<PAGE>
[LOGO]
COLONIAL
HIGH INCOME
MUNICIPAL
TRUST
SEMIANNUAL REPORT
JUNE 30, 1997
<PAGE>
COLONIAL HIGH INCOME MUNICIPAL TRUST HIGHLIGHTS
JANUARY 1, 1997 - JUNE 30, 1997
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.
THE FUND IS DESIGNED TO OFFER:
- Potential for high tax-free income
- Professional management
- Expert credit analysis
CO-PORTFOLIO MANAGER COMMENTARY: "Many of the companies included in the Fund's
portfolio have operations around the world. By emphasizing these investments,
the Fund is able to benefit from a growing global economy. Our investment
strategy is focused on identifying undervalued industrial revenue bonds issued
by corporate borrowers. Not only do these bonds have "household name" value in
the marketplace, they tend to have more diversified earnings and lower debt
levels. In contrast, many municipal bond funds look no farther than local or
state economies for issues. We will continue to invest in this class of bonds as
long as our economic outlook is positive and we have expectations for corporate
earnings increases."
-Peter Andersen
COLONIAL HIGH INCOME MUNICIPAL TRUST PERFORMANCE
<TABLE>
<S> <C>
Distributions declared per share(1) $0.273
</TABLE>
<TABLE>
<CAPTION>
NAV MARKET PRICE
<S> <C> <C>
Six-month total return, assuming
reinvestment of all distributions 3.63% 4.16%
Price per share $8.36 $8.31
</TABLE>
(1) A portion of the Trust's income may be subject to the alternative minimum
tax.
The Trust may at times purchase tax-exempt securities at a discount, and some or
all of this discount may be included in the Trust's ordinary income which will
be taxable when distributed.
<TABLE>
<CAPTION>
TOP FIVE SECTORS QUALITY BREAKDOWN
(as of 6/30/97) (as of 6/30/97)
[Pie Chart]
<S> <C> <C> <C>
Nursing ................. 17.3% AAA: 7.8%
Housing ................. 15.7% Non-rated: 51.9%
Hospital ................ 7.0% AA: 5.8%
Refunded ................ 6.8% A: 10.7%
Manufacturing ........... 5.5% BBB: 22.6%
BB: 1.2%
</TABLE>
Sector and quality breakdowns are calculated as a percent of total net assets.
Because the Trust is actively managed, there can be no guarantee the Trust will
continue to maintain these quality weightings or invest in these sectors in the
future. Industry sectors in the following financial statements are based upon
the standard industrial classifications (SIC) published by the U.S. Office of
Management and Budget. 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
[Photo of Harold W. Cogger]
During the six months covered in this report - January 1, 1997 through June 30,
1997 - the bond market experienced volatility. Your Fund was managed against a
backdrop of fluctuating interest rates. The economy was strong, corporate
profits continued to grow, unemployment was at a 25-year low, and inflation
remained low. For investors in the stock market, the environment couldn't have
been much better.
But people who invest in bonds saw it differently. They saw stronger-than-
expected economic growth in the first part of 1997, creating fears of renewed
inflation. They also saw the Federal Reserve Board raising short-term interest
rates in an attempt to slow down the economy.
The environment then improved for bond investors in May when Congress and the
President agreed to a balanced budget plan which helped calm the bond markets.
Interest rates eased downward, the economy was slowing, inflation was still low
and the Federal Reserve Board decided against raising short-term rates at their
May meeting.
One of the primary attractions of municipal bond investing is tax-free income
and your tax-exempt income within this Trust remains strong, particularly when
compared to inflation.
As always, we thank you for the opportunity to help you meet your investment
goals.
Respectfully,
/s/ Harold W. Cogger
Harold W. Cogger
President
August 15, 1997
Because market conditions change frequently, there can be no assurance that the
trends described here will continue, come to pass or affect Trust performance.
3
<PAGE>
INVESTMENT PORTFOLIO
JUNE 30, 1997 (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 98.5% PAR VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 2.0%
Education - 1.0%
CA Statewide Communities Development Corp.,
J. Paul Getty Trust Center,
5.000% 10/01/23 $3,000 $ 2,749
-----
Local General Obligations - 1.0%
NY New York City:
Series 1997-A,
7.000% 08/01/07 1,000 1,121
Series 1997-H,
6.000% 08/01/17 1,400 1,412
-----
2,533
-----
----------------------------------------------------------------------------------------
HEALTH CARE - 25.3%
Hospital - 6.8%
AL Alabama Special Care Facilities Authority,
Montgomery Healthcare,
Series 1989,
11.000% 10/01/19 3,375 3,443
CA State Health Facilities Financing
Authority, Kaiser Permanente,
Series 1989-A,
(a) 10/01/12 5,500 2,351
DE State Economic Development Authority,
Riverside Hospital, Series 1992-A,
9.500% 01/01/22 890 1,155
GA Clayton Hospital Authority,
The Woodlands Foundation Inc.,
Series 1991-A,
9.750% 05/01/21(b) 2,500 1,625
IL State Health Facilities Authority,
Edgewater Medical Center,
Series A,
9.250% 07/01/24 2,000 2,420
MS Lowndes County, Golden Triangle
Regional Medical Center, 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 1,053
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PA Delaware County Authority,
Southeastern Pennsylvania Obligated Group,
Series 1996:
6.000% 12/15/16 $1,400 $ 1,405
6.000% 12/15/26 1,000 990
VT State Educational & Health Buildings
Financial Agency, Springfield Hospital,
Series A,
7.750% 01/01/13 1,115 1,214
WA Washington State Health Care
Facility, Grays Harbor Community
Hospital, Series 1993,
8.025% 07/01/20(c) 1,480 1,665
------
17,590
------
Intermediate Care Facilities - 1.7%
IL Champaign, First Mortgage,
Hoosier Care Inc., Series 1989-A,
9.750% 08/01/19 1,465 1,567
MA State Health & Educational
Facilities Authority,
Corporation for Independent Living,
8.100% 07/01/18 730 785
TN Shelby County, Health, Education,
& Housing Facilities Board, Open Arms
Development Center:
Series 1992-A,
9.750% 08/01/19 940 1,088
Series 1992-C,
9.750% 08/01/19 915 1,059
------
4,499
------
Nursing Homes - 16.8%
CO Health Care Facilities Authority:
American Housing Foundation Inc.,
Series 1990-A,
10.250% 12/01/20 1,400 1,400
Pioneer Health Care,
Series 1989,
10.500% 05/01/19 2,000 2,042
FL Flagler County Industrial
Development Authority,
South Florida Properties, Series 1988,
10.500% 12/01/18 2,420 2,205
FL Gadsden County Industrial
Development Authority,
Florida Properties, Inc., Series 1988-A,
10.450% 10/01/18 1,920 1,971
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1997
--------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEALTH CARE - CONT.
Nursing Homes - Cont.
FL Jacksonville Industrial Development,
Beverly Enterprises, 9.750% 10/01/11 $ 905 $ 980
FL Leon County Industrial Development,
Beverly Enterprises, Series 1985, 9.800% 06/01/11 785 874
FL Volusia County Industrial
Development Authority, Beverly
Enterprises, Series 1987, 9.800% 12/01/07 840 861
IA State Finance Authority,
Care Initiatives Project,
Series 1996, 9.250% 07/01/25 1,000 1,239
IN Gary Industrial Economic Development,
West Side Health Care Center,
Series 1987-A, 11.500% 10/01/17 1,500 1,549
IN Michigan City Health Facilities,
Metropolitan Health Foundation
Inc., Project, 10.000% 11/01/22 3,085 2,776
KS Washington County Industrial
Development Authority, Central
States, Series 1989, 10.250% 11/01/19 1,925 1,935
MA Boston, St. Joseph Nursing Care
Center, Inc. Series 1990, 10.000% 01/01/20 965 1,053
MA State Industrial Finance Agency,
American Health Foundation Inc.,
Series 1989, 10.125% 03/01/19 2,005 1,804
MO Grove Industrial Development Authority,
First Mortgage Health Care Facility,
Heritage Manor Series 1988, 10.250% 11/01/13 1,755 1,579
MO Saint Louis County Industrial
Development Authority, 10.250% 12/01/16 1,795 1,840
NJ Economic Development Authority,
Geriatric & Medical Service, Inc.,
Series B, 10.500% 05/01/20 2,000 2,139
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1997
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NM Clovis Industrial Development,
Retirement Ranches Project:
10.750% 04/01/19 $ 210 $ 227
10.750% 04/01/19 2,115 2,287
PA Chester County Industrial Development,
Pennsylvania Nursing Home, Inc.,
Series 1989,
10.125% 05/01/19 2,583 2,506
PA Philadelphia Authority for Industrial
Development, RHA/Philadelphia Project,
10.250% 11/01/18 1,445 1,447
TN Metropolitan Government, Nashville
& Davidson Counties Health & Education
Facilities, Central States, Series 1989,
10.250% 11/01/19 1,755 1,764
TX Bexar County Health Facilities
Development, Heartway Corp.,
Series 1989-A-1,
10.250% 03/01/19(b) 1,905 1,562
TX Whitehouse Health Facilities
Development Corp., Oak Brook Health
Care Center, Series 1989,
10.000% 12/01/19 1,805 1,868
VA Beach Development Authority,
Beverly Enterprises, Series 1985,
10.000% 04/01/10 1,670 1,835
WA Kitsap County Housing Authority,
Martha & Mary Nursing Home,
7.100% 02/20/36 1,000 1,098
WI State Health & Educational Facilities,
Metro Health Foundation, Inc., Series 1993,
10.000% 11/01/22(c) 2,775 2,498
------
43,339
------
- -------------------------------------------------------------------------------------------------
HOUSING - 16.7%
Assisted Living/Senior - 3.3%
FL Clearwater Housing Authority,
Hampton Apartments,
Series 1994,
8.250% 05/01/24 2,500 2,628
IL State Development Finance Authority,
Care Institute, Inc.,
8.250% 06/01/25 1,300 1,375
MN Roseville, Care Institute, Inc.,
Series 1993,
7.750% 11/01/23 1,740 1,681
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Investment Portfolio/June 30, 1997
- -------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING - CONT
Assisted Living/Senior - Cont
PA Montgomery County Industrial
Development Authority, Assisted
Living Facility, Series 1993-A,
8.250% 05/01/23 $ 860 $ 898
TX Bell County Health Facilities
Development Corp., Care Institutions, Inc.,
9.000% 11/01/24 1,800 1,973
-----
8,555
-----
Multi-Family - 10.1%
FL Hialeah Housing Authority,
Series 1991,
9.500% 11/01/21 3,000 2,850
FL State Housing Finance Agency,
Windsong Apartments, Series 1993-C,
9.250% 01/01/19 1,000 1,011
GA Augusta Housing Authority Mortgage,
Mountain Ridge Holdings II, Series A,
8.960% 09/01/24(b) 1,880 1,222
MN Lakeville,
Southfork Apartments Project:
Series 1989-A,
9.875% 02/01/20 2,570 2,599
Series 1989-B,
(d) 02/01/20 1,150 2,320
MN Washington County Housing &
Redevelopment Authority, Cottages of
Aspen, Series 1992,
9.250% 06/01/22 1,085 1,184
MN White Bear Lake,
Birch Lake Townhome Project:
Series 1989-A,
10.250% 07/15/19 2,200 2,200
Series 1989-B,
(d) 07/15/19 748 1,404
NC Eastern Carolina Regional Housing
Authority, Jacksonville New River
Apartments, Series 1994,
8.250% 09/01/14 1,925 1,980
NY Nyack Housing Assistance Corp.,
Nyack Plaza Apartments,
7.375% 06/01/21 430 430
Pass Through Certificates, Series 1993-A,
8.500% 12/01/16(c) 5,098 5,308
</TABLE>
8
<PAGE>
Investment Portfolio/June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TN Franklin Industrial Board,
Landings Apartment Project,
Series 1996-B,
8.750% 04/01/27 $1,000 $ 1,000
TX Galveston Health Facilities Center,
8.000% 08/01/23 1,000 1,034
VA Alexandria Redevelopment
& Housing Authority, Courthouse
Commons Apartments, Series 1990-A,
10.000% 01/01/21 1,500 1,517
-------
26,059
-------
Single-Family - 3.3%
LA Louisiana Housing Finance Agency,
Residual Lien Mortgage, Series 1992,
7.375% 09/01/13 775 799
NE Investment Finance Authority,
Single-Family Mortgage, RIB (variable rate),
Series 1990-B,
10.886% 03/15/22 1,600 1,796
OH Housing Finance Agency, Single-Family
Mortgage Revenue, RIB (variable rate),
Series B-4,
9.578% 03/31/31 975 1,068
TX Bexar County Housing Finance Corp.,
GNMA Collateralized Mortgage,
Series 1989-A,
8.200% 04/01/22 2,915 3,068
TX Harris County Housing Finance Corp.,
Single Family, Series 1987,
8.875% 12/01/17 475 488
WA State Housing Finance Commission,
Series 1992 D-1,
6.150% 01/01/26 1,200 1,248
-------
8,467
-------
- --------------------------------------------------------------------------------
OTHER - 6.7%
Refunded/Escrow/Special Obligation(e)
AZ Apache County School District,
Number 010, Round Valley
Project of 1987, Series 1990-C,
9.875% 07/01/05 2,000 2,243
CA Colton Public Financing Authority,
Series 1995,
7.500% 10/01/20 2,000 2,325
</TABLE>
9
<PAGE>
Investment Portfolio/June 30, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
OTHER - CONT.
Refunded/Escrow/Special Obligation - Cont.
ID State Health Facilities Authority,
IHC Hospitals, Inc.,
8.250% 02/15/21 $1,750 $ 1,923
IL State Health Facilities Authority,
Hinsdale Hospital,
Series 1990-C,
9.500% 11/15/19 680 793
MA State Industrial Finance Agency,
Series 1990,
9.000% 10/01/20 2,350 2,708
MI State Hospital Finance Authority,
Detroit Osteopathic Hospital,
Series 1987-A,
7.500% 11/01/10 2,235 2,306
MN Mille Lacs Capital Improvement Authority,
Mille Lacs Band of Chippewa,
Series 1992-A,
9.250% 11/01/12 1,085 1,345
MO Hannibal Industrial Development Authority,
Regional Healthcare Systems,
Series 1992,
9.500% 03/01/22 2,250 2,776
NC Lincoln County,
Lincoln County Hospital,
9.000% 05/01/07 490 583
WA State Health Care Facilities Authority,
Grays Harbor Community Hospital,
Series 1993,
7.200% 07/01/03(c) 170 186
-------
17,188
-------
- --------------------------------------------------------------------------------
OTHER REVENUE - 20.6%
Chemicals - 4.3%
LA Saint Charles Parish, Pollution Control
Revenue, Union Carbide Project,
Series 1992,
7.350% 11/01/22 3,000 3,274
SC York County Industrial Revenue,
Hoechst Celanese Corp.,
Series 1994,
5.700% 01/01/24 4,000 4,010
TX Corpus Christi Port Authority,
Hoechst Celanese Corp.,
7.500% 08/01/12 3,500 3,828
-------
11,112
-------
</TABLE>
10
<PAGE>
Investment Portfolio/June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
HOTELS/CAMPS/LODGING - 1.0%
MN Burnsville Commercial Development,
Holiday Inn Project,
10.600% 06/01/06 $2,500 $ 2,530
-------
MANUFACTURING - 5.3%
CO Mesa County Industrial Development,
Joy Technologies Inc.,
Series 1992,
8.500% 09/15/06 1,000 1,131
Il Solid Waste Armstrong World Industries Inc.,
5.950% 12/01/24 1,000 1,001
La South La Port Cargill Inc.,
5.850% 04/01/17 1,000 1,019
MA State Industrial Finance Agency,
House of Bianchi Inc.,
8.750% 06/01/18 335 329
MN Brooklyn Park, TL Systems Corp.,
Series 1991,
10.000% 09/01/16 785 965
OH Cuyahoga County, Joy Technologies, Inc.,
Series 1992,
8.750% 09/15/07 550 628
TN McKenzie Individual Development Board,
American Lantern Co.,
10.500% 05/01/16 2,128 2,252
TX Trinity River Authority, Texas Instruments
Project, Series 1996,
6.200% 03/01/20 1,000 1,021
WA Pilchuck Public Development Corp.,
Special Facilities Airport, Tramco Inc. Project,
Series 1993,
6.000% 08/01/23 5,420 5,359
-------
13,705
-------
MISCELLANEOUS RETAIL - 0.9%
OH Lake County Economic Development,
North Madison Properties, Series 1993,
8.819% 09/01/11 765 809
VA Virginia Beach Development Authority,
SC Diamond Associates, Inc.,
8.000% 12/01/10 1,360 1,467
-------
2,276
-------
OTHER REVENUE - 3.0%
DC District of Columbia,
Carnegie Endowment, Series 1996,
5.750% 11/15/10 2,000 2,040
</TABLE>
11
<PAGE>
Investment Portfolio/June 30, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
OTHER REVENUE - CONT
OTHER REVENUE - CONT
IN Hammond, American Maize
Products Co., Series 1994,
8.000% 12/01/24 $ 2,000 $ 2,285
MD Baltimore, Park Charles Project,
Series 1986,
8.000% 01/01/10 870 922
TX Gulf Coast Waste Disposal Authority,
Quaker Oats Co., Series 1994,
5.700% 05/01/06 2,500 2,613
-------
7,860
-------
PAPER PRODUCTS - 4.1%
GA Rockdale County Development
Authority, Solid Waste Disposal, Visy
Paper, Inc., Series 1993,
7.500% 01/01/26 3,600 3,793
MI State Strategic Fund Ltd.:
Blue Water Fiber Project, Series 1994,
8.000% 01/01/12(b) 2,500 1,675
Great Lakes Pulp & Fibre Project,
Series 1994,
10.250% 12/01/16(b) 2,500 1,138
SC Darlington County, Industrial
Development Authority, SONOCO
Products Co. Project,
6.125% 06/01/25 2,000 2,078
WA Walla Walla Public Corp.,
Ponderosa Fibres Project,
Series 1995,
9.125% 01/01/26 2,460 1,968
-------
10,652
-------
PETROLEUM REFINING - 0.5%
NY State Environmental Facilities Corp.,
Occidental Petroleum Corp. Project,
Series 1995,
6.100% 11/01/30 1,300 1,300
-------
STATE APPROPRIATED - 1.5%
NY Metropolitan Transportation Authority,
Commuter Facilities Board, Series 7
Project,
5.625% 07/01/16 4,000 3,915
-------
</TABLE>
12
<PAGE>
Investment Portfolio/June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
RESOURCE RECOVERY - 3.4%
Miscellaneous Disposal - 1.4%
CT State Development Authority,
Sewer Sludge Disposal Facilities,
Series 1996,
8.250% 12/01/06 $ 1,250 $1,280
MA State Industrial Finance Agency,
Peabody Monofill Associates, Inc.,
Series 1995,
9.000% 09/01/05 1,215 1,326
MA State Industrial Finance Agency,
Massachusetts Environmental Services,
Series 1994-A,
8.750% 11/01/21 985 965
------
3,571
------
Resource Recovery - 2.0%
PA Delaware County BFI,
6.200% 07/01/19 4,000 4,080
PA Economic Development Northampton,
6.500% 01/01/13 1,000 1,000
------
5,080
------
- --------------------------------------------------------------------------------
TAX-BACKED - 3.7%
State General Obligations - 1.3%
PR Commonwealth of Puerto Rico,
5.375% 07/01/22 1,250 1,223
VI Virgin Islands Public Financing,
Series 1992-A,
7.250% 10/01/18 2,000 2,178
------
3,401
------
Mello-Roos/1915 Act - 0.1%
CA Carson Improvement, Series 1992,
7.375% 09/02/22 190 201
------
Sales & Excise Tax - 2.3%
IL Metropolitan Pier & Exposition
Authority, McCormick Place Expansion
Project, Series A,
(a) 06/15/16 10,000 3,400
IL State Development Finance Authority,
City of Marion Project, Series 1991,
9.625% 09/15/21 2,450 2,539
------
5,939
------
</TABLE>
13
<PAGE>
Investment Portfolio/June 30, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION - 9.6%
Air Transportation - 3.4%
CO Denver City & County Airport,
United Airlines Inc., Series 1992-A,
6.875% 10/01/32 $1,645 $1,711
IN Indianapolis Airport Authority,
Federal Express Corp., Series 1994,
7.100% 01/15/17 2,000 2,192
TX Alliance Airport Authority:
American Airlines Project,
7.500% 12/01/29 1,600 1,724
Federal Express Corp., Series 1996,
6.375% 04/01/21 3,000 3,075
------
8,702
------
Airport - 3.2%
CO Denver City & County Airport:
Airport System, Series 1992-C,
6.125% 11/15/25 5,120 5,203
Series 1992-B,
7.250% 11/15/23 2,855 3,155
------
8,358
------
Turnpike/Tollroad/Bridge - 3.0%
CA San Joaquin Hills Transportation
Corridor Agency,
Series 1993:
5.000% 01/01/33 6,130 5,371
6.750% 01/01/32 1,500 1,584
7.000% 01/01/30 865 924
------
7,879
------
- --------------------------------------------------------------------------------
UTILITY - 10.5%
Individual Power Producer - 3.7%
FL Martin County Industrial
Development Authority,
Indiantown Cogeneration Project, Series 1994-A,
7.875% 12/15/25 1,000 1,132
MD State Energy Financing Administration,
AES Warrior Cogeneration Project,
7.400% 09/01/19 2,000 2,083
NY Port Authority of New York & New Jersey,
KIAC Partners,
Series 1996 IV,
6.750% 10/01/11 2,000 2,118
</TABLE>
14
<PAGE>
Investment Portfolio/June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
PA State Economic Development Finance
Authority,
Colver Project, Series D,
7.125% 12/01/15 $ 4,000 $ 4,300
--------
9,633
--------
Investor Owned - 5.2%
IL Bryant,
Central Illinois Light Co.,
Series 1993,
5.900% 08/01/23 5,000 5,062
IL Chicago,
People's Gas, Light & Coke Co.,
Series 1990-A,
8.100% 05/01/20 2,000 2,195
NM Farmington San Juan,
6.375% 04/01/22 1,300 1,333
NY State Energy Research & Development
Authority,
Consolidated Edison Co., Series 1991-A,
7.500% 01/01/26 2,000 2,140
PA Beaver County Industrial
Development Authority,
Ohio Edison Co., Series 1989-A,
7.750% 09/01/24 2,500 2,641
--------
13,371
--------
Municipal Electric - 0.4%
VI Water and Power Authority Electric
Systems, Series 1991-A,
7.400% 07/01/11 960 1,025
--------
Water & Sewer - 1.2%
LA Public Facility Belmont Water Authority,
9.000% 03/15/24(c) 760 684
MS V Lakes Utility District,
8.250% 07/15/24 500 494
NJ State Economic Development Authority,
Hills Development Co.,
10.500% 09/01/08 2,000 2,015
--------
3,193
--------
TOTAL MUNICIPAL BONDS (cost of $248,884)(f) 254,682
--------
</TABLE>
15
<PAGE>
Investment Portfolio/June 30, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS-0.0% PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
VARIABLE RATE DEMAND NOTES(g)
AZ Pinal County Industrial
Development Authority, Newmont
Mining Corp., Series 1984-A
4.000% 12/01/09 $ 100 $ 100
--------
OTHER ASSETS & LIABILITIES, NET-1.5% 3,822
- --------------------------------------------------------------------------------
NET ASSETS-100% $258,604
========
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- --------------------------------------------------------------------------------
(a) Zero coupon bond.
(b) This issuer is in default of certain debt covenants. Income is not being
accrued.
(c) 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,
1997, the value of these securities amounted to $10,341 or 4.0% of net
assets.
(d) Accrued interest accumulates in the value of the security and is payable
at redemption.
(e) The Fund has been informed that the issuer has placed direct obligations
of the U.S. Government in an irrevocable trust, solely for the payments of
the interest and principal.
(f) Cost for federal income tax purposes is $248,933.
(g) Variable rate demand notes are considered short-term obligations. Interest
rates change periodically on speified 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, 1997.
Acronym Name
- ------------------ --------------------------
RIB Residual Interest Bond
See notes to financial statements.
16
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands except for per share amount)
ASSETS
<S> <C> <C>
Investments at value (cost $248,884) $254,682
Short-term obligations 100
--------
254,782
Receivable for:
Interest $ 5,053
Investments sold 111
Other 71 5,235
--------- --------
Total Assets 260,017
LIABILITIES
Payable for:
Distributions 1,407
Accrued:
Deferred Trustees fees 4
Other 2
---------
Total Liabilities 1,413
--------
NET ASSETS at value for 30,919
shares of beneficial interest outstanding $258,604
--------
Net asset value per share $ 8.36
--------
COMPOSITION OF NET ASSETS
Capital paid in $286,694
Undistributed net investment income 290
Accumulated net realized loss (34,178)
Net unrealized appreciation 5,798
--------
$258,604
========
</TABLE>
See notes to financial statements.
17
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
INVESTMENT INCOME
Interest $ 9,853
EXPENSES
Management fee $ 1,031
Transfer agent 47
Bookkeeping fee 33
Trustees fee 11
Audit fee 19
Legal fee 34
Reports to shareholders 9
Other 13 1,197
------- -------
Net Investment Income 8,656
-------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized loss (3,205)
Net unrealized appreciation during
the period 3,826
-------
Net Gain 621
-------
Net Increase in Net Assets from Operations $9,277
------
</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
------------ -----------
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income $ 8,656 $ 17,414
Net realized loss (3,205) (4,094)
Net unrealized appreciation (depreciation) 3,826 (1,987)
--------- ---------
Net Increase from Operations 9,277 11,333
Distributions:
From net investment income (8,441) (18,032)
--------- ---------
Total Increase (Decrease) 836 (6,699)
NET ASSETS
Beginning of period 257,768 264,467
--------- ---------
End of period (including undistributed net
investment income of $290 and $71,
respectively) $ 258,604 $ 257,768
--------- ---------
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, 1997 (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, 1997, 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 investment objective is to provide high current income, generally
exempt from federal income taxes, by investing primarily in medium and lower
quality municipal 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 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, 1997
- --------------------------------------------------------------------------------
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, 1997, purchases and
sales of investments, other than short-term obligations, were $10,693,206, and
$10,107,740, respectively.
Unrealized appreciation (depreciation) at June 30, 1997, based on cost of
investments for federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 13,195,802
Gross unrealized depreciation (7,447,228)
------------
Net unrealized appreciation $ 5,748,574
============
</TABLE>
21
<PAGE>
Notes to Financial Statements/June 30, 1997
- --------------------------------------------------------------------------------
NOTE 4. PORTFOLIO INFORMATION - CONT.
- --------------------------------------------------------------------------------
At December 31, 1996, 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
2004 2,815,000
------------
$ 29,603,000
------------
</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 (UNAUDITED)
- --------------------------------------------------------------------------------
On May 30, 1997, the Annual Meeting of Shareholders of the Fund was held to
elect five Trustees and to ratify the selection of Price Waterhouse LLP as
independent accountants for the fiscal year ending December 31, 1997. On March
3, 1997, 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 five Trustees:
<TABLE>
<CAPTION>
WITHHOLD
FOR AUTHORITY
--- ---------
<S> <C> <C>
Robert J. Birnbaum 26,642,449 518,675
James E. Grinnell 26,650,852 510,272
William D. Ireland, Jr. 26,653,739 507,385
William E. Mayer 26,667,611 493,513
James L. Moody, Jr. 26,661,657 499,467
</TABLE>
22
<PAGE>
Notes to Financial Statements/June 30, 1997
- --------------------------------------------------------------------------------
The Board of Trustees also consists of Tom Bleasdale, Lora S. Collins, Richard
W. Lowry, John J. Neuhauser, George L. Shinn, Robert L. Sullivan and Sinclair
Weeks, Jr.
Ratification of the selection of Price Waterhouse LLP as independent
accountants:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
26,551,395 163,890 445,839
</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
---------- ------------------------------
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 8.340 $ 8.550 $ 7.960
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.280 0.566 0.597
Net realized and
unrealized gain (loss) 0.013 (0.193) 0.583
---------- ---------- ----------
Total from Investment
Operations 0.293 0.373 1.180
---------- ---------- ----------
LESS DISTRIBUTIONS DECLARED TO
SHAREHOLDERS:
From net investment income (0.273) (0.583) (0.590)
---------- ---------- ----------
Net asset value -
End of period $ 8.360 $ 8.340 $ 8.550
---------- ---------- ----------
Market price per share $ 8.312 $ 8.250 $ 7.375
---------- ---------- ----------
Total return - based on market
value (a) 4.16% (b) 20.09% 15.65%
---------- ---------- ----------
RATIOS TO AVERAGE NET ASSETS
Expenses 0.93% (c)(d) 1.00% (c) 1.06% (c)
Net investment income 6.72% (c)(d) 6.74% (c) 7.15% (c)
Portfolio turnover 4% (b) 15% 23%
Net assets at end
of period (000) $ 258,604 $ 257,768 $ 264,467
</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
--------------------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C>
$ 8.670 $ 8.780 $ 8.910
---------- ---------- ----------
0.616 0.671 0.694
(0.716) (0.106) (0.140)
---------- ---------- ----------
(0.100) 0.565 0.554
---------- ---------- ----------
(0.610) (0.675) (0.684)
---------- ---------- ----------
$ 7.960 $ 8.670 $ 8.780
---------- ---------- ----------
$ 6.875 $ 8.250 $ 8.250
---------- ---------- ----------
(9.83)% 7.96% 3.51%
---------- ---------- ----------
1.03% 0.97% 0.96%
7.44% 7.58% 7.86%
20% 29% 15%
$ 245,967 $ 268,130 $ 269,848
</TABLE>
25
<PAGE>
DIVIDEND REINVESTMENT PLAN
As a shareholder in the Fund you are eligible to participate in the 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
1-617-575-3120
1-800-730-6001
Colonial High Income Municipal Trust mails one shareholder report to each
shareholder address. If you would like more than one report, please call
Colonial at 1-800-426-3750 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 LOGO]
Mutual Funds for
Planned Portfolios
TRUSTEES
ROBERT J. BIRNBAUM
Retired (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Retired (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
Partner, Development Capital, L.L.C. (formerly Dean, College of Business and
Management, University of Maryland; 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.
Retired (formerly Chairman of the Board and 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
Retired Partner, Peat Marwick Main & Co. (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 (Copy Rights) 1997
A Liberty Financial Company (NYSE: L)
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
HI-03/947D-0697 M (8/97)
