<PAGE>
--------------------------------------------------------
COLONIAL INTERMEDIATE HIGH INCOME FUND SEMIANNUAL REPORT
--------------------------------------------------------
APRIL 30, 2000
[Graphic Omitted]
<PAGE>
President's Message
DEAR SHAREHOLDER:
The last six months have been difficult for the bond market overall. Reacting to
strong economic growth and capacity constraints in the labor market, the Federal
Reserve Board (The Fed) raised short-term rates three times over the last six
months. This move was largely anticipated and reflects the Fed's attempts to
keep economic growth in check and inflation under control. Bond prices declined
in response to these continued efforts of monetary tightening.
Yield spreads between corporate bonds and mortgage-backed bonds widened, causing
the returns in the high-yield market to be low. However, since high-yield bonds
have tended to be less sensitive to changes in short-term rates compared with
Treasurys, their returns could continue to outperform Treasurys in an
environment of rising interest rates.
Despite this challenging environment, high-yield bonds held up relatively well.
Better-than-expected economic strength has fueled solid corporate earnings.
While there has been some weakness in the high-yield market, the fundamentals
remain strong as liquidity has been very good.
Colonial Intermediate High Income Fund holds a well-diversified portfolio and
the manager employs extensive credit analysis of corporate high-yield bonds to
seek attractive investment opportunities, including current income and total
return. This investment style over the long-term has delivered competitive
returns.(1) The Fund's total return of negative 1.12% reflects the challenges
facing the bond market during the six-month period ended April 30, 2000.
The following report provides you with more specific information about your
Fund's performance and investment strategy during the period. Thank you for
choosing Colonial Intermediate High Income Fund and for allowing us the
opportunity to serve your investment needs.
Sincerely,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
June 15, 2000
(1) Lipper, Inc., a widely respected data provider, calculates an average total
return for mutual funds with similar investment objectives as the Fund. The
Fund's Class A shares ranked in the third quartile for one year (15 out of
27 funds), in the second quartile for three years (5 out of 17 funds), and
in the first quartile for five years (3 out of 17 funds). Rankings do not
include any sales charges. Performance for different share classes will vary
with fees associated with each class. Past performance cannot guarantee
future results.
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.
---------------------------------
Not FDIC May lose value
Insured No Bank Guarantee
---------------------------------
<PAGE>
--------------------------------------------------------------------------------
HIGHLIGHTS
--------------------------------------------------------------------------------
A WELL-DIVERSIFIED PORTFOLIO REMAINS OUR FOCUS
Our long-term investment strategy is to own a diversified portfolio of
asset-rich companies with strong market niches and improving credit
fundamentals. We have consistently held overweighted positions in the cable
television sector both in the U.S. and United Kingdom. Other strong holdings
include securities in cyclical industries such as paper and chemicals.
Disappointing returns came from the auto and metals industries, and we have
reduced our holdings accordingly. The Fund, which emphasizes diversity and
liquidity of issuers, was comprised of more than 140 different issues on April
30, 2000. To reduce the Fund's exposure to credit risk, we have slightly
upgraded the average quality of the bonds and increased the number of issues
owned by the portfolio. We will continue to actively manage the Fund's position
in an effort to add value for our investors.
Scott Richards
Portfolio Manager
> HIGH-YIELD BONDS LESS SENSITIVE TO INCREASING SHORT-TERM RATES
The comparatively high levels of income provided by high-yield bonds helped
cushion them against price declines. As interest rates are expected to
continue to rise throughout the year, high-yield bonds could be more
resilient than other types of bonds.
> FUND VERSUS THE LIPPER BENCHMARK
The Fund returned a negative 1.12% at net asset value, underperforming the
Lipper High Current Yields Funds (Leveraged) Category, which posted a return
of negative 0.25% for the six-month period ended April 30, 2000.
COLONIAL INTERMEDIATE HIGH INCOME FUND PERFORMANCE
VS. LIPPER HIGH CURRENT YIELDS FUNDS CATEGORY AVERAGE(2)
10/31/99 - 4/30/00
Colonial Intermediate High Income Fund (1.12)%
Lipper High Current Yields Funds Category Average (0.25)%
Total Returns
High-yield investing offers the potential for high income and attractive
total returns, but also involves certain risks. These include credit risks
associated with lower-rated bonds, changes in interest rates, and certain
risks associated with foreign investments. Past performance cannot predict
future results. Returns and values of an investment will vary, resulting in
a gain or loss on sale. All results shown assume reinvestment of
distributions.
(2) Returns are computed at net asset value.
TOP CORPORATE ISSUERS AS OF 4/30/00(1)
Adelphia
Communications 3.42%
------------------------------
NTL Inc. 3.32%
------------------------------
CSC Holding 3.24%
------------------------------
Nextel
Communications 3.19%
------------------------------
Verio Inc. 1.57%
------------------------------
TOP FIVE SECTOR BREAKDOWNS AS OF 4/30/00(1)
Telecom/Wired 12.85%
------------------------------
Telecom/Wireless 9.01%
------------------------------
Metals/Minerals 7.46%
------------------------------
General Industrial 7.01%
------------------------------
Media 6.22%
------------------------------
(1) Corporate issuers are calculated as a percent of total investments including
short-term investments. Sectors are calculated as a percent of total
portfolio adjusted for leverage. Because the Fund is actively managed, there
can be no guarantee the Fund will continue to hold securities of these
issuers in these sectors in the future. Industry sectors in the following
financial statements are based upon the standard industrial classifications
(SIC) as published by the U.S. Office of Management and Budget. The sector
classifications used on this page are based upon the Advisor's defined
criteria as used in the investment process.
SIX-MONTH DISTRIBUTIONS
DECLARED PER SHARE AS OF 4/30/00
$0.370
SIX-MONTH TOTAL RETURNS,
ASSUMING REINVESTMENT OF ALL
DISTRIBUTIONS
NAV Market Price
--- ------------
(1.12)% (1.41)%
PRICES PER SHARE ON 10/31/99
NAV Market Price
--- ------------
$5.52 $5.187
<PAGE>
--------------------
INVESTMENT PORTFOLIO
--------------------
April 30, 2000 (Unaudited)
(In thousands)
CORPORATE FIXED-INCOME BONDS - 91.2% PAR VALUE
-------------------------------------------------------------------------------
CONSTRUCTION - 0.1%
BUILDING CONSTRUCTION
Atrium Companies, Inc.,
10.500% 05/01/09 $ 100 $ 94
--------
-------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 0.4%
DEPOSITORY INSTITUTIONS
Sovereign Bancorp, Inc.,
10.500% 11/15/06 625 611
--------
-------------------------------------------------------------------------------
MANUFACTURING - 33.6%
CHEMICALS & ALLIED PRODUCTS - 6.2%
Agricultural Minerals Co., LP,
10.750% 09/30/03 430 322
Allied Waste North America, Inc.,
10.000% 08/01/09 (b) 2,200 1,507
Bio-Rad Laboratories, Inc.,
11.625% 02/15/07 350 359
Huntsman Corp.,
9.500% 07/01/07 (b) 150 137
Huntsman ICI Holdings LLC,
stepped coupon, (c) (9.500% 12/31/09)
12/31/09 2,075 654
HydroChem Industrial Services,
10.375% 08/01/07 500 382
Lyondell Chemical Co.:
9.625% 05/01/07 300 297
10.875% 05/01/09 1,000 990
PCI Chemicals Canada, Inc.,
9.250% 10/15/07 750 604
Sterling Chemicals, Inc.,
11.750% 08/15/06 1,875 1,669
Terra Industries, Inc.,
10.500% 06/15/05 1,260 945
Texas Petrochemical Corp.,
11.125% 07/01/06 1,275 1,046
Trans Resources, Inc.,
10.750% 03/15/08 1,000 540
--------
9,452
--------
ELECTRONIC & ELECTRICAL EQUIPMENT - 1.2%
Amphenol Corp.,
9.875% 05/15/07 735 746
Gentek, Inc.,
11.000% 08/01/09 (b) 500 503
TransDigm, Inc.,
10.375% 12/01/08 850 671
--------
1,920
--------
FABRICATED METAL - 2.6%
Earle M. Jorgensen & Co.,
9.500% 04/01/05 1,500 1,380
Euramax International, PLC,
11.250% 10/01/06 1,500 1,508
US Can Corp.,
10.125% 10/15/06 1,000 1,050
--------
3,938
--------
FOOD & KINDRED PRODUCTS - 1.7%
Chattem, Inc.,
8.875% 04/01/08 1,400 1,204
New World Pasta Co.,
9.250% 02/15/09 250 188
Premier International Foods, PLC,
12.000% 09/01/09 (b) 1,250 1,190
--------
2,582
--------
MACHINERY & COMPUTER EQUIPMENT - 0.8%
IMO Industries, Inc.,
11.750% 05/01/06 1,145 1,145
--------
MEASURING & ANALYZING INSTRUMENTS - 0.8%
Envirosource, Inc.,
9.750% 06/15/03 2,000 1,300
--------
MISCELLANEOUS MANUFACTURING - 7.5%
Alliance Laundry Systems LLC,
9.625% 05/01/08 1,000 815
Associated Materials, Inc.,
9.250% 03/01/08 500 465
Blount, Inc.,
13.000% 08/01/09 1,200 1,200
Eagle-Picher Industries, Inc.,
9.375% 03/01/08 750 634
ISG Resources, Inc.,
10.000% 04/15/08 1,000 882
Koppers Industries, Inc.,
9.875% 12/01/07 600 554
Moll Industries, Inc.,
10.500% 07/01/08 1,500 480
Newcor, Inc.,
9.875% 03/01/08 1,270 406
Owens-Illinois, Inc.,
7.500% 05/15/10 1,500 1,314
Special Devices, Inc.,
11.375% 12/15/08 1,000 300
Tekni-Plex, Inc.,
9.250% 03/01/08 1,500 1,440
Terex Corp.:
8.875% 04/01/08 250 221
8.875% 04/01/08 575 509
Thermadyne Holdings Corp.,
9.875% 06/01/08 1,700 1,343
Tokheim Corp.,
11.375% 08/01/08 (b) 565 170
Werner Holding Co.,
10.000% 11/15/07 750 701
--------
11,434
--------
PAPER PRODUCTS - 4.7%
Gaylord Container Corp.,
9.750% 06/15/07 2,000 1,770
Georgia Gulf Corp.,
10.375% 11/01/07 300 308
Repap New Brunswick, Inc.,
10.625% 04/15/05 1,425 1,332
Riverwood International Corp.:
10.625% 08/01/07 500 498
10.875% 04/01/08 2,050 1,937
Stone Container Corp.,
12.250% 04/01/02 1,250 1,256
--------
7,101
--------
PETROLEUM REFINING - 0.4%
Benton Oil & Gas Co.:
9.375% 11/01/07 1,000 600
11.625% 05/01/03 100 66
--------
666
--------
PRIMARY METAL - 4.8%
Algoma Steel, Inc.,
12.375% 07/15/05 500 493
Bayou Steel Corp.,
9.500% 05/15/08 1,000 915
Kaiser Aluminum & Chemical Corp.,
10.875% 10/15/06 1,600 1,544
Keystone Consolidated Industries, Inc.,
9.625% 08/01/07 1,000 850
Renco Metals, Inc.,
11.500% 07/01/03 500 235
WCI Steel Inc.,
10.000% 12/01/04 1,500 1,470
Wheeling-Pittsburgh Corp.,
9.250% 11/15/07 2,000 1,820
--------
7,327
--------
PRINTING & PUBLISHING - 0.9%
American Lawyer Media, Inc.:
9.750% 12/15/07 880 814
stepped coupon, (c) (12.250% 12/15/02)
12/15/08 865 549
--------
1,363
--------
RUBBER & PLASTIC - 0.5%
Burke Industries, Inc.,
10.000% 08/15/07 535 219
Metromedia Fiber Network, Inc.,
10.000% 12/15/09 650 619
--------
838
--------
STONE, CLAY, GLASS & CONCRETE - 0.5%
Anchor Glass Container Corp.,
11.250% 04/01/05 500 350
Owens-Illinois, Inc.,
8.100% 05/15/07 400 375
--------
725
--------
TEXTILE MILL PRODUCTS - 0.1%
Collins & Aikman Products Co.,
10.000% 01/15/07 100 98
--------
TRANSPORTATION EQUIPMENT - 0.9%
Dura Operating Corp.,
9.000% 05/01/09 650 578
LDM Technologies, Inc.,
10.750% 01/15/07 1,000 740
--------
1,318
--------
-------------------------------------------------------------------------------
MINING & ENERGY - 4.2%
COAL MINING - 0.1%
AEI Resources, Inc.,
10.500% 12/15/05 (b) 1,050 210
--------
OIL & GAS EXTRACTION - 3.7%
Belden & Blake Corp.,
9.875% 06/15/07 770 447
HS Resources, Inc.,
9.250% 11/15/06 1,375 1,334
Magnum Hunter Resources, Inc.,
10.000% 06/01/07 750 673
Mariner Energy, Inc.,
10.500% 08/01/06 1,500 1,380
Ocean Energy, Inc.,
8.875% 07/15/07 850 837
Petsec Energy, Inc.,
9.500% 06/15/07 2,000 780
Vintage Petroleum, Inc.,
9.750% 06/30/09 250 252
--------
5,703
--------
OIL & GAS FIELD SERVICES - 0.4%
RBF Finance Corp.,
11.000% 03/15/06 500 526
--------
-------------------------------------------------------------------------------
RETAIL TRADE - 1.9%
FOOD STORES - 1.5%
Pathmark Stores, Inc.,
9.625% 05/01/03 2,375 1,686
Richmont Marketing Specialist, Inc.,
10.125% 12/15/07 1,000 520
--------
2,206
--------
MISCELLANEOUS RETAIL - 0.4%
MTS, Inc.,
9.375% 05/01/05 1,500 645
--------
-------------------------------------------------------------------------------
SERVICES - 9.0%
AMUSEMENT & RECREATION - 3.9%
Boyd Gaming Corp.,
9.500% 07/15/07 650 608
Coast Hotels & Casinos, Inc.,
9.500% 04/01/09 1,000 934
Hollywood Casino Corp.,
11.250% 05/01/07 1,000 1,012
Hollywood Casino Shreveport,
13.000% 08/01/06 500 530
Hollywood Park, Inc.,
9.500% 08/01/07 1,000 1,000
Horseshoe Gaming, LLC,
9.375% 06/15/07 500 489
Mohegan Tribal Gaming Authority,
8.750% 01/01/09 735 698
Regal Cinemas, Inc.,
9.500% 06/01/08 1,480 607
--------
5,878
--------
BUSINESS SERVICES - 1.2%
Interep National Radio Sales, Inc.,
10.000% 07/01/08 1,500 1,365
PSINet, Inc.,
10.000% 02/15/05 (b) 550 484
--------
1,849
--------
HEALTH SERVICES - 1.6%
Tenet Healthcare Corp.,
8.625% 01/15/07 2,450 2,358
--------
HOTELS, CAMPS & LODGING - 1.9%
CapRock Communications Corp.,
11.500% 05/01/09 1,050 987
Eldorado Resorts LLC,
10.500% 08/15/06 2,005 1,965
--------
2,952
--------
OTHER SERVICES - 0.4%
Intertek Finance, PLC,
10.250% 11/01/06 800 664
--------
-------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 42.0%
AIR TRANSPORTATION - 0.9%
U.S. Airways, Inc.,
10.375% 03/01/13 1,600 1,328
--------
BROADCASTING - 4.1%
Allbritton Communications Co.,
9.750% 11/30/07 1,500 1,432
Cumulus Media, Inc.,
10.375% 07/01/08 225 204
Fox Family Worldwide, Inc.,
9.250% 11/01/07 1,500 1,335
Lin Holding Corp.,
stepped coupon, (c) (10.000% 03/01/03)
03/01/08 1,500 892
Sinclair Broadcast Group, Inc.,
10.000% 09/30/05 900 859
Young Broadcasting Corp.,
11.750% 11/15/04 1,500 1,508
--------
6,230
--------
CABLE - 12.1%
Adelphia Communications Corp.,
9.875% 03/01/07 2,600 2,545
Avalon Cable Holdings LLC,
stepped coupon, (c) (11.875% 12/01/03)
12/01/08 2,000 1,260
Charter Communications Holding LLC,
stepped coupon, (c) (9.920% 04/01/04)
04/01/11 2,075 1,136
Comcast UK Cable Partners Ltd.,
stepped coupon, (c) (11.200% 11/15/00)
11/15/07 2,000 1,920
Diamond Cable Co.,
stepped coupon, (c) (10.750% 02/15/02)
02/15/07 3,000 2,280
EchoStar DBS Corp.,
9.250% 02/01/06 2,350 2,268
FrontierVision Holdings LP,
stepped coupon, (c) (11.875% 09/15/01)
09/15/07 2,000 1,745
NTL, Inc.,
11.500% 10/01/08 1,000 1,015
Northland Cable Television, Inc.,
10.250% 11/15/07 1,350 1,296
Shop At Home, Inc.,
11.000% 04/01/05 500 500
Telewest Communication PLC,
stepped coupon, (c) (11.000% 10/01/00)
10/01/07 2,500 2,350
--------
18,315
--------
COMMUNICATIONS - 5.4%
Call-Net Enterprises, Inc.,
stepped coupon, (c) (10.800% 05/15/04)
05/15/09 2,000 740
Centennial Cellular Corp.,
10.750% 12/15/08 850 844
Exodus Communications, Inc.,
10.750% 12/15/09 600 597
Spectrasite Holdings, Inc.,
stepped coupon, (c) (11.250% 04/15/04)
04/15/09 1,600 872
10.750% 03/15/10 750 735
Time Warner Telecom LLC,
9.750% 07/15/08 1,000 990
United Pan-Europe Communications N.V.,
11.500% 02/01/10 1,000 930
Verio, Inc.,
11.250% 12/01/08 2,506 2,468
--------
8,176
--------
ELECTRIC SERVICES - 1.1%
AES Corp.,
9.500% 06/01/09 1,650 1,609
--------
MOTOR FREIGHT & WAREHOUSING - 0.1%
MTL, Inc.,
10.000% 06/15/06 1,000 770
--------
TELECOMMUNICATION - 18.1%
Adelphia Business Solutions,
stepped coupon, (c) (9.875% 03/01/07)
04/15/06 500 455
AirGate PCS, Inc.,
stepped coupon, (c) (13.500% 10/01/04)
10/01/09 1,109 649
Arch Communication Group, Inc.,
12.750% 07/01/07 1,000 820
Carrier1 International SA,
13.250% 02/15/09 750 750
Clearnet Communications, Inc.,
stepped coupon, (c) (14.750% 12/15/00)
12/15/05 1,750 1,750
Covad Communications Group, Inc.,
12.000% 02/15/10 325 306
Crown Castle International Corp.,
stepped coupon, (c) (10.375% 05/15/04)
05/15/11 1,750 1,032
FLAG Telecom Holdings Ltd.,
11.625% 03/30/10 750 690
Global Crossing Holding Ltd.:
9.125% 11/15/06 1,325 1,282
9.625% 05/15/08 150 147
Jazztel PLC,
13.250% 12/15/09 (e) KB 375 341
Level 3 Communications, Inc.:
9.125% 05/01/08 635 553
11.000% 03/15/08 800 768
McLeodUSA, Inc.:
stepped coupon, (c) (10.500% 03/01/01)
03/01/07 1,000 800
8.125% 02/15/09 1,000 885
MetroNet Communications Corp.,
12.000% 08/15/07 250 283
Metrocall, Inc.,
10.375% 10/01/07 735 544
Metromedia Fiber Network, Inc.,
10.000% 11/15/08 1,000 955
Microcell Telecommunications, Inc.,
stepped coupon, (c) (14.000% 12/01/01)
06/01/06 1,000 890
Nextlink Communications, Inc.,
10.750% 06/01/09 500 493
Nextel Communications, Inc.:
stepped coupon, (c) (9.375% 10/31/02)
11/15/09 1,300 1,232
stepped coupon, (c) (9.950% 02/15/03)
11/15/09 2,000 1,405
Nextel International, Inc.,
stepped coupon, (c) (12.125% 04/15/03)
04/15/08 665 413
Nextel Partners, Inc.,
11.000% 03/15/10 500 486
Ono Finance PLC,
13.000% 05/01/09 750 754
RCN Corp.,
stepped coupon, (c) (11.125% 10/15/02)
10/15/07 750 472
Rhythms NetConnections, Inc.,
12.750% 04/15/09 500 425
Rogers Cantel, Inc.,
9.750% 06/01/16 2,000 2,140
TeleCorp PCS, Inc.,
stepped coupon, (c) (11.625% 04/15/04)
04/15/09 2,150 1,397
UbiquiTel Operating Co.,
(c) 04/15/10 525 310
Viatel, Inc.,
11.500% 03/15/09 1,000 910
Williams Communications Group, Inc.,
10.875% 10/01/09 1,750 1,763
WinStar Equipment Corp.,
12.500% 04/15/08 250 244
Worldwide Fiber, Inc.,
12.000% 08/01/09 (b) 850 786
XM Satellite Radio Holdings, Inc.,
14.000% 03/15/10 350 317
--------
27,447
--------
WATER TRANSPORTATION - 0.2%
Azurix Corp.,
10.750% 02/15/10 325 324
--------
TOTAL CORPORATE FIXED-INCOME BONDS
(cost of $158,508) 139,102
--------
PREFERRED STOCKS - 7.9% SHARES
-------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 0.1%
DEPOSITORY INSTITUTIONS
Cal Fed Bancorp, Inc.,
9.125%, Series A 9 183
--------
-------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 7.8%
BROADCASTING - 0.5%
Granite Broadcasting Corp.,
12.750% PIK 1 479
PriMedia Inc.,
9.200% 3 273
--------
752
--------
-------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES (CONTINUED)
CABLE - 4.1%
Adelphia Communications Corp. 10 1,085
CSC Holdings Limited:
11.125% PIK 20 2,111
11.750% PIK 27 2,983
--------
6,179
--------
COMMUNICATIONS - 0.3%
Dobson Communication Corp.,
12.250% PIK 394
--------
ELECTRIC SERVICES - 0.7%
Nextlink Communications, Inc.,
14.000% PIK 22 1,076
--------
TELECOMMUNICATION - 2.2%
Concentric Network Corp.,
13.000% PIK 1 638
Global Crossing Ltd.,
10.500% PIK 8 750
Nextel Communications, Inc.:
13.000% PIK 1 1,431
11.125% PIK 1 599
--------
3,418
--------
TOTAL PREFERRED STOCKS
(cost of $12,475) 12,002
--------
COMMON STOCKS - 0.6%
-------------------------------------------------------------------------------
MINING & ENERGY - 0.1%
OIL & GAS EXTRACTION
Pioneer Natural Resources Co. 8 84
--------
-------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 0.5%
MOTOR FREIGHT & WAREHOUSING - 0.0%
St. Johnsbury Trucking Co. (d)(f) 79 1
Sun Carriers, Inc. (d)(f) 326 3
--------
4
--------
TELECOMMUNICATION - 0.5%
Nextel Communications, Inc. Class A (d) 3 339
Price Communications Corp. (d) 24 484
--------
823
--------
TOTAL COMMON STOCKS
(cost of $1,604) 911
--------
WARRANTS (D) - 0.3%
-------------------------------------------------------------------------------
SERVICES - 0.3%
HEALTH SERVICES - 0.1%
AirGate PCS, Inc. 1 157
--------
TELECOMMUNICATION - 0.1%
Carrier 1 International 156
MetroNet Communications Corp. 29
--------
185
--------
-------------------------------------------------------------------------------
RETAIL TRADE - 0.1%
FOOD STORES
Ono Finance PLC 1 113
--------
TOTAL WARRANTS (cost of $145) 455
--------
TOTAL INVESTMENTS - 100.0%
(cost of $172,732) (g) 152,470
--------
SHORT-TERM OBLIGATIONS PAR
-------------------------------------------------------------------------------
Federal Home Loan Bank
5.880% 05/01/2000 (h) $1,642 1,642
Federal National Mortgage Association
5.250% 06/16/2000 (h) 3,000 2,980
--------
TOTAL SHORT-TERM OBLIGATIONS
(cost of $4,623) 4,622
--------
FORWARD CURRENCY CONTRACTS 22
-------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET (45,222)
-------------------------------------------------------------------------------
NET ASSETS - 100.0% $111,892
========
NOTES TO INVESTMENT PORTFOLIO:
--------------------------------------------------------------------------------
(a) Industry classification percentages are based on total investments. Total
investments represents 136.3% of the Fund's net assets.
(b) 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 April 30, 2000,
the value of these securities amounted to $4,987 or 4.5% of net assets.
(c) Currently zero coupon. Shown parenthetically is the next interest rate to be
paid and the date the Fund will begin accruing this rate.
(d) Non-income producing.
(e) This is a British security. Par amount is stated in U.S. dollars.
(f) Represents fair value as determined in good faith under the direction of the
Trustees.
(g) Cost for federal income tax purposes is the same.
(h) Rate represents yield at date of purchase.
NET UNREALIZED
CONTRACTS IN EXCHANGE SETTLEMENT DEPRECIATION
TO DELIVER FOR DATE (U.S.$)
------------------------------------------------------------------------------
Eu 185 US$ 178 06/16/2000 $(10)
----
NET UNREALIZED
CONTRACTS IN EXCHANGE SETTLEMENT APPRECIATION
TO RECEIVE FOR DATE (U.S.$)
------------------------------------------------------------------------------
Eu 558 US$ 542 06/16/2000 $ 32
---
ACRONYM NAME
------ ------------
PIK Payment-In-Kind
See notes to investment portfolio.
<PAGE>
<TABLE>
-----------------------------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
April 30, 2000 (Unaudited
(In thousands except for per share amount)
<S> <C> <C>
ASSETS
Investments at value (cost $172,732) $152,470
Short-term obligations (cost of $4,623) 4,622
--------
157,092
Cash $ 1
Unrealized appreciation on forward currency contracts 32
Receivable for:
Interest 4,135
Investments sold 550
Dividends 97
Other 10 4,825
------- --------
Total assets 161,917
LIABILITIES
Unrealized depreciation on forward currency contracts 10
Payable for:
Distributions 1,176
Interest 1,106
Investments purchased 188
Notes payable 47,300
Accrued:
Management fee 61
Bookkeeping fee 4
Deferred Trustees fee 3
Other 177
-------
Total liabilities 50,025
--------
Net assets at value for 20,268 shares of beneficial interest
outstanding $111,892
--------
Net asset value per share $ 5.52
--------
COMPOSITION OF NET ASSETS
Capital paid in $151,020
Undistributed net investment income 39
Accumulated net realized loss (18,926)
Net unrealized appreciation/depreciation on:
Investments (20,263)
Foreign currency transactions 22
--------
$111,892
========
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
For the Six Months Ended April 30, 2000 (Unaudited)
(In thousands)
<S> <C> <C>
INVESTMENT INCOME
Interest $ 8,355
Dividends 710
--------
9,065
EXPENSES
Management fee $ 388
Bookkeeping fee 26
Transfer agent fee 17
Trustees fee 6
Custodian fee 2
Audit fee 13
Legal fee 5
Registration fee 12
Reports to shareholders 7
Other 38
-------
Total operating expenses 514
Interest expense 1,534
-------
Total expenses 2,048
--------
Net Investment Income 7,017
--------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments (4,109)
Foreign currency transactions 34
--------
Net realized loss (4,075)
Net change in unrealized appreciation/depreciation during the period on:
Investments (4,591)
Foreign currency transactions 22
--------
Net unrealized depreciation (4,569)
--------
Net Loss (8,644)
--------
Decrease in Net Assets from Operations $ (1,627)
========
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 7,017 $ 14,068
Net realized loss (4,075) (3,133)
Net change in unrealized appreciation/depreciation (4,569) (1,305)
-------- --------
Net Increase (Decrease) from Operations (1,627) 9,630
DISTRIBUTIONS:
From net investment income (7,499) (14,199)
-------- --------
(9,126) (4,569)
FUND SHARE TRANSACTIONS
Value of distributions reinvested -- 1,107
-------- --------
Net Increase from Fund Share Transactions -- 1,107
-------- --------
Total Decrease (9,126) (3,462)
NET ASSETS
Beginning of period 121,018 124,480
-------- --------
End of period (including undistributed net investment income of
$39 and $521, respectively) $111,892 $121,018
======== ========
NUMBER OF FUND SHARES
Issued for distributions reinvested -- 201
-------- --------
Outstanding at
Beginning of period 20,268 20,067
-------- --------
End of period 20,268 20,268
-------- --------
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
-----------------------
STATEMENT OF CASH FLOWS
-----------------------
Six Months Ended April 30, 2000
(In thousands)
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS (UNAUDITED)
SIX MONTHS
ENDED
APRIL 30,
---------
2000
---------
<S> <C>
Operations:
Net investment income(a) $ 5,561
Net increase in cash from investment activity(b) 1,936
---------
Net increase from Operations 7,497
Distributions from net investment income (7,498)
---------
(1)
Cash
Beginning of period 2
---------
End of period $ 1
=========
Notes to statement of cash flows:
(a) Reconciliation of net investment income:
Net investment income per books $ 7,017
Net change in assets and liabilities related to income and expenses, including net accretion and (1,456)
amortization
---------
Net investment income - cash basis $ 5,561
=========
(b) Net increase in cash from investment activity
Receipts for investments sold $ 407,431
Cost of investments purchased (405,495)
---------
$ 1,936
=========
See notes to financial statements.
</TABLE>
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
April 30, 2000 (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, 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 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 investment objective is to seek high current
income and total return by investing primarily in lower-rated corporate debt
securities. The Fund 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 consistently followed by the Fund 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.
Equity securities generally 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.
Forward currency contracts are valued based on the weighted value of the
exchange traded contracts with similar durations.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
The value of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates.
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 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 Flows.
The cash amount shown in the Statement of Cash Flows is the amount included 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, 2000.
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.
FOREIGN CURRENCY TRANSACTIONS:
Net realized and unrealized gains (losses) on foreign currency transactions
includes gains (losses) arising from the fluctuations in exchange rates
between trade and settlement dates on securities transactions, gains (losses)
arising from the disposition of foreign currency, and currency gains (losses)
between the accrual and payment dates on dividends and interest income and
foreign withholding taxes.
The Fund does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included
with the net realized and unrealized gains (losses) on investments.
FORWARD CURRENCY CONTRACTS:
The Fund may enter into forward currency contracts to purchase or sell foreign
currencies at predetermined exchange rates in connection with the settlement
of purchases and sales of securities. The Fund may also enter into forward
currency contracts to hedge certain other foreign currency denominated assets.
The contracts are used to minimize the exposure to foreign exchange rate
fluctuations during the period between trade and settlement date of the
contracts. All contracts are marked-to-market daily, resulting in unrealized
gains (losses) which become realized at the time the forward currency
contracts are closed or mature. Realized and unrealized gains (losses) arising
from such transactions are included in net realized and unrealized gains
(losses) on foreign currency transactions. Forward currency contracts do not
eliminate fluctuations in the prices of the Fund's portfolio securities. While
the maximum potential loss from such contracts is the aggregate face value in
U.S. dollars at the time the contract was opened, exposure is typically
limited to the change in value of the contract (in U.S. dollars) over the
period it remains open. Risks may also arise if counterparties fail to perform
their obligations under the contracts.
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 Advisor) is the investment advisor
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 Advisor provides bookkeeping and pricing services for a monthly fee equal to
$27,000 annually 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
Advisor.
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 Fund's assets.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY
During the six months ended April 30, 2000, purchases and sales of
investments, other than short-term obligations, were $32,898,315 and
$31,817,592 respectively.
Unrealized appreciation (depreciation) at April 30, 2000, based on cost of
investments for both financial statement and federal income tax purposes was:
Gross unrealized appreciation $ 1,892,656
Gross unrealized depreciation (22,155,431)
------------
Net unrealized depreciation $(20,262,775)
============
CAPITAL LOSS CARRYFORWARDS
At October 31, 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 $ 9,467,000
2003 2,102,000
2007 3,282,000
-----------
$14,851,000
===========
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
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
NOTE 5. LOAN AGREEMENT
At April 30, 2000, the Fund had four term loans outstanding with Bank of
America Illinois, totaling $47,300,000, comprised of a $13,700,000 term loan
which bears interest at 6.17% per annum, due June 13, 2000, a $6,900,000 term
loan which bears interest at 6.37% per annum, due May 21, 2001, a $3,800,000
revolving loan which bears interest at 6.29375% per annum, due June 26, 2001,
a $9,200,000 term loan which bears interest at 6.26% per annum, due June 29,
2001, and a $13,700,000 term loan which bears interest at 6.84% per annum, due
June 13, 2002. The Fund is required to maintain certain asset coverage with
respect to the loans.
<PAGE>
<TABLE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected per share data, total return, ratios and supplemental data
throughout each period are as follows:
<CAPTION>
(UNAUDITED)
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED OCTOBER 31,
-------- ------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 5.970 $ 6.200 $ 7.270 $ 6.890 $ 6.620 $ 6.280
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.324 0.705 0.699 0.699(c) 0.699 0.696
Net realized and unrealized gain (loss) (0.404) (0.231) (1.077) 0.383 0.258 0.340
-------- -------- -------- -------- -------- --------
Total from Investment Operations (0.102) 0.474 (0.378) 1.082 0.957 1.036
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.370) (0.704) (0.692) (0.702) (0.687) (0.696)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 5.520 $ 5.970 $ 6.200 $ 7.270 $ 6.890 $ 6.620
-------- -------- -------- -------- -------- --------
MARKET PRICE PER SHARE $ 5.190 $ 5.625 $ 6.812 $ 7.562 $ 7.125 $ 6.875
-------- -------- -------- -------- -------- --------
Total return -- based on market value (a) (1.41)%(b) (7.89)% (0.74)% 16.97% 14.62% 33.00%
-------- -------- -------- -------- -------- --------
RATIOS TO AVERAGE NET ASSETS
Operating expenses (c) 0.86%(d) 0.89% 0.88% 0.89% 0.98% 0.95%
Interest and amortization of deferred debt
issuance expenses 2.57%(d) 2.48% 2.11% 1.96% 2.07% 1.94%
-------- -------- -------- -------- -------- --------
Total expenses 3.43%(d) 3.37% 2.99% 2.85% 3.05% 2.89%
Net investment income (c) 11.77%(d) 10.82% 9.70% 9.63% 10.11% 10.76%
Portfolio turnover 20%(b) 44% 69% 92% 92% 92%
Net assets at end of period (000) $111,892 $121,018 $124,480 $107,774 $ 99,925 $ 93,984
(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 an impact of 0.01% and $0.001 per share in
1997 only.
(d) Annualized.
</TABLE>
SENIOR SECURITIES OF COLONIAL INTERMEDIATE HIGH INCOME FUND: (UNAUDITED)
INVOLUNTARY
TOTAL ASSET LIQUIDATING APPROXIMATE
AMOUNT COVERAGE PREFERENCE MARKET VALUE
YEAR OUTSTANDING PER SHARE PER UNIT PER UNIT
---- ----------- --------- ------------ -------------
2000 $47,300,000 237% NA 100
1999 $47,300,000 256% NA 100
1998 $47,300,000 263% NA 100
1997 $27,400,000 393% NA 100
1996 $27,400,000 365% NA 100
1995 $27,400,000 343% NA 100
<PAGE>
--------------------------
DIVIDEND REINVESTMENT PLAN
--------------------------
As a shareholder in the Fund you are eligible to participate in the 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 mailed by check 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 of 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. However, if the market price of the 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.
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 30 days written notice
to the Plan participants. All correspondence concerning the Plan should be
directed to State Street Bank and Trust Company, the Plan agent, by mail at P.O.
Box 8200, Boston, MA 02266-8200 or by phone at 1-800-426-5523.
<PAGE>
TRANSFER AGENT
--------------------------------------------------------------------------------
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Intermediate High Income Fund is:
First Data Investor Services Group, Inc.
P.O. Box 8030
Boston, MA 02266-8030
1-800-331-1710
The Fund 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 Intermediate High
Income Fund.
SEMIANNUAL REPORT.
COLONIAL INTERMEDIATE HIGH INCOME FUND
<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
Professor of Finance, College of
Business, Boise State University; Business Consultant and Author
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
----------------------------------------------------------
COLONIAL INTERMEDIATE HIGH INCOME FUND SEMIANNUAL REPORT
----------------------------------------------------------
IH-03/322B-0500 (6/00) 00/882
