<PAGE> 1
[BUILDING GRAPHIC]
COLONIAL HIGH INCOME MUNICIPAL TRUST ANNUAL REPORT
November 30, 1999
<PAGE> 2
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
This is the first shareholder report for Colonial High Income Municipal Trust's
new fiscal year, which has changed from December 31 to November 30. This report
will cover the 11-month period from December 31, 1998 to November 30, 1999.
The U.S. bond market continued to show negative returns during the past year, as
interest rates across the board rose steadily throughout the 11-month period.
The rise in bond yields over the past year has come primarily in response to
continued economic strength in the U.S. and a dramatic recovery in the economies
of Southeast Asia and Japan. This growth has caused concern among bond investors
that inflation could potentially begin to increase if the economy becomes
"overheated."
In the bond market, rising interest rates can hurt performance because as rates
rise, prices fall. During the period, the Fund's performance was affected not
only by the general decline in the bond market, but also by unforeseen
disappointments with certain holdings and strategies we undertook to help the
Fund improve its returns over the long-term. The holdings that experienced
difficulties have been sold, and we believe the Fund is positioned for the
economic environment we are forecasting in the coming year.
In the pages that follow, the Fund's portfolio manager will provide more
specific information about its performance and the strategies employed during
the fiscal year. As always, thank you for choosing Liberty Funds, and for giving
us the opportunity to serve your investment needs.
Sincerely,
/s/Stephen E. Gibson
Stephen E. Gibson
January 12, 2000
Because market and economic conditions change frequently, there can be no
assurance that the trends described in this report will continue or come to
pass.
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
<PAGE> 3
HIGHLIGHTS
- - MUNICIPALS OUTPERFORMED TREASURY BONDS DURING THE PERIOD
Municipal bonds were slightly undervalued at the start of the period, and
they gained value, relative to Treasury bonds, during the year. The yield
on the 30-year AAA-rated general obligation (GO) bond -- a benchmark of
municipal bond market performance -- rose from 4.86% on December 31, 1998
to 5.73% on November 30, 1999.
- - RISING RATES MADE FOR A CHALLENGING YEAR IN THE BOND MARKET
During the period, short-, intermediate- and long-term interest rates rose
dramatically. These increases significantly affected bond performance in
every sector because bond prices move in the opposite direction of yields.
Municipal bonds were no exception, although their declines were mitigated
somewhat by a reduction in supply.
- - PORTFOLIO MANAGER'S COMMENTARY
The declines in the Fund and the Lehman Brothers Municipal Bond Index
reflect the difficult market conditions of the past year. During the
period, the Fund had a total return of negative 6.39%, based on net asset
value. The Fund experienced difficulties due to a few poor performing
holdings, some of which have been sold. In addition, The Fund issued
preferred shares during the period designed to enhance yield. By increasing
the Fund's duration, preferred shares can increase the Fund's sensitivity
to changes in interest rates and, by paying a short-term variable rate to
other investors, can increase the potential for volatility in the dividend
rate. However, we employ certain hedging techniques that are designed to
reduce these risks.
- MAUREEN NEWMAN
TOTAL RETURN FOR THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX, 12/31/98 - 11/30/99
[LINE GRAPH]
<TABLE>
<S> <C>
12/31/98 10000
1/31/99 10119
2/28/99 10074.5
3/31/99 10088.6
4/30/99 10113.8
5/31/99 10055.1
6/30/99 9910.35
7/31/99 9946.03
8/31/99 9866.46
9/30/99 9870.4
10/31/99 9763.8
11/30/99 9867.3
</TABLE>
The Lehman Brothers Municipal Bond Index is a broad-based, unmanaged index that
tracks the performance of the municipal bond market. Unlike mutual funds,
indexes are not investments and do not incur fees or expenses. It is not
possible to invest directly in an index.
TOTAL RETURN, ASSUMING REINVESTMENT OF ALL DISTRIBUTIONS (12/31/98-11/30/99):
<TABLE>
<S> <C>
NAV (6.39)%
- --------------------------------------------------------------------------------
Market price (21.72)%
- --------------------------------------------------------------------------------
</TABLE>
11-MONTH DISTRIBUTIONS DECLARED PER COMMON SHARE THROUGH 11/30/99: $0.454(1)
PRICE PER SHARE AS OF 11/30/1999:
<TABLE>
<S> <C>
NAV $7.49
- --------------------------------------------------------------------------------
Market price $6.13
- --------------------------------------------------------------------------------
</TABLE>
(1)A portion of the Fund's income may be subject to the alternative minimum tax.
The Fund may at times purchase tax-exempt securities at a discount. Some or all
of this discount may be included in the Fund's ordinary income, and is taxable
when distributed.
TOP FIVE INDUSTRY SECTORS
<TABLE>
<S> <C>
Hospitals 14.8%
- --------------------------------------------------------------------------------
Nursing Homes 10.1%
- --------------------------------------------------------------------------------
Refunded/Escrowed 9.1%
- --------------------------------------------------------------------------------
Local General Obligations 8.6%
- --------------------------------------------------------------------------------
Multi-Family Housing 6.6%
- --------------------------------------------------------------------------------
</TABLE>
QUALITY BREAKDOWN AS OF 11/30/1999
<TABLE>
<S> <C>
AAA 28.5%
- --------------------------------------------------------------------------------
AA 9.9%
- --------------------------------------------------------------------------------
A 7.4%
- --------------------------------------------------------------------------------
BBB 15.7%
- --------------------------------------------------------------------------------
BB 2.1%
- --------------------------------------------------------------------------------
Non-rated 35.7%
- --------------------------------------------------------------------------------
Cash equivalents 0.7%
- --------------------------------------------------------------------------------
</TABLE>
Quality and sector breakdowns are calculated as a percentage of total
investments, including short-term obligations. Ratings shown in the Quality
Breakdown represent the highest rating assigned to a particular bond by one of
the following respected rating agencies: Standard & Poor's Corp., Moody's
Investors Service, Inc. or Fitch Investors Service.
Because the Fund is actively managed, there can be no guarantee the Fund will
continue to maintain this quality breakdown 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.
1
<PAGE> 4
INVESTMENT PORTFOLIO
November 30, 1999
(In thousands)
<TABLE>
<CAPTION>
MUNICIPAL BONDS 97.8% PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
EDUCATION 2.0%
EDUCATION
CA Statewide Communities
Development Authority, Crossroads
School for Arts & Sciences,
Series 1998,
6.000% 08/01/28 (a) $1,375 $1,286
IL State Development Finance
Authority, Latin School of Chicago,
Series 1998,
5.650% 08/01/28 230 206
MA State Industrial Finance Agency:
Cambridge Friends School,
Series 1998,
5.800% 09/01/28 1,000 904
St. John's High School,
Series 1998,
5.350% 06/01/28 300 256
MI Southfield Economic Development
Corp., Lawrence University,
Series 1998 A,
5.400% 02/01/18 1,000 885
MN Victoria,
Holy Family Catholic High School,
Series 1999 A,
5.875% 09/01/29 1,000 914
MO State Health & Educational
Facilities Authority, Central Institute
for the Deaf, Series 1999,
5.850% 01/01/22 1,075 1,025
NM Santa Fe,
College of Santa Fe,
Series 1998 A,
5.500% 10/01/28 250 221
VT State Educational & Health
Buildings Finance Agency, Norwich
University, Series 1998,
5.500% 07/01/21 1,500 1,359
------
7,056
------
- --------------------------------------------------------------------------------
HEALTHCARE 28.4%
CONGREGATE CARE RETIREMENT 2.6%
KS Manhattan,
Meadowlark Hills Retirement Home,
Series 1999 A,
6.375% 05/15/20 650 606
KY State Economic Development
Finance Authority, Christian Church
Homes of Kentucky, Inc., Series 1998,
5.500% 11/15/30 750 622
MA Boston Industrial Development
Finance Authority, Springhouse, Inc.,
Series 1988,
5.875% 07/01/20 605 525
MA State Development Finance Agency,
Series 1999 A:
5.625% 07/01/15 $ 500 $ 446
5.750% 07/01/23 250 216
MI State Strategic Fund,
Holland Home,
Series 1998,
5.750% 11/15/28 400 329
MN Columbia Heights,
Crest View Corp.,
Series 1998:
6.000% 03/01/33 740 660
NH State Higher Educational & Health
Facilities Authority, Rivermead at
Peterborough, Series 1998:
5.625% 07/01/18 500 439
5.750% 07/01/28 500 430
PA Philadelphia Authority for Industrial
Development, Baptist Home of
Philadelphia, Series 1998 A:
5.500% 11/15/18 360 315
5.600% 11/15/28 570 486
TN Metropolitan Government,
Nashville and Davidson County,
Blakeford at Green Hills,
Series 1998,
5.650% 07/01/24 600 514
TX Abilene Health Facilities
Development Corp.
Sears Methodist Retirement
Obligation Group:
Series 1998 A,
5.900% 11/15/25 1,000 883
Series 1999,
6.000% 11/15/29 500 445
WI State Health & Educational
Facilities Authority: Attic Angel
Obligated Group,
5.750% 11/15/27 1,000 866
United Lutheran Program for Aging, Inc.,
5.700% 03/01/28 1,000 880
Clement Manor, Series 1998,
5.750% 08/15/24 600 527
------
9,189
------
HEALTH SERVICES 0.2%
IL State Health Facilities Authority,
Midwest Physician Group, Ltd.,
Series 1998,
5.500% 11/15/19 120 102
</TABLE>
2
<PAGE> 5
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
MA State Development Finance Agency,
Boston Biomedical Research Institute,
Series 1999:
5.650% 02/01/19 $ 200 $ 176
5.750% 02/01/29 450 388
------
666
------
HOSPITAL 14.6%
AL Alabama Special Care Facilities
Authority, Montgomery Healthcare,
Series 1989,
11.000% 10/01/19 (b) 3,295 1,834
AR Conway Health Facilities Board,
Conway Regional Medical Center:
Series 1999 A,
6.400% 08/01/29 425 420
Series 1999 B,
6.400% 08/01/29 1,000 966
AZ Maricopa County Industrial
Development Authority: Mayo Clinic
Hospital, Series 1998,
5.250% 11/15/37 6,000 5,211
National Health Facilities II Project,
5.100% 01/01/33 (c) 4,500 3,874
CA State Health Facilities Financing
Authority: Cedars-Sinai Medical
Center, Series 1999 A,
6.125% 12/01/30 2,500 2,447
Kaiser Permanente,
Series 1989 A,
(d) 10/01/12 (c) 5,500 2,710
CO State Health Care Facilities
Authority, National Jewish Medical &
Research Center, Series 1998,
5.375% 01/01/23 330 276
FL Tampa,
H. Lee Moffitt Cancer Center,
Series 1999 A,
5.750% 07/01/29 2,000 1,843
GA Forsyth County Hospital Authority,
Georgia Baptist Healthcare System,
Series 1998,
6.000% 10/01/08 1,000 939
IL Health Facilities Authority,
Thorek Hospital & Medical Center,
5.250% 08/15/18 600 504
IL Southwestern Illinois Development
Authority, Anderson Hospital,
Series 1999,
5.500% 08/15/20 225 193
IN State Health Facilities Financing
Authority, Riverview Hospital,
Series 1999,
5.500% 08/01/24 $ 400 $ 340
LA State Public Facilities Authority,
Touro Infirmary,
Series 1999,
5.625% 08/15/29 600 516
MI Dickinson County,
Series 1999,
5.700% 11/01/18 750 663
MI Flint Hospital Building Authority,
Hurley Medical Center,
Series 1998 A,
5.375% 07/01/20 625 530
MI State Hospital Finance Authority,
Detroit Medical Center,
Series 1998 A,
5.250% 08/15/28 650 500
MN St. Paul Housing & Redevelopment
Authority, Healtheast Project,
Series A,
5.700% 11/01/15 1,000 865
MN Washington County Housing &
Redevelopment Authority, Healtheast,
Inc., Series 1998,
5.250% 11/15/12 1,500 1,269
MS Lowndes County,
Golden Triangle Regional Medical
Center, Series 1990,
8.500% 02/01/10 235 241
MS State Business Finance Corp.,
Medical Foundation, Inc.,
Series 1998,
5.625% 07/01/23 1,450 1,239
NC State Medical Care Commission:
Stanley Memorial Hospital,
Series 1999,
6.375% 10/01/29 1,915 1,910
Gaston Health Care,
Series 1998,
5.000% 02/15/29 5,000 4,183
NH State Higher Educational & Health
Facilities Authority,
Littleton Hospital Assoc., Inc.,
Series 1998 A:
5.900% 05/01/28 780 671
6.000% 05/01/28 625 545
NM State Hospital Equipment Loan
Council, Memorial Medical Center,
Series 1998,
5.500% 06/01/28 1,220 1,030
</TABLE>
3
<PAGE> 6
INVESTMENT PORTFOLIO (CONTINUED)
November 30, 1999
(In thousands)
<TABLE>
<CAPTION>
MUNICIPAL BONDS (CONTINUED) PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
HOSPITAL (CONTINUED)
OH Belmont County,
East Ohio Regional Hospital,
Series 1998,
5.700% 01/01/13 $1,875 $1,659
OH Franklin County,
Doctors OhioHealth Corp.,
Series 1998 A,
5.600% 12/01/28 2,150 1,800
OH Highland County Joint Township
Hospital District, Series 1999,
6.750% 12/01/29 1,000 946
OH Miami County,
Upper Valley Medical Center, Inc.,
Series 1996 A,
6.375% 05/15/26 1,000 942
OH Sandusky County,
Series 1998,
5.150% 01/01/10 250 236
PA Allegheny County Hospital
Development, Ohio Valley General
Hospital, Series 1998 A,
5.450% 01/01/28 1,000 844
PA Mount Pleasant Business District
Authority, Frick Hospital,
5.750% 12/01/27 1,300 1,128
PA Pottsville Hospital Authority,
Pottsville Hospital & Warne Clinic,
Series 1998,
5.500% 07/01/18 1,000 852
TX Lufkin Health Facilities
Development Corp., Memorial Health
Systems of East Texas, Series 1998,
5.700% 02/15/28 1,120 964
TX Richardson Hospital Authority,
Baylor Richardson Medical Center,
Series 1998,
5.625% 12/01/28 750 634
UT Weber County,
INC Health Services, Inc.,
Series 1999,
5.000% 08/15/30 4,500 3,757
VT State Educational & Health
Buildings Authority, Springfield
Hospital, Series A,
7.750% 01/01/13 1,115 1,208
VT State Educational & Health
Buildings Finance Agency,
Brattleboro Memorial Hospital,
5.375% 03/01/28 1,075 891
------
51,580
------
INTERMEDIATE CARE FACILITIES 1.0%
IL State Development Finance Authority,
Hoosier Care, Inc.,
Series 1999 A,
7.125% 06/01/34 $1,240 $1,158
IN State Health Facilities Financing
Authority, Hoosier Care, Inc.,
Series 1999 A,
7.125% 06/01/34 150 140
PA State Economic Development
Financing Authority, Northwestern
Human Services, Inc., Series 1998 A,
5.250% 06/01/14 2,510 2,235
------
3,533
------
NURSING HOME 10.0%
AK Juneau,
St. Ann's Care Center,
Series 1999,
6.875% 12/01/25 700 658
CO Health Care Facilities Authority
Pioneer Health Care, Series 1989,
10.500% 05/01/19 2,000 2,015
CO State Health Facilities Authority:
American Housing Foundation, Inc.,
Series 1990 A,
10.250% 12/01/20 (b) 1,300 1,040
Volunteers of America Care
Facilities, Inc.:
Series 1998 A:
5.450% 07/01/08 300 283
5.750% 07/01/20 865 761
Series 1999 A,
6.000% 07/01/29 350 311
FL Gadsden County Industrial
Development Authority, Florida
Properties, Inc., Series 1988 A,
10.450% 10/01/18 1,835 1,844
IA State Finance Authority,
Care Initiatives Project:
Series 1996,
9.250% 07/01/25 1,000 1,249
Series 1998 B:
5.750% 07/01/18 550 499
5.750% 07/01/28 1,475 1,302
IN Gary Industrial Economic
Development, West Side Health
Care Center, Series 1987 A,
11.500% 10/01/17 1,425 1,454
IN Michigan City Health Facilities,
Metropolitan Health Foundation Inc.
Project,
10.000% 11/01/22 (b) 3,085 2,468
</TABLE>
4
<PAGE> 7
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
IN State Health Facilities Financing
Authority, Metro Health Indiana, Inc.,
Series 1998,
6.400% 12/01/33 $1,210 $1,074
KS Washington County Industrial
Development Authority, Central States,
Series 1989,
10.250% 11/01/19 1,795 1,829
MA State Development Finance Agency,
Alliance Health Care Facilities,
Series 1999,
7.100% 07/01/32 1,500 1,442
MA State Industrial Finance Agency,
American Health Foundation, Inc.,
Series 1989,
10.125% 03/01/19 (b) 1,923 1,366
MN Minneapolis,
Walker Methodist Senior Services
Group, Series 1998 A,
6.000% 11/15/28 1,200 1,031
MN New Hope,
North Ridge Care Center, Inc.,
Series 1999,
5.875% 03/01/29 800 695
MN Sartell,
Foundation for Healthcare,
Series 1999 A,
6.625% 09/01/29 1,145 1,051
NJ State Economic Development
Authority, Geriatric & Medical
Service, Inc., Series B,
10.500% 05/01/20 2,000 2,018
PA Chester County Industrial
Development, Pennsylvania Nursing
Home, Inc., Series 1989,
10.125% 05/01/19 (b) 2,548 1,911
TN Metropolitan Government,
Nashville & Davidson Counties Health
& Education Facilities, Central States,
Series 1989,
10.250% 11/01/19 1,680 1,711
TX Bell County Health Facilities
Development Corp., Heartway Corp.
Project:
9.500% 03/01/19 1,500 1,350
10.000% 03/01/19 (b) 255 (e)
TX Kirbyville Health Facilities
Development Corp., Heartway III
Project:
Series 1997 A,
10.000% 03/20/18 $ 720 $ 673
Series 1997 B,
(d) 03/20/04 106 61
TX Whitehouse Health Facilities
Development Corp., Oak Brook
Health Care Center, Series 1989,
10.000% 12/01/19 1,725 1,800
WA Kitsap County Housing Authority,
Martha & Mary Nursing Home,
7.100% 02/20/36 1,000 1,101
WI State Health & Educational
Facilities Authority, Meto Health
Foundation, Inc., Series 1993,
10.000% 11/01/22 (b) 2,775 2,220
------
35,217
------
- --------------------------------------------------------------------------------
HOUSING 10.9%
ASSISTED LIVING/SENIOR 3.4%
CA Abag Finance Authority for
Nonprofit Corps., Eskaton Gold River
Lodge, Series 1998:
6.375% 11/15/15 (f) 750 707
6.375% 11/15/28 (f) 550 500
DE Kent County,
Heritage at Dover,
Series 1999,
7.625% 01/01/30 1,750 1,739
GA Columbus Housing Authority,
The Gardens at Calvary, Series 1999,
7.000% 11/15/19 500 474
IL Clarendon Hills Residential Facilities,
Churchill Estate,
Series 1998 A:
6.750% 03/01/24 1,050 979
6.750% 03/01/31 1,370 1,271
IL State Development Finance Authority,
Care Institute, Inc.,
8.250% 06/01/25 1,300 1,407
MN Roseville,
Care Institute, Inc., Series 1993,
7.750% 11/01/23 1,740 1,627
NC State Medical Care Commission,
DePaul Community Facilities Project,
Series 1999,
7.625% 11/01/29 (g) 1,500 1,500
TX Bell County Health Facilities
Development Corp., Care
Institutions, Inc.,
9.000% 11/01/24 1,800 1,973
------
12,177
------
</TABLE>
5
<PAGE> 8
INVESTMENT PORTFOLIO (CONTINUED)
November 30, 1999
(In thousands)
<TABLE>
<CAPTION>
MUNICIPAL BONDS (CONTINUED) PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
MULTI-FAMILY 6.3%
DE Wilmington,
Electra Arms Senior
Association Project,
6.250% 06/01/28 $1,000 $ 883
GA Clayton County Housing Authority,
Magnolia Park Apartments,
Series 1999 A,
6.250% 06/01/30 955 880
MN Lakeville,
Southfork Apartments Project:
Series 1989 B,
(h) 02/01/20 982 1,179
Series 1989 A,
9.875% 02/01/20 2,570 2,569
MN Robbinsdale Economic
Development Authority, Series 1999 A,
6.875% 01/01/26 500 497
MN Washington County Housing &
Redevelopment Authority, Cottages
of Aspen, Series 1992,
9.250% 06/01/22 1,050 1,113
MN White Bear Lake,
Birch Lake Townhome Project:
Series 1989 B,
(h) 07/15/19 732 220
Series 1989 A,
10.250% 07/15/19 2,200 2,200
NC Eastern Carolina Regional
Housing Authority, New River
Apartments-Jacksonville, Series 1994,
8.250% 09/01/14 1,785 1,843
NY Nyack Housing Assistance Corp.,
Nyack Plaza Apartments,
7.375% 06/01/21 (i) 385 384
Resolution Trust Corp.,
Pass Through Certificates,
Series 1993 A,
9.250% 12/01/16 (i) 5,098 5,141
TN Franklin Industrial Board,
Landings Apartment Project,
Series 1996 B,
8.750% 04/01/27 920 948
TX Galveston Health Facilities Center,
Pass Through Certificates,
8.000% 08/01/23 1,000 1,026
TX State Department of Housing &
Community Affairs, Pebble Brooks
Apartments, Series 1998,
5.500% 12/01/18 1,000 947
VA Alexandria Redevelopment &
Housing Authority, Courthouse
Commons Apartments, Series 1990 A,
10.000% 01/01/21 $1,500 $1,470
WA Vancouver Housing Authority,
Series I,
5.500% 03/01/28 1,000 891
------
22,191
------
SINGLE-FAMILY 1.2%
LA Louisiana Housing Finance Agency,
Residual Lien Mortgage,
Series 1992,
7.375% 09/01/13 305 314
OH State Housing Finance Agency,
Series B-4, IFRN (variable rate),
9.162% 03/31/31 625 665
TX Bexar County Housing Finance Corp.,
GNMA Collateralized Mortgage,
Series 1989-A,
8.200% 04/01/22 (c) 1,955 2,016
WA State Housing Finance Commission,
Series 1992 D-1,
6.150% 01/01/26 1,095 1,103
------
4,098
------
INDUSTRIAL 4.5%
FOOD PRODUCTS 1.2%
IN Hammond,
American Maize Products Co.,
Series 1994,
8.000% 12/01/24 2,000 2,181
LA Southern Louisiana Port
Commission, Cargill, Inc. Project,
5.850% 04/01/17 1,000 975
MI State Strategic Fund,
Michigan Sugar Co., Sebewang Project,
Series 1998 A,
6.250% 11/01/15 1,250 1,166
------
4,322
------
FOREST PRODUCTS 0.5%
GA Rockdale County Development
Authority, Solid Waste Disposal,
Visy Paper, Inc., Series 1993,
7.500% 01/01/26 1,800 1,872
------
MANUFACTURING 2.2%
IL State Development Finance
Authority, Armstrong World
Industries, Inc. Project,
5.950% 12/01/24 1,000 950
IL Will-Kankakee Regional
Development Authority, Flanders Corp./
Precisionaire Project, Series 1997,
6.500% 12/15/17 950 936
</TABLE>
6
<PAGE> 9
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
MA State Industrial Finance Agency,
House of Bianchi, Inc.,
8.750% 06/01/18 $ 335 $ 323
MN Brooklyn Park,
TL Systems Corp.,
Series 1991,
10.000% 09/01/16 740 851
NV Henderson Public Improvement
Trust, Dongsung America Co., Inc.,
Series 1998,
7.000% 11/01/10 (b) 287 238
TN McKenzie Individual Development
Board, American Lantern Co.,
10.500% 05/01/16 (b) 2,086 1,106
TX Trinity River Authority,
Texas Instruments Project,
Series 1996,
6.200% 03/01/20 1,000 990
VA State Small Business Financing
Authority, Dongsung America,
Series 1998,
7.250% 11/01/15 (b) 312 259
WA Pilchuck Public Developement
Corp., Goodrich (B.F.) Co. Tramco
Project, Series 1993,
6.000% 08/01/23 2,420 2,225
------
7,878
------
METALS & MINING 0.6%
NV State Department of Business &
Industry, Wheeling-Pittsburgh Steel
Corp., Series 1999 A,
8.000% 09/01/14 1,000 968
VA Greensville County Industrial
Development Authority,
Wheeling Steel, Series 1999 A:
6.375% 04/01/04 100 97
7.000% 04/01/14 500 466
VA Peninsula Ports Authority,
Ziegler Coal Project,
Series 1997,
6.900% 05/02/22 675 594
------
2,125
------
OTHER 9.2%
REFUNDED/ESCROWED (j)
CA Colton Public Financing
Authority, Series 1995,
7.500% 10/01/20 1,965 2,169
CA San Joaquin Hills Transportation
Corridor Agency,
Series 1993:
6.750% 01/01/32 (c) $1,500 $1,630
7.000% 01/01/30 775 847
CO Denver City and County Airport:
Series C,
6.125% 11/15/25 2,280 2,290
Series B,
7.250% 11/15/23 580 634
FL Clearwater Housing Authority,
Hampton Apartments,
Series 1994,
8.250% 05/01/24 2,500 2,881
ID State Health Facilities Authority:
IHC Hospitals, Inc.,
6.650% 02/15/21 1,750 1,912
Edgewater Medical Center,
Series A,
9.250% 07/01/24 1,965 2,319
Hinsdale Hospital,
Series 1990 C,
9.500% 11/15/19 585 626
MA Boston,
St. Joseph Nursing Care Center, Inc.,
Series 1990,
10.000% 01/01/20 935 967
MA State Health & Educational
Facilities Authority, Corporation for
Independent Living,
8.100% 07/01/18 710 805
MA State Industrial Finance Agency,
Series 1990,
9.000% 10/01/20 2,240 2,365
MD Baltimore,
Park Charles Project,
Series 1986,
8.000% 01/01/10 740 774
MN Mille Lacs Capital Improvement
Authority, Mille Lacs Band of
Chippewa, Series 1992 A,
9.250% 11/01/12 980 1,129
NC Lincoln County,
Lincoln County Hospital,
9.000% 05/01/07 420 477
PA Delaware County Authority,
Southeastern Pennsylvania
Obligated Group, Series 1996:
6.000% 12/15/16 1,400 1,437
6.000% 12/15/26 1,000 1,004
PA Montgomery County Industrial
Development Authority, Assisted
Living Facility, Series 1993 A,
8.250% 05/01/23 840 931
</TABLE>
7
<PAGE> 10
INVESTMENT PORTFOLIO (CONTINUED)
November 30, 1999
(In thousands)
<TABLE>
<CAPTION>
MUNICIPAL BONDS (CONTINUED) PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
OTHER (CONTINUED)
REFUNDED/ESCROWED (CONTINUED)
TN Shelby County, Health, Education,
& Housing Facilities Board,
Open Arms Development Center:
Series 1992 A,
9.750% 08/01/19 $ 905 $ 1,175
Series 1992 C,
9.750% 08/01/19 885 1,149
VI Virgin Islands Public Financing,
Series 1992 A,
7.250% 10/01/18 2,000 2,198
VI Water and Power Authority Electric
Systems, Series 1991 A,
7.400% 07/01/11 880 929
WA State Health Care Facilities
Authority, Grays Harbor Community
Hospital, Series 1993:
7.200% 07/01/03 170 175
8.025% 07/01/20 1,480 1,561
------
32,384
------
OTHER REVENUE 2.5%
HOTELS 0.3%
PA Philadelphia Authority for
Industrial Development,
Doubletree Project,
6.500% 10/01/27 1,000 976
------
RECREATION 1.3%
CA Statewide Communities
Development Corp.,
J. Paul Getty Trust Center,
5.000% 10/01/23 (c) 2,250 1,949
DC District of Columbia,
Smithsonian Institute,
Series 1997,
5.000% 02/01/28 1,750 1,485
NM Red River Sports Facility,
Red River Ski Area Project,
Series 1998,
6.450% 06/01/07 1,065 1,026
------
4,460
------
RETAIL 0.9%
NJ State Economic Development
Authority, Glimcher Properties L.P.
Project,
6.000% 11/01/28 1,250 1,136
OH Lake County,
North Madison Properties,
Series 1993,
8.819% 09/01/11 765 841
VA Virginia Beach Development
Authority, SC Diamond Associates, Inc.,
8.000% 12/01/10 1,115 1,193
------
3,170
------
RESOURCE RECOVERY 1.4%
DISPOSAL 0.8%
CT State Development Authority,
Sewer Sludge Disposal Facilities,
Series 1996,
8.250% 12/01/06 $ 875 $ 966
MA State Industrial Finance Agency:
Massachusetts Environmental Services,
Series 1994 A,
8.750% 11/01/21 975 780
Peabody Monofill Associates, Inc.,
Series 1995,
9.000% 09/01/05 1,015 1,070
------
2,816
------
RESOURCE RECOVERY 0.6%
MA State Industrial Finance Agency,
Ogden Hill Project,
Series 1998 A,
5.500% 12/01/13 500 461
PA Delaware County Industrial
Development Authority, Series A,
6.200% 07/01/19 2,000 1,824
------
2,285
------
TAX-BACKED 17.4%
LOCAL GENERAL OBLIGATIONS 8.5%
IL Chicago Board of Education,
Series 1997 A,
5.250% 12/01/30 (c) 14,470 12,803
IL Cook County,
Series 1997 A,
5.625% 11/15/22 4,200 4,005
NY New York City:
Series 1997 A,
7.000% 08/01/07 1,000 1,110
Series 1997 H,
6.000% 08/01/17 1,400 1,406
TX Irving Independent School District,
Series 1997,
(d) 02/15/18 1,000 333
TX Keller Independent School District,
Series 1998,
5.000% 08/15/30 (c) 10,000 8,530
WA King County,
Series 1998 B,
5.000% 01/01/30 1,965 1,657
------
29,844
------
SPECIAL NON-PROPERTY TAX 1.6%
IL Metropolitan Pier & Exposition
Authority, McCormick Place
Expansion Project, Series A,
(d) 06/15/16 (c) 10,000 3,743
</TABLE>
8
<PAGE> 11
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
IL State Development Finance Authority,
City of Marion Project,
Series 1991,
9.625% 09/15/21 $2,375 $1,781
------
5,524
------
SPECIAL PROPERTY TAX 2.0%
CA Carson,
Series 1992,
7.375% 09/02/22 185 193
CA Orange County Community
Facilities District, Ladera Ranch,
Series 1999 A,
6.700% 08/15/29 500 501
CA Poway Community Facilities District,
No. 88-1 Parkway Business Center,
Series 1998,
6.750% 08/15/15 600 622
CA Riverside County Public Financing
Authority, Redevelopment Projects,
Series A,
5.500% 10/01/22 650 576
FL Heritage Springs Community
Development District, Series 1999 B,
6.250% 05/01/05 1,850 1,843
FL Lexington Oaks Community
Development District:
Series 1998 A,
6.125% 05/01/19 400 383
Series 1998 B,
5.500% 05/01/05 565 550
FL Northern Palm Beach County
Improvement District, Series 1999,
6.000% 08/01/29 750 706
FL Orlando, Conroy Road
Interchange Project, Series 1998 A:
5.500% 05/01/10 180 172
5.800% 05/01/26 500 454
FL Stoneybrook Community
Development District, Series 1998 B,
5.700% 05/01/08 970 942
------
6,942
------
STATE APPROPRIATED 0.3%
NY State Urban Development Corp.,
University Facilities Grants,
Series 1995,
5.875% 01/01/21 1,000 987
------
STATE GENERAL OBLIGATIONS 5.0%
DC District of Columbia,
Series 1999 A,
5.375% 06/01/18 2,395 2,222
TX State, Series 1999 ABC,
5.500% 08/01/35 $ 4,200 $ 3,883
WA State, Series 1999 B,
5.000% 01/01/24 13,250 11,542
------
17,647
------
TRANSPORTATION 8.9%
AIR TRANSPORTATION 1.8%
CO Denver City & County Airport,
United Airlines Inc.,
Series 1992 A,
6.875% 10/01/32 1,645 1,653
TX Alliance Airport Authority:
American Airlines Project,
7.500% 12/01/29 1,600 1,665
Federal Express Corp.,
Series 1996,
6.375% 04/01/21 3,000 2,930
------
6,248
------
AIRPORT 5.5%
CO Denver City & County Airport:
Series 1997 E,
5.250% 11/15/23 (c) 4,590 4,134
Series 1998 B,
5.000% 11/15/25 3,200 2,748
Series C,
6.125% 11/15/25 2,840 2,861
Series B,
7.250% 11/15/23 2,275 2,423
MA State Port Authority,
Series 1998 D,
5.000% 07/01/28 (c) 6,500 5,571
MI Wayne County,
Detroit Metropolitan Airport,
Series 1998 A,
5.000% 12/01/22 2,000 1,702
------
19,439
------
TOLL FACILITIES 1.6%
NY State Thruway Authority,
Series 1998 E,
5.000% 01/01/25 4,330 3,732
VA Richmond Metropolitan Authority,
Series 1998,
5.250% 07/15/22 2,000 1,841
------
5,573
------
UTILITY 12.6%
INDEPENDENT POWER PRODUCER 2.3%
NY Port Authority of New York &
New Jersey, KIAC Partners,
Series 1996 IV,
6.750% 10/01/11 2,000 2,108
OH State Water Development Authority,
Bay Shore Power Project, Series 1998 A,
5.875% 09/01/20 2,000 1,813
</TABLE>
9
<PAGE> 12
INVESTMENT PORTFOLIO (CONTINUED)
November 30, 1999
(In thousands)
<TABLE>
<CAPTION>
MUNICIPAL BONDS (CONTINUED) PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
UTILITY (CONTINUED)
INDEPENDENT POWER PRODUCER (CONTINUED)
PA State Economic Development
Finance Authority:
Colver Project,
Series D,
7.125% 12/01/15 $ 3,000 $ 3,178
Northampton Generating, Series A,
6.500% 01/01/13 1,000 1,007
------
8,106
------
INVESTOR OWNED 4.2%
AZ Pima County Industrial
Development Authority, Tucson
Electric Power Co., Series A,
6.100% 09/01/25 750 680
CT State Development Authority,
Connecticut Light & Power Co.,
Series 1993 B,
5.950% 09/01/28 400 364
IL Bryant,
Central Illinois Light Co.,
Series 1993,
5.900% 08/01/23 5,000 4,708
LA Calcasieu Parish Industrial
Development Board, Entergy Gulf
States, Inc., Series 1999,
5.450% 07/01/10 500 472
LA West Feliciana Parish,
Entergy Gulf States, Inc.,
Series 1999 B,
6.600% 09/01/28 500 485
MS State Business Finance Corp.,
Systems Energy Resources Project,
Series 1998,
5.875% 04/01/22 2,000 1,765
NM Farmington,
San Juan Public Service Co. Project,
Series D,
6.375% 04/01/22 1,300 1,266
WV Pleasant County,
Western Pennsylvania Power Co.,
Series 1999 E,
5.500% 04/01/29 5,750 5,259
------
14,999
------
JOINT POWER AUTHORITY 0.1%
NC Eastern Municipal Power Agency,
Series 1999 D,
6.700% 01/01/19 500 503
------
MUNICIPAL ELECTRIC 0.6%
WA Chelan County Public Utilities
District No. 1, Columbia River Rock
Hydroelectric,
(d) 06/01/14 (c) 5,000 2,167
------
WATER & SEWER 5.4%
FL Miami-Dade County,
Series 1999 A,
5.000% 10/01/29 (c) $ 8,000 $ 6,934
GA Atlanta,
Series 1999 A,
5.000% 11/01/38 (c) 4,200 3,510
LA Public Facility Belmont Water
Authority,
9.000% 03/15/24 (k) 760 646
MA State Water Resources Authority,
Series 1997 D,
5.000% 08/01/24 4,000 3,474
MO State Environmental Improvement
& Energy Resource Authority,
Tri-County Water Authority Project,
Series 1999,
5.750% 04/01/19 1,125 1,072
MS V Lakes Utility District,
8.250% 07/15/24 500 400
WA King County,
Series 1999,
5.250% 01/01/30 3,250 2,871
------
18,907
------
TOTAL MUNICIPAL BONDS
(cost of $361,744) 344,881
------
</TABLE>
<TABLE>
<CAPTION>
PREFERRED STOCKS 0.5% SHARES
- --------------------------------------------------------------------------------
<S> <C> <C>
Charter MAC Equity ISS
(cost of $2,000)
6.625% 06/30/49 (h) 2,000 1,955
-------
TOTAL INVESTMENTS
(cost of $363,744) (l) 346,836
-------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM OBLIGATIONS 0.7% PAR
- --------------------------------------------------------------------------------
<S> <C> <C>
VARIABLE RATE DEMAND NOTES (m)
CA State Educational Facilities
Authority, Foundation for Educational
Achievement, Series 1996,
3.650% 07/01/26 $ 200 200
GA Richmond County Development
Authority, Monsanto Co.,
Series 1998,
3.900% 06/01/21 500 500
IL State Development Finance
Authority, Council for Jewish Elderly,
Series 1995,
3.900% 03/01/15 100 100
IN State Hospital Equipment Finance
Authority, Series A,
3.900% 12/01/15 600 600
</TABLE>
10
<PAGE> 13
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
MI Flint Hospital Building Authority,
Hurley Medical Center,
Series 1995 B,
3.900% 07/01/15 $ 100 $ 100
MN Minneapolis,
Series 1997 A,
3.250% 12/01/02 700 700
NY New York City Municipal Water
Finance Authority, Series 1994 G,
3.600% 06/15/24 100 100
--------
TOTAL SHORT-TERM OBLIGATIONS 2,300
--------
OTHER ASSETS & LIABILITIES, NET 1.0% 3,503
--------
NET ASSETS 100.0% $352,639
========
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
(a) This is a restricted security which was acquired at a cost of $1,400. This
security represents 0.4% of the Trust's net assets at November 30, 1999.
(b) This issuer is in default of certain debt covenants. Income is not being
accrued.
(c) These securities, or a portion thereof, with a total market value of
$48,826, are being used to collateralize the delayed delivery purchases
indicated in note (g) below and open futures contracts.
(d) Zero coupon bond.
(e) Rounds to less than one.
(f) This is a restricted security which was acquired at a cost of $1,287. This
security represents 0.3% of the Trust's net assets at November 30, 1999.
(g) This security has been purchased on a delayed delivery basis for settlement
at a future date beyond the customary settlement date.
(h) Accrued interest accumulates in the value of the security and is payable at
redemption.
(i) 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 November 30,
1999, the value of these securities amounted to $7,480 or 2.1% of net
assets.
(j) The Trust has been informed that each issuer has placed direct obligations
of the U.S. Government in an irrevocable trust, solely for the payment of
the principal and interest.
(k) This is a restricted security which was acquired at a cost of $820. This
security represents 0.2% of the Trust's net assets at November 30, 1999.
(l) Cost for federal income tax purposes is $363,792.
(m) 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 November 30,
1999.
Long and short futures contracts open at November 30, 1999:
<TABLE>
<CAPTION>
Unrealized
Par value appreciation
covered by Expiration (depreciation)
Type contracts month at 11/30/99
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Treasury Bond 42,700 March 35
Treasury Note 4,200 March (24)
----
$ 11
----
</TABLE>
<TABLE>
<CAPTION>
ACRONYM NAME
------- ----
<S> <C>
IFRN Inverse Floating Rate Note
</TABLE>
See notes to financial statements.
11
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1999
(In thousands except for per share amount)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $363,744) $ 346,836
Short-term obligations 2,300
---------
349,136
Cash $ 13
Receivable for:
Interest 6,251
Investments sold 451
Other 145 6,860
------- ---------
Total Assets 355,996
LIABILITIES
Payable for:
Investments purchased 1,500
Distributions -- common shares 1,243
Distributions -- preferred shares 99
Variation margin on futures 126
Accrued:
Management fee 236
Bookkeeping fee 7
Deferred Trustees fees 6
Other 140
-------
Total Liabilities 3,357
---------
NET ASSETS $ 352,639
=========
COMPOSITION OF NET ASSETS
Auction Preferred shares (5 shares issued
and outstanding at $25,000 per share) $ 120,000
Capital paid in -- common shares 283,688
Overdistributed net investment income (867)
Accumulated net realized loss (33,285)
Net unrealized appreciation (depreciation) on:
Investments (16,908)
Open futures contracts 11
---------
$ 352,639
=========
NET ASSETS at value for 31,078 common shares
of beneficial interest outstanding $ 232,540
=========
Net Asset value per common share $ 7.49
=========
NET ASSETS at value including undeclared
dividends for 5 preferred shares outstanding $ 120,099
=========
</TABLE>
STATEMENT OF OPERATIONS
For the period ended November 30, 1999(a)
(In thousands)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest $ 16,926
EXPENSES
Management fee $ 2,111
Transfer agent fee 73
Bookkeeping fee 67
Trustees fee 20
Custodian fee 7
Audit fee 60
Legal fee 65
Reports to shareholders 22
Preferred shares remarketing commissions 75
Other 114 2,614
-------- --------
Net Investment Income 14,312
--------
NET REALIZED & UNREALIZED GAIN (LOSS) ON
PORTFOLIO POSITIONS
Net realized loss on:
Investments (2,747)
Closed futures contracts (963)
--------
Net Realized Loss (3,710)
Net change in unrealized appreciation/depreciation
during the period on:
Investments (24,971)
Open futures contracts 30
--------
Net change in unrealized appreciation/depreciation (24,941)
--------
Net Loss (28,651)
--------
Decrease in Net Assets from Operations $(14,339)
========
</TABLE>
(a) The Fund changed its fiscal year end from December 31 to November 30.
See notes to financial statements.
12
<PAGE> 15
STATEMENT OF CHANGES IN NET ASSETS
(In thousands)
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED
NOVEMBER 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1999(a) 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income $ 14,312 $ 15,972
Net realized gain (loss) (3,710) 3,475
Net change in unrealized appreciation/
depreciation (24,941) (5,309)
--------- ---------
Net Increase (Decrease) from Operations (14,339) 14,138
Distributions:
From net investment income
-- common shares (14,106) (16,218)
From net investment income
-- preferred shares (1,171) --
--------- ---------
(29,616) (2,080)
Fund Share Transactions:
Preferred share offering
(net of $1,606 offering costs) 118,394 --
Value of distributions reinvested
-- common shares 156 595
--------- ---------
Net Increase from Fund Share
Transactions 118,550 595
--------- ---------
Total Increase (Decrease) 88,934 (1,485)
NET ASSETS
Beginning of period 263,705 265,190
--------- ---------
End of period (net of overdistributed
and including undistributed
net investment income of $867 and
$115, respectively) $ 352,639 $ 263,705
--------- ---------
NUMBER OF FUND SHARES
Common:
Issued for distributions reinvested 19 69
Outstanding at
Beginning of period 31,059 30,990
--------- ---------
End of period 31,078 31,059
--------- ---------
Preferred:
Issued in initial offering 5 --
Outstanding at
Beginning of period -- --
--------- ---------
End of period 5 --
--------- ---------
</TABLE>
(a) The Fund changed its fiscal year end from December 31 to November 30.
See notes to financial statements.
13
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
November 30, 1999
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION:
Colonial High Income Municipal Trust (the Trust), is a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as a
diversified, closed-end, management investment company. The Trust'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 Trust authorized an unlimited number of common 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 Trust 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 Trust 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 Trust to subsequently invest at less advantageous prices.
FEDERAL INCOME TAXES:
Consistent with the Trust's policy to qualify as a regulated investment company
and to distribute all of its taxable and tax-exempt 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 common 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 Trust's capital
accounts to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
Distributions to preferred shareholders are recorded daily and are payable at
the end of each dividend period. Each dividend payment period for the Auction
Preferred Shares (APS) is generally seven days. The applicable dividend rate for
the Auction Preferred Shares on November 30, 1999 was 4.00%. For the period
ended November 30, 1999, the Trust paid dividends to Auction Preferred
shareholders amounting to $1,171,128 representing an average APS dividend rate
for such period of 3.62%.
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE:
Colonial Management Associates, Inc. (the Advisor) is the investment Advisor of
the Trust and furnishes accounting and other services and office facilities for
a monthly fee equal to 0.80% annually of the Trust's average weekly net assets.
BOOKKEEPING FEE:
The Advisor provides bookkeeping and pricing services for $18,000 per year plus
0.0233% annually of the Trust's average weekly net assets over $50 million.
OTHER:
The Trust pays no compensation to its officers, all of whom are employees of the
Advisor.
The Trust'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 Trust's assets.
NOTE 3. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY:
During the period ended November 30, 1999, purchases and sales of investments,
other than short-term obligations, were $158,013,816 and $48,246,402,
respectively.
Unrealized appreciation (depreciation) at November 30, 1999, based on cost of
investments for federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 6,666,556
Gross unrealized depreciation (23,622,915)
------------
Net unrealized depreciation $(16,956,359)
============
</TABLE>
14
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1999
CAPITAL LOSS CARRYFORWARDS:
At November 30, 1999, capital loss carry forwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD
- --------------------------------------------------------------------------------
<S> <C>
2000 $ 3,157,000
2001 5,578,000
2002 6,579,000
2003 5,268,000
2004 2,815,000
2005 5,927,000
2007 3,942,000
---------------
$ 33,266,000
===============
</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 Trust may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Trust may purchase or sell municipal and Treasury bond futures contracts and
purchase and write options on futures. The Trust 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 Trust 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 Advisor of the future direction of interest rates.
Any of these risks may involve amounts exceeding the amount recorded in the
Trust's Statement of Assets and Liabilities at any given time.
PREFERRED SHARE OFFERING
On August 20, 1999, the Trust offered and currently has outstanding 4,800
Auction Preferred Shares (2,400 shares each of Series T and Series W). The
Auction Preferred Shares are redeemable at the option of the Trust on any
dividend payment date at the redemption price of $25,000 per share, plus an
amount equal to any dividends accumulated on a daily basis unpaid through the
redemption date (whether or not such dividends have been declared). Total
proceeds, net of commissions, of $118,500,000 were received upon completion of
the offering.
Costs incurred by the Trust in connection with the offerings of the Auction
Preferred Shares, totalling $1,606,148, were recorded as a reduction of capital
paid in excess of par applicable to common shares.
Under the Investment Company Act of 1940, the Trust is required to maintain
asset coverage of at least 200% with respect to the Auction Preferred Shares as
of the last business day of each month in which any Auction Preferred Shares are
outstanding. Additionally, the Trust is required to meet more stringent asset
coverage requirements under the terms of the Auction Preferred Shares and in
accordance with the guidelines prescribed by the rating agencies. Should these
requirements not be met, or should dividends accrued on the Auction Preferred
Shares not be paid, the Trust may be restricted in its ability to declare
dividends to common shareholders or may be required to redeem certain of the
Auction Preferred Shares. At November 30, 1999 there were no such restrictions
on the Trust.
15
<PAGE> 18
FINANCIAL HIGHLIGHTS
Selected per share data, total return, ratios and supplemental data throughout
each period are as follows:
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED
NOVEMBER DECEMBER
30 31
1999(a) 1998
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.490 $ 8.560
------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.461 0.519
Net realized and unrealized loss (0.917) (0.066)
Preferred share offering cost (0.052) --
------------ ------------
Total from Investment Operations (0.508) 0.453
------------ ------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- common shares (0.454) (0.523)
From net investment income -- preferred shares (0.038) --
------------ ------------
Total Distributions Declared to Shareholders (0.492) (0.523)
------------ ------------
NET ASSET VALUE, END OF PERIOD $ 7.490 $ 8.490
============ ============
Market price per share -- common shares $ 6.125 $ 8.312
============ ============
Total return based on market value -- common shares (b) (21.72)%(c) 2.47%
============ ============
RATIOS TO AVERAGE NET ASSETS:
Expenses (d) 1.13%(e)(f) 0.93%
Net investment income (d) 5.67%(e)(f) 6.02%
Portfolio turnover 16%(c) 29%
Net assets at end of period (000) -- Total Fund $ 352,639 $ 263,705
</TABLE>
(a) The Fund changed its fiscal year end from December 31 to November 30.
(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) Ratios reflect net assets available to common shares only; net investment
income ratio also reflects reduction for dividend payments to preferred
shareholders.
(f) Annualized
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
All of the distributions will be treated as exempt income for federal income tax
purposes.
16
<PAGE> 19
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected per share data, total return, ratios and supplemental data throughout
each period are as follows:
<TABLE>
<CAPTION>
YEARS 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 0.552 0.566 0.597
Net realized and unrealized gain (loss) 0.214 (0.193) 0.583
------------ ------------ ------------
Total from Investment Operations 0.766 0.373 1.180
------------ ------------ ------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- common (0.546) (0.583) (0.590)
------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD $ 8.560 $ 8.340 $ 8.550
============ ============ ============
Market price per share $ 8.630 $ 8.250 $ 7.380
============ ============ ============
Total return based on market value (a) 11.60% 20.09% 15.65%
============ ============ ============
RATIOS TO AVERAGE NET ASSETS:
Expenses (b) 0.96% 1.00% 1.06%
Net investment income (b) 6.54% 6.74% 7.15%
Portfolio turnover 17% 15% 23%
Net assets at end of period (000) $ 265,190 $ 257,768 $ 264,467
</TABLE>
(a) Total return at market value assuming all distributions reinvested and
excluding brokerage commissions.
(b) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
17
<PAGE> 20
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND THE TRUSTEES OF COLONIAL HIGH INCOME MUNICIPAL TRUST
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations, changes in
net assets and the financial highlights present fairly, in all material
respects, the financial position of Colonial High Income Municipal Trust (the
"Trust") at November 30, 1999, the results of its operations, the changes in its
net assets and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
the financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Trust's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of portfolio positions at November 30, 1999
by correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 12, 2000
18
<PAGE> 21
DIVIDEND REINVESTMENT PLAN
As a shareholder in the Trust you are eligible to participate in the Dividend
Reinvestment Plan.
The Trust generally distributes net investment income and net short-term capital
gains monthly and net long-term capital gains annually. Under the Trust's
Dividend Reinvestment Plan (the "Plan") all distributions are reinvested
automatically in additional shares of the Trust, unless the shareholder elects
to receive cash or the shares are held in broker or nominee name and a
reinvestment service is not provided by the broker or nominee. All cash
distributions will be mailed by check directly to the record holder by the
dividend paying agent.
If the market price of Trust 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. However, if the market
price of shares is less than the net asset value, shares will be bought as soon
as practicable (but no more than 30 days after the distribution, except as may
be required to comply with federal securities laws) in the open market for the
accounts of Plan participants. If, during this purchase period, the market price
surpasses the net asset value, the average per share price paid may exceed the
net asset value of the shares, resulting in the acquisition of fewer shares than
if the distribution had been in newly-issued shares. The aggregate market value
of the shares may constitute taxable income to shareholders for federal income
tax purposes.
All Plan accounts receive monthly written confirmations of all transactions.
Shares purchased under the Plan ordinarily are held in uncertificated form,
although each participant has the right to receive certificates for whole shares
owned by the participant. 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.
There is no charge to Plan participants for reinvesting distributions. Fees and
expenses of the Plan other than brokerage charges are paid by the Trust.
Participants bear a pro-rata share of brokerage charges incurred on open market
purchases of shares issued under the Plan. A shareholder may elect not to
participate or terminate his or her participation in the Plan by written notice
to the Plan administrator. Such notice must be received by the Plan
administrator before the dividend record date in order to be effective with
respect to that dividend. 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 should be directed to BankBoston, NA, the Trust's dividend
disbursing agent and administrator of the Plan, at P.O. Box 1681, Boston,
Massachusetts 02105, Attention: Dividend Reinvestment Department.
19
<PAGE> 22
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<PAGE> 23
TRANSFER AGENT
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial High Income Municipal Trust is:
BankBoston, NA
100 Federal Street
Boston, MA 02110
1-800-730-6001
The 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> 24
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 V. CARBERRY
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President - Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Development Capital, LLC (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Academic Vice President and Dean of Faculties, Boston College (former Dean,
Boston College School of Management)
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ROBERT L. SULLIVAN
Retired Partner, KPMG 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)
COLONIAL HIGH INCOME MUNICIPAL TRUST ANNUAL REPORT
