-----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, BDH0ECjRouKFMpw8Sa79CBlDSoqZbT+v97IDT3SdtTjM6ySKY+oYicYJgWbTiOdg Z/OR3jLeYUQPh85DuJuxLw== 0000950156-99-000502.txt : 19990809 0000950156-99-000502.hdr.sgml : 19990809 ACCESSION NUMBER: 0000950156-99-000502 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990531 FILED AS OF DATE: 19990730 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: SEC FILE NUMBER: 811-04992 FILM NUMBER: 99675283 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 N-30D 1 COLONIAL MUNICIPAL INCOME TRUST - 5/30/99 - ------------------------------------------------- COLONIAL MUNICIPAL INCOME TRUST SEMIANNUAL REPORT - ------------------------------------------------- May 31, 1999 - -------------------------------------------------------------------------------- COLONIAL MUNICIPAL INCOME TRUST HIGHLIGHTS DECEMBER 1, 1998 - MAY 31, 1999 INVESTMENT OBJECTIVE: Colonial Municipal Income Trust seeks to provide high current income, generally exempt from federal income taxes. The Trust will invest primarily in tax-exempt bonds that are consistent with this objective. The Trust's secondary objective is to preserve its capital. POLICY CHANGE: At a meeting held on April 30, 1999, the Trustees approved a policy change to allow the Trust to invest primarily in any tax-exempt bonds that are consistent with its objective of high income and total return. PORTFOLIO MANAGER COMMENTARY: "We altered our investment strategy in response to an environment of rising interest rates and wider credit spreads. First, we reduced the Trust's sensitivity to interest rates. Second, we purchased additional lower-rated securities because the yield differential between higher-rated and lower-rated securities increased. These purchases also added to the portfolio's diversification among issuers. During the period, holdings of a large obligor, representing almost 3.5% of the Trust, did not pay interest, resulting in a decrease in the Trust's dividend." -- Maureen Newman COLONIAL MUNICIPAL INCOME TRUST PERFORMANCE - -------------------------------------------------------------------------------- Six-month distributions declared per share(1) $ 0.241 - -------------------------------------------------------------------------------- Six-month total return, assuming reinvestment of all distributions |X| NAV 1.20% |X| Market Price (7.08)% - -------------------------------------------------------------------------------- Price per share on 5/31/99 |X| NAV $7.42 |X| Market Price $7.31 - -------------------------------------------------------------------------------- TOP FIVE SECTORS QUALITY BREAKDOWN (as of 5/31/99) (as of 5/31/99) - ---------------------------------- ---------------------------------- Nursing Home ............ 16.1% Non-rated: .............. 50.1% Hospital ................ 11.8% Short-term Obligations .. 0.6% Refunded/Escrowed ....... 11.7% AAA: .................... 12.6% Multi-Family ............ 7.6% AA: ..................... 2.6% Air Transportation ...... 4.2% A: ...................... 6.4% BBB: .................... 22.6% BB: ..................... 4.2% B: ...................... 0.9% (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, and some or all of this discount may be included in the Trust's ordinary income which will be taxable when distributed. Sector breakdowns are calculated as a percent of total net assets. Quality breakdowns are calculated as a percent of total investments, including short-term obligations. Because the Trust is actively managed, there can be no guarantee the Trust will continue to maintain these quality weightings or invest in these sectors in the future. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PRESIDENT'S MESSAGE TO FUND SHAREHOLDERS ---------------------------- [Photo of Stephen E. Gibson] ---------------------------- During the six-months ended May 31, 1999, the bond market experienced considerable volatility. By early December 1998, continued fears of a global recession had resulted in a "flight to quality" that benefited bond performance. Treasury securities, considered the safest bond investments, were the top performers among U.S. bonds, but municipal bonds also posted solid returns. By the end of May 1999, several events reversed this trend of lower interest rates. Global economies stabilized and strong U.S. economic growth in the last quarter of 1998 and the first quarter of 1999 renewed investors' inflation fears. Bond prices declined, driving interest rates up across the board. Municipal bonds were not hit as hard as Treasurys when prices fell. This difficult environment was reflected in the Fund's total return of 1.20%, which slightly underperformed its Lipper peer group average of 1.29%.(1) In a registration statement filed in April with the Securities and Exchange Commission, the Trust announced a plan to issue municipal auction rate preferred shares, and to invest the proceeds of the offering in accordance with the Trust's investment objectives. Existing common shareholders should benefit from the incremental yield generated by investing these additional cash flows if the rate of return on the Trust's investments exceeds the dividend rate on the preferred shares. 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, 1999 (1) Source: Lipper, Inc. Lipper averages are based on the Lipper High Yield Municipal Debt category. For the one-year period, the Fund had a return of 4.81% vs. the Lipper average of 4.18%. For the five-year period, the Fund had an average annual total return of 7.30% vs. the Lipper average of 7.37%. For the ten-year period, the Fund had a return of 5.91% vs. the Lipper average of 7.22%. The averages for six-months, one-year and five-years included 13 funds. The average for ten-years included 8 funds. Neither the Fund's returns nor the Lipper averages include sales charges or commissions. Past performance cannot guarantee future results. Because economic and market conditions change frequently, there can be no assurance that the trends described herein will continue or come to pass. - -------------------------------------------------------------------------------- INVESTMENT PORTFOLIO MAY 31, 1999 (UNAUDITED, IN THOUSANDS) MUNICIPAL BONDS - 98.1% PAR VALUE - -------------------------------------------------------------------------------- EDUCATION - 3.6% EDUCATION - 2.5% CA Statewide Communities Development Authority, Crossroads School for Arts & Sciences, Series 1998, 6.000% 8/1/28 (a) $ 1,200 $ 1,205 IL State Development Finance Authority, Latin School of Chicago, Series 1998: 5.600% 8/1/18 250 245 5.650% 8/1/28 500 487 MA State Industrial Finance Agency, St. John's High School, Series 1998, 5.350% 6/1/28 300 285 MI Southfield Economic Development Corp., Lawrence University, Series 1998-A, 5.400% 2/1/18 1,000 977 MN Victoria, Holy Family Catholic High School, Series 1999-A, 5.875% 9/1/29 (b) 1,000 1,000 VT State Educational & Health Buildings Finance Agency, Norwich University, Series 1998, 5.500% 7/1/21 1,000 970 -------- 5,169 -------- STUDENT LOAN - 1.1% SD State Student Loan Finance Corp., Series 1996-E, 6.550% 8/1/20 2,000 2,169 -------- ................................................................................ HEALTHCARE - 32.6% CONGREGATE CARE RETIREMENT - 3.6% KY State Economic Development Financing Authority, Christian Church Homes of Kentucky, Inc., Series 1998, 5.500% 11/15/30 750 719 MA Boston Industrial Development Financing Authority, Springhouse, Inc., Series 1998, 5.875% 7/1/20 500 490 MA State Development Finance Agency, Loomis Community Project, Series 1999-A, 5.625% 7/1/15 250 245 MI State Strategic Fund, Holland Home, Series 1998, 5.750% 11/15/18 1,250 1,231 MN Columbia Heights, Crest View Corp., Series 1998, 6.000% 3/1/33 745 735 NH State Higher Educational & Health Facilities Authority, Rivermead at Peterborough, Series 1998, 5.750% 7/1/28 500 489 PA Philadelphia Authority for Industrial Development, Baptist Home of Philadelphia, Series 1998-A: 5.500% 11/15/18 360 350 5.600% 11/15/28 570 546 TN Metropolitan Government, Nashville and Davidson County, Blakeford at Green Hills, Series 1998, 5.650% 7/1/24 575 555 TX Abilene Health Facilities Development Corp., Sears Methodist Retirement Obligation Group: Series 1998-A, 5.900% 11/15/25 750 730 Series 1999, 5.875% 11/15/18 500 490 WI State Health & Educational Facilities Authority, Attic Angel Obligated Group, 5.750% 11/15/27 875 841 -------- 7,421 -------- HEALTH SERVICES - 0.1% IL State Health Facilities Authority, Midwest Physician Group, Ltd., Series 1998, 5.500% 11/15/19 90 85 MA State Development Finance Agency, Boston Biomedical Research, Series 1999, 5.650% 2/1/19 120 118 -------- 203 -------- HOSPITALS - 11.8% AL Alabama Special Care Facilities Authority, Montgomery Healthcare, Series 1989, 11.000% 10/1/19 2,250 2,272 CO State Health Care Facilities Authority, National Jewish Medical & Research Center, Series 1998, 5.375% 1/1/23 840 804 GA Clayton Hospital Authority, The Woodlands Foundation, Inc., Series 1991-A, 9.750% 5/1/21 (c) 1,500 450 GA Forsyth County Hospital Authority, Georgia Baptist Heathcare System, Series 1998, 6.000% 10/1/08 1,000 990 IL Health Facilities Authority, Thorek Hospital & Medical Center, 5.375% 8/15/28 500 467 IL Southwestern Development Authority, Anderson Hospital, Series 1999: 5.375% 8/15/15 500 489 5.500% 8/15/20 550 535 IN State Health Facilities Financing Authority, Riverview Hospital Project, Series 1999, 5.500% 8/1/24 275 266 LA State Public Facilities Authority, Touro Infirmary, Series 1999-A, 5.500% 8/15/19 500 489 MA State Health & Educational Facilities Authority, Milford-Whitinsville Regional Hospital, Series C, 5.250% 7/15/18 500 474 MI Dickinson County Healthcare System, Series 1999, 5.700% 11/1/18 (b) 585 574 MI Flint Hospital Building Authority, Hurley Medical Center, Series 1998-A, 5.375% 7/1/20 625 584 MI State Hospital Finance Authority, Detroit Medical Center, Series 1998-A, 5.250% 8/15/28 600 526 MN St. Paul Housing & Redevelopment Authority, Healtheast Project, Series A, 5.700% 11/1/15 2,000 1,910 MN Washington County Housing & Redevelopment Authority, Healtheast, Inc., Series 1998, 5.250% 11/15/12 1,250 1,148 MS State Business Finance Corp., Medical Foundation, Inc., Series 1998, 5.625% 7/1/23 1,150 1,115 NH State Higher Educational & Health Facilities Authority, Littleton Hospital Association, Inc., Series 1998-A: 5.900% 5/1/18 500 499 5.900% 5/1/28 675 661 6.000% 5/1/28 625 627 NM State Hospital Equipment Loan Council, Memorial Medical Center, Inc. Project, Series 1998, 5.500% 6/1/28 1,000 966 OH Belmont County, East Ohio Regional Hospital, Series 1998, 5.700% 1/1/13 1,500 1,466 OH Franklin County, Doctors OhioHealth Corp., Series 1998-A, 5.600% 12/1/28 1,600 1,551 OH Sandusky County, Memorial Hospital, Series 1998, 5.150% 1/1/08 270 275 PA Allegheny County Hospital Development, Ohio Valley General Hospital, Series 1998-A, 5.450% 1/1/28 1,050 1,013 PA Pottsville Hospital Authority, Pottsville Hospital & Warner Clinic, Series 1998, 5.625% 7/1/24 755 717 TX Lufkin Health Facilities Development Corp., Memorial Health Systems of East Texas, Series 1998, 5.700% 2/15/28 750 736 TX Richardson Hospital Authority, Baylor Richardson Medical Center, Series 1998, 5.625% 12/1/28 600 573 VT State Educational & Health Buildings Financing Agency: Brattleboro Memorial Hospital, 5.375% 3/1/28 1,000 950 Springfield Hospital, Series A, 7.750% 1/1/13 1,040 1,170 -------- 24,297 -------- INTERMEDIATE CARE FACILITIES - 1.0% PA State Economic Development Financing Authority, Northwestern Human Services, Inc., Series 1998-A, 5.250% 6/1/14 2,150 2,093 -------- NURSING HOMES - 16.1% CO State Health Facilities Authority: American Housing Foundation, Inc., Series 1990-A, 10.250% 12/1/20 (c) 1,500 1,500 Volunteers of America Care Facilities, Inc.: Series 1998-A: 5.450% 7/1/08 250 248 5.750% 7/1/20 700 677 Series 1999-A, 6.000% 7/1/29 350 339 DE State Economic Development Authority, Georgetown Health Center, 12.000% 4/1/25 2,210 2,381 DE Sussex County, Healthcare Facility, Delaware Health Corp., Series 1994-A, 7.600% 1/1/24 1,000 1,047 IA State Finance Authority, Care Initiatives Project: Series 1996, 9.250% 7/1/25 1,000 1,327 Series 1998-B: 5.750% 7/1/18 550 541 5.750% 7/1/28 1,475 1,436 IN Gary Industrial Economic Development, West Side Health Care Center, Series 1987-A, 11.500% 10/1/17 2,435 2,491 IN Michigan City Health Facilities, Metro Health Foundation, Inc. Project, 10.000% 11/1/22 (c) 4,500 4,500 IN State Health Facilities Financing Authority, Metro Health Indiana, Inc. Project, Series 1998, 6.400% 12/1/33 1,000 976 KS Halstead Industrial Health Care Project, 10.250% 8/1/13 (c) 1,330 313 KY Jefferson County First Mortgage, AHF Kentucky-Iowa, Inc. Project, Series 1990, 10.250% 1/1/20 945 979 KY Lexington-Fayette Urban County Government First Mortgage, AHF Kentucky-Iowa, Inc. Project, Series 1990, 10.250% 1/1/20 950 984 MA State Industrial Finance Agency: American Health Foundation, Inc., Series 1989, 10.125% 3/1/19 (c) 463 347 GF/Massachusetts, Inc., Series 1994, 8.300% 7/1/23 970 1,074 MI Cheboygan County Economic Development Corp., Metro Health Foundation Project, Series 1993, 10.000% 11/1/22 (c) 2,440 2,440 MN Duluth Economic Development Authority, BSM Properties, Inc., Series 1998-A, 5.875% 12/1/28 250 245 MN Minneapolis, Walker Methodist Senior Services Group, Series 1998-A, 6.000% 11/15/28 1,000 1,004 MN New Hope Housing and Health, Masonic Home North Ridge, Series 1999, 5.875% 3/1/29 500 486 MO Springfield Industrial Development Authority, 10.250% 12/1/10 1,100 1,105 NJ Economic Development Authority, Geriatric and Medical Service, Inc., Series A, 10.500% 5/1/04 570 590 OH Montgomery County, Grafton Oaks Limited Partners, Series 1986, 9.750% 12/1/16 1,480 1,406 OK Muskogee County Economic Development Authority Health Facilities, Heartway Corp.: Series A, 9.500% 3/1/19 1,545 1,562 Series B, (d) 3/1/19 250 63 TN New Tazewell Health Education and Housing Facilities Board, New Tazewell, Series 1987, 10.000% 6/1/17 1,560 1,589 TX Kirbyville Health Facilities Development Corp., Heartway III Project: Series 1997-A, 10.000% 3/20/18 586 582 Series 1997-B, (d) 3/20/04 100 56 WA Kitsap County Housing Authority, Martha & Mary Nursing Home, 7.100% 2/20/36 643 746 -------- 33,034 -------- ................................................................................ HOUSING - 12.2% Assisted Living/Senior - 4.2% IL Clarendon Hills Residential Facilities, Churchill Estate, Series 1998-A: 6.750% 3/1/24 1,050 1,058 6.750% 3/1/31 1,365 1,375 IL State Development Finance Authority, Care Institute, Inc., 8.250% 6/1/25 1,500 1,684 MN Roseville, Care Institute, Inc., Series 1993, 7.750% 11/1/23 1,630 1,628 TX Bell County Health Facilities Development Corp., Care Institute, Inc., 9.000% 11/1/24 1,500 1,699 WI State Health & Educational Facilities Authority: Clement Manor, Series 1998, 5.750% 8/15/24 450 429 United Lutheran Program for Aging, Inc., 5.700% 3/1/28 750 728 -------- 8,601 -------- MULTI-FAMILY - 7.6% DE Wilmington, Electra Arms Senior Association Project, 6.250% 6/1/28 1,000 964 IL Chicago, Michigan Boulevard Garden Apartment Rehabilitation Project, Series 1985, 12.000% 1/1/00 130 117 MN Washington County Housing & Redevelopment Authority, Cottages of Aspen, Series 1992, 9.250% 6/1/22 1,065 1,162 MN White Bear Lake, Birch Lake Townhomes Project: Series 1989-A, 10.250% 7/15/19 1,770 1,785 Series 1989-B, (d) 7/15/19 (e) 667 200 NC Eastern Carolina Regional Housing Authority, New River Apartments Jacksonville, Series 1994, 8.250% 9/1/14 1,820 1,950 Resolution Trust Corp., Pass Through Certificates, Series 1993-A, 9.250% 12/1/16 (f) 4,248 4,344 SC State Housing Finance and Development Multi-Family Housing Finance Revenue, Westbridge Apartments, Series A, 9.500% 9/1/20 2,143 2,188 TN Franklin Industrial Development Board, Landings Apartment Project, Series 1996-B, 8.750% 4/1/27 785 846 TX Galveston Health Facilities Center, Driftwood Apartments, 8.000% 8/1/23 1,000 1,060 VA Alexandria Redevelopment & Housing Authority, Courthouse Commons Apartments, Series 1990-A, 10.000% 1/1/21 1,000 1,030 -------- 15,646 -------- SINGLE FAMILY - 0.4% AK State Housing Finance Corp., Series 1996-A, 6.050% 12/1/17 750 793 KY Kentucky Counties Single Family Mortgage Revenue, Class A, 9.000% 9/1/16 30 30 -------- 823 -------- ................................................................................ INDUSTRIAL - 10.6% Chemicals - 1.1% LA St. Charles Parish, Union Carbide Corp., Series 1992, 7.350% 11/1/22 2,000 2,176 -------- FOOD PRODUCTS - 2.4% IN Hammond, American Maize Products Co., Series 1994, 8.000% 12/1/24 2,000 2,293 LA Port New Orleans Industrial Development, Continental Grain Co., Series 1993, 7.500% 7/1/13 1,000 1,037 LA Southern Louisiana Port Commission, Cargill, Inc. Project, 5.850% 4/1/17 500 524 MI State Strategic Fund, Michigan Sugar Co., Sebewaing Project, Series 1998-A, 6.250% 11/1/15 1,000 1,009 -------- 4,863 -------- FOREST PRODUCTS - 1.4% GA Rockdale County Development Authority, Solid Waste Disposal, Visy Paper, Inc., Series 1993, 7.500% 1/1/26 800 845 SC Darlington County, Industrial Development Authority, Sonoco Products Co. Project, 6.125% 6/1/25 2,000 2,103 -------- 2,948 -------- MANUFACTURING - 3.5% IL State Development Finance Authority, Armstrong World Industries, Inc. Project, 5.950% 12/1/24 1,000 1,076 IL Will-Kankakee Regional Development Authority, Flanders Corp./Precisionaire Project, Series 1997, 6.500% 12/15/17 975 1,019 MA State Industrial Finance Agency, House of Bianchi, Inc., 8.750% 6/1/18 280 285 MN Brooklyn Park, TL Systems Corp., Series 1991, 10.000% 9/1/16 770 919 NV Henderson Public Improvement Trust, Dongsung America Co., Inc., Series 1998, 7.000% 11/1/10 500 496 TX Trinity River Authority, Texas Instruments Project, Series 1996, 6.200% 3/1/20 750 802 VA Halifax County Industrial Development, Craddock-Terry, Inc., Series 1989, 10.000% 12/1/19 (c) 256 23 VA Pittsylvania County Industrial Development, Craddock-Terry, Inc., Series 1989, 10.000% 12/1/19 (c) 120 24 VA Prince Edward County Industrial Development, Craddock-Terry, Inc., Series 1989, 10.000% 12/1/19 (c) 750 262 VA State Small Business Financing Authority, Dongsung America, Series 1998-A, 7.250% 11/1/15 250 247 WA Pilchuck Public Development Corp., Goodrich (B.F.) Co. Tramco, Inc. Project, Series 1993, 6.000% 8/1/23 2,000 2,055 -------- 7,208 -------- METALS & MINING - 1.5% CO Mesa County Industrial Development, Joy Technologies, Inc., Series 1992, 8.500% 9/15/06 (c) 1,500 1,588 OH Cuyahoga County, Joy Technologies, Inc., Series 1992, 8.750% 9/15/07 550 586 VA Greensville County Industrial Development Authority, Wheeling Steel Project, Series 1999-A: 6.375% 4/1/04 75 75 7.000% 4/1/14 375 371 VA Peninsula Ports Authority, Ziegler Coal, Series 1997, 6.900% 5/2/22 500 504 -------- 3,124 -------- OIL & GAS - 0.7% WA Pierce County Economic Development Corp., Occidental Petroleum Co., 5.800% 9/1/29 1,500 1,506 -------- ................................................................................ OTHER - 12.1% OTHER - 0.4% MD Baltimore, Park Charles Project, Series 1986, 8.000% 1/1/10 720 768 -------- Refunded/Escrowed (g) - 11.7% CA San Joaquin Hills Transportation Corridor Agency, Series 1993, (d) 1/1/25 10,000 2,640 FL Clearwater Housing Authority, Hampton Apartments, Series 1994, 8.250% 5/1/24 2,500 3,006 ID State Health Facilities Authority, IHC Hospitals, Inc., 6.650% 2/15/21 2,750 3,288 IL State Health Facilities Authority, Edgewater Medical Center, Series A, 9.250% 7/1/24 2,235 2,797 MA Boston, St. Joseph Nursing Care Center, Inc., Series 1990, 10.000% 1/1/20 1,890 2,017 MA State Health & Educational Facilities Authority, Corp. for Independent Living, 8.100% 7/1/18 680 795 MA State Industrial Finance Agency, Series 1990, 9.000% 10/1/20 920 1,000 MN Mille Lacs Capital Improvement Authority, Mille Lacs Band of Chippewa, Series 1992-A, 9.250% 11/1/12 1,015 1,210 NC Lincoln County, Lincoln County Hospital, 9.000% 5/1/07 430 506 PA Delaware County Authority, Southeastern Pennsylvania Obligated Group, Series 1996: 6.000% 12/15/16 1,400 1,542 6.000% 12/15/26 500 552 PA Montgomery County Industrial Development Authority, Assisted Living Facility, Series 1993-A, 8.250% 5/1/23 790 907 TN Shelby County, Health, Education, & Housing Facilities Board, Open Arms Development Center: Series 1992-A, 9.750% 8/1/19 505 692 Series 1992-C, 9.750% 8/1/19 515 706 WA State Health Care Facilities Authority, Grays Harbor Community Hospital, Series 1993: 7.200% 7/1/03 330 347 8.025% 7/1/20 1,770 1,916 -------- 23,921 -------- ................................................................................ OTHER REVENUE - 1.4% RECREATION - 0.5% NM Red River Sports Facility, Red River Ski Area Project, Series 1998, 6.450% 6/1/07 1,000 998 -------- RETAIL - 0.9% NJ State Economic Development Authority, Glimcher Properties L.P. Project, 6.000% 11/1/28 1,000 986 OH Lake County, North Madison Properties, Series 1993, 8.819% 9/1/11 710 804 -------- 1,790 -------- ................................................................................ RESOURCE RECOVERY - 3.0% DISPOSAL - 2.0% CT State Development Authority, Sewer Sludge Disposal Facilities, NETCO New Haven, Series 1996, 8.250% 12/1/06 1,150 1,320 MA Boston Industrial Development Finance Authority, Jet-A-Way, Inc., 10.500% 1/1/11 900 983 MA State Industrial Finance Agency: Massachusetts Environmental Services, Series 1994-A, 8.750% 11/1/21 975 780 Peabody Monofill Associates, Inc., Series 1995, 9.000% 9/1/05 1,025 1,121 -------- 4,204 -------- RESOURCE RECOVERY - 1.0% MA State Industrial Finance Agency, Ogden Haverhill Project, Series 1998-A, 5.500% 12/1/13 1,000 1,003 PA Delaware County Industrial Development Authority, Series A, 6.200% 7/1/19 1,000 1,031 -------- 2,034 -------- ................................................................................ TAX-BACKED - 7.4% LOCAL APPROPRIATED - 0.5% A Compton, Civic Center Project, 5.500% 9/1/15 1,000 1,001 -------- LOCAL GENERAL OBLIGATIONS - 1.4% LA New Orleans, Series 1991, (d) 9/1/15 (h) 4,000 1,728 TX Irving Independent School District, Series 1997: (d) 2/15/15 1,500 666 (d) 2/15/16 (h) 1,000 419 -------- 2,813 -------- SPECIAL NON-PROPERTY TAX - 3.4% IL Metropolitan Pier & Exposition Authority: McCormick Project: (d) 6/15/14 5,000 2,299 (d) 6/15/15 3,000 1,300 Series 1996-A, (d) 12/15/13 5,000 2,376 IL State Development Finance Authority, City of Marion Project, Series 1991, 9.625% 9/15/21 1,445 1,084 -------- 7,059 -------- SPECIAL PROPERTY TAX - 2.1% CA Poway Community Facilities District, No. 88-1 Parkway Business Center, Series 1998, 6.750% 8/15/15 575 620 CA Riverside County Public Financing Authority, Redevelopment Projects, Series A, 5.500% 10/1/22 650 644 CA Yorba Linda Redevelopment Agency, Series 1998-A, (d) 9/1/24 1,325 349 FL Lexington Oaks Community Development District, Series 1998-A, 6.125% 5/1/19 800 799 FL Orlando, Conroy Road Interchange Project, Series 1998-A: 5.500% 5/1/10 125 123 5.800% 5/1/26 500 491 FL Stoneybrook Community Development District: Series 1998-A, 6.100% 5/1/19 250 249 Series 1998-B, 5.700% 5/1/08 960 955 -------- 4,230 -------- ................................................................................ TRANSPORTATION - 5.2% AIR TRANSPORTATION - 4.2% IN Indianapolis Airport Authority, Federal Express Corp., Series 1994, 7.100% 1/15/17 2,000 2,221 United Airlines Project, Series A, 6.500% 11/15/31 2,000 2,145 KY Kenton County Airport Board, Delta Airlines, Inc., Series 1992-A, 7.500% 2/1/20 2,500 2,707 PA Philadelphia Authority for Industrial Development, Aero Philadelphia LLC, Series 1999, 5.250% 1/1/09 500 485 TX Alliance Airport Authority, Federal Express Corp., Series 1996, 6.375% 4/1/21 1,000 1,073 -------- 8,631 -------- AIRPORT - 0.3% OH Toledo-Lucas County Port Authority, Series 1998, 5.500% 5/15/20 585 566 TOLL FACILITIES - 0.7% CA San Joaquin Hills Transportation Corridor Agency, Series A, (d) 1/15/15 3,000 1,353 -------- ................................................................................ UTILITY - 10.0% INDEPENDENT POWER PRODUCER - 3.6% NY Port Authority of New York & New Jersey, KIAC Partners, Series 1996-IV, 6.750% 10/1/11 2,000 2,193 OH State Water Development Authority, Bay Shore Power Project, Series 1998-A, 5.875% 9/1/20 1,500 1,504 PA Economic Development Financing Authority, Colver Project, Series D: 7.125% 12/1/15 500 556 7.150% 12/1/18 2,750 3,063 -------- 7,316 -------- INVESTOR OWNED - 3.1% AZ Pima County Industrial Development Authority, Tucson Electric Power Co., Series A, 6.100% 9/1/25 750 748 CT State Development Authority, Connecticut Light & Power Co., Series 1993-B, 5.950% 9/1/28 300 299 IL Bryant Pollution Control Revenue, Central Illinois Light Co., Series 1993, 5.900% 8/1/23 2,000 2,060 LA Calcasieu Parish Industrial Development Board, Entergy Gulf States, Inc., Series 1999, 5.450% 7/1/10 500 493 MS State Business Finance Corp., Systems Energy Resources Project, Series 1998, 5.875% 4/1/22 1,500 1,492 NM Farmington, San Juan Public Service Co. Project, Series D, 6.375% 4/1/22 1,250 1,316 -------- 6,408 -------- MUNICIPAL ELECTRIC - 2.1% TX Austin Utility System Revenue, Series 1994: (d) 5/15/17 (h) 6,600 2,570 (d) 5/15/18 (h) 5,000 1,837 -------- 4,407 -------- WATER & SEWER - 1.2% LA Public Facility Belmont Water Authority, 9.000% 3/15/24 (c)(i) 730 621 MS Five Lakes Utility District, 8.250% 7/15/24 500 400 TX Houston Water & Sewer System, Series C, (d) 12/1/12 (h) 3,000 1,523 -------- 2,544 -------- TOTAL MUNICIPAL BONDS (cost of $196,895)(j) 201,324 -------- SHORT-TERM OBLIGATIONS - 0.6% VARIABLE RATE DEMAND NOTES (k) IN Purdue University, Series 1998, 3.250% 7/1/19 600 600 NY New York City, Series B, 3.300% 10/1/22 200 200 WA State Health Care Facilities Authority, Fred Hutchinson Cancer Research Center, Series 1996, 3.500% 1/1/23 400 400 -------- TOTAL SHORT-TERM OBLIGATIONS 1,200 -------- OTHER ASSETS & LIABILITIES, NET - 1.3% 2,611 - -------------------------------------------------------------------------------- NET ASSETS - 100.0% $ 205,135 ========= NOTES TO INVESTMENT PORTFOLIO: - -------------------------------------------------------------------------------- (a) This is a restricted security which was acquired on August 21, 1998 and August 31, 1998 at an aggregate cost of $1,200. This security represents 0.6% of the Trust's net assets as of May 31, 1999. (b) These securities have been purchased on a delayed delivery basis for settlement at a future date beyond the customary settlement date. (c) This issuer is in default of certain debt covenants. Income is not being accrued. (d) Zero coupon bond. (e) Accrued interest accumulates in the value of the security and is payable at redemption. The value of this security represents fair value as determined under procedures approved by the Trustees. (f) This security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At May 31, 1999, the value of this security amounted to $4,344 or 2.1% of net assets. (g) 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 interest and principal. (h) These securities, or a portion thereof, with a total market value of $6,934, are being used to collateralize the delayed purchases indicated in note (b) above and open futures contracts. (i) This is a restricted security which was acquired on March 22, 1994 at a cost of $730. This security represents 0.3% of the Trust's net assets as of May 31, 1999. (j) Cost for federal income tax purposes is $196,960. (k) Variable rate demand notes are considered short-term obligations. Interest rates change periodically on specified dates. These securities are payable on demand and are secured by either letters of credit or other credit support agreements from banks. The rates listed are as of May 31, 1999. Futures contracts open at May 31, 1999: Unrealized Par value Expiration depreciation Type covered by contracts month at 5/31/99 - -------------------------------------------------------------------------------- Treasury Bond $ 3,400 September $ (18) See notes to financial statements. STATEMENT OF ASSETS & LIABILITIES MAY 31, 1999 (UNAUDITED) (in thousands except for per share amount) ASSETS Investments at value (cost $196,895) $201,324 Short-term obligations 1,200 -------- 202,524 Receivable for: Interest $ 3,860 Investments sold 1,190 Variation margin on futures 1 Other 187 5,238 --------- -------- Total Assets 207,762 LIABILITIES Payable for: Investments purchased 1,578 Distributions 995 Accrued: Deferred Trustees fees 5 Other 49 -------- Total Liabilities 2,627 -------- NET ASSETS at value for 27,645 shares of beneficial interest outstanding $205,135 ======== Net asset value per share $ 7.42 ======== COMPOSITION OF NET ASSETS Capital paid in $244,991 Overdistributed net investment income (1,051) Accumulated net realized loss (43,216) Net unrealized appreciation (depreciation) on: Investments 4,429 Open futures contracts (18) -------- $205,135 ======== See notes to financial statements. STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MAY 31, 1999 (UNAUDITED) (in thousands) INVESTMENT INCOME Interest $ 6,674 EXPENSES Management fee $ 677 Transfer agent 85 Bookkeeping fee 27 Trustees fee 7 Custodian fee 3 Audit fee 21 Legal fee 98 Reports to shareholders 6 Other 47 971 ------ ------- Net Investment Income 5,703 ------- NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS Net realized gain (loss) on: Investments 527 Closed futures contracts (48) ------ Net Realized Gain 479 Net change in unrealized depreciation during the period on: Investments (3,730) Open futures contracts (13) ------- Net Change in Unrealized Depreciation (3,743) ------- Net Loss (3,264) ------- Increase in Net Assets from Operations $ 2,439 ======= See notes to financial statements. STATEMENT OF CHANGES IN NET ASSETS (Unaudited) Six months ended Year ended (in thousands) May 31 November 30 ---------------- ----------- INCREASE (DECREASE) IN NET ASSETS 1999 1998 Operations: Net investment income $ 5,703 $ 12,907 Net realized gain 479 4,942 Net unrealized appreciation (depreciation) (3,743) 26 --------- --------- Net Increase from Operations 2,439 17,875 Distributions: From net investment income (6,658) (13,417) In excess of net investment income -- (124) --------- --------- (4,219) 4,334 Trust Share Transactions: Value of distributions reinvested 423 1,064 --------- --------- Total Increase (Decrease) (3,796) 5,398 NET ASSETS Beginning of period 208,931 203,533 --------- --------- End of period (net of overdistributed net investment income of $1,051 and $96, respectively) $ 205,135 $ 208,931 ========= ========= NUMBER OF TRUST SHARES Issued for distributions reinvested 55 141 Outstanding at Beginning of period 27,590 27,449 --------- --------- End of period 27,645 27,590 --------- --------- See notes to financial statements. NOTES TO FINANCIAL STATEMENTS MAY 31, 1999 (UNAUDITED) NOTE 1. INTERIM FINANCIAL STATEMENTS ................................................................................ In the opinion of management of Colonial Municipal Income Trust (the Trust), the accompanying financial statements contain all normal and recurring adjustments necessary for the fair presentation of the financial position of the Trust at May 31, 1999, and the results of its operations, the changes in its net assets and the financial highlights for the six months then ended. NOTE 2. ACCOUNTING POLICIES ................................................................................ ORGANIZATION: The Trust is a Massachusetts business trust, registered under the Investment Company Act of 1940, 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 tax-exempt bonds that are consistent with this objective. The Trust's secondary objective is to preserve its capital. The Trust authorized an unlimited number of shares. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies that are consistently followed by the 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. DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders are recorded on the ex-date. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. Reclassifications are made to the Trust's capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES ................................................................................ MANAGEMENT FEE: Colonial Management Associates, Inc. (the 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 $18,000 per year plus 0.0233% 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 out of the Trust's assets. NOTE 4. PORTFOLIO INFORMATION ................................................................................ INVESTMENT ACTIVITY: During the six months ended May 31, 1999, purchases and sales of investments, other than short-term obligations, were $17,324,379 and $18,355,410, respectively. Unrealized appreciation (depreciation) at May 31, 1999, based on cost of investments for federal income tax purposes was approximately: Gross unrealized appreciation $10,863,000 Gross unrealized depreciation (6,499,000) ----------- Net unrealized appreciation $ 4,364,000 =========== CAPITAL LOSS CARRYFORWARDS: At November 30, 1998, 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 ---------- ------------ 1999 6,352,000 2000 9,103,000 2001 7,979,000 2002 5,301,000 2003 7,499,000 2004 4,000 2005 7,197,000 ------------ $43,435,000 ------------ 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 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 5. RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED) ................................................................................ On April 15, 1999, the Annual Meeting of Shareholders of the Trust was held to elect a Board of Trustees and to ratify the selection of PricewaterhouseCoopers LLP as independent accountants for the fiscal year ending November 30, 1999. On February 17, 1999, the record date for the Meeting, the Trust had outstanding 27,612,747 shares of beneficial interest. The votes cast at the Meeting were as follows: AUTHORITY FOR WITHHELD --- -------- To elect a Board of Trustees: Robert J. Birnbaum 22,726,408 427,189 Tom Bleasdale 22,734,479 419,118 John V. Carberry 22,740,353 413,244 James E. Grinnell 22,739,548 414,050 Salvatore Macera 22,750,647 402,950 James L. Moody, Jr. 22,750,647 402,950 Thomas E. Stitzel 22,740,948 412,650 Anne-Lee Verville 22,745,930 407,668 The Board of Trustees also consists of Lora S. Collins, Richard W. Lowry, William E. Mayer, John J. Neuhauser and Robert L. Sullivan. To ratify the selection of PricewaterhouseCoopers LLP as independent accountants for the fiscal year ending November 30,1999: FOR AGAINST ABSTAIN --- ------- ------- 22,711,495 153,862 282,240 FINANCIAL HIGHLIGHTS Selected per share data, total return, ratios and supplemental data throughout each period are as follows: (Unaudited) Six months ended May 31 Year ended November 30 ------------ -------------------------- 1999 1998 1997 Net asset value - Beginning of period $ 7.570 $ 7.410 $ 7.410 --------- --------- --------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.206 0.469 0.509 Net realized and unrealized gain (loss) (0.115) 0.183 (0.002) --------- --------- --------- Total from Investment Operations 0.091 0.652 0.507 --------- --------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.241) (0.487) (0.507) In excess of net investment income -- (0.005) -- --------- --------- --------- Total Distributions Declared to Shareholders (0.241) (0.492) (0.507) --------- --------- --------- Net asset value - End of period $ 7.420 $ 7.570 $ 7.410 ========= ========= ========= Market price per share - End of period $ 7.312 $ 8.125 $ 7.560 ========= ========= ========= Total return - based on net asset value (a) 1.20%(b) 8.99% 7.07% ========= ========= ========= Total return - based on market value (c) (7.08)%(b) 14.57% 11.67% ========= ========= ========= RATIOS TO AVERAGE NET ASSETS Expenses 0.93%(d)(e) 0.82%(e) 0.86%(e) Net investment income 5.47%(d)(e) 6.20%(e) 6.83%(e) Portfolio turnover 9%(b) 34% 15% Net assets at end of period (000) $ 205,135 $ 208,931 $ 203,533 (a) Total return at net asset value assuming all distributions reinvested. (b) Not annualized. (c) Total return at market value assuming all distributions reinvested and excluding brokerage commissions. (d) Annualized. (e) The benefits derived from custody credits and directed brokerage arrangements had no impact. Prior years' ratios are net of benefits received, if any. FINANCIAL HIGHLIGHTS - CONT. Year ended November 30 -------------------------------------------- 1996 1995 1994 $ 7.480 $ 7.150 $ 7.830 --------- --------- --------- 0.508 0.547 0.609 (0.068) 0.335 (0.707) --------- --------- --------- 0.440 0.882 (0.098) --------- --------- --------- (0.510) (0.552) (0.582) --------- --------- --------- (0.510) (0.552) (0.582) --------- --------- --------- $ 7.410 $ 7.480 $ 7.150 ========= ========= ========= $ 7.250 $ 6.750 $ 6.750 ========= ========= ========= 6.38% 12.96% (0.42)% ========= ========= ========= 15.36% 8.04% (10.06)% ========= ========= ========= 0.91%(e) 0.98%(e) 0.90% 6.87%(e) 7.47%(e) 8.12% 22% 24% 24% $ 202,793 $ 204,666 $ 195,444 - -------------------------------------------------------------------------------- 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 monthly and capital gains annually. Under the Trust's Dividend Reinvestment and Cash Purchase Plan (the "Plan") shareholders may elect to have all distributions reinvested automatically in additional shares of the Trust. Shareholders not making such election will receive all distributions in cash paid by check mailed directly to the record holder by the dividend paying agent. Shareholders participating in the Plan will receive distributions in the form of shares of the Trust. If the market price of the shares on the distribution payment date is equal to or greater than the net asset value, Plan participants will be issued shares at the higher of net asset value or 95% of the market price. For shares issued at a discount from market value, the difference between market value and issue price may represent taxable income at the time of issuance. Any portion of the discount includable in income will increase the basis of the shares issued. If net asset value exceeds the market price, or the distribution is payable only in cash, shares will be bought in the open market for the accounts of Plan participants. If the market price surpasses the net asset value before such purchasing is completed, the average per share price paid may exceed the net asset value of the shares, resulting in the acquisition of fewer shares than if the distribution had been in newly-issued shares. Participants in the Plan have the option of making additional cash payments to the Plan administrator semiannually, for investment in the Trust's shares. Such payments may be made in any amount from $100 to $500. The administrator will use all funds received from participants (as well as any dividends and distributions received in cash) to purchase Trust shares in the open market semiannually. Interest will not be paid on any uninvested cash payments. Please refer to the Dividend Reinvestment and Cash Purchase Plan pamphlet for further details. All Plan accounts receive monthly written confirmations of all transactions. Shares purchased under the Plan are ordinarily held in uncertificated form, although participants have the right to receive certificates for whole shares 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 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 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. - -------------------------------------------------------------------------------- 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 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 ROBERT J. BIRNBAUM Consultant (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief Operating Officer, New York Stock Exchange, Inc.; President, American Stock Exchange Inc.) TOM BLEASDALE Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank & Trust Company) JOHN V. CARBERRY Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing Director, Salomon Brothers) LORA S. COLLINS Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel) JAMES E. GRINNELL Private Investor (formerly Senior Vice President-Operations, The Rockport Company) RICHARD W. LOWRY Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood Corporation) SALVATORE MACERA Private Investor (formerly Executive Vice President of Itek Corp. and President of Itek Optical & Electronic Industries, Inc.) WILLIAM E. MAYER Partner, Development Capital, LLC (formerly Dean, College of Business and Management, University of Maryland; Dean, Simon Graduate School of Business, University of Rochester; Chairman and Chief Executive Officer, CS First Boston Merchant Bank; and President and Chief Executive Officer, The First Boston Corporation) JAMES L. MOODY, JR. Retired (formerly Chairman of the Board, Chief Executive Officer and Director, Hannaford Bros. Co.) JOHN J. NEUHAUSER Dean, Boston College School of Management THOMAS E. STITZEL Professor of Finance, College of Business, Boise State University; Business Consultant and Author ROBERT L. SULLIVAN Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi Consulting Ltd. and Principal and International Practice Director, Management Consulting, Peat Marwick Main & Co.) ANNE-LEE VERVILLE Consultant (formerly General Manager, Global Education Industry, and President, Applications Solutions Division, IBM Corporation) IT-03/299H-0599 (7/99) 99/805 - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----