--------------------------------------------------------------------------------
COLONIAL MUNICIPAL INCOME TRUST Semiannual Report
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May 31, 2000
[COVER PHOTO]
<PAGE>
President's Message
Dear Shareholder:
Volatility was the watchword for the municipal markets during the past six
months. Early in the period, interest rates were rising. Yields on most bonds
followed suit, and as they rose, bond prices fell. The higher rates and yields
were prompted by Federal Reserve actions, as the Fed attempted to cool the
economy. Concerned that robust economic growth could ignite higher levels of
inflation, the Fed raised key short-term lending rates by 0.25% in both February
and March 2000.
Later, the municipal markets rallied. Although the Fed once again raised
short-term interest rates in May -- this time by 0.50% -- investors viewed it as
a positive move. Convinced that the central bankers were determined to keep the
economy and inflation from overheating, investors relaxed their demands for
increasingly higher municipal bond yields and prices recovered to some extent.
In the end, the municipal bond market, as measured by the Lehman Brothers
Municipal Bond Index, finished ahead by 1.02% for the period. Although steps
were taken to mitigate the impact of rising rates, the Fund's performance was
affected by general market volatility.
Despite the challenges facing investors, we believe the Fed's efforts to slow
the economy will eventually succeed. In the past, it has taken about one year
before interest rate increases have had a measurable impact. After ten months of
short-term interest rate increases, we would not be surprised to see the economy
start to slow in the second half of 2000.
In the pages that follow, Fund manager Maureen G. Newman will provide you with
more specific information about the Fund's performance and investment
strategies. For more information, please contact your financial advisor. 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 17, 2000
Because economic and market conditions change frequently, there can be no
assurance that the trends described in this report will continue or come to
pass.
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Not FDIC May Lose Value
Insured No Bank Guarantee
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<PAGE>
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Highlights
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o Municipals lagged behind Treasury bonds.
Because they are more liquid than municipal bonds, Treasury bonds tend to
respond more quickly both in bond rallies and in downturns of the bond
market. This held true during the period, as Treasurys outperformed
municipals when the bond market was strong, but fell behind municipals as
the bond market declined.
o Bond market beginning to pick up.
The bond market may be in the beginning stages of a recovery, after a
difficult year in 1999. Federal Reserve Board efforts to slow the economy
seem to be having some success, and the bond market consequently saw
several strong periods during the last six months.
o Portfolio Manager's Commentary
The Fund's performance reflects the difficulties of the bond market in
general. For the six-month period ended May 31, 2000, the Fund had a total
return of negative 3.42% at net asset value. The Fund experienced
difficulties due in part to the poor performance of a few holdings, but we
are actively working to resolve these situations. In addition, fees and
other costs associated with the final sales of other holdings had a
negative effect on the Fund's net asset value. In response to continued
market uncertainties, we are seeking to structure the Fund to perform well
in a strong bond market, but we are also taking steps to cushion the
effects of a declining market. Some of the Fund's core holdings are
structured to take advantage of the bond market rally we anticipate, but
we are seeking to reduce the volatility of the Fund by employing hedging
strategies.
- Maureen G. Newman
Portfolio Manager
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 5/31/00:
NAV (3.42%)
-----------------------------
Market price 0.49%
-----------------------------
Distributions declared
per common share
12/01/99-5/31/00(1): $0.219
(1) A portion of the Fund's income may be subject to the alternative minimum
tax. The Fund may at times purchase tax-exempt securities at a discount. Some or
all of this discount may be included in the Fund's ordinary income, and is
taxable when distributed.
Price per share as of 5/31/00
NAV $6.05
-----------------------------
Market price $5.56
-----------------------------
Top Five Industry Sectors
as of 5/31/00
Nursing Homes 12.04%
-----------------------------
Hospitals 9.85%
-----------------------------
Water/Sewer 8.48%
-----------------------------
Refunded/Escrowed 7.88%
-----------------------------
Special Non-property
Tax 6.60%
-----------------------------
Quality Breakdown as of 5/31/00
AAA 26.0%
-----------------------------
AA 7.1%
-----------------------------
A 4.5%
-----------------------------
BBB 18.6%
-----------------------------
BB 2.1%
-----------------------------
CC 0.4%
-----------------------------
Non-rated 40.2%
-----------------------------
Cash equivalents 1.1%
-----------------------------
Quality and sector breakdowns are calculated as a percentage of total invest
ments, including short-term obligations. Ratings shown in the Quality Breakdown
represent the highest rating assigned to a particular bond by one of the
following respected agencies: Standard & Poor's Corp., Moody's Investors
Service, Inc. or Fitch Investors Service.
Because the Fund is actively managed, there can be no guarantee the Fund will
continue to maintain this quality breakdown or invest in these sectors in the
future. The sector classifications used on this page are based upon Colonial's
defined criteria as used in the investment process.
1
<PAGE>
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Investment Portfolio
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May 31, 2000 (Unaudited)
(In thousands)
Municipal Bonds - 97.8% PAR VALUE
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EDUCATION - 4.9%
Education
CA Statewide Communities Development
Authority, Crossroads School for Arts
& Sciences, Series 1998,
6.000% 08/01/28 (a) $ 1,180 $ 1,079
MA State Industrial Finance Agency,
St. John's High School,
Series 1998,
5.350% 06/01/28 300 245
MI Southfield Economic Development Corp.,
Lawrence University,
Series 1998 A,
5.400% 02/01/18 1,000 852
MN Victoria,
Holy Family Catholic High School,
Series 1999 A,
5.875% 09/01/29 1,000 876
VT State Educational & Health Buildings
Finance Agency:
Middlebury College, Series 1999,
5.000% 11/01/38 5,180 4,260
Norwich University, Series 1998,
5.500% 07/01/21 1,000 854
WA State Higher Education Facilities
Authority, Puget Sound University,
Series 1998,
5.375% 10/01/30 5,000 4,464
-------
12,630
-------
--------------------------------------------------------------------------------
HEALTHCARE - 26.4%
Congregate Care Retirement - 3.7%
KS Manhattan,
Meadowlark Hills Retirement Home,
Series 1999 A:
6.375% 05/15/20 500 427
6.500% 05/15/28 1,750 1,479
KY State Economic Development Finance
Authority, Christian Church Homes of
Kentucky, Inc., Series 1998,
5.500% 11/15/30 500 375
MA Boston Industrial Development
Finance Authority,
Springhouse, Inc., Series 1988,
5.875% 07/01/20 500 403
MA State Development Finance Agency,
Series 1999 A,
5.625% 07/01/15 250 208
MI State Strategic Fund,
Holland Home,
Series 1998,
5.750% 11/15/18 1,250 997
MN Columbia Heights,
Crest View Corp.,
Series 1998,
6.000% 03/01/33 745 604
NH State Higher Educational & Health
Facilities Authority,
Rivermead at Peterborough, Series 1998,
5.750% 07/01/28 500 395
PA Chartiers Valley Industrial & Commercial
Development Authority,
Asbury Health Center, Series 1999,
6.375% 12/01/24 1,000 845
PA Philadelphia Authority for Industrial
Development, Baptist Home of
Philadelphia, Series 1998 A:
5.500% 11/15/18 360 277
5.600% 11/15/28 570 415
TN Metropolitan Government, Nashville
and Davidson County,
Blakeford at Green Hills, Series 1998,
5.650% 07/01/24 575 431
TX Abilene Health Facilities Development Corp.,
Sears Methodist Retirement Obligation Group:
Series 1998 A,
5.900% 11/15/25 750 581
Series 1999,
5.875% 11/15/18 500 401
WI State Health & Educational
Facilities Authority:
Attic Angel Obligated Group,
5.750% 11/15/27 875 681
Clement Manor, Series 1998,
5.750% 08/15/24 450 354
United Lutheran Program for Aging, Inc.,
5.700% 03/01/28 750 579
-------
9,452
-------
Health Services - 0.1%
IL State Health Facilities Authority,
Midwest Physician Group, Ltd.,
Series 1998,
5.500% 11/15/19 90 71
MA State Development Finance Agency,
Boston Biomedical Research Institute,
Series 1999,
5.650% 02/01/19 120 103
-------
174
-------
Hospital - 9.7%
AL Alabama Special Care Facilities Authority,
Montgomery Healthcare,
Series 1989,
11.000% 10/01/19 (b) 1,556 78
AR Conway Health Facilities Board,
Conway Regional Medical Center:
Series 1999 A,
6.400% 08/01/29 350 310
Series 1999 B,
6.400% 08/01/29 850 754
See notes to investment portfolio.
2
<PAGE>
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Investment Portfolio (continued)
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May 31, 2000 (Unaudited)
(In thousands)
PAR VALUE
--------------------------------------------------------------------------------
CA State Health Facilities Financing Authority,
Cedars-Sinai Medical Center,
Series 1999 A,
6.125% 12/01/30 $ 650 $ 630
CO State Health Care Facilities Authority,
National Jewish Medical & Research Center,
Series 1998:
5.375% 01/01/16 1,500 1,210
5.375% 01/01/23 840 640
FL Miami Beach Health Facilities Authority,
Mt. Sinai Medical Center of Florida,
Series 1998,
5.375% 11/15/28 500 369
GA Forsyth County Hospital Authority,
Georgia Baptist Heathcare System,
Series 1998,
6.000% 10/01/08 1,000 959
IL Health Facilities Authority,
Thorek Hospital & Medical Center,
5.375% 08/15/28 500 370
IL Southwestern Illinois Development Authority,
Anderson Hospital,
Series 1999:
5.375% 08/15/15 500 404
5.500% 08/15/20 550 432
IL State Health Facilities Authority:
Riverview Hospital,
Series 1999,
5.500% 08/01/24 275 219
Swedish American Hospital,
Series 2000,
6.875% 11/15/30 500 482
LA State Public Facilities Authority,
Touro Infirmary,
Series 1999:
5.500% 08/15/19 500 405
5.625% 08/15/29 2,000 1,565
MA State Health & Educational Facilities
Authority, Milford-Whitinsville Regional
Hospital, Series C,
5.250% 07/15/18 500 380
MI Dickinson County,
Series 1999,
5.700% 11/01/18 585 473
MI Flint Hospital Building Authority,
Hurley Medical Center,
Series 1998 A,
5.375% 07/01/20 625 464
MI State Hospital Finance Authority,
Detroit Medical Center,
Series 1998 A,
5.250% 08/15/28 600 420
MN St. Paul Housing & Redevelopment
Authority, Healtheast Project, Series A,
5.700% 11/01/15 2,000 1,603
MN Washington County Housing
& Redevelopment Authority,
Healtheast, Inc., Series 1998,
5.250% 11/15/12 1,250 992
MS State Business Finance Corp.,
Medical Foundation, Inc.,
Series 1998,
5.625% 07/01/23 1,150 886
NH State Higher Educational & Health
Facilities Authority, Littleton Hospital
Association, Inc., Series 1998 A:
5.900% 05/01/18 500 414
5.900% 05/01/28 675 516
6.000% 05/01/28 625 500
NM State Hospital Equipment Loan Council,
Memorial Medical Center,
Series 1998,
5.500% 06/01/28 1,000 768
OH Belmont County,
East Ohio Regional Hospital,
Series 1998,
5.700% 01/01/13 1,500 1,253
OH Franklin County,
Doctors OhioHealth Corp.,
Series 1998 A,
5.600% 12/01/28 1,600 1,133
OH Highland County Joint Township
Hospital District,
Series 1999,
6.750% 12/01/29 750 633
OH Miami County,
Upper Valley Medical Center, Inc.,
Series 1996 A,
6.250% 05/15/16 665 589
OH Sandusky County,
Series 1998,
5.150% 01/01/08 270 248
OR Clackamas County Hospital Facilities
Authority, Williamette Falls Hospital,
Series 1999,
6.000% 04/01/19 1,000 867
PA Allegheny County Hospital Development,
Ohio Valley General Hospital,
Series 1998 A,
5.450% 01/01/28 1,050 792
PA Pottsville Hospital Authority,
Pottsville Hospital & Warne Clinic,
Series 1998,
5.625% 07/01/24 755 590
TX Lufkin Health Facilities Development Corp.,
Memorial Health Systems of East Texas,
Series 1998,
5.700% 02/15/28 750 568
See notes to investment portfolio.
3
<PAGE>
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Investment Portfolio (continued)
--------------------------------------------------------------------------------
May 31, 2000 (Unaudited)
(In thousands)
Municipal Bonds (continued) PAR VALUE
--------------------------------------------------------------------------------
TX Richardson Hospital Authority,
Baylor Richardson Medical Center,
Series 1998,
5.625% 12/01/28 $ 850 $ 650
VT State Educational & Health
Buildings Authority:
Brattleboro Memorial Hospital,
5.375% 03/01/28 500 372
Springfield Hospital, Series A,
7.750% 01/01/13 1,040 1,105
-------
25,042
-------
Intermediate Care Facilities - 1.0%
IN State Health Facilities Financing Authority,
Hoosier Care, Inc.,
Series 1999 A,
7.125% 06/01/34 1,095 961
PA State Economic Development Financing
Authority, Northwestern Human Services, Inc.,
Series 1998 A,
5.250% 06/01/14 2,150 1,791
-------
2,752
-------
Nursing Home - 11.9%
AK Juneau,
St. Ann's Care Center,
Series 1999,
6.875% 12/01/25 1,000 891
CO State Health Facilities Authority,
American Housing Foundation, Inc.,
Series 1990 A:
10.250% 12/01/20 (b) 1,500 1,136
CO State Health Facilities Authoritiy,
Volunteers of America Care Facilities, Inc.,
Series 1998 A:
5.450% 07/01/08 250 227
5.750% 07/01/20 700 568
Series 1999 A,
6.000% 07/01/29 350 283
DE State Economic Development Authority,
12.000% 04/01/25 2,170 2,308
DE Sussex County, Healthcare Facility,
Delaware Health Corp., Series 1994A,
7.600% 01/01/24 995 889
IA State Finance Authority,
Care Initiatives Project:
Series 1996,
9.250% 07/01/25 1,000 1,205
Series 1998 B:
5.750% 07/01/18 550 441
5.750% 07/01/28 1,475 1,125
IN Gary Industrial Economic Development,
West Side Health Care Center,
Series 1987 A,
11.500% 10/01/17 2,395 2,416
IN Michigan City Health Facilities,
Metropolitan Health Foundation
Incorporated Project,
10.000% 11/01/22 4,500 3,409
IN State Health Facilities Financing
Authority, Metro Health Indiana, Inc.,
Series 1998,
6.400% 12/01/33 1,000 821
KY Jefferson County First Mortgage,
Kentucky Iowa, Inc., Project Series 1990,
10.250% 01/01/20 930 930
KY Lexington - Fayette Urban County
Government, First Mortgage, AHF
Kentucky-Iowa, Inc., Project Series 1990,
10.250% 01/01/20 935 935
MA State Development Finance Agency,
Alliance Health Care Facilities,
Series 1999,
7.100% 07/01/32 1,250 1,133
MA State Industrial Finance Agency:
American Health Foundation, Inc.,
Series 1989,
10.125% 03/01/19 (b) 463 328
GF/Massachusetts, Inc.,
Series 1994,
8.300% 07/01/23 945 992
MI Cheboygan County Economic Development
Corp., Metro Health Foundation Project,
Series 1993,
10.000% 11/01/2022 (b) 2,440 1,848
MN Carlton,
Inter-Faith Social Services, Inc.,
Series 2000,
7.500% 04/01/19 250 238
7.750% 04/01/29 250 240
MN Duluth Economic Development Authority,
BSM Properties, Inc.,
Series 1998 A,
5.875% 12/01/28 250 195
MN Minneapolis,
Walker Methodist Senior Services Group,
Series 1998 A,
6.000% 11/15/28 1,000 800
MN New Hope,
North Ridge Care Center, Inc.,
Series 1999,
5.875% 03/01/29 500 394
MN Sartell,
Foundation for Healthcare,
Series 1999 A,
6.625% 09/01/29 2,500 2,153
NJ Economic Development Authority
Geriatric and Medical Service, Inc.,
Series A,
10.500% 05/01/04 475 470
See notes to investment portfolio.
4
<PAGE>
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Investment Portfolio (continued)
--------------------------------------------------------------------------------
May 31, 2000 (Unaudited)
(In thousands)
PAR VALUE
--------------------------------------------------------------------------------
OH Montgomery County,
Grafton Oaks Limited Partners,
Series 1986,
9.750% 12/01/16 $ 1,480 $ 1,406
TN New Tazewell Health Education
& Housing Facilities Board,
New Tazewell Project, Series 1987,
10.000% 06/01/17 1,530 1,548
TX Kirbyville Health Facilities Development
Corp., Heartway III Project:
Series 1997 A,
10.000% 03/20/18 575 512
Series 1997 B,
6.000% 03/20/04 100 59
WA Kitsap County Housing Authority,
Martha & Mary Nursing Home,
7.100% 02/20/36 643 701
-------
30,601
-------
--------------------------------------------------------------------------------
HOUSING - 10.5%
Assisted Living/Senior - 3.8%
DE Kent County,
Heritage at Dover,
Series 1999,
7.625% 01/01/30 1,250 1,177
GA Columbus Housing Authority,
The Gardens at Calvary,
Series 1999,
7.000% 11/15/19 500 460
IL Clarendon Hills Residential Facilities,
Churchill Estate,
Series 1998 A:
6.750% 03/01/24 1,050 957
6.750% 03/01/31 1,365 1,230
IL State Development Finance Authority,
Care Institute, Inc.,
8.250% 06/01/25 1,500 1,560
MN Roseville,
Care Institute, Inc., Series 1993,
7.750% 11/01/23 1,630 1,455
NC State Medical Care Commission,
DePaul Community Facilities Project,
Series 1999,
7.625% 11/01/29 1,000 949
NY Huntington Housing Authority,
Gurwin Jewish Senior Center,
Series 1999,
6.000% 05/01/29 400 320
TX Bell County Health Facilities
Development Corp., Care Institutions, Inc.,
9.000% 11/01/24 1,500 1,596
-------
9,704
-------
Multi-Family - 6.4%
DE Wilmington,
Electra Arms Senior Association Project,
6.250% 06/01/28 985 847
FL Broward County Housing Finance
Authority, Chaves Lake Apartment Project,
Series 2000,
7.500% 07/01/40 500 495
FL Clay County Housing Finance Authority,
Madison Commons Apartments,
Series 2000 A,
7.450% 07/01/40 500 491
GA Clayton County Housing Authority,
Magnolia Park Apartments,
Series 1999 A,
6.250% 06/01/30 750 673
IL Chicago,
Michigan Boulevard Garden Apartment
Rehabilitation Project, Series 1985,
12.000% 01/01/50 (b) 70 63
MN Washington County Housing
& Redevelopment Authority,
Cottages of Aspen, Series 1992,
9.250% 06/01/22 1,055 1,091
MN White Bear Lake,
Birch Lake Townhomes Project:
Series 1989 A,
10.250% 07/15/19 661 265
Series 1989 B,
(c) 07/15/19 (d) 1,770 1,825
NC Eastern Carolina Regional Housing
Authority, New River Apartments - Jacksonville,
Series 1994,
8.250% 09/01/14 1,760 1,789
Resolution Trust Corp.,
Pass Through Certificates,
Series 1993 A,
9.250% 12/01/16 (e) 4,248 4,261
SC State Housing Finance & Development
Multi-Family Housing Finance Revenue,
Westbridge Apartments, Series A,
9.500% 09/01/20 2,110 2,052
TN Franklin Industrial Board,
Landings Apartment Project,
Series 1996 B,
8.750% 04/01/27 775 798
TX Galveston Health Facilities Center,
Driftwood Apartments,
8.000% 08/01/23 (e) 1,000 996
VA Alexandria Redevelopment
& Housing Authority, Courthouse
Commons Apartments, Series 1990A,
10.000% 01/01/21 1,000 910
-------
16,556
-------
See notes to investment portfolio.
5
<PAGE>
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Investment Portfolio (continued)
--------------------------------------------------------------------------------
May 31, 2000 (Unaudited)
(In thousands)
Municipal Bonds (continued) PAR VALUE
--------------------------------------------------------------------------------
Single Family - 0.3%
AK State Housing Finance Corp.,
Series 1996 A,
6.050% 12/01/17 (f) $ 665 $ 665
KY Kentucky Counties Single Family
Mortgage Revenue, Class A,
9.000% 09/01/16 (f) 30 30
-------
695
-------
--------------------------------------------------------------------------------
INDUSTRIAL - 7.1%
Food Products - 1.7%
IN Hammond,
American Maize Products Co.,
Series 1994,
8.000% 12/01/24 2,000 2,137
LA Port New Orleans Industrial Development
Revenue, Continental Grain Co., Series 1993,
7.500% 07/01/13 1,000 983
LA Southern Louisiana Port Commission,
Cargill, Inc. Project,
5.850% 04/01/17 500 484
MI State Strategic Fund,
Michigan Sugar Co.,
Sebewaing Project, Series 1998 A,
6.250% 11/01/15 1,000 866
-------
4,470
-------
Forest Products - 1.0%
AL Courtland Industrial Development Board,
Champion International Corp.,
Series 1999,
6.000% 08/01/29 2,000 1,789
GA Rockdale County Development
Authority, Solid Waste Disposal,
Visy Paper, Inc., Series 1993,
7.500% 01/01/26 800 815
-------
2,604
-------
Manufacturing - 2.2%
IL State Development Finance Authority,
Armstrong World Industries, Inc. Project,
5.950% 12/01/24 1,000 888
IL Will-Kankakee Regional Development
Authority, Flanders Corp./Precisionaire Project,
Series 1997,
6.500% 12/15/17 950 911
MA State Industrial Finance Agency,
House of Bianchi, Inc.,
8.750% 06/01/18 (g) 235 214
MN Brooklyn Park,
TL Systems Corp.,
Series 1991,
10.000% 09/01/16 755 850
NV Henderson Public Improvement Trust,
Dongsung America Co., Inc.,
Series 1998,
6.625% 11/01/10 204 163
TX Trinity River Authority,
Texas Instruments Project,
Series 1996,
6.200% 03/01/20 750 738
VA Halifax County Industrial Development,
Craddock-Terry, Inc., Series 1989,
10.000% 12/01/19 (b) 213 11
VA Pittsylvania County Industrial
Development, Craddock-Terry, Inc.,
Series 1989,
10.000% 12/01/19 (b) 102 12
VA Prince Edward County Industrial
Development, Craddock-Terry, Inc.,
Series 1989,
10.000% 12/01/19 (b) 456 23
VA State Small Business Financing Authority,
Donsung America, Series 1998,
7.250% 11/01/15 (b) 156 97
WA Pilchuck Public Development Corp.,
Goodrich (B.F.) Co. Tramco Project,
Series 1993,
6.000% 08/01/23 2,000 1,795
-------
5,702
-------
Metals & Mining - 0.4%
NV State Department of Business & Industry,
Wheeling-Pittsburgh Steel Corp.,
Series 1999 A,
8.000% 09/01/14 250 246
VA Greensville County Industrial
Development Authority,
Wheeling Steel, Series 1999 A:
6.375% 04/01/04 70 68
7.000% 04/01/14 375 338
VA Peninsula Ports Authority,
Ziegler Coal Project,
Series 1997,
6.900% 05/02/22 500 426
-------
1,078
-------
Oil and Gas - 1.8%
NY State Energy Research & Development Authority,
Central Hudson Gas & Electric Corp.,
Series 1999,
5.450% 08/01/27 (f) 3,500 3,218
WA Pierce County Economic
Development Corp.,
Occidental Petroleum Co.,
5.800% 09/01/29 1,500 1,290
-------
4,508
-------
--------------------------------------------------------------------------------
OTHER - 8.8%
Other - 0.3%
MD Baltimore,
Park Charles Project,
Series 1986,
8.000% 01/01/10 655 676
-------
See notes to investment portfolio.
6
<PAGE>
Investment Portfolio (continued)
May 31, 2000 (Unaudited)
(In thousands)
PAR VALUE
--------------------------------------------------------------------------------
Pool/Bond Bank - 0.7%
IN Indianapolis Local Public
Improvement Bond Bank,
Series 1999 E,
5.750% 02/01/29 $ 2,000 $ 1,860
-------
Refunded/Escrowed (h) - 7.8%
CA San Joaquin Hills Transportation
Corridor Agency,
Series 1993,
(c) 01/01/25 (f) 10,000 2,240
FL Clearwater Housing Authority,
Hampton Apartments,
Series 1994,
8.250% 05/01/24 2,467 2,775
ID State Health Facilities Authority,
IHC Hospitals, Inc.,
6.650% 02/15/21 2,750 2,970
IL State Health Facilities Authority,
Edgewater Medical Center,
Series A,
9.250% 07/01/24 (f) 2,210 2,531
MA State Health & Educational
Facilities Authority,
Corp. for Independent Living,
8.100% 07/01/18 655 721
MA State Industrial Finance Agency,
Series 1990,
9.000% 10/01/20 905 934
MN Mille Lacs Capital Improvement Authority,
Mille Lacs Band of Chippewa,
Series 1992 A,
9.250% 11/01/12 975 1,081
NC Lincoln County,
Lincoln County Hospital,
9.000% 05/01/07 390 432
PA Delaware County Authority,
Southeastern Pennsylvania Obligated Group,
Series 1996:
6.000% 12/15/16 (f) 1,400 1,423
6.000% 12/15/26 (f) 500 493
PA Montgomery County Industrial
Development Authority, Assisted
Living Facility, Series 1993-A,
8.250% 05/01/23 780 846
SD State Student Loan Finance Corp.,
Series 1996 1E,
6.550% 08/01/20 2,000 2,094
TN Shelby County, Health, Education,
& Housing Facilities Board, Open Arms
Development Center,
Series 1992-A:
9.750% 08/01/19 500 630
9.750% 08/01/19 510 643
WA State Health Care Facilities Authority,
Grays Harbor Community Hospital,
Series 1993,
7.200% 07/01/03 235 238
-------
20,051
-------
--------------------------------------------------------------------------------
OTHER REVENUE - 1.7%
Hotels - 0.7%
PA Philadelphia Authority for Industrial
Development, Doubletree Project,
6.500% 10/01/27 2,000 1,883
-------
Recreation - 0.3%
NM Red River Sports Facility,
Red River Ski Area Project,
Series 1998,
6.450% 06/01/07 930 882
-------
Retail - 0.7%
NJ State Economic Development Authority,
Glimcher Properties L.P. Project,
6.000% 11/01/28 1,000 873
OH Lake County,
North Madison Properties,
Series 1993,
8.819% 09/01/11 710 760
-------
1,633
-------
--------------------------------------------------------------------------------
RESOURCE RECOVERY - 2.0%
Disposal - 1.3%
CT State Development Authority,
Sewer Sludge Disposal Facilities,
Series 1996,
8.250% 12/01/06 1,045 1,129
MA Boston Industrial Development
Finance Authority,
Jet-A-Way, Inc.,
10.500% 01/01/11 800 838
MA State Industrial Finance Agency,
Peabody Monofill Associates, Inc.,
Series 1995,
9.000% 09/01/05 925 959
MA State Industrial Finance Agency,
Massachusetts Environmental Services,
Series 1994 A,
8.750% 11/01/21 (b) 975 488
-------
3,414
-------
Resource Recovery - 0.7%
MA State Industrial Finance Agency,
Ogden Hill Project,
Series 1998 A,
5.500% 12/01/13 1,000 885
PA Delaware County Industrial
Development Authority, Series A,
6.200% 07/01/19 1,000 875
-------
1,760
-------
See notes to investment portfolio.
7
<PAGE>
--------------------------------------------------------------------------------
Investment Portfolio (continued)
--------------------------------------------------------------------------------
May 31, 2000 (Unaudited)
(In thousands)
Municipal Bonds (continued) PAR VALUE
--------------------------------------------------------------------------------
TAX-BACKED - 12.1%
Local Appropriated - 0.4%
CA Compton,
Civic Center Project,
5.500% 09/01/15 $ 1,000 $ 905
-------
Local General Obligations - 1.0%
LA New Orleans,
Series 1991,
(c) 09/01/15 (f) 4,000 1,617
TX Irving Independent School District,
Series 1997:
(c) 02/15/15 (f) 1,500 620
(c) 02/15/16 (f) 1,000 386
-------
2,623
-------
Special Non-Property Tax - 6.5%
IL Metropolitan Pier & Exposition Authority:
McCormick Project:
(c) 06/15/14 (f) 5,000 2,177
(c) 06/15/15 (f) 3,000 1,222
Series 1996 A,
(c) 12/15/13 (f) 5,000 2,261
IL State Development Finance Authority,
City of Marion Project,
Series 1991,
9.625% 09/15/21 1,425 1,069
NY New York City Transitional
Finance Authority,
Series 1999 C,
5.000% 05/01/29 9,985 8,412
PR Commonwealth of Puerto Rico
Highway & Transportation Authority,
Series 1998 A,
5.000% 07/01/38 2,000 1,648
-------
16,789
-------
Special Property Tax - 2.9%
CA Orange County Community Facilities District,
Ladera Ranch,
Series 1999 A,
6.500% 08/15/21 1,000 964
CA Poway Community Facilities District,
No. 88-1 Parkway Business Center,
Series 1998,
6.750% 08/15/15 575 587
CA Riverside County Public Financing
Authority, Redevelopment Projects,
Series A,
5.500% 10/01/22 650 558
CA Yorba Linda Redevelopment Agency,
Series 1998 A,
(c) 09/01/24 (f) 1,325 301
FL Heritage Palms Community
Development District,
Series 1999,
6.250% 11/01/04 1,000 991
FL Heritage Springs Community
Development District,
Series 1999 B,
6.250% 05/01/05 851 837
FL Lexington Oaks Community
Development District:
Series 1998 A,
6.125% 05/01/19 780 721
Series 2000 D,
6.700% 05/01/07 400 398
FL Northern Palm Beach County
Improvement District,
Series 1999,
5.900% 08/01/19 500 452
FL Orlando,
Conroy Road Interchange Project,
Series 1998 A:
5.500% 05/01/10 125 117
5.800% 05/01/26 500 430
FL Stoneybrook Community
Development District:
Series 1998 A,
6.100% 05/01/19 250 229
Series 1998 B,
5.700% 05/01/08 820 781
-------
7,366
-------
State General Obligations - 1.3%
WA State,
Series 1999 B,
5.000% 01/01/24 4,000 3,431
-------
--------------------------------------------------------------------------------
TRANSPORTATION - 8.7%
Air Transportation - 2.7%
IN Indianapolis Airport Authority,
Federal Express Corp.,
Series 1994,
7.100% 01/15/17 2,000 2,051
IN Indianapolis Airport Authority,
United Airlines Project,
Series A,
6.500% 11/15/31 1,000 906
KY Kenton County Airport Board,
Delta Airlines, Inc.,
Series 1992 A,
7.500% 02/01/20 2,500 2,552
PA Philadelphia Authority for
Industrial Development,
Aero Philadelphia, Series 1999,
5.250% 01/01/09 500 460
TX Alliance Airport Authority,
Federal Express Corp.,
Series 1996,
6.375% 04/01/21 1,000 955
-------
6,924
-------
See notes to investment portfolio.
8
<PAGE>
--------------------------------------------------------------------------------
Investment Portfolio (continued)
--------------------------------------------------------------------------------
May 31, 2000 (Unaudited)
(In thousands)
PAR VALUE
--------------------------------------------------------------------------------
Airport - 3.3%
MI Wayne Charter County,
Detroit Metropolitan Airport,
Series 1998 A,
5.000% 12/01/28 (f) $ 1,250 $ 1,033
PA Philadelphia Authority for
Industrial Development,
Series 1998 A,
5.125% 07/01/28 (f) 8,750 7,353
-------
8,386
-------
Toll Facilities - 2.7%
CA San Joaquin Hills Transportation
Corridor Agency, Series A,
(c) 01/15/15 (f) 3,000 1,293
CO State Public Highway Authority,
Arapahoe County, E470
Series 2000 B,
(c) 09/01/18 3,000 971
(c) 09/01/35 8,750 604
MA State Turnpike Authority,
Series 1999 A,
5.000% 01/01/39 (f) 5,000 4,130
-------
6,998
-------
--------------------------------------------------------------------------------
UTILITY - 15.6%
Independent Power Producer - 2.2%
NY Port Authority of New York & New Jersey,
KIAC Partners, Series 1996 IV,
6.750% 10/01/11 2,000 2,035
PA Economic Development Finance
Authority, Colver Project, Series D,
7.125% 12/01/15 500 506
7.150% 12/01/18 2,750 2,771
PR Commonwealth of Puerto Rico Industrial,
Educational, Medical & Environmental
Cogeneration Facilities, AES Project,
Series 2000
6.625% 06/01/26 325 327
-------
5,639
-------
Investor Owned - 2.9%
AZ Pima County Industrial Development
Authority, Tucson Electric Power Co.,
Series A,
6.100% 09/01/25 750 641
CT State Development Authority,
Connecticut Light & Power Co.,
Series 1993 B,
5.950% 09/01/28 300 260
IL Bryant,
Central Illinois Light Co.,
Series 1993,
5.900% 08/01/23 2,000 1,878
LA Calcasieu Parish Industrial Development
Board, Entergy Gulf States, Inc.,
Series 1999,
5.450% 07/01/10 500 459
LA West Feliciana Parish,
Entergy Gulf States, Inc.,
Series 1999 B,
6.600% 09/01/28 500 472
MS State Business Finance Corp.,
Systems Energy Resources Project,
Series 1998,
5.875% 04/01/22 1,500 1,262
NV Clark County,
Nevada Power Co.,
Series 1997 A,
5.900% 11/01/32 3,000 2,536
-------
7,508
-------
Municipal Electric - 2.1%
NY Long Island Power Authority,
Series 1998 A,
5.250% 12/01/26 1,550 1,367
TX Austin,
Series 1994:
(c) 05/15/17 (f) 6,600 2,359
(c) 05/15/18 (f) 5,000 1,670
-------
5,396
-------
Water & Sewer - 8.4%
CA Castaic Lake Water Agency,
Series 1999 A:
(c) 08/01/25 (f) 10,445 2,225
(c) 08/01/26 (f) 10,445 2,087
GA Atlanta,
Series 1999 A,
5.000% 11/01/38 (f) 7,500 6,225
LA Public Facility Belmont
Water Authority,
9.000% 03/15/24 (b) (i) 730 621
MA State Water Resources Authority,
Series 1997 D,
5.000% 08/01/24 (f) 10,000 8,562
MS Five Lakes Utility District,
8.250% 07/15/24 500 400
TX Houston Water & Sewer System,
Series C,
(c) 12/01/12 (f) 3,000 1,452
-------
21,572
-------
Total Municipal Bonds
(cost of $275,439) (j) 251,663
-------
Short-Term Obligations - 1.1%
--------------------------------------------------------------------------------
Variable Rate Demand Notes (k)
IA Woodbury County,
Siouxland Medical Educational Foundation,
Series 1996,
4.300% 11/01/16 500 500
IN State Hospital Equipment Finance
Authority, Series A,
4.250% 12/01/15 300 300
See notes to investment portfolio.
9
<PAGE>
--------------------------------------------------------------------------------
Investment Portfolio (continued)
--------------------------------------------------------------------------------
May 31, 2000 (Unaudited)
(In thousands)
Municipal Bonds (continued) PAR VALUE
--------------------------------------------------------------------------------
TX Brazos River Authority,
Monsanto Co.,
Series 1990,
4.400% 09/01/02 500 500
TX Gulf Coast Waste Disposal Authority,
Monsanto Co.,
Series 1996,
4.400% 07/01/01 700 700
TX Tarrant County Housing Finance Corp.,
Sierra Springs Apartments,
Series 1999,
4.250% 02/15/27 400 400
WY Lincoln County,
Exxon Corp.,
Series 1987 B,
4.550% 07/01/17 500 500
--------
Total Short-Term Obligations 2,900
--------
Other Assets & Liabilities, Net - 1.1% 2,806
--------
Net Assets - 100.0% $257,369
--------
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 $1,180. This security represents
0.4% of the Trust's net assets as of May 31, 2000.
(b) This issuer is in default of certain debt covenants. Income is not being
accrued.
(c) Zero coupon bond.
(d) 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.
(e) These securities are 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
May 31, 2000, the value of these securities amounted to $5,257 or 2.0% of
net assets.
(f) These securities, or a portion thereof, with a total market value of
$60,093, are being used to collateralize the open future contracts below.
(g) This is a restricted security which was acquired on June 30, 1992 at a
cost of $235. This security represents 0.1% of the Trust's net assets as
of May 31, 2000.
(h) 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.
(i) This is a restricted security which was acquired on March 22, 1994 at a
cost of $730. This security represents 0.2% of the Trust's net assets as
of May 31, 2000.
(j) Cost for federal income tax purposes is the same.
(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, 2000.
Short futures contracts open at May 31, 2000:
Par value Unrealized
covered by Expiration depreciation
Type contracts month at 5/31/00
--------------------------------------------------------------------------------
Treasury Bond 51,600 September $ (482)
Municipal Bond 35,000 September (597)
--------
$ (1,079)
--------
See notes to financial statements.
10
<PAGE>
--------------------------------------------------------------------------------
Statement of Assets and Liabilities
--------------------------------------------------------------------------------
May 31, 2000 (Unaudited)
(In thousands except for per share amount)
Assets
Investments at value (cost $275,439) $ 251,663
Short-term obligations 2,900
---------
254,563
Receivable for:
Interest $ 4,887
Investments sold 215
Other 127 5,229
------- ---------
Total Assets 259,792
Liabilities
Payable for:
Distributions - common shares 1,009
Distributions - preferred shares 17
Variation margin on futures 784
Investments purchased 324
Accrued:
Management fees 143
Bookkeeping fees 6
Deferred Trustees fees 6
Other 134
-------
Total Liabilities 2,423
---------
Net Assets $ 257,369
=========
Composition of Net Assets
Auction Preferred shares (4 shares issued
and outstanding at $25,000 per share) $ 90,000
Capital paid in 237,265
Overdistributed net investment income (1,294)
Accumulated net realized loss (43,747)
Net unrealized depreciation on:
Investments (23,776)
Open futures contracts (1,079)
---------
$ 257,369
=========
Net Assets at value for 27,645
shares of beneficial interest outstanding $ 167,369
=========
Net Asset value per share $ 6.05
=========
Net Assets at value including accrued dividends
for 4 preferred shares outstanding $ 90,017
=========
--------------------------------------------------------------------------------
Statement of Operations
--------------------------------------------------------------------------------
For the Six Months Ended May 31, 2000 (Unaudited)
(In thousands)
Investment Income
Interest $ 8,891
Expenses
Management fee $ 855
Bookkeeping fee 34
Transfer agent fee 53
Trustees' fees 8
Custodian fee 2
Audit fee 17
Legal fee 20
Reports to shareholders 12
Preferred shares remarketing commissions 112
Other 43 1,156
------- ---------
Net Investment Income 7,735
---------
Net Realized & Unrealized Loss
on Portfolio Positions
Net realized loss on:
Investments (2,640)
Closed futures contracts (463)
------- ---------
Net Realized Loss (3,103)
Net change in unrealized
appreciation /depreciation during
the period on:
Investments (8,160)
Open futures contracts (1,155)
-------
Net change in Unrealized
Appreciation/Depreciation (9,315)
---------
Net Loss (12,418)
---------
Decrease in Net Assets from Operations $ (4,683)
=========
See notes to financial statements.
11
<PAGE>
--------------------------------------------------------------------------------
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
(In thousands)
(Unaudited)
Six months
ended Year ended
May 31, November 30,
----------- ------------
Increase (Decrease) in Net Assets 2000 1999
--------------------------------------------------------------------------------
Operations:
Net investment income $ 7,735 $12,726
Net realized loss (3,103) (3,197)
Net change in unrealized appreciation/
depreciation (9,315) (23,694)
-------- --------
Net Decrease from Operations (4,683) (14,165)
Distributions:
From net investment income - common (6,054) (11,561)
In excess of net investment income -
common -- (1,096)
From net investment income - preferred (1,887) (1,165)
-------- --------
(12,624) (27,987)
Fund Share Transactions:
Preferred share offering (net of $109 and
$1,265 offering costs, respectively) (109) 88,735
Value of distributions reinvested -
common -- 423
-------- --------
Total Increase (Decrease) (12,733) 61,171
Net Assets
Beginning of period 270,102 208,931
-------- --------
End of period (net of overdistributed
net investment income of
$1,294 and $1,088, respectively) $257,369 $270,102
-------- --------
Number of Fund Shares
Common:
Issued for distributions reinvested -- 55
Outstanding at
Beginning of period 27,645 27,590
-------- --------
End of period 27,645 27,645
-------- --------
Preferred:
Issued in initial offering -- 4
Outstanding at
Beginning of period 4 --
-------- --------
End of period 4 4
-------- --------
See notes to financial statements.
12
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements
--------------------------------------------------------------------------------
May 31, 2000 (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, 2000, 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.
Distributions to preferred shareholders are recorded daily and are payable at
the end of each dividend period. Each dividend payment period for the Auction
Preferred Shares (APS) is generally seven days. The applicable dividend rate for
the Auction Preferred Shares on May 31, 2000 was 4.45%. For the year ended May
31, 2000, the Trust paid dividends to Auction Preferred shareholders amounting
to $1,887,411 representing an average APS dividend rate for such period of
4.19%.
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% annually of the Trust's average weekly 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 4. Portfolio Information
Investment activity:
During the six months ended May 31, 2000, purchases and sales of investments,
other than short-term obligations, were $20,021,315 and $21,789,005,
respectively.
13
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Unrealized appreciation (depreciation) at May 31, 2000, based on cost of
investments for both financial statement and federal income tax purposes was:
Gross unrealized appreciation $ 3,356,131
Gross unrealized depreciation (27,131,726)
------------
Net unrealized depreciation $(23,775,595)
============
Capital loss carryforwards:
At November 30, 1999, 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
---------- ------------
2000 $ 9,102,000
2001 7,979,000
2002 5,301,000
2003 7,499,000
2004 4,000
2005 7,197,000
2007 3,491,000
-----------
$40,573,000
===========
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. Preferred Share Offering
On July 20, 1999, the Trust offered and currently has outstanding 3,600 Auction
Preferred Shares. The Auction Preferred Shares 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 of $88,627,310, net of underwriting and offering costs, were
received upon the offering.
Costs incurred by the Trust in connection with the offering of the Auction
Preferred Shares totaling $1,372,690 were recorded as a reduction of capital
paid in excess of par applicable to common shares.
Under the Investment Company Act of 1940, the Trust is required to maintain
asset coverage of at least 200% with respect to the Auction Preferred Shares as
of the last business day of each month in which any Auction Preferred Shares are
outstanding. Additionally, the Trust is required to meet more stringent asset
coverage requirements under the terms of the Auction Preferred Shares and in
accordance with the guidelines prescribed by the rating agencies. Should these
requirements not be met, or should dividends accrued on the Auction Preferred
Shares 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
Auction Preferred Shares. At May 31, 2000 there were no such restrictions on the
Trust.
Note 6. Results of Annual Meeting of Shareholders
On April 24, 2000, the Annual Meeting of Shareholders of the Trust was held to
elect four Trustees to be voted by Common and Preferred shareholders, to elect
two Trustees to be voted solely by Preferred shareholders and to ratify the
selection of PricewaterhouseCoopers LLP as independent accountants for the
fiscal year ending November 30, 2000. The meeting was adjourned to May 15, 2000
in connection with the election of two Trustees to be voted solely by Preferred
shareholders. On February 1, 2000, the record date for the Meeting, the Trust
had outstanding 27,645,113 of Common shares and 3,600 of Preferred shares. The
votes cast at the Meeting were as follows:
Authority
For Withheld
--- --------
To elect six Trustees:
John V. Carberry 23,347,427 679,759
Lora S. Collins 23,339,780 687,406
Richard W. Lowry 23,350,234 676,952
John J. Neuhauser 23,342,480 684,706
Salvatore Macera 421 24
Thomas E. Stitzel 421 24
The Board of Trustees also consists of Tom Bleasdale, James E. Grinnell, William
E. Mayer, James L. Moody, Robert L. Sullivan and Anne-Lee Verville.
To ratify the selection of PricewaterhouseCoopers LLP as independent accountants
for the fiscal year ending November 30, 2000:
For Against Abstain
--- ------- -------
22,660,459 212,920 1,153,807
14
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
Selected per share data, total return, ratios and supplemental data throughout
each period are as follows (common shares unless otherwise noted):
<TABLE>
<CAPTION>
(Unaudited)
Six months ended
May 31, Year ended November 30
---------------- -----------------------------------------------------------
2000 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 6.510 $ 7.570 $ 7.410 $ 7.410 $ 7.480 $ 7.150
-------- -------- -------- ------- -------- --------
Income from Investment Operations:
Net investment income 0.211 0.460 0.469 0.509 0.508 0.547
Offering costs - preferred shares (0.004) (0.046) -- -- -- --
Net realized and unrealized gain (loss) (0.380) (0.974) 0.183 (0.002) (0.068) 0.335
-------- -------- -------- ------- -------- --------
Total from Investment Operations (0.173) (0.560) 0.652 0.507 0.440 0.882
-------- -------- -------- ------- -------- --------
Less Distributions Declared to Shareholders:
From net investment income - common shares (0.219) (0.418) (0.487) (0.507) (0.510) (0.552)
From net investment income - preferred shares (0.068) (0.042) -- -- -- --
In excess of net investment income - common shares -- (0.040) (0.005) -- -- --
-------- -------- -------- ------- -------- --------
Total Distributions Declared to Shareholders (0.287) (0.500) (0.492) (0.507) (0.510) (0.552)
-------- -------- -------- ------- -------- --------
Net Asset Value, End of Period $ 6.050 $ 6.510 $ 7.570 $ 7.410 $ 7.410 $ 7.480
======== ======== ======== ======= ======== ========
Market price per share $ 5.562 $ 5.750 $ 8.125 $ 7.560 $ 7.250 $ 6.750
======== ======== ======== ======= ======== ========
Total return - based on market value (a) 0.49%(b) (24.33)% 14.57% 11.67% 15.36% 8.04%
======== ======== ======== ======= ======== ========
Ratios to Average Net Assets
Expenses (c) 1.34%(d)(e) 1.08% 0.82% 0.86% 0.91% 0.98%
Net investment income (c) 6.77%(d)(e) 6.36% 6.20% 6.83% 6.87% 7.47%
Portfolio turnover 8%(b) 20% 34% 15% 22% 24%
Net assets at end of period (000) $257,369 $270,102 $208,931 $203,533 $202,793 $204,666
</TABLE>
(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.
(d) Annualized.
(e) Ratios reflect net assets available to common shares only, net investment
income ratio also reflects reduction for dividend payments to preferred
shareholders.
15
<PAGE>
--------------------------------------------------------------------------------
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 BankBoston, NA, the Trust's dividend
disbursing agent and administrator of the Plan, at P.O. Box 1681, Boston,
Massachusetts 02105, Attention: Dividend Reinvestment Department.
16
<PAGE>
Transfer Agent
Important Information About This Report
The Transfer Agent for Colonial Municipal Income Trust is:
BankBoston, NA.
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.
<PAGE>
Trustees
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
Academic Vice President and Dean of Faculties, Boston College (formerly Dean,
Boston College School of Management)
Thomas E. Stitzel
Business Consultant and Chartered Financial Analyst (formerly Professor of
Finance, College of Business, Boise State University)
Anne-Lee Verville
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
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COLONIAL MUNICIPAL INCOME TRUST Semiannual Report
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101-03/767B-0600 (7/00) 00/1165
