Partners (formerly Chief Executive Officer and Chairman of the Board of Directors, Continental Bank Corporation) ANNE-LEE VERVILLE Chairman of the Board of Directors, Enesco Group, Inc. and author and speaker on educational systems needs (formerly General Manager, Global Education Industry, and President, Applications Solutions Division, IBM Corporation) - --------------------------------------------------- COLONIAL MUNICIPAL INCOME TRUST SEMIANNUAL REPORT - --------------------------------------------------- 101-03/197G-0501 (7/01)01/1283 -----END PRIVACY-ENHANCED MESSAGE-----