-----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, CssBhzocCYySqxVjU4T1ea1IA51513XXHIVv4GIjqcOSfpF61gN20MNybOOZqfoS x0On640QUEU1oz0xFOofyg== 0000021832-96-000027.txt : 19960708 0000021832-96-000027.hdr.sgml : 19960708 ACCESSION NUMBER: 0000021832-96-000027 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960705 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONIAL INTERMEDIATE HIGH INCOME FUND CENTRAL INDEX KEY: 0000833021 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05567 FILM NUMBER: 96591444 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CNTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 N-30D 1 COLONIAL INTERMEDIATE HIGH INCOME FUND SEMIANNUAL REPORT APRIL 30, 1996 COLONIAL INTERMEDIATE HIGH INCOME FUND HIGHLIGHTS NOVEMBER 1, 1995 - APRIL 30, 1996 INVESTMENT OBJECTIVE: Colonial Intermediate High Income Fund seeks to provide high current income by investing in high yield fixed-income securities. THE FUND IS DESIGNED TO OFFER: - High monthly income potential - Attractive long-term total return potential - Broad diversification PORTFOLIO MANAGER COMMENTARY: "Companies that issue high yield corporate bonds continue to benefit from improved earnings and low interest rates. It appears the economic environment is benign -- low to moderate inflation with areas of growth and most recently some cyclical recovery after a weak first quarter." - Andrea Feingold COLONIAL INTERMEDIATE HIGH INCOME FUND PERFORMANCE Distributions declared per share $0.345 Six month total return, assuming reinvestment of all distributions - NAV 7.29% - Market Price 7.10% Price per share - NAV $ 6.75 - Market Price $ 7.00
TOP FIVE HOLDINGS TOP FIVE SECTORS 1. NWCG Holding Corp. 1. Manufacturing ........... 21.4% 2. Winstar Communications 2. Services ................ 20.0% 3. Continental Cablevision 3. Cable ................... 12.0% 4. Pathmark Stores 4. Broadcasting ............ 10.5% 5. Revlon Consumer Products 5. Mining & Energy ......... 9.0%
2 PRESIDENT'S MESSAGE TO FUND SHAREHOLDERS [PHOTO] I am pleased to present your Fund's semiannual report for the period ended April 30, 1996. First, however, I would like to extend my thanks to President John A. McNeice, Jr., who has retired after a career with Colonial that spanned 40 years. We look forward to his continued involvement on the executive committee of the board of directors at our parent company, Liberty Financial Companies, Inc. In my new position, I am directing Colonial's focus on the delivery of superior investment performance over the long term. To achieve this mission, we will continue to seek the optimal combination of talented people and effective investment disciplines. The receipt of your semiannual report is a good time to reflect on market conditions and the performance of your Fund during the past 6 months. Falling interest rates and minimal inflation helped the economy grow at a comfortable pace throughout 1995 and created a positive environment for fixed income investments. After a difficult 1994, investors who stayed the course during 1995 were amply rewarded. While there may be some current market volatility, we expect slow growth and low inflation to continue and believe that reductions in interest rates may take place later in the year. With over 12 years of service at Colonial and more than 25 years in the industry, I am enthusiastic about -- and dedicated to achieving -- Colonial's mission of providing you with competitive investment returns. In my new role, I look forward to communicating with you regarding your Colonial investment. We appreciate the opportunity to help you meet your investment goals. Respectfully, /s/ Harold W. Cogger Harold W. Cogger President June 14, 1996 Because market conditions change frequently, there can be no assurance that the trends described here will continue, come to pass, or affect Fund performance. 3 INVESTMENT PORTFOLIO APRIL 30, 1996 (UNAUDITED, IN THOUSANDS)
BONDS & NOTES (a) - 99.4% PAR VALUE --------------------------------------------------------------------------------------------- CORPORATE FIXED INCOME BONDS & NOTES - 99.1% --------------------------------------------------------------------------------------------- CONSUMER NON-DURABLES - 62.1% APPAREL - 0.2% Linter Textiles Corp., (b)(c) 13.750% 10/01/00 $ 2,500 $ 238 COMMUNICATIONS & MEDIA - 31.8% Allbritton Communications Co., 11.500% 08/15/04 2,000 2,080 Bell Cablemedia PLC, stepped coupon, (11.950% 07/15/99) 07/15/04(d) 1,500 1,095 Brooks Fiber Properties, Inc., stepped coupon, (10.875% 03/01/01) 03/01/06(d)(e) 1,500 825 Cablevision Systems Corp., 10.750% 04/01/04 2,000 2,100 Comcast Corp., 10.625% 07/15/12 1,500 1,620 Continental Cablevision, Inc.: 9.500% 08/01/13 1,000 1,105 11.000% 06/01/07 2,000 2,245 Echostar Communications Corp., stepped coupon, (12.875% 06/01/99) 06/01/04(d) 1,000 740 Heritage Media Corp., 11.000% 06/15/02 1,000 1,066 Insight Communications Co., 11.250% 03/01/00 2,000 2,030 IntelCom Group, Inc., stepped coupon, (13.500% 09/15/00) 09/15/05(d) 1,000 610 MFS Communications, Inc., stepped coupon, (8.875% 01/15/01) 01/15/06(d) 2,000 1,248 Marcus Cable Co., L.P., 11.875% 10/01/05 1,500 1,579 Mobilemedia Corp., 9.375% 11/01/07 500 479 NWCG Holding Corp., (f) 06/15/99 2,000 1,465 Nextel Communications, Inc., stepped coupon, (9.750% 02/15/99) 08/15/04(d) 500 291
4 Investment Portfolio/April 30, 1996 ----------------------------------------------------------------------------------- Nextlink Communications, L.L.C., 12.500% 04/15/06(e) $ 1,000 $ 1,010 Rogers Communications, Inc., 10.875% 04/15/04 2,000 2,067 SCI Television, Inc., 11.000% 06/30/05 2,500 2,616 Shared Technologies Fairchild, Inc., stepped coupon, (12.250% 03/01/99) 03/01/06(d)(e) 500 370 Sinclair Broadcast Group, Inc., 10.000% 12/15/03 1,000 972 Sullivan Broadcasting, Inc., 10.250% 12/15/05 2,000 1,930 Telewest Communication PLC, (f) 10/01/07 1,500 919 WinStar Communications, Inc., stepped coupon: (14.000% 10/15/00) 10/15/05(d)(e) 2,000 1,360 (14.000% 10/15/00) 10/15/05(d) 4,000 2,320 Young Broadcasting Corp., 11.750% 11/15/04 2,500 2,712 -------- 36,854 -------- CONSUMER PRODUCTS - 2.7% Gillett Holdings, Inc., 12.250% 06/30/02 267 279 Revlon Consumer Products Corp., 10.500% 02/15/03 2,000 2,045 Revlon Worldwide Corp., (f) 03/15/98 1,000 810 -------- 3,134 -------- ENTERTAINMENT & LEISURE - 16.6% Bally's Grand, Inc., Series B, 10.375% 12/15/03 2,000 2,067 Boyd Gaming Corp., 10.750% 09/01/03 2,000 2,115 Empress River Casino Finance Corp., 10.750% 04/01/02 2,000 2,080 GNF Corp., 10.625% 04/01/03 2,500 2,581 HMH Properties, Inc., 9.500% 05/15/05 1,500 1,455 Mohegan Tribal Gaming, 13.500% 11/15/02(e) 1,000 1,240 Showboat, Inc., 13.000% 08/01/09 2,250 2,588
5 Investment Portfolio/April 30, 1996
----------------------------------------------------------------------------------- CORPORATE FIXED INCOME BONDS & NOTES (a) - CONT. PAR VALUE ----------------------------------------------------------------------------------- CONSUMER NON-DURABLES - CONT. ENTERTAINMENT & LEISURE - CONT. Station Casinos, Inc., 10.125% 03/15/06 $ 2,000 $ 1,970 Stratosphere Corp., 14.250% 05/15/02 1,500 1,890 Trump Atlantic City Associates, 11.250% 05/01/06 1,250 1,278 -------- 19,264 -------- FOOD, BEVERAGES, & TOBACCO - 1.8% Doskocil Companies, Inc., 9.750% 07/15/00 1,600 1,660 Pilgrim's Pride Corp., 10.875% 08/01/03 450 425 -------- 2,085 -------- HEALTH CARE - 4.6% Genesis Health Ventures, 9.750% 06/15/05 1,500 1,556 OrNda Health Corp.: 11.375% 08/15/04 2,000 2,170 12.250% 05/15/02 500 559 Tenet Healthcare Corp., 10.125% 03/01/05 1,000 1,068 -------- 5,353 -------- RETAIL TRADE - 4.4% Dominick's Finer Foods, Inc., 10.875% 05/01/05 2,000 2,095 Pathmark Stores, Inc.: 9.625% 05/01/03 1,000 957 11.625% 06/15/02 2,000 2,020 -------- 5,072 ----------------------------------------------------------------------------------- ENERGY - 10.2% DOMESTIC OIL & GAS - 8.1% Falcon Drilling Co., Inc., Series B, 9.750% 01/15/01 1,000 1,032 Gulf Canada Resources Ltd., 9.250% 01/15/04 2,500 2,512 Mesa Capital Corp., 12.750% 06/30/98 1,500 1,500 Nevo Energy Co., 9.500% 04/15/06 2,100 2,105 Plains Resources, Inc., 10.250% 03/15/06(e) 650 660
6 Investment Portfolio/April 30, 1996 ----------------------------------------------------------------------------------- Santa Fe Energy Resources, Inc., 11.000% 05/15/04 $ 1,500 $ 1,613 -------- 9,422 -------- OIL & GAS SERVICES - 2.1% California Energy Co., Inc., 9.875% 06/30/03 1,250 1,263 Flores & Rucks, Inc., 13.500% 12/01/04 1,000 1,145 -------- 2,408 ----------------------------------------------------------------------------------- MANUFACTURING - 22.1% BUILDING & HOUSING - 0.9% Clark-Schwebel, Inc., 10.500% 04/15/06(e) 1,000 1,023 -------- CHEMICALS - 6.5% Agricultural Minerals Co., L.P., 10.750% 09/30/03 2,250 2,413 Applied Extrusion Technologies, Inc., 11.500% 04/01/02 1,500 1,538 G-I Holdings, Inc., 10.000% 02/15/06(e) 1,500 1,492 N.L. Industries, Inc., 11.750% 10/15/03 2,000 2,070 -------- 7,513 -------- COMPUTERS - 0.7% IMO Industries, Inc., 11.750% 05/01/06(e) 750 754 -------- CONSUMER DURABLES - 3.1% Aftermarket Technology Corp., Series B, 12.000% 08/01/04 1,000 1,065 Owens-Illinois, Inc., 10.500% 06/15/02 2,000 2,075 Simmons Co., 10.750% 04/15/06(e) 500 504 -------- 3,644 -------- METALS & MINERALS - 6.4% A.K. Steel Corp., 10.750% 04/01/04 2,000 2,187 Algoma Steel, Inc., 12.375% 07/15/05 1,000 983 Earle M. Jorgensen & Co., 10.750% 03/01/00 500 498
7 Investment Portfolio/April 30, 1996
---------------------------------------------------------------------------------------- CORPORATE FIXED INCOME BONDS & NOTES (a) - CONT. PAR VALUE ---------------------------------------------------------------------------------------- MANUFACTURING - CONT. METALS & MINERALS - CONT. Kaiser Aluminum & Chemical Corp., 12.750% 02/01/03 $ 2,000 $ 2,145 United Meridian Corp., 10.375% 10/15/05 1,610 1,678 -------- 7,491 -------- OTHER MANUFACTURING - 0.6% Dade International, Inc., 11.125% 05/01/06 750 750 -------- PAPER & FOREST PRODUCTS - 3.9% Repap Wisconsin, Inc., 9.250% 02/01/02 1,500 1,444 S.D. Warren Co., 12.000% 12/15/04 1,000 1,045 Stone Container Corp., 10.750% 10/01/02 2,000 2,015 -------- 4,504 ---------------------------------------------------------------------------------------- TECHNOLOGY - 3.0% TELECOMMUNICATIONS - 3.0% Paging Network, Inc., 10.125% 08/01/07 1,000 1,029 PanAmSat Corp., stepped coupon, (11.375% 08/01/98) 08/01/03(d) 2,800 2,394 -------- 3,423 ---------------------------------------------------------------------------------------- TRANSPORTATION - 1.7% AIR TRANSPORTATION - 1.7% U.S. Air, Inc., 10.375% 03/01/13 2,000 1,960 -------- TOTAL CORPORATE FIXED-INCOME BONDS & NOTES (cost of $114,129) 114,892 -------- GOVERNMENT BONDS & NOTES - 0.3% ---------------------------------------------------------------------------------------- U.S. Treasury Notes 7.750% 01/31/00 (cost of $322) 301 315 -------- TOTAL BONDS & NOTES (cost of $114,451) 115,207 -------- ---------------------------------------------------------------------------------------- PREFERRED STOCKS - 0.4% COMMUNICATIONS & MEDIA - 0.4% Cablevision Systems Corp., 11.125% PIK, Series L (cost of $523) (e) 5 496 ----------------------------------------------------------------------------------------
8 Investment Portfolio/April 30, 1996
---------------------------------------------------------------------------------------------------- COMMON STOCKS - 0.2% SHARES ---------------------------------------------------------------------------------------------------- ENERGY - 0.1% DOMESTIC OIL & GAS - 0.1% Mesa, Inc. (g) 26 $ 99 ---------------------------------------------------------------------------------------------------- TRANSPORTATION - 0.1% MOTOR FREIGHT & WAREHOUSING - 0.1% St. Johnsbury Trucking Co. (g) 79 157 Sun Carriers, Inc. (c)(e)(g) 326 3 -------- 160 -------- TOTAL COMMON STOCKS (cost of $1,122) 259 -------- TOTAL INVESTMENTS - 100.0% (cost of $116,096)(h) 115,962 -------- SHORT-TERM OBLIGATIONS PAR ---------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., 5.300% 05/01/96(i) $ 7,856 7,856 -------- OTHER ASSETS & LIABILITIES, NET (26,902) ---------------------------------------------------------------------------------------------------- NET ASSETS $ 96,916 --------
NOTES TO INVESTMENT PORTFOLIO: ----------------------------------------------------------------------- (a) Industry classification percentages are based on total investments. Total investments represent 119.7% of the Fund's net assets. (b) This issuer has filed under Chapter 11 of the Federal Bankruptcy Code. Income is not being accrued. (c) Represents fair value as determined in good faith under directions of the Trustees. (d) Currently zero coupon. Shown parenthetically is the next interest rate to be paid and the date the Fund will begin accruing this rate. (e) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At year end, the value of these securities amounted to $9,737 or 10.0% of net assets. (f) Zero coupon bond. (g) Non-income producing. (h) Cost for federal income tax purposes is the same. (i) Rate represents yield at date of purchase. Acronym Name PIK Payment-In-Kind See notes to financial statements. 9 STATEMENT OF ASSETS & LIABILITIES APRIL 30, 1996 (UNAUDITED)
(in thousands except for per share amount) ASSETS Investments at value (cost $116,096) $115,962 Short-term obligations 7,856 -------- 123,818 Receivable for: Interest $ 2,514 Other 54 2,568 ------- -------- Total Assets 126,386 LIABILITIES Payable for: Investments purchased 750 Distributions 818 Interest 501 Accrued: Deferred Trustees fees 1 Notes payable 27,400 ------- Total Liabilities 29,470 -------- NET ASSETS at value for 14,354 shares of beneficial interest outstanding $ 96,916 -------- Net asset value per share $ 6.75 -------- COMPOSITION OF NET ASSETS Capital paid in $129,492 Undistributed net investment income 226 Accumulated net realized loss (32,668) Net unrealized depreciation (134) -------- $ 96,916 --------
See notes to financial statements. 10 STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
(in thousands) INVESTMENT INCOME Interest $6,165 Dividends 7 ------ 6,172 EXPENSES Management fee $ 312 Transfer agent 16 Bookkeeping fee 22 Trustees fee 7 Custodian fee 1 Audit fee 34 Legal fee 7 Reports to shareholders 8 Other 46 ------ Total operating expenses 453 Interest and amortization of deferred debt issuance expenses 879 1,332 ------ ------ Net Investment Income 4,840 NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS Net realized gain 2,792 Net unrealized depreciation during the period (821) ------ Net Gain 1,971 ------ Net Increase in Net Assets from Operations $6,811 ------
See notes to financial statements. 11 STATEMENT OF CHANGES IN NET ASSETS & STATEMENT OF CASH FLOW
Cash flow Changes in net assets (cash basis) (accrual basis) (Unaudited) (Unaudited) ------------ -------------------------- Six months Six months Year ended ended ended (in thousands) April 30 April 30 October 31 --------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS 1996 1996 1995 --------- ---------- ---------- Operations: Net investment income (a) $ 4,509 $ 4,840 $ 9,734 Net realized gain (loss) 2,792 (2,047) Net unrealized appreciation (depreciation) (821) 6,871 Net decrease in cash from investment activity (b) (625) --------- ---------- ---------- Net Increase from Operations 3,884 6,811 14,558 Distributions from net investment income (3,884) (4,931) (9,784) --------- ---------- ---------- 0 1,880 4,774 Fund share transactions Value of distributions reinvested 1,052 1,691 --------- ---------- ---------- Total Increase 0 2,932 6,465 Cash Beginning of period 0 --------- End of period $ 0 --------- NET ASSETS Beginning of period 93,984 87,519 --------- --------- End of period (including undistributed net investment income of $226 and $131, respectively) $ 96,916 $ 93,984 --------- --------- NUMBER OF FUND SHARES Issued for distributions reinvested 156 260 Outstanding at Beginning of period 14,198 13,938 --------- --------- End of period 14,354 14,198 --------- --------- Notes to statement of cash flows: a) Reconciliation of net investment income: Net investment income per books $ 4,840 Net change in assets and liabilities related to income and expenses, including net accretion and amortization (331) --------- Net investment income-cash basis $ 4,509 --------- b) Net decrease in cash from investment activity Receipts for investments sold $ 719,750 Cost of investments purchased (720,375) --------- $ (625) ---------
See notes to financial statements. 12 NOTES TO FINANCIAL STATEMENTS APRIL 30, 1996 (UNAUDITED) NOTE 1. INTERIM FINANCIAL STATEMENTS In the opinion of management of Colonial Intermediate High Income Fund (the Fund), the accompanying financial statements contain all normal and recurring adjustments necessary for the fair presentation of the financial position of the Fund at April 30, 1996, and the results of its operations, the changes in its net assets and the financial highlights for the six months then ended. NOTE 2. ACCOUNTING POLICIES ORGANIZATION: The Fund is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end, management investment company. The Fund's objective is to provide high current income. The Fund may issue an unlimited number of shares. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies that are consistently followed by the Fund in the preparation of its financial statements. SECURITY VALUATION AND TRANSACTIONS: Debt securities are valued by a pricing service based upon market transactions for normal, institutional-size trading units of similar securities. When management deems it appropriate, an over-the-counter or exchange bid quotation is used. Equity securities are valued at the last sale price or, in the case of unlisted or listed securities for which there were no sales during the day, at current quoted bid prices. Short-term obligations with a maturity of 60 days or less are valued at amortized cost. Portfolio positions which cannot be valued as set forth above are valued at fair value under procedures approved by the Trustees. Security transactions are accounted for on the date the securities are purchased, sold or mature. Cost is determined and gains and losses are based upon the specific identification method for both financial statement and federal income tax purposes. The Fund may trade securities on other than normal settlement terms. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. STATEMENT OF CASH FLOWS: Information on financial transactions which have been settled through the receipt or disbursement of cash is presented in the Statement of Cash Flow. The cash amount shown in the Statement of Cash Flow is the amount included in other assets in the Fund's Statement of Assets and Liabilities and represents cash on hand at its custodian bank account and does not include any short-term investments at April 30, 1996. 13 Notes to Financial Statements/April 30, 1996 FEDERAL INCOME TAXES: Consistent with the Fund's policy to qualify as a regulated investment company and to distribute all of its taxable 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; premium and market discount are not amortized or accreted. The value of additional securities received as an interest payment is recorded as income and as the cost basis of such securities. DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders are recorded on the ex-date. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. Reclassifications are made to the Fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. OTHER: Corporate actions are recorded on the ex-date. The Fund's custodian takes possession through the federal book-entry system of securities collateralizing repurchase agreements. Collateral is marked-to-market daily to ensure that the market value of the underlying assets remains sufficient to protect the Fund. The Fund may experience costs and delays in liquidating the collateral if the issuer defaults or enters bankruptcy. NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES MANAGEMENT FEE: Colonial Management Associates, Inc. (the Adviser) is the investment adviser of the Fund and furnishes accounting and other services and office facilities for a monthly fee equal to 0.65% annually of the Fund's average weekly net assets. BOOKKEEPING FEE: The Adviser provides bookkeeping and pricing services for $27,000 per year plus 0.035% of the Fund's average net assets over $50 million. OTHER: The Fund pays no compensation to its officers, all of whom are employees of the Adviser. The Fund's Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the the Fund's assets. NOTE 4. PORTFOLIO INFORMATION INVESTMENT ACTIVITY: During the six months ended April 30, 1996, purchases and sales of investments, other than short-term obligations, were $59,083,103 and $59,864,947, respectively, of which $2,033,125 and $5,347,659 respectively, were U.S. government securities. 14 Notes to Financial Statements/April 30, 1996 NOTE 4. PORTFOLIO INFORMATION - CONT. Unrealized appreciation (depreciation) at April 30, 1996, based on cost of investments for both financial statement and federal income tax purposes was approximately: Gross unrealized appreciation $ 4,089,000 Gross unrealized depreciation (4,223,000) ----------- Net unrealized depreciation $ (134,000) -----------
Capital loss carryforwards: At October 31, 1995, capital loss carryforwards available (to the extent provided in regulations) to offset future realized gains were approximately as follows:
Year of Capital loss expiration carryforward ---------- ------------ 1998 $ 5,028,000 1999 18,676,000 2000 9,467,000 2003 2,103,000 ------------ $ 35,274,000 ------------
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 share- holders as ordinary income. OTHER: The Fund may focus its investments in certain industries, subjecting it to greater risk than a fund that is more diversified. NOTE 5. SENIOR EXTENDIBLE NOTES At April 30, 1996, the Fund had $27,400,000 principal amount of notes outstand- ing at 6.21% per annum, due July 15, 1998. The Fund is required to maintain certain asset coverage with respect to the notes. NOTE 6. SUBSEQUENT EVENT Subsequent to April 30, 1996, the Fund has re-negotiated the senior extendible notes outstanding to a three year term due June 1999, at 7.33% per annum. The Fund is required to maintain certain asset coverage with respect to the notes. 15 FINANCIAL HIGHLIGHTS Selected per share data, total return, ratios and supplemental data throughout each period are as follows:
(Unaudited) Six months ended April 30 Year ended October 31 -------------- --------------------- 1996 1995 1994 Net asset value - Beginning of period $ 6.620 $ 6.280 $ 6.920 ----------- ----------- ----------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.352 0.696 0.693 Net realized and unrealized gain (loss) 0.123 0.340 (0.587) ----------- ----------- ----------- Total from Investment Operations 0.475 1.036 0.106 ----------- ----------- ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.345) (0.696) (0.746) ----------- ----------- ----------- Net asset value - End of period $ 6.750 $ 6.620 $ 6.280 ----------- ----------- ----------- Market price per share $ 7.000 $ 6.875 $ 5.750 ----------- ----------- ----------- Total return - based on market value (a) 7.10%(b) 33.00% (2.80)% ----------- ----------- ----------- RATIOS TO AVERAGE NET ASSETS Operating expenses 0.94%(c)(d) 0.95%(c) 0.97% Interest and amortization of deferred debt issuance expenses 1.83%(d) 1.94% 1.91% Net investment income 10.07%(c)(d) 10.76%(c) 10.40% Portfolio turnover 102%(d) 92% 160% Net assets at end of period (000) $ 96,916 $ 93,984 $ 87,519
(a) Total return at market value assuming all distributions reinvested and excluding brokerage commissions. (b) Not annualized. (c) The benefits derived from custody credits and directed brokerage arrangements, had no impact. Prior years' ratios are net of any benefits received, if any. (d) Annualized. 16 FINANCIAL HIGHLIGHTS - CONT. Selected per share data, total return, ratios and supplemental data throughout each period are as follows:
Year ended October 31 ------------------------------------------- 1993 1992 1991 Net asset value - Beginning of period $ 6.430 $ 6.290 $ 4.880 ----------- ----------- ----------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.709 0.773 0.800 Net realized and unrealized gain (loss) 0.497 0.142 1.385 ----------- ----------- ----------- Total from Investment Operations 1.206 0.915 2.185 ----------- ----------- ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.716) (0.775) (0.775) ----------- ----------- ----------- Net asset value - End of period $ 6.920 $ 6.430 $ 6.290 ----------- ----------- ----------- Market price per share $ 6.625 $ 6.250 $ 6.000 ----------- ----------- ----------- Total return - based on market value (a) 17.89% 17.39% 54.29% ----------- ----------- ----------- RATIOS TO AVERAGE NET ASSETS Operating expenses 1.00% 1.00% 1.38% Interest and amortization of deferred debt issuance expenses 2.66% 3.24% 3.80% Net investment income 10.62% 11.98% 14.40% Portfolio turnover 135% 78% 30% Net assets at end of period (000) $ 95,164 $ 87,149 $ 83,613
--------------------------------------------------------------------------- SENIOR SECURITIES OF COLONIAL INTERMEDIATE HIGH INCOME FUND: (UNAUDITED)
Involuntary Total Asset liquidating Approximate amount coverage preference market value Year outstanding per share per unit per unit ---- ----------- --------- -------- -------- 1996 $27,400,000 354% NA 100 1995 $27,400,000 343% NA 100 1994 $27,400,000 319% NA 100 1993 $27,400,000 347% NA 100 1992 $27,400,000 318% NA 100 1991 $27,400,000 305% NA 100 1990 $27,400,000 237% NA 100 1989 $27,400,000 288% NA 100
17 QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED --------------------------------------------------- APRIL 30, 1996 JANUARY 31, 1996 (000) Per share (000) Per share ----- --------- ----- --------- Total investment income $3,153 $ 0.220 $3,019 $0.211 Net investment income $2,496 $ 0.184 $2,344 $0.168 Net realized and unrealized gain (loss) $ (413) $(0.042) $2,384 $0.165 Market value per share: High $ 7.250 $7.125 Low $ 6.875 $6.750
THREE MONTHS ENDED ------------------------------------------------------------------------------------------------- OCTOBER 31, 1995 JULY 31, 1995 APRIL 30, 1995 JANUARY 31, 1995 (000) Per share (000) Per share (000) Per share (000) Per share ----- --------- ----- --------- ----- --------- ----- --------- Total investment income $3,070 $ 0.216 $3,148 $0.223 $3,044 $0.217 $ 3,092 $0.221 Net investment income $2,429 $ 0.175 $2,481 $0.176 $2,389 $0.170 $ 2,435 $0.175 Net realized and unrealized gain (loss) $ (128) $(0.012) $2,147 $0.149 $4,416 $0.317 $(1,611) ($0.114) Market value per share: High $ 7.125 $6.875 $6.625 $6.500 Low $ 6.750 $6.375 $6.125 $5.500
At April 30, 1996 there were 1,586 shareholder accounts. 18 DIVIDEND REINVESTMENT PLAN The Fund generally distributes net investment income monthly and capital gains annually. Under the Fund's Dividend Reinvestment Plan (the "Plan") all distributions will be reinvested automatically in additional shares of the Fund, 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 by check mailed directly to the record holder by the dividend paying agent. 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 net asset value or 95% of the market price. The aggregate market value of the shares may constitute income to shareholders for federal income tax purposes. If net asset value exceeds the market price, shares will be bought as soon as practicable (but no more that 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 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. All Plan accounts receive written confirmations of all transactions. Shares purchased under the Plan are held in uncertificated form. 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. Fees and expenses of the Plan other than brokerage charges will be paid by the Fund. No brokerage charges are incurred on shares issued directly by the Fund. Participants will bear a pro-rata share of brokerage charges incurred on open market purchases. A Plan participant may terminate his or her participation by written notice to the Plan agent. The Plan may be amended or terminated on 90 days written notice to the Plan participants. All correspondence concerning the Plan should be directed to First Data Investor Services Group, the Plan agent, by mail at P.O. Box 1376, Boston, MA 02104 or by phone at 1-800-331-1710. 19 THIS PAGE INTENTIONALLY LEFT BLANK 20 THIS PAGE INTENTIONALLY LEFT BLANK 21 THIS PAGE INTENTIONALLY LEFT BLANK 22 IMPORTANT INFORMATION ABOUT THIS REPORT The Transfer Agent for Colonial Intermediate High Income Fund is: First Data Investor Services Group P.O. Box 1376 Boston, MA 02104 1-800-331-1710 Colonial Intermediate High Income Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call our Literature Department at 1-800-248-2828 and additional reports will be sent to you. This report has been prepared for shareholders of Colonial Intermediate High Income Fund. 23 [COLONIAL MUTUAL FUNDS LOGO] Mutual Funds for Planned Portfolios TRUSTEES ROBERT J. BIRNBAUM Trustee (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief Operating Officer, New York Stock Exchange, Inc.) TOM BLEASDALE Trustee (formerly Chairman of the Board and Chief Executive Officer, Shore Bank & Trust Company) LORA S. COLLINS Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel JAMES E. GRINNELL Private Investor (formerly Senior Vice President - Operations, The Rockport Company) WILLIAM D. IRELAND, JR. Trustee (formerly Chairman of the Board, Bank of New England - Worcester) RICHARD W. LOWRY Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood Corporation) WILLIAM E. MAYER Dean, College of Business and Management, University of Maryland (formerly Dean, Simon Graduate School of Business, University of Rochester; Chairman and Chief Executive Officer, C.S. First Boston Merchant Bank; and President and Chief Executive Officer, The First Boston Corporation) JAMES L. MOODY, JR. Chairman of the Board, Hannaford Bros. Co. (formerly Chief Executive Officer, Hannaford Bros. Co.) JOHN J. NEUHAUSER Dean, Boston College School of Management GEORGE L. SHINN Financial Consultant (formerly Chairman, Chief Executive Officer and Consultant, The First Boston Corporation) ROBERT L. SULLIVAN Management Consultant (formerly Management Consultant, Saatchi and Saatchi Consulting Ltd. and Principal and International Practice Director, Management Consulting, Peat Marwick Main & Co.) SINCLAIR WEEKS, JR. Chairman of the Board, Reed & Barton Corporation NOT FDIC- MAY LOSE VALUE INSURED NO BANK GUARANTEE Colonial Investment Services, Inc., Distributor (C) 1996 One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750 IH-03/256C-0496 M (6/96) [RECYCLE LOGO] Printed on recycled paper -----END PRIVACY-ENHANCED MESSAGE-----