<PAGE>
COLONIAL
INTERMEDIATE
HIGH INCOME
FUND
SEMIANNUAL REPORT
APRIL 30, 1996
<PAGE>
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
<TABLE>
<S> <C>
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
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE HOLDINGS TOP FIVE SECTORS
<S> <C> <C>
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%
</TABLE>
2
<PAGE>
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
<PAGE>
INVESTMENT PORTFOLIO
APRIL 30, 1996 (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
BONDS & NOTES (a) - 99.4% PAR VALUE
---------------------------------------------------------------------------------------------
CORPORATE FIXED INCOME BONDS & NOTES - 99.1%
---------------------------------------------------------------------------------------------
<S> <C> <C>
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
</TABLE>
4
<PAGE>
Investment Portfolio/April 30, 1996
<TABLE>
-----------------------------------------------------------------------------------
<S> <C> <C>
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
</TABLE>
5
<PAGE>
Investment Portfolio/April 30, 1996
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
CORPORATE FIXED INCOME BONDS &
NOTES (a) - CONT. PAR VALUE
-----------------------------------------------------------------------------------
<S> <C> <C>
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
</TABLE>
6
<PAGE>
Investment Portfolio/April 30, 1996
<TABLE>
-----------------------------------------------------------------------------------
Santa Fe Energy Resources, Inc.,
<S> <C> <C>
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
</TABLE>
7
<PAGE>
Investment Portfolio/April 30, 1996
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
CORPORATE FIXED INCOME BONDS &
NOTES (a) - CONT. PAR VALUE
----------------------------------------------------------------------------------------
<S> <C> <C>
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
----------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
Investment Portfolio/April 30, 1996
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
COMMON STOCKS - 0.2% SHARES
----------------------------------------------------------------------------------------------------
<S> <C> <C>
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
--------
</TABLE>
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
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands except for per share amount)
<S> <C> <C>
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
--------
</TABLE>
See notes to financial statements.
10
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
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
------
</TABLE>
See notes to financial statements.
11
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
& STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
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
--------- ---------- ----------
<S> <C> <C> <C>
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)
---------
</TABLE>
See notes to financial statements.
12
<PAGE>
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
<PAGE>
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
<PAGE>
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:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 4,089,000
Gross unrealized depreciation (4,223,000)
-----------
Net unrealized depreciation $ (134,000)
-----------
</TABLE>
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:
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
---------- ------------
<S> <C>
1998 $ 5,028,000
1999 18,676,000
2000 9,467,000
2003 2,103,000
------------
$ 35,274,000
------------
</TABLE>
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
<PAGE>
FINANCIAL HIGHLIGHTS
Selected per share data, total return, ratios and supplemental data
throughout each period are as follows:
<TABLE>
<CAPTION>
(Unaudited)
Six months
ended April 30 Year ended October 31
-------------- ---------------------
1996 1995 1994
<S> <C> <C> <C>
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
</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. Prior years' ratios are
net of any benefits received, if any.
(d) Annualized.
16
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected per share data, total return, ratios and supplemental data
throughout each period are as follows:
<TABLE>
<CAPTION>
Year ended October 31
-------------------------------------------
1993 1992 1991
<S> <C> <C> <C>
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
</TABLE>
---------------------------------------------------------------------------
SENIOR SECURITIES OF COLONIAL INTERMEDIATE HIGH INCOME FUND: (UNAUDITED)
<TABLE>
<CAPTION>
Involuntary
Total Asset liquidating Approximate
amount coverage preference market value
Year outstanding per share per unit per unit
---- ----------- --------- -------- --------
<S> <C> <C> <C> <C>
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
</TABLE>
17
<PAGE>
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------------------
APRIL 30, 1996 JANUARY 31, 1996
(000) Per share (000) Per share
----- --------- ----- ---------
<S> <C> <C> <C> <C>
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
</TABLE>
<TABLE>
<CAPTION>
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
----- --------- ----- --------- ----- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
At April 30, 1996 there were 1,586 shareholder accounts.
18
<PAGE>
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
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
20
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
21
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
22
<PAGE>
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
<PAGE>
[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