<PAGE>
[graphic omitted]
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COLONIAL HIGH INCOME MUNICIPAL TRUST SEMIANNUAL REPORT
- ---------------------------------------------------------
June 30, 1998
<PAGE>
COLONIAL HIGH INCOME MUNICIPAL TRUST HIGHLIGHTS
JANUARY 1, 1998 - JUNE 30, 1998
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:
o Potential for high tax-free income
o Professional management
o Expert credit analysis
PORTFOLIO MANAGER COMMENTARY: "Based on our long-term outlook for low inflation
and modest economic growth, we structured the Fund to take advantage of a
potential decline in interest rates. This had a positive impact on performance
during the period. We took this opportunity to add to the Fund's holdings in
non-cyclical sectors, such as community hospitals. In general, we think
non-cyclicals offer good value and the potential to perform well in an
environment characterized by slower economic growth."
-- Bonny Boatman
COLONIAL HIGH INCOME MUNICIPAL TRUST PERFORMANCE
Distributions declared per share(1) $0.270
- -------------------------------------------------------------------------------
NAV MARKET PRICE
Six-month total return, assuming
reinvestment of all distributions 2.72% 0.95%
- -------------------------------------------------------------------------------
Price per share $8.52 $8.44
TOP FIVE SECTORS QUALITY BREAKDOWN
(as of 6/30/98) (as of 6/30/98)
- -------------------------- ---------------------------------------
Housing 13.9% Non-rated: 44.0%
Nursing 12.4% BBB: 24.3%
Refunded 11.7% AAA: 12.3%
Hospital 10.3% A: 11.3%
Industrial 5.5% AA: 5.1%
BB: 2.2%
Short-term obligations & other: 0.5%
B: 0.3%
(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.
Sector and quality breakdowns are calculated as a percent of total investments,
including short-term obligations. 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.
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[Photo of Stephen E. Gibson]
In June 1998, Harold Cogger retired as president of Colonial High Income
Municipal Trust. I would like to take this opportunity to thank him for his
guidance over the past few years and wish him well. As the new president of the
Trust, I am pleased to present the semiannual report for the six months ended
June 30, 1998.
A variety of factors caused bond prices to seesaw during the period, as
different sectors of the economy provided mixed signals to fixed-income
investors. The economic turmoil in Southeast Asia, its potential to slow U.S.
economic growth and the possibility of interest rate increases by the Federal
Reserve Board were strong contributors to price volatility. By the end of the
period, fixed-income investors saw improving economic conditions. With hints
that growth might slow, investors' fear of inflation was reduced. As interest
rates dropped, bond prices finished on a positive note.
The tax-exempt bonds in which the Fund invests showed a similar pattern. In
addition to the trends mentioned above, supply and demand factors contributed
towards rising and declining prices during the period.
Municipal bond funds such as Colonial High Income Municipal Trust offer
investors a number of benefits, including attractive after-tax income and a
means to diversify your fixed-income portfolio.
Thank you for choosing Colonial High Income Municipal Trust and for giving us
the opportunity to serve your investment needs.
Respectfully,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
August 11, 1998
Because market and economic conditions change, there can be no assurance that
the trends described above will continue.
<PAGE>
INVESTMENT PORTFOLIO
JUNE 30, 1998 (UNAUDITED, IN THOUSANDS)
MUNICIPAL BONDS - 98.7% PAR VALUE
- ----------------------------------------------------------------------------
EDUCATION - 3.4%
EDUCATION
CA Statewide Communities Development Corp.,
J. Paul Getty Trust Center,
5.000% 10/01/23(a) $ 2,750 $ 2,688
MA State Industrial Finance Agency:
Cambridge Friends School,
Series 1998,
5.800% 09/01/28 1,000 1,018
St John's High School, Inc.,
5.350% 06/01/28 300 294
Wentworth Institute of Technology,
Series 1998,
5.750% 10/01/28 1,000 1,018
MI Southfield Economic Development Corp.,
Lawrence University,
Series 1998-A,
5.400% 02/01/18 1,000 988
NM Santa Fe,
College of Santa Fe,
Series 1998-A,
5.500% 10/01/28 250 250
NY State Dormitory Authority,
New York University
Series 1998-A,
5.750% 07/01/27(a) 1,000 1,116
VT State Educational & Health
Buildings Finance Agency, Norwich
University, Series 1998,
5.500% 07/01/21 1,500 1,488
--------
8,860
--------
- ----------------------------------------------------------------------------
HEALTHCARE - 27.2%
HEALTH SERVICES - 0.1%
IL State Health Facilities Authority,
Midwest Physician Group, Ltd.,
Series 1998,
5.500% 11/15/19 350 342
--------
HOSPITAL - 10.1%
AL Alabama Special Care Facilities Authority,
Montgomery Healthcare,
Series 1989,
11.000% 10/01/19 3,375 3,434
CA State Health Facilities Financing
Authority, Kaiser Permanente,
Series 1989-A,
(b) 10/01/12(a) 5,500 2,698
CO State Health Care Facilities Authority,
National Jewish Medical & Research Center,
Series 1998,
5.375% 01/01/23 830 817
CT State Health & Educational Facilities
Authority, Hospital for Special Care,
Series B,
5.375% 07/01/17 500 500
GA Clayton Hospital Authority,
The Woodlands Foundation Inc.,
Series 1991-A,
9.750% 05/01/221(c) 2,500 1,625
IL Health Facilities Authority,
Thorek Hospital & Medical Center,
5.250% 08/15/18 600 586
LA Public Facilities Pendleton Memorial Hospital,
5.250% 06/01/17(d) 1,250 1,208
MI Flint Hospital Building Authority,
Hurley Medical Center,
Series 1998-A,
5.375% 07/01/20 625 614
MI Tawas City St. Joseph Health,
5.750% 02/15/23 475 476
MN Monticello-Big Lake Community Hospital
District,
5.750% 12/01/19 1,000 1,042
MN St. Paul Housing & Redevelopment Authority,
Healtheast Project, Series A,
5.700% 11/01/15 1,000 1,020
MN Washington County Healtheast,
5.250% 11/15/12(d) 1,500 1,464
MO State Housing Development Commission,
Freeman Health Systems,
Series 1998:
5.250% 02/15/18 750 735
5.250% 02/15/28 500 485
MS Lincoln County Hospital Kings Daughters,
Series B,
5.500% 04/01/18 395 390
MS Lowndes County, Golden Triangle
Regional Medical Center, Series 1990,
8.500% 02/01/10 250 270
NH State Higher Educational & Health
Facilities Authority, Littleton Hospital
Assoc., Inc., Series 1998-A,
6.000% 05/01/28 625 634
NJ Health Care Facilities Financing
Authority, Raritan Bay Medical Center,
7.250% 07/01/27 1,000 1,093
NY State Dormitory Authority,
Bronx-Lebanon Hospital Center,
Series 1998-E,
5.200% 02/15/14 1,000 1,002
OH Belmont County, Ohio Valley Health,
5.700% 01/01/13 1,875 1,856
OH Sandusky County,
Series 1998,
5.150% 01/01/10 250 248
PA Allegheny County Hospital Development Authority,
Ohio Valley General Hospital,
Series 1998-A,
5.450% 01/01/28 1,000 997
PA Mount Pleasant Business District Authority,
Frick Hospital,
5.750% 12/01/27 1,300 1,324
PA Pottsville Hospital Authority,
5.500% 07/01/18 1,000 991
VT State Educational & Health Buildings
Authority, Springfield Hospital, Series A,
7.750% 01/01/13 1,115 1,263
--------
26,772
--------
INTERMEDIATE CARE FACILITIES - 2.6%
IL Champaign, First Mortgage,
Hoosier Care, Inc., Series 1989-A,
9.750% 08/01/19 1,445 1,528
MA State Health & Educational
Facilities Authority,
Corporation for Independent Living,
8.100% 07/01/18 725 817
PA Economic Development Northwestern,
5.250% 06/01/14(d) 2,510 2,423
TN Shelby County Health, Education,
& Housing Facilities Board, Open Arms
Development Center,
Series 1992-A:
9.750% 08/01/19 930 1,107
Series 1992-C,
9.750% 08/01/19 905 1,077
--------
6,952
--------
LIFECARE - 2.2%
CO State Health Care Facilities Authority,
National Benevolent Association:
Series 1998-A,
5.250% 01/01/27 500 489
Series 1998-B,
5.250% 02/01/28 750 732
KY State Economic Development Finance Authority,
Christian Church Homes of Kentucky, Inc.,
Series 1998,
5.500% 11/15/30 750 742
MN Columbia Heights,
Crest View Corp.,
Series 1998,
6.000% 03/01/33 740 743
NH Education & Health Rivermead:
5.625% 07/01/18 500 494
5.750% 07/01/28 500 499
PA Philadelphia Authority for
Industrial Development, Baptist Home
of Philadelphia,
Series 1998-A:
5.500% 11/15/18 360 357
5.600% 11/15/28 570 558
TN Metropolitan Government:
Nashville and Davidson County,
Blakeford at Green Hills, Series 1998,
5.650% 07/01/24 600 591
Richland Place,
5.500% 05/01/23 500 514
--------
5,719
--------
NURSING HOME - 12.2%
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 2,111
FL Gadsden County Industrial
Development Authority,
Florida Properties, Inc., Series 1988-A,
10.450% 10/01/18 1,890 1,919
IA State Finance Authority,
Care Initiatives Project:
Series 1996,
9.250% 07/01/25 1,000 1,348
Series 1998-B:
5.750% 07/01/18 550 551
5.750% 07/01/28 1,475 1,471
IN Gary Industrial Economic Development,
West Side Health Care Center,
Series 1987-A,
11.500% 10/01/17 1,480 1,524
IN Michigan City Health Facilities,
Metropolitan Health Foundation,
Inc. Project,
10.000% 11/01/22 3,085 3,085
KS Washington County Industrial
Development Authority, Central
States, Series 1989,
10.250% 11/01/19 1,835 1,876
MA Boston, St. Joseph Nursing Care
Center, Inc., Series 1990,
10.000% 01/01/20 950 1,038
MA State Industrial Finance Agency,
American Health Foundation, Inc.,
Series 1989,
10.125% 03/01/19(c) 1,975 1,481
NJ State Economic Development Authority,
Geriatric & Medical Service, Inc.,
Series B,
10.500% 05/01/20 2,000 2,122
PA Chester County Industrial Development,
Pennsylvania Nursing Home, Inc.,
Series 1989,
10.125% 05/01/19 2,548 2,344
TN Metropolitan Government, Nashville
& Davidson Counties Health & Education
Facilities, Central States, Series 1989
10.250% 11/01/19 1,725 1,764
TX Bell County Health Facilities
Development Corp., Heartway Corp. Project:
9.500% 03/01/19 1,500 1,532
(b) 03/01/19 255 63
TX Kirbyville Health Facilities Development Corp.,
Heartway III Project:
Series 1997-A,
10.000% 03/20/18 739 745
Series 1997-B,
(b) 03/20/04 106 55
TX Whitehouse Health Facilities
Development Corporation, Oak Brook
Health Care Center, Series 1989,
10.000% 12/01/19 1,780 1,860
WA Kitsap County Housing Authority,
Martha & Mary Nursing Home,
7.100% 02/20/36 1,000 1,154
WI State Health & Educational Facilities
Authority, Metro Health Foundation, Inc.,
Series 1993,
10.000% 11/01/22 2,775 2,775
--------
32,218
--------
- ----------------------------------------------------------------------------
HOUSING - 14.7%
ASSISTED LIVING/SENIOR - 3.3%
IL Clarendon Hills Residential Facilities,
Churchill Estate,
Series 1998-A:
6.750% 03/01/31 1,370 1,372
6.750% 03/01/24 1,050 1,051
IL State Development Finance Authority,
Care Institute, Inc.,
8.250% 06/01/25 1,300 1,472
MN Roseville, Care Institute, Inc.,
Series 1993,
7.750% 11/01/23 1,740 1,764
PA Montgomery County Industrial
Development Authority, Assisted
Living Facility, Series 1993-A,
8.250% 05/01/23 850 951
TX Bell County Health Facilities
Development Corp., Care Institutions, Inc.,
9.000% 11/01/24 1,800 2,081
--------
8,691
--------
MULTI-FAMILY - 9.1%
FL State Housing Finance Agency,
Windsong Apartments,
Series 1993-C,
9.250% 01/01/19 1,000 800
GA Augusta Housing Authority,
Mountain Ridge Holdings II Project,
Series A,
8.960% 09/01/24(c) 1,880 1,222
MN Lakeville,
Southfork Apartments Project:
Series 1989-A,
9.875% 02/01/20 2,570 2,596
Series 1989-B,
(e) 02/01/20 1,057 2,480
MN Washington County Housing &
Redevelopment Authority, Cottages of
Aspen, Series 1992,
9.250% 06/01/22 1,070 1,188
MN White Bear Lake,
Birch Lake Townhome Project:
Series 1989-A,
10.250% 07/15/19 2,200 2,241
Series 1989-B,
(b) 07/15/19(f) 743 225
NC Eastern Carolina Regional Housing
Authority, Jacksonville New River
Apartments, Series 1994,
8.250% 09/01/14 1,870 2,034
NY Nyack Housing Assistance Corp.,
Nyack Plaza Apartments,
7.375% 06/01/21 401 402
Resolution Trust Corp.,
Pass Through Certificates, Series 1993-A,
8.500% 12/01/16 5,098 5,295
TN Franklin Industrial Board,
Landings Apartment Project,
Series 1996-B,
8.750% 04/01/27 950 976
TX Galveston Health Facilities Center,
8.000% 08/01/23 1,000 1,081
TX State Department of Housing & Community
Affairs, Pebble Brooks Apartments,
Series 1998,
5.500% 12/01/18 1,000 1,002
VA Alexandria Redevelopment
& Housing Authority, Courthouse
Commons Apartments, Series 1990-A,
10.000% 01/01/21 1,500 1,539
WA Vancouver Housing Authority,
Series I,
5.500% 03/01/28 1,000 1,002
--------
24,083
--------
SINGLE-FAMILY - 2.3%
LA Louisiana Housing Finance Agency,
Residual Lien Mortgage, Series 1992,
7.375% 09/01/13 595 632
OH State Housing Finance Agency,
Series B-4,
9.740% 03/31/31(a) 875 982
TX Bexar County Housing Finance Corp.
GNMA Collateralized Mortgage,
Series 1989-A,
8.200% 04/01/22 2,575 2,692
TX Harris County Housing Finance
Corp., Single Family,
Series 1987,
8.875% 12/01/17 385 393
WA State Housing Finance Commission,
Series 1992 D-1,
6.150% 01/01/26 1,200 1,298
--------
5,997
--------
- ----------------------------------------------------------------------------
OTHER - 12.6%
OTHER - 1.2%
IN Hammond,
American Maize Products Co.,
Series 1994,
8.000% 12/01/24 2,000 2,356
MD Baltimore,
Park Charles Project,
Series 1986,
8.000% 01/01/10 810 881
--------
3,237
--------
REFUNDED/ESCROWED (G) - 11.4%
Colton Public Financing Authority,
Series 1995,
7.500% 10/01/20 2,000 2,327
CA San Joaquin Hills Transportation
Corridor Agency,
Series 1993:
6.750% 01/01/32 1,500 1,689
7.000% 01/01/30 775 880
CO Denver City and County Airport:
Series B,
7.250% 11/15/23 580 661
Series C,
6.125% 11/15/25 2,280 2,556
FL Clearwater Housing Authority,
Hampton Apartments,
Series 1994,
8.250% 05/01/24 2,500 3,069
ID State Health Facilities Authority,
IHC Hospitals, Inc.,
8.350% 02/15/21 1,750 2,127
IL State Health Facilities Authority:
Edgewater Medical Center,
Series A,
9.250% 07/01/24 1,985 2,506
Hinsdale Hospital,
Series 1990-C,
9.500% 11/15/19 650 756
MA State Industrial Finance Agency,
Series 1990,
9.000% 10/01/20 2,315 2,599
MN Mille Lacs Capital Improvement Authority,
Mille Lacs Band of Chippewa,
Series 1992-A,
9.250% 11/01/12 1,055 1,291
NC Lincoln County,
Lincoln County Hospital,
9.000% 05/01/07 455 546
NM City of Clovis,
Retirement Ranches Project:
10.750% 04/01/19 210 227
10.750% 04/01/19 2,090 2,256
PA Delaware County Authority,
Southeastern Pennsylvania Obligated Group,
Series 1996:
6.000% 12/15/16 1,400 1,564
6.000% 12/15/26 1,000 1,116
VI Virgin Islands Public Financing,
Series 1992-A,
7.250% 10/01/18 2,000 2,283
WA State Health Care Facilities Authority,
Grays Harbor Community Hospital,
Series 1993:
7.200% 07/01/03 170 185
8.025% 07/01/20 1,480 1,641
--------
30,279
--------
- ----------------------------------------------------------------------------
OTHER REVENUE - 11.6%
CHEMICALS - 2.7%
LA Saint Charles Parish,
Union Carbide Corp.,
Series 1992,
7.350% 11/01/22 3,000 3,323
TX Corpus Christi Port Authority,
Hoechst Celanese Corp,
7.500% 08/01/12 3,500 3,805
--------
7,128
--------
INDUSTRIAL - 5.4%
CO Mesa County Industrial Development,
Joy Technologies Incorporated,
Series 1992,
8.500% 09/15/06 1,000 1,129
IL State Development Finance Authority,
Armstrong World Industries, Inc. Project,
5.950% 12/01/24 1,000 1,096
IL Will-Kankakee Regional Development Authority,
Flanders Corp.,
Series 1997,
6.500% 12/15/17 1,000 1,025
LA Southern Louisiana Port Commission,
Cargill, Inc. Project,
5.850% 04/01/17 1,000 1,059
MA State Industrial Finance Agency,
House of Bianchi, Inc.,
8.750% 06/01/18 335 346
MN Brooklyn Park,
TL Systems Corp.,
Series 1991,
10.000% 09/01/16 770 944
OH Cuyahoga County,
Joy Technologies, Inc.,
Series 1992,
8.750% 09/15/07 550 626
TN McKenzie Individual Development Board,
American Lantern Co.,
10.500% 05/01/16(c) 2,086 1,356
TX Trinity River Authority,
Texas Instruments Project,
Series 1996,
6.200% 03/01/20 1,000 1,072
WA Pilchuck Public Development Corp.,
Goodrich (B.F.) Co. Tramco Project,
Series 1993,
6.000% 08/01/23 5,420 5,606
--------
14,259
--------
OIL AND GAS - 0.5%
NY State Environmental Facilities Corp.,
Occidental Petroleum Corp. Project,
Series 1995,
6.100% 11/01/30 1,300 1,372
--------
PAPER PRODUCTS - 1.7%
AL Phenix City Industrial Development Board,
Mead Boated Board, Inc.,
Series 1998-A,
5.300% 04/01/27 650 642
GA Rockdale County Development
Authority, Solid Waste Disposal, Visy
Paper, Incorporated, Series 1993,
7.500% 01/01/26 3,600 3,929
--------
4,571
--------
RECREATION - 0.4%
NM Red River Sports,
6.450% 06/01/07 1,180 1,187
--------
RETAIL - 0.9%
OH Lake County,
North Madison Properties,
Series 1993,
8.819% 09/01/11 765 878
VA Virginia Beach Development Authority,
SC Diamond Associates, Inc.,
8.000% 12/01/10 1,260 1,414
--------
2,292
--------
- ----------------------------------------------------------------------------
RESOURCE RECOVERY - 2.9%
DISPOSAL- 1.2%
CT State Development Authority,
Sewer Sludge Disposal Facilities,
Series 1996,
8.250% 12/01/06 1,050 1,109
MA State Industrial Finance Agency:
Massachusetts Environmental Services,
Series 1994-A,
8.750% 11/01/21(c) 975 780
Series 1995,
9.000% 09/01/05 1,215 1,353
--------
3,242
--------
RESOURCE RECOVERY - 1.6%
PA Delaware County Industrial
Development Authority, Series A,
6.200% 07/01/19 4,000 4,329
--------
- ----------------------------------------------------------------------------
TAX-BACKED - 9.2%
LOCAL GENERAL OBLIGATIONS - 1.8%
Roseville Unified High School District,
Series B,
(b) 06/01/20 6,000 1,914
NY New York City:
Series 1997-A,
7.000% 08/01/07 1,000 1,162
Series 1997-H,
6.000% 08/01/17 1,400 1,503
TX Irving Independent School District,
Series 1997,
(b) 02/15/18 1,000 362
--------
4,941
--------
SPECIAL NON-PROPERTY TAX - 2.2%
IL Metropolitan Pier & Exposition
Authority, McCormick Place Expansion
Project, Series A,
(b) 06/15/16(a) 10,000 3,957
IL State Development Finance Authority,
City of Marion Project,
Series 1991,
9.625% 09/15/21 2,425 1,819
--------
5,776
--------
SPECIAL PROPERTY TAX - 1.0%
CA Carson,
Series 1992,
7.375% 09/02/22 185 199
CA Fontana Redevelopment Agency,
Jurupa Hills Project,
Series 1997-A,
5.500% 10/01/27 700 710
CA Poway Community Facilities District,
No. 88-1 Parkway Business Center,
Series 1998,
6.750% 08/15/15 600 653
CA Riverside County Public Financing Authority,
Redevelopment Projects, Series A,
5.500% 10/01/22 650 660
CA Yorba Linda Redevelopment Agency,
Series A,
(b) 09/01/24 1,325 335
--------
2,557
--------
STATE APPROPRIATED - 3.7%
NY Metropolitan Transportation Authority,
Commuter Facilities Board, Project:
Series 7,
5.625% 07/01/16 4,000 4,073
Series 1997-8,
5.250% 07/01/17 3,240 3,221
NY State Thruway Authority,
5.000% 04/01/17 1,500 1,454
NY State Urban Development Corp.,
University Facilities Grants,
Series 1995,
5.875% 01/01/21 1,000 1,100
--------
9,848
--------
STATE GENERAL OBLIGATIONS - 0.5%
PR Commonwealth of Puerto Rico,
5.375% 07/01/22 1,250 1,281
--------
- ----------------------------------------------------------------------------
TRANSPORTATION - 6.1%
AIR TRANSPORTATION - 3.0%
CO Denver City & County Airport,
United Airlines, Inc.,
Series 1992-A,
6.875% 10/01/32 1,645 1,785
TN Memphis-Shelby County Airport Authority,
Federal Express Corp.,
5.350% 09/01/12 1,200 1,220
TX Alliance Airport Authority:
American Airlines Project,
7.500% 12/01/29 1,600 1,728
Federal Express Corp.,
Series 1996,
6.375% 04/01/21 3,000 3,247
--------
7,980
--------
AIRPORT - 2.3%
CO Denver City and County Airport:
Series B,
7.250% 11/15/23 2,275 2,529
Series C,
6.125% 11/15/25 2,840 2,950
OH Toledo-Lucas County Port Authority,
Series 1998,
5.500% 05/15/20 585 570
--------
6,049
--------
TOLL FACILITIES - 0.8%
VA Richmond Metropolitan Authority,
Series 1998,
5.250% 07/15/22 2,000 2,069
--------
- ----------------------------------------------------------------------------
UTILITY - 11.0%
INDIVIDUAL POWER PRODUCER - 3.4%
FL Martin County Industrial
Development Authority,
Indiantown Cogeneration Project, Series 1994-A,
7.875% 12/15/25 1,000 1,173
NY Port Authority of New York & New Jersey,
KIAC Partners,
Series 1996 IV,
6.750% 10/01/11 2,000 2,235
PA State Economic Development Finance
Authority:
Colver Project,
Series D,
7.125% 12/01/15 4,000 4,464
Northampton Generating,
Series A,
6.500% 01/01/13 1,000 1,064
--------
8,936
--------
INVESTOR OWNED - 5.2%
AZ Pima County Industrial Development
Authority, Tucson Electric Power Co.,
Series A,
6.100% 09/01/25 750 757
IL Bryant,
Central Illinois Light Co.,
Series 1993,
5.900% 08/01/23 5,000 5,185
IL Chicago,
Peolple's Gas, Light & Coke Co.,
Series 1990-A,
8.100% 05/01/20 2,000 2,174
NM Farmington,
San Juan Public Service Co. Project,
Series D,
6.375% 04/01/22 1,300 1,411
NY State Energy Research & Development
Authority,
Consolidated Edison Co.,
Series 1991-A,
7.500% 01/01/26 1,500 1,580
PA Beaver County Industrial
Development Authority,
Ohio Edison Co.,
Series 1989-A,
7.750% 09/01/24 2,500 2,631
--------
13,738
--------
MUNICIPAL ELECTRIC - 1.2%
VI Water and Power Authority Electric
Systems,
Series 1991-A,
7.400% 07/01/11 920 1,019
WA Chelan County Public Utilities District No. 1,
Columbia River Rock Hydroelectric,
(b) 06/01/14(a) 5,000 2,232
--------
3,251
--------
WATER & SEWER - 1.2%
LA Public Facility Belmont Water
Authority,
9.000% 03/15/24 760 684
MS Five Lakes Utility District,
8.250% 07/15/24 500 400
NJ State Economic Development
Authority, Hills Development Co.,
10.500% 09/01/08 2,000 2,068
--------
3,152
--------
TOTAL MUNICIPAL BONDS (cost of $251,260)(h) 261,108
--------
SHORT-TERM OBLIGATIONS - 0.5%
- ----------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (i)
CA Newport Beach Hoag Memorial Presbyterian Hospital,
3.600% 10/01/22 200 200
IL State Development Finance Authority,
Ulich Children's Home Project,
3.600% 04/01/07 700 700
LA State Offshore Terminal Authority,
Loop, Inc.,
3.800% 09/01/06 300 300
--------
TOTAL SHORT-TERM OBLIGATIONS 1,200
--------
OTHER ASSETS & LIABILITIES, NET - 0.8% 2,134
- -----------------------------------------------------------------------------
NET ASSETS - 100.0% $264,442
========
NOTES TO INVESTMENT PORTFOLIO:
-------------------------------------------------------------------------------
(a) These securities, or a portion thereof, with a total market value of
$11,916 are being used to collateralize the delayed delivery purchases
indicated in note (d) below and open futures contracts.
(b) Zero coupon bond.
(c) This issuer is in default of certain debt covenants. Income is not being
accrued.
(d) These securities have been purchased on a delayed delivery basis for
settlement at a future date beyond the customary settlement time.
(e) Accrued interest accumulates in the value of the security and is payable at
redemption.
(f) The value of this security represents fair value as determined in good
faith under the direction of the trustees.
(g) The Fund has been informed that the issuer has placed direct obligations of
the U.S. Government in an irrevocable trust, solely for the payment of the
interest and principal.
(h) Cost for federal income tax purposes is $251,345.
(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, 1998.
Acronym Name
------------------ -------------------------------
IFRN Inverse Floating Rate Note
Long futures contracts open at June 30, 1998:
Par value Unrealized
covered by Expiration appreciation
Type contracts month at 6/30/98
---------------------------------------------------------------------
Municipal Bond $ 4,600 September $ 30
See notes to financial statements.
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1998 (UNAUDITED)
(in thousands except for per share amount)
ASSETS
Investments at value (cost $251,260) $261,108
Short-term obligations 1,200
--------
262,308
Cash $ 81
Receivable for:
Interest 5,291
Investments sold 3,215
Other 15 8,602
------- --------
Total Assets 270,910
LIABILITIES
Payable for:
Investments purchased 5,119
Distributions 1,320
Variation margin on futures 14
Accrued:
Deferred Trustees fees 2
Other 13
-------
Total Liabilities 6,468
--------
NET ASSETS at value for 31,049
shares of beneficial interest outstanding $264,442
========
Net asset value per share $ 8.52
========
COMPOSITION OF NET ASSETS
Capital paid in $287,745
Undistributed net investment income 46
Accumulated net realized loss (33,227)
Net unrealized appreciation on:
Investments 9,848
Open futures contracts 30
--------
$264,442
========
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
(in thousands)
INVESTMENT INCOME
Interest $ 9,373
EXPENSES
Management fee $ 1,064
Transfer agent 30
Bookkeeping fee 34
Trustees fee 10
Custodian fee 4
Audit fee 16
Legal fee 44
Reports to shareholders 9
Registration fee 16
Other 22 1,249
------- -------
Net Investment Income 8,124
-------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain on:
Investments 2,303
Closed futures contracts 169
-------
Net Realized Gain 2,472
Net unrealized depreciation
during the period on:
Investments (3,469)
Open futures contracts (6)
-------
Net Unrealized Depreciation (3,475)
-------
Net Loss (1,003)
-------
Increase in Net Assets from Operations $ 7,121
=======
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
Six months
ended Year ended
(in thousands) June 30 December 31
---------------------------
INCREASE (DECREASE) IN NET ASSETS 1998 1997
Operations:
Net investment income $ 8,124 $ 16,994
Net realized gain (loss) 2,472 (4,664)
Net unrealized appreciation (depreciation) (3,475) 11,381
---------- -----------
Net Increase from Operations 7,121 23,711
Distributions:
From net investment income (8,370) (16,893)
In excess of net investment income (7) -
---------- -----------
(1,256) 6,818
Fund share transactions
Value of distributions reinvested 508 604
---------- -----------
Total Increase (Decrease) (748) 7,422
NET ASSETS
Beginning of period 265,190 257,768
---------- -----------
End of period (including undistributed
net investment income of $46
and $261, respectively) $ 264,442 $ 265,190
========== ===========
NUMBER OF FUND SHARES
Issued for distributions reinvested 59 71
Outstanding at
Beginning of period 30,990 30,919
---------- -----------
End of period 31,049 30,990
========== ===========
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
In the opinion of management of Colonial High Income Municipal Trust (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 June 30, 1998, 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.
Futures contracts are valued based on the difference between the last sale price
and the opening price of the contract.
Options are valued at the last reported sale price, or in the absence of a sale,
the mean between the last quoted bid and asking price.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains 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.
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, 1998, purchases and
sales of investments, other than short-term obligations, were $41,510,128 and
$43,564,119, respectively.
Unrealized appreciation (depreciation) at June 30, 1998, based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $ 16,414,297
Gross unrealized depreciation (6,651,512)
------------
Net unrealized appreciation $ 9,762,785
============
CAPITAL LOSS CARRYFORWARDS: At December 31, 1997, 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
------------ -----------------------
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
2005 5,927,000
---------------------
$ 35,530,000
---------------------
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized gains,
it is unlikely that such gains would be distributed since they may be taxable to
shareholders as ordinary income.
OTHER: There are certain risks arising from geographic concentration in any
state. Certain revenue or tax related events in a state may impair the ability
of certain issuers of municipal securities to pay principal and interest on
their obligations.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Fund may purchase or sell municipal and Treasury bond futures contracts and
purchase and write options on futures. The Fund will invest in these instruments
to hedge against the effects of changes in the value of portfolio securities due
to anticipated changes in interest rates and/or market conditions, for duration
management, or when the transactions are economically appropriate to the
reduction of risk inherent in the management of the Fund and not for trading
purposes. The use of futures contracts and options involves certain risks, which
include (1) imperfect correlation between the price movement of the instruments
and the underlying securities, (2) inability to close out positions due to
different trading hours or the temporary absence of a liquid market for either
the instrument or the underlying securities or (3) an inaccurate prediction by
the Adviser of the future direction of interest rates. Any of these risks may
involve amounts exceeding the amount recorded in the Fund's Statement of Assets
and Liabilities at any given time.
NOTE 5. RESULTS OF ANNUAL SHAREHOLDER MEETING (UNAUDITED)
- ------------------------------------------------------------------------------
On May 27, 1998, 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, 1998. On March
2, 1998, the record date of the Meeting, the Fund had outstanding 31,013,575
shares of beneficial interest. The votes cast at the Meeting were as follows:
Election of three Trustees:
WITHHOLD
FOR AUTHORITY
---------- ---------
Tom Bleasdale 26,109,460 589,545
Richard W. Lowry 26,116,697 582,308
John J. Neuhauser 26,101,472 597,533
The Board of Trustees also consists of Robert J. Birnbaum, Lora S. Collins,
James E. Grinnell, William E. Mayer, James L. Moody, Jr. and Robert L. Sullivan.
Ratification of the selection of Price Waterhouse LLP as independent
accountants:
FOR AGAINST ABSTAIN
---------- ------- -------
26,160,991 127,296 410,718
<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
------------ -----------------------------
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 8.560 $ 8.340 $ 8.550
------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.263 0.552 0.566
Net realized and unrealized gain (loss) (0.033) 0.214 (0.193)
------------ ------------ ------------
Total from Investment Operations 0.230 0.766 0.373
------------ ------------ ------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.270) (0.546) (0.583)
In excess of net investment income (0.000) -- --
------------
Total Distributions Declared to Shareholders (0.270) (0.546) (0.583)
------------ ------------ ------------
Net asset value -
End of period $ 8.520 $ 8.560 $ 8.340
============ ============ ============
Market price per share $ 8.440 $ 8.630 $ 8.250
============ ============ ============
Total return based on net asset value (a) 2.72%(c) 9.57% 4.71%
============ ============ ============
Total return based on market value (b) 0.95%(c) 11.60% 20.09%
============ ============ ============
RATIOS TO AVERAGE NET ASSETS:
Expenses (d) 0.94%(e) 0.96% 1.00%
Net investment income (d) 6.11%(e) 6.54% 6.74%
Portfolio turnover 16%(c) 17% 15%
Net assets at end of period (000) $ 264,442 $ 265,190 $ 257,768
(a) Total return at net asset value assuming all distributions reinvested.
(b) Total return at market value assuming all distributions reinvested and excluding brokerage commissions.
(c) Not annualized.
(d) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(e) Annualized.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected per share data, total return, ratios and supplemental data throughout
each period are as follows:
Year ended December 31
- ---------------------------------------------------
1995 1994 1993
- ------------ ------------ ------------
$ 7.960 $ 8.670 $ 8.780
- ------------ ------------ ------------
0.597 0.616 0.671
0.583 (0.716) (0.106)
- ------------ ------------ ------------
1.180 (0.100) 0.565
- ------------ ------------ ------------
(0.590) (0.610) (0.675)
-- -- --
- ------------ ------------ ------------
(0.590) (0.610) (0.675)
- ------------ ------------ ------------
$ 8.550 $ 7.960 $ 8.670
============ ============ ============
$ 7.380 $ 6.880 $ 8.250
============ ============ ============
15.70% (0.75)% 6.57%
============ ============ ============
15.65% (9.83)% 7.96%
============ ============ ============
1.06%(d) 1.03% 0.97%
7.15%(d) 7.44% 7.58%
23% 20% 29%
$ 264,467 $ 245,967 $ 268,130
<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 30 days written
notice to the Plan participants. Upon withdrawal by any participant or any
termination of the Plan, certificates for whole shares will be issued and cash
payments will be made for any fractional shares. All correspondence concerning
the Plan, 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.
<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
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.
<PAGE>
TRUSTEES
ROBERT J. BIRNBAUM
Consultant (formerly Special Counsel, Dechert, Price & Rhoads; President and
Chief Operating Officer, New York Stock Exchange, Inc.; President, American
Stock Exchange, Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
JOHN 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)
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, 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
Dean, Boston College School of Management
ROBERT L. SULLIVAN
Retired Partner, KPMG Peat Marwick LLP (formerly Management Consultant, Saatchi
and Saatchi Consulting Ltd. and Principal and International Practice Director,
Management Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
HI-03/615F-0698 M (8/98) 98/802
