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<PAGE>
COLONIAL
HIGH INCOME
MUNICIPAL
TRUST
SEMI ANNUAL REPORT
JUNE 30, 1996
<PAGE>
COLONIAL HIGH INCOME MUNICIPAL TRUST HIGHLIGHTS
JANUARY 1, 1996 - JUNE 30, 1996
INVESTMENT OBJECTIVE: Colonial High Income Municipal Trust seeks to provide high
current income, generally exempt from federal income taxes, by investing
primarily in medium and lower quality municipal securities.
POLICY CHANGE: At a meeting held on February 16, 1996, the Trustees approved a
policy change to eliminate the Trust's 5% limit on investing in zero coupon
tax-exempt bonds.
THE FUND IS DESIGNED TO OFFER:
- Potential for high tax-free income
- Professional management
- Expert credit analysis
CO-PORTFOLIO MANAGER COMMENTARY: "Despite recent events which have had a
negative impact on the municipal bond market, including an increase in long-term
interest rates of close to 100 basis points, we continue to maintain a `big
picture' strategy that is based on the long-range fundamental prospects of the
companies in which the Trust invests. While we believe that the tax-exempt bond
market may continue to experience lower prices in the coming months, we remain
confident that our approach will continue to provide attractive returns for
investors."- Peter Andersen
COLONIAL HIGH INCOME MUNICIPAL TRUST PERFORMANCE
<TABLE>
<S> <C>
Distributions declared per share(1) $0.292
Six-month total return, assuming
reinvestment of all distributions
- NAV 0.36%
- Market Price 12.44%
Price per share
- NAV $ 8.28
- Market Price $ 8.00
</TABLE>
1 A portion of the Fund's income may be subject to the alternative minimum tax.
<TABLE>
<CAPTION>
TOP FIVE SECTORS QUALITY BREAKDOWN
(as of 6/30/96) (as of 6/30/96)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Nursing 17.58% AAA: 7.2%
Housing 13.98% AA: 4.3%
Hospital 8.74% A: 6.5%
Paper 7.83% BBB: 22.8%
Publicly Owned Utilities 4.69% BB: 0.6%
NON-RATED: 56.8%
OTHER: 1.8%
</TABLE>
Because the Trust is actively managed, there can be no guarantee the Trust will
continue to maintain these quality weightings in the future. The sector
classifications used on this page are based upon Colonial's defined criteria as
used in the investment process.
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
I am pleased to present your Fund's semiannual report
for the period ended June 30, 1996. First, however, I
would like to extend my thanks to President John A. [Photo of President]
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
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 six months. Interest
rates rose fairly steadily during the first half of 1996. This increase was
caused in part by unemployment statistics that proved to be lower than
anticipated, causing a decline in bond prices.
While there may be some current stock market volatility, we expect
corporate earnings to continue to make progress, but at a slower pace than in
1995. We also anticipate growth opportunities in certain foreign markets.
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 superior investment returns. In my new role, I
look forward to communicating with you about your Colonial investment. We
appreciate the opportunity to help you meet your investment goals.
Respectfully,
/s/ HAROLD W. COGGER
Harold W. Cogger
President
August 12, 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
JUNE 30, 1996 (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 98.2% PAR VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - 1.8%
EDUCATION - 0.9%
NY State Dormitory Authority,
City University Consolidated Bonds,
Series 1993-F,
5.000% 07/01/20 $ 2,900 $ 2,418
---------------
SCHOOL DISTRICT GENERAL OBLIGATION - 0.9%
AZ Apache County School District,
Number 010, Round Valley
Project of 1987, Series 1990-C,
9.875% 07/01/05 2,000 2,182
---------------
- --------------------------------------------------------------------------------------------------------
HEALTH CARE - 27.7%
HOSPITAL - 8.6%
AL Alabama Special Care Facilities Authority,
Montgomery Healthcare, Series 1989,
11.000% 10/01/19 3,375 3,442
CA State Health Facilities Financing
Authority, Kaiser Permanente,
Series 1989-A,
(a) 10/01/12 5,500 2,069
DE State Economic Development Authority,
Riverside Hospital, Series 1992-A,
9.500% 01/01/22 900 1,169
GA Clayton Hospital Authority,
The Woodlands Foundation Inc.,
Series 1991-A,
9.750% 05/01/21 2,500 2,125
ID State Health Facilities Authority,
IHC Hospitals, Inc.,
8.190% 02/15/21 1,750 1,855
IL Health Facilities Authority:
Edgewater Medical Center,
Series A,
9.250% 07/01/24 3,000 3,232
Hinsdale Hospital, Series 1990-C,
9.500% 11/15/19 700 802
MO Hannibal Industrial Development,
Medical Systems of Northeast Missouri,
Series 1992,
9.500% 03/01/22 2,250 2,568
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
MS Lowndes County, Golden Triangle
Regional Medical Hospital, Series 1990,
8.500% 02/01/10 $ 250 $ 269
NJ Health Care Facilities Financing
Authority, Raritan Bay Medical Center,
7.250% 07/01/27 1,000 1,017
TX Tarrant County, Health Facilities
Development Corp.,
10.125% 04/01/21 1,600 560
VT Educational & Health Buildings
Financing Agency, Springfield Hospital,
Series A,
7.750% 01/01/13 1,145 1,231
WA Washington State Health Care
Facility, Grays Harbor Community
Hospital, Series 1993:
7.200% 07/01/03 (b) 180 188
8.025% 07/01/20 (b) 1,480 1,560
---------------
22,087
---------------
INTERMEDIATE CARE FACILITIES - 1.7%
IL Champaign, First Mortgage,
Hoosier Care Inc., Series 1989-A,
9.750% 08/01/19 1,485 1,576
MA State Health & Educational
Facilities Authority, Corporation
for Independent Living,
8.100% 07/01/18 740 729
TN Shelby County, Health, Education,
& Housing Facilities Board, Open Arms
Development Center:
Series 1992-A,
9.750% 08/01/19 940 1,067
Series 1992-C,
9.750% 08/01/19 915 1,038
---------------
4,410
---------------
NURSING HOME - 17.4%
CO Health Care Facilities Authority:
American Housing Foundation I,
Series 1990,
10.250% 12/01/20 1,500 1,659
Denver Health Care Inc.,
10.500% 05/01/19 (c) 1,400 964
Pioneer Health Care, Series 1989,
10.500% 05/01/19 2,000 1,940
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- --------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTH CARE - CONT.
NURSING HOME - CONT.
FL Flagler County Industrial
Development Authority,
South Florida Properties, Series 1988,
10.500% 12/01/18 $ 2,450 $ 2,465
FL Gadsden County Industrial
Development Authority,
Florida Properties, Inc., Series 1988-A,
10.450% 10/01/18 1,945 2,006
FL Jacksonville Industrial Development,
Beverly Enterprises,
9.750% 10/01/11 940 1,027
FL Leon County Industrial Development,
Beverly Enterprises, Series 1985,
9.800% 06/01/11 805 896
FL Volusia County Industrial
Development Authority, Beverly
Enterprises, Series 1987,
9.800% 12/01/07 870 901
IA State Finance Authority,
Care Initiatives Project, Series 1996,
9.250% 07/01/25 1,900 2,078
IN Gary Industrial Economic Development,
West Side Health Care Center,
Series 1987-A,
11.500% 10/01/17 1,500 1,470
IN Michigan City Health Facilities,
Metropolitan Health Foundation
Inc. Project,
10.000% 11/01/22 3,085 2,468
KS Washington County Industrial
Development Authority, Central
States, Series 1989,
10.250% 11/01/19 1,925 1,867
MA Boston, St. Joseph's Nursing Care
Center, Inc., Series 1990,
10.000% 01/01/20 980 1,074
MA State Industrial Finance Agency,
American Health Foundation Inc.,
Series 1989,
10.125% 03/01/19 2,035 2,137
MO Grove Industrial Development Authority,
First Mortgage Health Care Facility,
Heritage Manor, Series 1988,
10.250% 11/01/13 1,800 1,620
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
MO Saint Louis County Industrial
Development Authority,
10.250% 12/01/16 $ 1,825 $ 1,864
NJ Economic Development Authority,
Geriatric and Medical Service, Inc.,
Series B,
10.500% 05/01/20 2,000 2,160
NM Clovis Industrial Development:
Retirement Ranches Project,
10.750% 04/01/19 2,140 2,343
Retirement Ranches Project,
10.750% 04/01/19 215 236
PA Chester County Industrial Development,
Pennsylvania Nursing Home, Inc.,
Series 1989,
10.125% 05/01/19 2,615 2,697
PA Philadelphia Authority for Industrial
Development, RHA/ Philadelphia Project,
10.250% 11/01/18 1,465 1,513
TN Metropolitan Government, Nashville
& Davidson Counties, Health & Education
Facilities, Central States, Series 1989,
10.250% 11/01/19 1,785 1,731
TX Bexar County Health Facilities
Development, Heartway Corp.,
Series 1989-A-1,
10.250% 03/01/19 (d) 1,905 1,333
TX Whitehouse Health Facilities
Development Corp., Oak Brook Health
Care Center, Series 1989,
10.000% 12/01/19 1,825 1,854
VA Beach Development Authority,
Beverly Enterprises, Series 1985,
10.000% 04/01/10 1,730 1,912
WI State Health & Educational Facilities ,
Metro Health Foundation Inc.,
10.000% 11/01/22 (b) 2,775 2,220
---------------
44,435
---------------
- --------------------------------------------------------------------------------------------------------
HOUSING - 17.3%
ASSISTED LIVING/SENIOR - 2.3%
IL State Development Finance Authority,
Care Institute, Inc.,
8.250% 06/01/25 1,300 1,324
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- --------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTH CARE - CONT.
ASSISTED LIVING/SENIOR - CONT.
MN Roseville, Care Institute, Inc.,
Series 1993,
7.750% 11/01/23 $ 1,740 $ 1,666
PA Montgomery County Industrial
Development Authority, Assisted
Living Facility, Series 1993-A,
8.250% 05/01/23 870 882
TX Bell County Health Facilities
Development Corp., Care Institutions, Inc.,
9.000% 11/01/24 1,800 1,917
---------------
5,789
---------------
MULTI-FAMILY - 11.8%
FL Clearwater Housing Authority,
Hampton Apartments, Series 1994,
8.250% 05/01/24 2,500 2,594
FL Hialeah Housing Authority,
Series 1991,
9.500% 11/01/21 3,000 3,086
FL State Housing Finance Agency,
Windsong Apartments, Series 1993-C,
9.250% 01/01/19 1,000 995
GA Augusta Housing Authority Mortgage,
Mountain Ridge Holdings II, Series A,
8.960% 09/01/24 (d) 1,880 1,222
MN Lakeville Multi-family Housing,
Southfork Apartments Project:
Series 1989-A,
9.875% 02/01/20 2,570 2,596
Series 1989-B,
(e) 02/01/20 1,150 1,961
MN Washington County Housing &
Redevelopment Authority, Cottages of
Aspen, Series 1992,
9.250% 06/01/22 1,095 1,115
MN White Bear Lake,
Birch Lake Townhome Project:
Series 1989-A,
10.250% 07/15/19 2,200 2,194
Series 1989-B,
(e) 07/15/19 800 1,317
NC Durham, Urban Development Authority,
Durham Hosiery Mill Project, Series 1987,
7.500% 08/01/29 1,595 1,693
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
NC Eastern Carolina Regional Housing
Authority, Jacksonville New River
Apartments, Series 1994,
8.250% 09/01/14 $ 1,975 $ 1,977
NY Nyack Housing Assistance Corp.,
Nyack Plaza Apartments,
7.375% 06/01/21 (b) 446 450
NY Yorktown Housing Corp.,
Beaveridge Apartments, Series 1979,
7.375% 06/01/21 (b) 477 477
Pass Through Certificates, Series 1993-A,
8.500% 12/01/16 (b) 5,098 5,193
TX Galveston Health Facilities Center,
8.000% 08/01/23 1,000 1,007
VA Alexandria Redevelopment
& Housing Authority, Courthouse
Commons Apartments, Series 1990-A,
10.000% 01/01/21 1,500 1,502
VA Roanoke Redevelopment & Housing
Authority, First Mortgage, Mountain
Ridge,
9.250% 11/01/22 (d) 960 912
---------------
30,291
---------------
SINGLE FAMILY - 3.2%
LA Louisiana Housing Finance Agency,
Residual Lien Mortgage, Series 1992,
7.375% 09/01/13 905 920
NE Investment Finance Authority,
Single-family Mortgage, Series 1990-B,
11.265% 03/15/22 1,800 1,989
OH Housing Finance Agency, Single-family
Mortgage Revenue, RIB (variable rate),
Series B-4,
9.855% 03/31/31 1,025 1,062
TX Bexar County Housing Finance Corp.,
GNMA Collateralized Mortgage,
Series 1989-A,
8.200% 04/01/22 3,390 3,627
TX Harris County Housing Finance Corp.,
Single-family, Series 1987,
8.875% 12/01/17 545 560
---------------
8,158
---------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- --------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
OTHER - 4.1%
PUBLIC FACILITIES IMPROVEMENT - 1.0%
CA Statewide Communities
Development Corp.,
J. Paul Getty Trust Center,
5.000% 10/01/23 (f) $ 3,000 $ 2,610
---------------
PUBLIC INFRASTRUCTURE - 0.8%
VI Virgin Islands Public Financing,
Series 1992-A,
7.250% 10/01/18 2,000 2,110
---------------
REFUNDED/ESCROW/SPECIAL OBLIGATION - 2.3%
MA State Industrial Finance Agency,
Series 1990,
9.000% 10/01/20 2,380 2,799
MI State Hospital Finance Authority,
Detroit Osteopathic Hospital,
Series 1987-A,
7.500% 11/01/10 2,235 2,380
NC Lincoln County, Lincoln County Hospital,
9.000% 05/01/07 520 624
---------------
5,803
---------------
- --------------------------------------------------------------------------------------------------------
OTHER REVENUE - 19.9%
AMUSEMENTS & RECREATION - 0.5%
MN Mille Lacs
Capital Improvement
Infrastructure, Band of Chippewa,
Series 1992-A,
9.250% 11/01/12 1,115 1,235
---------------
CHEMICALS - 4.2%
LA St. Charles Parish Pollution Control
Revenue, Union Carbide Project,
7.350% 11/01/22 3,000 3,195
SC York County Industrial Revenue,
Hoechst Celanese Corp.,
5.700% 01/01/24 4,000 3,755
TX Corpus Christi Port Authority,
Hoechst Celanese Corp.,
7.500% 08/01/12 3,500 3,833
---------------
10,783
---------------
HOTELS/CAMPS/LODGING - 1.0%
MN Burnsville Commercial Development,
Holiday Inn Project,
10.600% 06/01/06 2,500 2,563
---------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
MANUFACTURING - 3.9%
CO Mesa County Industrial Development,
Joy Technologies, Inc., Series 1992,
8.500% 09/15/06 $ 1,000 $ 1,054
MA State Industrial Finance Agency,
House of Bianchi, Inc.,
8.750% 06/01/18 345 353
MN Brooklyn Park, TL Systems Corp.,
Series 1991,
10.000% 09/01/16 795 980
OH Cuyahoga County, Joy Technologies, Inc.,
Series 1992,
8.750% 09/15/07 550 586
TN McKenzie Individual Development Board,
American Lantern Co.,
10.500% 05/01/16 2,160 2,287
WA Pilchuck Development Public Corp.,
Special Facilities Airport, Tramco, Inc. Project,
6.000% 08/01/23 5,000 4,738
---------------
9,998
---------------
MISCELLANEOUS RETAIL - 0.9%
OH Lake County Economic Development,
North Madison Properties, Series 1993,
8.819% 09/01/11 765 791
VA Virginia Beach Development Authority,
SC Diamond Associates, Inc.,
8.000% 12/01/10 1,490 1,494
---------------
2,285
---------------
OTHER REVENUE - 1.2%
IL Hennepin Individual Development,
Methchem Corp., Series 1989,
10.250% 01/01/05 (d) 2,650 40
IN Hammond, American Maize
Products Co., Series 1994,
8.000% 12/01/24 2,000 2,195
MD Baltimore, Park Charles Project,
Series 1986,
8.000% 01/01/10 920 949
---------------
3,184
---------------
PAPER PRODUCTS - 7.7%
GA Rockdale County Development
Authority, Solid Waste Disposal, Visy
Paper, Inc., Series 1993,
7.500% 01/01/26 5,000 4,975
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- --------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
OTHER REVENUE - CONT.
PAPER PRODUCTS - CONT.
MI State Strategic Fund:
Blue Water Fiber Project, Series 1994,
8.000% 01/01/12 $ 2,500 $ 2,147
Great Lakes Pulp & Fibre Project,
Series 1994,
10.250% 12/01/16 5,000 4,363
NY New York City Industrial
Development Agency, Visy Paper, Inc.,
Series 1995,
7.950% 01/01/28 2,400 2,493
SC Darlington County Industrial
Development Authority, SONOCO
Products Co. Project,
6.125% 06/01/25 2,000 2,013
WA Walla Walla Public Corp.,
Ponderosa Fibres Project,
9.125% 01/01/26 4,000 3,805
---------------
19,796
---------------
PETROLEUM REFINING - 0.5%
NY State Environmental Facilities Corp.,
Occidental Petroleum Corp. Project,
Series 1995,
6.100% 11/01/30 1,300 1,199
---------------
- --------------------------------------------------------------------------------------------------------
RESOURCE RECOVERY - 2.5%
CO-GENERATION - 2.0%
FL Martin County Industrial
Development Authority, Indiantown
Co-Generation Project, Series 1994-A,
7.875% 12/15/25 1,000 1,116
MD State Energy Financing Administration,
AES Warrior Co-Generation Project,
7.400% 09/01/19 2,000 2,043
NY New York City Port Authority,
Special Obligation Revenue,
Special KIAC Project,
6.750% 10/01/11 2,000 2,013
---------------
5,172
---------------
LAND FILL - 0.5%
MA State Industrial Finance Agency,
Peabody Monofill Associates, Inc.,
Series 1995,
9.000% 09/01/05 1,260 1,315
---------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
TAX-BACKED - 3.6%
GENERAL OBLIGATION - 1.3%
NY New York City, Series A,
7.000% 08/01/07 (g) $ 2,000 $ 2,113
PR Commonwealth of Puerto Rico,
5.375% 07/01/22 (f) 1,250 1,186
---------------
3,299
---------------
MELLO-ROOS/1915 ACT - 0.1%
CA Carson Improvement, Series 1992,
7.375% 09/02/22 195 199
---------------
SALES & EXCISE TAX - 2.2%
IL Development Finance Authority,
City of Marion Project, Series 1991,
9.625% 09/15/21 2,475 2,500
IL Metropolitan Pier & Exposition
Authority, McCormick Place Expansion
Project, Series A,
(a) 06/15/16 10,000 3,000
---------------
5,500
---------------
- --------------------------------------------------------------------------------------------------------
TRANSPORTATION - 11.7%
AIR TRANSPORTATION - 3.3%
CO Denver City and County
Special Facilities Airport,
United Air Lines, Series 1992-A,
6.875% 10/01/32 1,645 1,668
IN Indianapolis Airport Authority,
Federal Express Project,
7.100% 01/15/17 2,000 2,103
TX Alliance Airport Authority:
American Airlines Project,
7.500% 12/01/29 1,600 1,692
Federal Express Corp., Series 1996,
6.375% 04/01/21 3,000 2,959
---------------
8,422
---------------
AIRPORT - 3.1%
CO Denver City & County Airport:
Series 1992-B,
7.250% 11/15/23 2,855 3,026
Series 1992-C,
6.125% 11/15/25 5,120 4,864
---------------
7,890
---------------
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- --------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION - CONT.
TRANSPORTATION - 1.5%
NY Metropolitan Transportation Authority,
Commuter Facilities Board, Series 7
Project,
5.625% 07/01/16 $ 4,000 $ 3,715
---------------
TURNPIKE/TOLLROAD/BRIDGE - 3.8%
CA San Joaquin Hills Transportation
Corrider Agency, Senior Lien Toll Road,
Series 1993:
(a) 01/01/23 14,500 2,411
5.000% 01/01/33 6,130 5,034
6.750% 01/01/32 1,500 1,526
7.000% 01/01/30 865 893
---------------
9,864
---------------
- --------------------------------------------------------------------------------------------------------
UTILITY - 9.6%
INDIVIDUAL POWER PRODUCER - 1.6%
PA State Economic Development Finance
Authority, Colver Project, Series D,
7.125% 12/01/15 4,000 4,085
---------------
INVESTOR OWNED - 4.6%
IL Bryant Pollution Control Revenue,
Central Illinois Light Co. Project,
5.900% 08/01/23 5,000 4,856
IL Chicago People's Gas, Light & Coke Co.,
Series 1990-A,
8.100% 05/01/20 2,000 2,205
NY State Energy Research & Development
Authority, Consolidated Edison Co.,
Series 1991-A,
7.500% 01/01/26 2,000 2,158
PA Beaver County Industrial Development
Authority, Pollution Control Revenue,
Ohio Edison Project, Series 1989-A,
7.750% 09/01/24 2,500 2,638
---------------
11,857
---------------
MUNICIPAL ELECTRIC - 1.2%
CA Colton Public Financing Authority,
Series 1995,
7.500% 10/01/20 2,000 2,050
VI Water and Power Authority, Electric
Systems, Series 1991-A,
7.400% 07/01/11 1,000 1,055
---------------
3,105
---------------
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1996
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
WATER & SEWER - 2.2%
CT State Development Authority,
Sewer Sludge Disposal Facilities,
Series 1996,
8.250% 06/01/06 $ 1,250 $ 1,250
LA Public Facility Belmont Water
Authority,
9.000% 03/15/24 820 842
MA State Industrial Finance Agency,
Environmental Service Project,
Series 1994-A,
8.750% 11/01/21 1,000 1,006
MS Five Lakes Utility District,
8.250% 07/15/24 500 505
NJ State Economic Development
Authority, Hills Development Co.,
Series 1988,
10.500% 09/01/08 2,000 2,058
---------------
5,661
---------------
TOTAL MUNICIPAL BONDS (cost of $253,435)(h) 251,420
---------------
SHORT-TERM OBLIGATIONS - 1.8%
- --------------------------------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (i)
IN Health Financing Authority,
3.550% 12/01/10 600 600
MS Perry County, Leaf River Forest Project,
3.550% 03/01/02 2,900 2,900
NY New York City General Obligation,
3.750% 08/15/22 1,000 1,000
---------------
TOTAL SHORT-TERM OBLIGATIONS 4,500
---------------
OTHER ASSETS & LIABILITIES, NET - 0.0% 9
- --------------------------------------------------------------------------------------------------------
NET ASSETS -100% $ 255,929
---------------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
(a) Zero coupon bond.
(b) 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 June 30, 1996, the value of these
securities amounted to $10,088 or 3.9% of net assets.
(c) The Fund and the other bondholders caused foreclosure on the
underlying assets. A portion of the proceeds of the foreclosure
were received prior to June 30, 1996, and were applied against
the interest receivable on the
15
<PAGE>
NOTES TO INVESTMENT PORTFOLIO - CONT:
bonds, with the remainder credited to an other liability
account. Once final proceeds of the foreclosure are received,
the bond will be removed from the portfolio, a loss representing
the cost less the total non-interest proceeds received will be
recorded, and the other liability will be reversed at that time.
(d) This issuer is in default of certain debt covenants. Income is
not being accrued.
(e) Accrued interest accumulates in the value of the security and is
payable at redemption.
(f) These securities, with a total market value of $3,796, are being
used to collateralize the delayed delivery purchase indicated in
note (g) below.
(g) This security has been purchased on a delayed delivery basis for
settlement at a future date beyond the customary settlement
time.
(h) Cost for federal income tax purposes is the same.
(i) 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 June 30, 1996.
Acronym Name
------- ----
RIB Residual Interest Bond
See notes to financial statements.
16
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands except for per share amount)
ASSETS
<S> <C> <C>
Investments at value (cost $253,435) $ 251,420
Short-term obligations 4,500
------------------
255,920
Receivable for:
Interest $ 5,607
Investments sold 100
Other 51 5,758
------------- ------------------
Total Assets 261,678
LIABILITIES
Payable for:
Investments purchased 3,349
Distributions 1,502
Accrued:
Deferred Trustees fees 3
Other 895
-------------
Total Liabilities 5,749
------------------
NET ASSETS at value for 30,919
shares of beneficial interest outstanding $ 255,929
------------------
Net asset value per share $ 8.28
------------------
COMPOSITION OF NET ASSETS
Capital paid in $ 286,695
Undistributed net investment income 345
Accumulated net realized loss (29,096)
Net unrealized depreciation (2,015)
------------------
$ 255,929
------------------
</TABLE>
See notes to financial statements.
17
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
INVESTMENT INCOME
<S> <C> <C>
Interest $ 10,136
EXPENSES
Management fee $ 1,036
Transfer agent 46
Bookkeeping fee 33
Trustees fee 15
Custodian fee 22
Audit fee 21
Legal fee 128
Reports to shareholders 7
Other 68 1,376
------------- ------------------
Net Investment Income 8,760
------------------
NET REALIZED & UNREALIZED LOSS ON PORTFOLIO POSITIONS
Net realized loss (2,308)
Net unrealized depreciation during
the period (5,974)
-------------
Net Loss (8,282)
------------------
Net Increase in Net Assets from Operations $ 478
------------------
</TABLE>
See notes to financial statements.
18
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Unaudited)
Six months
ended Year ended
(in thousands) June 30 December 30
------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS 1996 1995
Operations:
Net investment income $ 8,760 $ 18,441
Net realized loss (2,308) (4,446)
Net unrealized appreciation (depreciation) (5,974) 22,753
------------- ------------------
Net Increase from Operations 478 36,748
Distributions:
From net investment income (9,016) (18,248)
------------- ------------------
Total Increase (Decrease) (8,538) 18,500
NET ASSETS
Beginning of period 264,467 245,967
------------- ------------------
End of period (including undistributed net
investment income of $345 and $598,
respectively) $255,929 $ 264,467
------------- ------------------
NUMBER OF FUND SHARES
Outstanding at end of period 30,919 30,919
------------- ------------------
</TABLE>
See notes to financial statements.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial High Income Municipal Trust
(the Fund), a series of Colonial Trust I, the accompanying financial
statements contain all normal and recurring adjustments necessary for
the fair presentation of the financial position of the Fund at June
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: Colonial High Income Municipal Trust (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, generally exempt from Federal income taxes. 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 significant
accounting policies are 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.
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 (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.
20
<PAGE>
Notes to Financial Statements/June 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; 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 Fund's capital accounts to reflect income and gains
available for distribution (or available capital loss carryforwards)
under income tax regulations.
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE: Colonial Management Associates, Inc. (the Adviser)
is the investment Adviser of the Fund and furnishes accounting and
other services and office facilities for a monthly fee equal to 0.80%
annually of the Fund's average weekly net assets.
BOOKKEEPING FEE: The Adviser provides bookkeeping and pricing
services for $18,000 per year plus 0.0233% of the Fund's average
weekly 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 Fund's assets.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY: During the six months ended June 30, 1996,
purchases and sales of investments, other than short-term
obligations, were $30,662,676, and $26,780,291, respectively.
Unrealized appreciation (depreciation) at June 30, 1996, based on
cost of investments for both financial statement and federal income
tax purposes was:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized appreciation $ 8,943,539
Gross unrealized depreciation (10,958,988)
-------------------
Net unrealized depreciation $ (2,015,449)
-------------------
</TABLE>
21
<PAGE>
Notes to Financial Statements/June 30, 1996
NOTE 4. PORTFOLIO INFORMATION - CONT.
At December 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 $ 3,066,000
1999 3,140,000
2000 3,157,000
2001 5,578,000
2002 6,579,000
2003 5,268,000
---------------------
$ 26,788,000
---------------------
</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 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 Fund may focus its investments in certain industries, subjecting
it to greater risk than a fund that is more diversified.
NOTE 5. RESULTS OF ANNUAL SHAREHOLDER MEETING
On May 31, 1996, the Annual Meeting of Shareholders of the Fund was
held to elect three Trustees and to ratify the selection of Price
Waterhouse LLP as independent accountants for the fiscal year ending
December 31, 1996. On March 4, 1996, the record date of the Meeting,
the Fund had outstanding 30,918,576 shares of beneficial interest.
The votes cast at the Meeting were as follows:
Election of three Trustees:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
Lora S. Collins 26,897,978 630,165 3,390,433
Robert L. Sullivan 26,893,034 635,109 3,390,433
Sinclair Weeks, Jr. 26,853,248 674,895 3,390,433
</TABLE>
The Board of Trustees also consists of Robert J. Birnbaum, Tom
Bleasdale, James E. Grinnell, William D. Ireland, Jr., Richard W.
Lowry, William E. Mayer, James L. Moody, Jr., John J. Neuhauser and
George L. Shinn.
22
<PAGE>
Notes to Financial Statements/June 30, 1996
Ratification of the selection of Price Waterhouse LLP as independent
accountants:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
26,977,175 158,606 392,363
</TABLE>
23
<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
June 30 Year ended December 31
-------------- -----------------------------------
1996 1995 1994
-------------- ------------------ -------------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 8.550 $ 7.960 $ 8.670
-------------- ------------------ -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.283 0.597 0.616
Net realized and
unrealized gain (loss) (0.261) 0.583 (0.716)
-------------- ------------------ -------------
Total from Investment
Operations 0.022 1.180 (0.100)
-------------- ------------------ -------------
LESS DISTRIBUTIONS DECLARED TO
SHAREHOLDERS:
From net investment income (0.292) (0.590) (0.610)
-------------- ------------------ -------------
Net asset value -
End of period $ 8.280 $ 8.550 $ 7.960
-------------- ------------------ -------------
Market price per share $ 8.000 $ 7.375 $ 6.875
-------------- ------------------ -------------
Total return - based on market
value (a) 12.44% (b) 15.65% (9.83)%
-------------- ------------------ -------------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.06% (c)(d) 1.06% (c) 1.03%
Net investment income 6.76% (c)(d) 7.15% (c) 7.44%
Portfolio turnover 11% (b) 23% 20%
Net assets at end
of period (000) $ 255,929 $ 264,467 $ 245,967
</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 benefits received, if any.
(d) Annualized.
24
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected per share data, total return, ratios and supplemental data
throughout each period are as follows:
<TABLE>
<CAPTION>
Year ended December 31
------------------------------------------------------
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 8.780 $ 8.910 $ 9.000
------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.671 0.694 0.742
Net realized and
unrealized gain (loss) (0.106) (0.140) (0.074)
------------ ------------ ------------
Total from Investment
Operations 0.565 0.554 0.668
------------ ------------ ------------
LESS DISTRIBUTIONS DECLARED TO
SHAREHOLDERS:
From net investment income (0.675) (0.684) (0.758)
------------ ------------ ------------
Net asset value -
End of period $ 8.670 $ 8.780 $ 8.910
------------ ------------ ------------
Market price per share $ 8.250 $ 8.250 $ 8.625
------------ ------------ ------------
Total return - based on market
value (a) 7.96% 3.51% 5.76%
------------ ------------ ------------
RATIOS TO AVERAGE NET ASSETS
Expenses 0.97% 0.96% 0.97%
Net investment income 7.58% 7.86% 8.30%
Portfolio turnover 29% 15% 17%
Net assets at end
of period (000) $ 268,130 $ 269,848 $ 273,207
</TABLE>
25
<PAGE>
DIVIDEND REINVESTMENT PLAN
The Trust generally distributes net investment income monthly and capital gains
annually. Under the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders may elect to have all distributions reinvested automatically in
additional shares of the Trust. Shareholders not making such election will
receive all distributions in cash, paid by check and mailed directly to the
recordholder, from the dividend paying agent.
Shareholders participating in the Plan will receive distributions in the form of
shares of the Trust. If the market price of the shares on the distribution
payment date is equal to or greater than the net asset value, Plan participants
will be issued shares at the higher of net asset value or 95% of the market
price. In circumstances in which the net asset value of Trust shares is more
than 5% below their market price, Plan participants will be issued shares
through the Plan at a price exceeding net asset value. If net asset value
exceeds the market price, or the distribution is payable only in cash, shares
will be bought on 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 may exceed the net asset value of the shares,
resulting in the acquisition of fewer shares than if the distribution had been
newly-issued shares.
All Plan accounts receive monthly written confirmations of all transactions.
Shares purchased under the Plan are ordinarily held in uncertificated form,
although participants have the right to receive certificates for whole shares
held in their account.
Each shareholder's proxy includes shares purchased pursuant to the Plan. The
automatic reinvestment of distributions does not relieve participants of any
income tax payable on the distributions. Participants may recognize capital
gains or ordinary income for federal income tax purposes in an amount equal to
the market value of shares received under the Plan.
Fees and expenses of the Plan, other than brokerage charges, will be paid by the
Trust. No brokerage charges are incurred on shares issued directly by the Trust.
Participants will bear a pro-rata share of brokerage charges incurred on open
market purchases.
A Plan participant may terminate his or her participation by written notice to
the Plan administrator. The Plan may be amended or terminated on 90 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, including requests for information, should be directed to The First
National Bank of Boston, the Trust's dividend disbursing agent and administrator
of the Plan, at P.O. Box 1681, Boston, Massachusetts 02105, Attention: Dividend
Reinvestment Department.
26
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial High Income Municipal Trust is:
The First National Bank of Boston
100 Federal Street
Boston, MA 02110
1-617-575-2900
Colonial High Income Municipal Trust 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 High Income Municipal
Trust.
27
<PAGE>
[COLONIAL MUTUAL FUNDS LETTERHEAD]
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
Colonial Investment Services, Inc., Distributor [copyright] 1996
One Financial Center, Boston, Massachusetts 02111-2621, 617-426,3750
HI-03/467-0696 (8/96)
[LOGO Printed on recycled paper]
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