<PAGE>
[Graphic Omitted]
- --------------------------------------------------
COLONIAL INTERMARKET INCOME TRUST I ANNUAL REPORT
- --------------------------------------------------
NOVEMBER 30, 1999
<PAGE>
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
During the 12-month period ended November 30, 1999, most bond markets suffered
the effects of rising interest rates. The robust U.S. economy and renewed
economic strength overseas fanned inflationary fears, which ultimately prompted
investors to push bond yields higher early on. As bond yields rose, their prices
slumped. Later, in what were viewed as preemptive strikes against future
inflation, the Federal Reserve Board (Fed) raised short-term interest rates on
three separate occasions by one-quarter of a percentage point each in June,
August and November of 1999. Despite being generally viewed as anti-inflationary
measures and, as such, beneficial for bonds over the long run, those rate hikes
did little to soothe the already jittery bond market. Global economies --
primarily in Europe and Asia -- also strengthened, paving the way for rising
rates and lower bond prices in most high-quality foreign countries.
Stronger-than-expected worldwide growth and better commodity prices boosted the
performance of emerging market bonds, which were the period's best performers.
U.S. high-yield corporate securities posted decent returns, shielded somewhat
against the effects of rising rates by their high levels of income.
The Trust's diversification among three market sectors -- U.S. government bonds,
foreign government bonds and U.S. high-yield corporate bonds -- helped cushion
it against the effects of rising interest rates. In addition, while past
performance cannot predict future trends, it is important to keep a long-term
investment perspective.
As always, we thank you for choosing Colonial InterMarket Income Trust I and for
giving us the opportunity to serve your investment needs.
Respectfully,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
January 12, 2000
Because economic and market conditions change frequently, there can be no
assurance that the trends described herein will continue or come to pass.
<PAGE>
HIGHLIGHTS
o TRUST REMAINED DIVERSIFIED.
Throughout the period, the Trust remained broadly diversified across the
three sectors of the bond market -- U.S. government, high-yield corporate
and foreign bond markets. This strategy provided the flexibility to seek out
the most attractive opportunities from various bond sectors and has provided
the Trust with strong returns over the long term.
o HIGH-YIELD COMPONENT INCREASED.
During the period, the Trust's stake in high-yield bonds increased. Some of
the Trust's best performers in that segment were telecommunications and
cable holdings, which benefited from the ongoing growth of the Internet, the
rising demand for voice and data transmission and the convergence of the two
industries.
o HIGH-YIELD AND EMERGING MARKET BONDS FARED RELATIVELY WELL IN DIFFICULT BOND
MARKET.
"U.S. Treasury bonds suffered significant losses in response to worries
about the strength of the global economy, inflation and the direction of
interest rates. The stronger-than-expected U.S. economy and the rebound of
some foreign economies prompted the Fed to raise interest rates on three
separate occasions for a total of 0.75%. Signs of a strengthening global
economy and rising interest rates in developed foreign markets contributed
to the poor performance of most high-quality foreign government bonds as
well. The Trust's positions in U.S. Treasury and high-quality foreign
government securities, therefore, detracted from performance. On the flip
side, however, the Trust's holdings in high-yield corporate securities held
up better. The strength of the economy, plus the fact that they carry higher
levels of income that partially cushion them against rising rates, helped
high-yield bonds end the year with gains. But the year's shining stars were
the Trust's emerging market holdings, which rallied in response to signs
that Asia's economies were on the mend and the increase in many commodity
prices."
-- Laura Ostrander
Portfolio Manager
12-MONTH DISTRIBUTIONS DECLARED PER SHARE FOR PERIOD ENDED 11/30/99
$0.904
- --------------------------------------------------------------------------------
12-MONTH TOTAL RETURNS, ASSUMING REINVESTMENT OF ALL DISTRIBUTIONS FOR PERIOD
ENDED 11/30/99
NAV 1.14%
- --------------------------------------------------------------------------------
Market Price (13.51)%
- --------------------------------------------------------------------------------
PRICE PER SHARE ON 11/30/99
NAV $10.26
- --------------------------------------------------------------------------------
Market Price $ 8.31
- --------------------------------------------------------------------------------
SECURITIES BREAKDOWN
AS OF 11/30/99
High Yield Corporate 38.0%
- --------------------------------------------------------------------------------
Foreign Government & Agency 26.9%
- --------------------------------------------------------------------------------
U.S. Government & Agency 25.7%
- --------------------------------------------------------------------------------
Short-term Obligations 4.6%
- --------------------------------------------------------------------------------
Preferred Stocks 3.2%
- --------------------------------------------------------------------------------
Other 1.3%
- --------------------------------------------------------------------------------
Common Stock 0.3%
- --------------------------------------------------------------------------------
GOVERNMENT BREAKDOWN TOP FIVE FOREIGN COUNTRIES AS OF 11/30/99
Greece 3.4%
- --------------------------------------------------------------------------------
United Kingdom 3.1%
- --------------------------------------------------------------------------------
Mexico 3.0%
- --------------------------------------------------------------------------------
Brazil 2.5%
- --------------------------------------------------------------------------------
Argentina 1.9%
- --------------------------------------------------------------------------------
Securities and government breakdowns are calculated as a percentage of net
assets. Because the Trust is actively managed, there can be no guarantee the
Trust will continue to invest in these securities or maintain these country
weightings in the future.
<PAGE>
- --------------------
INVESTMENT PORTFOLIO
- --------------------
November 30, 1999
(In thousands)
BONDS & NOTES - 90.6% PAR VALUE
- ----------------------------------------------------------------------------
CORPORATE FIXED INCOME BONDS & NOTES - 38.0%
- ----------------------------------------------------------------------------
CONSTRUCTION - 0.5%
BUILDING CONSTRUCTION
Nortek, Inc.,
8.875% 08/01/08 $ 550 $ 525
--------
- ----------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 0.9%
FINANCIAL SERVICES
Dresdner Funding Trust II,
5.790% 06/30/11 500 458
PDVSA Finance Ltd., Series 1999 I,
9.750% 02/15/10 580 563
--------
1,021
--------
- ----------------------------------------------------------------------------
MANUFACTURING - 13.9%
CHEMICALS & ALLIED PRODUCTS - 3.2%
Agricultural Minerals Co., L.P.,
10.750% 09/30/03 100 63
Allied Waste North America, Inc.,
10.000% 08/01/09 1,000 911
ClimaChem, Inc.,
10.750% 12/01/07 500 275
HydroChem Industrial Services Inc.,
10.375% 08/01/07 490 412
LaRoche Industries, Inc.,
9.500% 09/15/07 500 130
PCI Chemicals Canada, Inc.,
9.250% 10/15/07 250 188
Sterling Chemicals, Inc.,
11.750% 08/15/06 500 350
Terra Industries, Inc.,
10.500% 06/15/05 245 154
Texas Petrochemical Corp.,
11.125% 07/01/06 315 280
Trans Resources, Inc.,
10.750% 03/15/08 1,000 890
--------
3,653
--------
ELECTRONIC & ELECTRICAL EQUIPMENT - 0.6%
Amphenol Corp.,
9.875% 05/15/07 250 253
TransDigm, Inc.,
10.375% 12/01/08 500 445
--------
698
--------
FABRICATED METAL - 0.9%
Euramax International, PLC,
11.250% 10/01/06 (a) 1,000 1,010
--------
FOOD & KINDRED PRODUCTS - 0.8%
Chattem, Inc.,
8.875% 04/01/08 500 445
Premier International Foods, PLC,
12.000% 09/01/09 (a)(b) 500 500
--------
945
--------
MACHINERY & COMPUTER EQUIPMENT - 0.6%
IMO Industries, Inc.,
11.750% 05/01/06 625 625
--------
MEASURING & ANALYZING INSTRUMENTS - 0.1%
Envirosource, Inc.,
9.750% 06/15/03 250 153
--------
MISCELLANEOUS MANUFACTURING - 3.3%
Blount, Inc.,
13.000% 08/01/09 150 157
Eagle-Picher Industries, Inc.,
9.375% 03/01/08 250 217
ISG Resources, Inc.,
10.000% 04/15/08 250 211
Koppers Industries, Inc.,
9.875% 12/01/07 500 452
Newcor, Inc.,
9.875% 03/01/08 1,000 450
Owens-Illinois, Inc.,
7.500% 05/15/10 500 451
Tekni-Plex, Inc.,
9.250% 03/01/08 500 500
Thermadyne Holdings Corp.,
9.875% 06/01/08 850 731
Tokheim Corp.,
11.375% 08/01/08 605 351
Werner Holding Co.,
10.000% 11/15/07 250 239
--------
3,759
--------
PAPER PRODUCTS - 0.8%
Repap New Brunswick, Inc.,
10.625% 04/15/05 450 421
Riverwood International Corp.,
10.625% 08/01/07 500 517
--------
938
--------
PRIMARY METAL - 1.9%
Bayou Steel Corp.,
9.500% 05/15/08 500 464
Keystone Consolidated Industries, Inc.,
9.625% 08/01/07 500 457
WCI Steel, Inc.,
10.000% 12/01/04 500 508
WHX Corp.,
10.500% 04/15/05 750 720
--------
2,149
--------
PRINTING & PUBLISHING - 0.4%
American Lawyer Media, Inc.,
9.750% 12/15/07 450 423
--------
RUBBER & PLASTIC - 0.4%
Burke Industries, Inc.,
10.000% 08/15/07 300 144
Metromedia Fiber Network, Inc.,
10.000% 12/15/09 350 353
--------
497
--------
STONE, CLAY, GLASS & CONCRETE - 0.0%
Owens-Illinois, Inc.,
8.100% 05/15/07 50 48
--------
TRANSPORTATION EQUIPMENT - 0.9%
Johnstown America Industries, Inc.,
11.750% 08/15/05 500 506
LDM Technologies, Inc.,
10.750% 01/15/07 600 528
--------
1,034
--------
- ----------------------------------------------------------------------------
MINING & ENERGY - 2.4%
COAL MINING - 0.4%
AEI Resources, Inc.,
10.500% 12/15/05 (b) 500 400
--------
OIL & GAS EXTRACTION - 2.0%
HS Resources, Inc.,
9.250% 11/15/06 400 396
Magnum Hunter Resources, Inc.,
10.000% 06/01/07 525 494
Mariner Energy, Inc.,
10.500% 08/01/06 1,000 940
Petsec Energy, Inc.,
9.500% 06/15/07 750 375
--------
2,205
--------
- ----------------------------------------------------------------------------
RETAIL TRADE - 1.7%
FOOD STORES
Pathmark Stores, Inc.:
9.625% 05/01/03 1,000 960
10.750% 11/01/03 750 694
Richmont Marketing Specialist, Inc.,
10.125% 12/15/07 500 300
--------
1,954
--------
- ----------------------------------------------------------------------------
SERVICES - 3.6%
AMUSEMENT & RECREATION - 1.7%
Coast Hotels & Casinos, Inc.,
9.500% 04/01/09 420 403
Hollywood Casino Corp.,
11.250% 05/01/07 500 515
Horseshoe Gaming, L.L.C.,
9.375% 06/15/07 350 347
Mohegan Tribal Gaming Authority,
8.750% 01/01/09 200 197
Regal Cinemas, Inc.,
9.500% 06/01/08 500 405
--------
1,867
--------
BUSINESS SERVICES - 0.4%
PSINet, Inc.,
10.000% 02/15/05 500 494
--------
HEALTH SERVICES - 0.4%
Tenet Healthcare Corp.,
8.625% 01/15/07 500 482
--------
HOTELS, CAMPS & LODGING - 0.7%
CapRock Communications Corp.,
11.500% 05/01/09 750 758
--------
OTHER SERVICES - 0.4%
Intertek Finance, PLC,
10.250% 11/01/06 (a) 500 471
--------
- ----------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 14.8%
AIR TRANSPORTATION - 0.2%
Trans World Airlines, Inc.,
11.375% 03/01/06 450 195
--------
BROADCASTING - 1.2%
LIN Holding Corp.,
stepped coupon, (10.000% 03/01/03)
(c) 03/01/08 500 338
Young Broadcasting Corp.,
10.125% 02/15/05 1,000 1,035
--------
1,373
--------
CABLE - 6.2%
Adelphia Communications Corp.,
9.875% 03/01/07 750 769
Charter Communications
Holding L.L.C.,
stepped coupon, (9.920% 04/01/04)
(c) 04/01/2011 1,500 904
Comcast UK Cable Partners Ltd.,
stepped coupon, (11.200% 11/15/00)
(c) 11/15/07 1,000 937
Diamond Cable Co.,
stepped coupon, (10.750% 02/15/02)
(c) 02/15/07 1,000 795
EchoStar DBS Corp.,
9.250% 02/01/06 1,000 1,000
NTL, Inc.,
stepped coupon, (9.750% 04/15/04)
(c) 04/15/09 (a) 1,000 915
Northland Cable Television, Inc.,
10.250% 11/15/07 250 250
Shop At Home, Inc.,
11.000% 04/01/05 500 495
Telewest Communication PLC,
stepped coupon, (11.000% 10/01/00)
(c) 10/01/07 (a) 1,000 925
--------
6,990
--------
COMMUNICATIONS - 1.5%
Call-Net Enterprises, Inc.,
stepped coupon, (10.800% 05/15/04)
(c) 05/15/09 500 240
Metrocall, Inc.,
9.750% 11/01/07 750 439
Time Warner Telecom L.L.C.,
9.750% 07/15/08 500 515
Verio, Inc.,
11.250% 12/01/08 506 527
--------
1,721
--------
ELECTRIC SERVICES - 0.5%
The AES Corp.,
9.500% 06/01/09 500 505
--------
MOTOR FREIGHT & WAREHOUSING - 0.2%
MTL, Inc.,
10.000% 06/15/06 250 217
--------
TELECOMMUNICATION - 5.0%
AirGate PCS, Inc.,
stepped coupon, (13.500% 10/01/04)
(c) 10/01/09 250 153
Arch Communication Group, Inc.,
12.750% 07/01/07 250 198
Clearnet Communications, Inc.,
stepped coupon, (14.750% 12/15/00)
(c) 12/15/05 750 729
Global Crossing Holding Ltd.,
9.125% 11/15/06 375 369
Hyperion Telecommunications, Inc.,
stepped coupon, (13.000% 04/15/01)
(c) 04/15/03 150 132
Level 3 Communications, Inc.,
9.125% 05/01/08 435 411
McLeodUSA, Inc.,
stepped coupon, (10.500% 03/01/02)
(c) 03/01/07 500 400
Nextel Communications, Inc.,
9.375% 11/15/09 (b) 100 99
Nextlink Communications, Inc.,
10.750% 06/01/09 300 307
Price Communications Wireless, Inc.,
9.125% 12/15/06 750 766
RCN Corp.,
stepped coupon, (11.125% 10/15/02)
(c) 10/15/07 750 529
Sprint Spectrum L.P.,
stepped coupon, (12.500% 08/15/01)
(c) 08/15/06 500 462
TeleCorp PCS, Inc.,
stepped coupon, (11.625% 04/15/04)
(c) 04/15/09 (b) 650 417
Williams Communications Group, Inc.,
10.875% 10/01/09 515 537
Worldwide Fiber, Inc.,
12.000% 08/01/09 (b) 175 178
--------
5,687
--------
WHOLESALE TRADE - 0.2%
NONDURABLE GOODS
Revlon Consumer Products Corp.,
9.000% 11/01/06 225 171
--------
TOTAL CORPORATE FIXED INCOME
BONDS AND NOTES (cost of $49,765) 42,968
--------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 25.7%
- ----------------------------------------------------------------------------
Government National Mortgage Association:
9.000% 2016 984 1,040
10.500% 2015 - 2020 91 100
11.000% 2018 - 2019 639 705
--------
1,845
--------
U.S. Treasury Notes:
8.750% 05/15/17 1,675 2,039
11.625% 11/15/04 (d) 12,327 15,079
11.875% 11/15/03 1,159 1,382
12.000% 08/15/13 (d) 5,952 8,086
--------
26,586
--------
Student Loan Marketing Assoc.,
5.286% 01/20/00 575 575
--------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(cost of $29,069) 29,006
--------
FOREIGN GOVERNMENT &
AGENCY OBLIGATIONS - 26.9%
CURRENCY PAR VALUE
- ----------------------------------------------------------------------------
French O.A.T.,
8.500% 04/25/03 (e) Eu 1,010 1,145
Government of Mexico,
11.375% 09/15/16 (f) 2,585 2,816
Government of New Zealand,
8.000% 11/15/06 NZ 3,276 1,758
Hellenic Republic,
8.800% 06/19/07 GD 190,000 655
8.600% 03/26/08 GD 346,000 1,190
8.900% 03/21/04 GD 571,000 1,887
Kingdom of Norway,
6.750% 01/15/07 NK 3,970 512
9.500% 10/31/02 NK 10,970 1,491
Kingdom of Sweden,
10.250% 05/05/03 SK 10,800 1,466
Poland Non-U.S. Global
Registered Bond,
5.000% 10/27/14 (g) 500 440
Republic of Argentina,
11.375% 01/30/17 (h) 1,550 1,474
11.250% 04/10/06 (i) DM 1,200 640
Republic of Brazil,
10.125% 05/15/27 (j) 2,725 2,166
14.500% 10/15/09 (j) 575 605
Republic of Bulgaria,
6.500% 07/28/11 (k) 2,250 1,742
Republic of Panama,
8.875% 09/30/27 (l) 1,290 1,072
Republic of Turkey,
12.375% 06/15/09 (m) 280 282
11.875% 11/05/04 (m) 855 885
Republic of Venezuela,
9.250% 09/15/27 (n) 1,800 1,133
Russian Federation,
11.000% 07/24/18 (o) 1,645 856
Treasury Corp. of Victoria:
12.000% 09/22/01 A$ 1,470 1,026
12.500% 10/15/03 A$ 698 532
United Kingdom Treasury:
10.000% 02/26/01 KB 645 1,076
10.000% 09/08/03 KB 1,355 2,427
United Mexican States,
10.375% 01/29/03 (p) DM 980 550
Western Australian Treasury,
8.000% 10/15/07 A$ 786 531
--------
TOTAL FOREIGN GOVERNMENT & AGENCY OBLIGATIONS
(cost of $30,944) 30,357
--------
TOTAL BONDS & NOTES
(cost of $109,778) 102,331
--------
PREFERRED STOCKS - 3.2%
SHARES
- ----------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 0.2%
DEPOSITORY INSTITUTIONS
Cal Fed Bancorp, Inc.,
9.125%, Series A 9 194
--------
TRANPORTATION, COMMUNICATION, ELECTRIC,
GAS, AND SANITARY SERVICES - 3.0%
BROADCASTING - 0.2%
PriMedia, Inc.,
9.200% 3 279
--------
CABLE - 0.5%
CSC Holdings Limited,
11.125% PIK 5 551
--------
TELECOMMUNICATION - 2.3%
Concentric Network Corp.,
13.500% PIK 1 570
Nextel Communications, Inc.:
11.125% PIK 1 606
13.000% PIK 1 1,420
--------
2,596
--------
TOTAL PREFERRED STOCKS
(cost of $3,600) 3,620
--------
WARRANTS (q) - 0.0%
SHARES VALUE
- ----------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 0.0%
COMMUNICATIONS - 0.0%
Clearnet Communications, Inc.,
(expires 09/15/05) 2 $ 37
--------
TELECOMMUNICATIONS - 0.0%
MetroNet Communications Corp.,
(expires 08/15/07) (r) 27
--------
TOTAL WARRANTS (cost of $35) 64
--------
COMMON STOCKS - 0.3%
- ----------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 0.3%
MOTOR FREIGHT & WAREHOUSING - 0.0%
St. Johnsbury Trucking Co. (s) 16 (r)
Sun Carriers, Inc. (s) 65 1
--------
1
--------
TELECOMMUNICATION - 0.3%
Price Communications Corp. 12 312
--------
TOTAL COMMON STOCKS
(cost of $338) 313
--------
TOTAL INVESTMENTS
(cost of $113,751) (t) 106,328
--------
SHORT-TERM OBLIGATIONS - 4.6%
PAR
- ----------------------------------------------------------------------------
Repurchase agreement with SBC
Warburg Corp., dated 11/30/99,
due 12/01/99 at 5.670%,
collateralized by U.S.
Treasury bills and/or notes
with various maturities to
2026, market value $5,293
(repurchase proceeds $5,179) $ 5,178 5,178
--------
FORWARD CURRENCY CONTRACTS (u) - 0.1% 112
- ----------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES - 1.2% 1,387
- ----------------------------------------------------------------------------
NET ASSETS - 100.0% $113,005
========
NOTES TO INVESTMENT PORTFOLIO:
- ----------------------------------------------------------------------------
(a) This is a British security. Par amount is stated in U.S. dollars.
(b) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At November 30,
1999, the value of these securities amounted to $1,594 or 1.4% of net
assets.
(c) Currently zero coupon. Shown parenthetically is the next interest rate to
be paid and the date the Trust will begin accruing this rate.
(d) These securities, or a portion thereof, with a total market value of $5,279
are being used to collateralize the forward currency contracts indicated in
note (u) below.
(e) This is a French security. Par amount is stated in Euro dollars.
(f) This is a Mexican security. Par amount is stated in U.S. dollars.
(g) This is a Polish security. Par amount is stated in U.S. dollars.
(h) This is an Argentinean security. Par amount is stated in U.S. dollars.
(i) This is an Argentinean security. Par amount is stated in German
Deutschemarks.
(j) This is a Brazilian security. Par amount is stated in U.S. dollars.
(k) This is a Bulgarian security. Par amount is stated in U.S. dollars.
(l) This is a Panamanian security. Par amount is stated in U.S. dollars.
(m) This is a Turkish security. Par amount is stated in U.S. dollars.
(n) This is a Venezuelan security. Par amount is stated in U.S. dollars.
(o) This is a Russian security. Par amount is stated in U.S. dollars.
(p) This a Mexican security. Par amount is stated in German Deutschemarks.
(q) Non-income producing.
(r) Rounds to less than one.
(s) Represents fair value as determined in good faith under the direction of
the Trustees.
(t) Cost for federal income tax purposes is $113,972.
(u) As of November 30, 1999, the Trust had entered into the following forward
currency exchange contracts:
NET UNREALIZED
CONTRACTS IN EXCHANGE SETTLEMENT APPRECIATION
TO DELIVER FOR DATE (U.S.$)
-------------------------------------------------------------------------
SK 6,288 U.S. $ 776 01/31/00 $ 31
KB 1,392 U.S. $ 2,289 02/07/00 63
NZ 3,480 U.S. $ 1,794 02/09/00 18
----
$112
----
<PAGE>
SUMMARY OF SECURITIES
BY COUNTRY COUNTRY VALUE % OF TOTAL
- -----------------------------------------------------------------------------
United States $ 72,150 67.8
United Kingdom UK 7,324 6.9
Greece Gr 3,732 3.5
Mexico Mx 3,366 3.2
Brazil Bz 2,771 2.6
Argentina Ar 2,114 2.0
Australia Au 2,089 2.0
Norway No 2,003 1.9
New Zealand NZ 1,758 1.6
Bulgaria Bu 1,742 1.6
Sweden Sw 1,466 1.4
Turkey Tu 1,167 1.1
France Fr 1,145 1.1
Venezuela Ve 1,133 1.1
Panama Pa 1,072 1.0
Russia Ru 856 0.8
Poland Po 440 0.4
-------- -----
$106,328 100.0
-------- -----
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
ACRONYM NAME
------- ----
A$ Australian Dollars
Eu Euro
GD Greek Drachmas
KB British Pounds
NK Norwegian Krone
PIK Payment-In-Kind
SK Swedish Krona
DM German Deutschemarks
See notes to financial statements.
<PAGE>
- -----------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- -----------------------------------
November 30, 1999
(In thousands except for per share amount)
ASSETS
Investments at value (cost $113,751) $106,328
Short-term obligations 5,178
--------
111,506
Cash including foreign currencies
(cost of $1,243) $1,215
Unrealized appreciation on forward
currency contracts 112
Receivable for:
Interest 2,341
Investments sold 507
Foreign tax reclaims 25
Other 2 4,202
------ --------
Total assets 115,708
LIABILITIES
Cash including foreign currencies
(cost of $1,228) 1,200
Payable for:
Investments purchased 481
Distributions 815
Accrued:
Management fee 71
Bookkeeping fee 3
Deferred Trustees fees 4
Other 129
------
Total liabilities 2,703
--------
Net Assets at value for 11,009 shares of
beneficial interest outstanding $113,005
========
Net asset value per share $ 10.26
========
COMPOSITION OF NET ASSETS
Capital paid in $122,281
Undistributed net investment income 17
Accumulated net realized loss (1,901)
Net unrealized appreciation (depreciation) on:
Investments (7,423)
Foreign currency transactions 31
-------
$113,005
========
See notes to financial statements.
<PAGE>
- -----------------------
STATEMENT OF OPERATIONS
- -----------------------
For the Year Ended November 30, 1999
(In thousands}
INVESTMENT INCOME
Interest $10,838
Dividends 344
-------
11,182
EXPENSES
Management fee $ 882
Transfer agent fee 54
Bookkeeping fee 34
Trustees fee 9
Custodian fee 19
Audit fee 76
Legal fee 7
Reports to shareholders 10
Other 86 1,177
------- -------
Net Investment Income 10,005
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments (1,969)
Foreign currency transactions 141
-------
Net Realized Loss (1,828)
Net Change in Unrealized Appreciation/Depreciation
during the period on:
Investments (7,624)
Foreign currency transactions (87)
-------
Net Change in Unrealized Appreciation/Depreciation (7,711)
-------
Net Loss (9,539)
-------
Increase in Net Assets from Operations $ 466
=======
See notes to financial statements.
<PAGE>
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
(In thousands)
YEARS ENDED NOVEMBER 30
------------------------
INCREASE (DECREASE) IN NET ASSETS 1999 1998
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 10,005 $ 10,231
Net realized gain (loss) (1,828) 585
Net change in unrealized appreciation/depreciation (7,711) (3,175)
-------- --------
Net Increase from Operations 466 7,641
DISTRIBUTIONS:
From net investment income (9,951) (10,230)
In excess of net investment income -- (26)
From net realized gains -- (305)
In excess of net realized gains -- (601)
-------- --------
Total Decrease (9,485) (3,521)
NET ASSETS
Beginning of period 122,490 126,011
-------- --------
End of period (including undistributed net investment
income of $17 and $81, respectively) $113,005 $122,490
======== ========
NUMBER OF TRUST SHARES
Outstanding 11,009 11,009
======== ========
See notes to financial statements.
<PAGE>
- -----------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
November 30, 1999
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION
Colonial Intermarket Income Trust I (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 seek as high a level of current income and total return as is
consistent with prudent risk, by diversifying investments primarily in U.S. and
foreign government and lower-rated corporate debt securities. The Trust
authorized an unlimited number of shares.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies that 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.
Equity securities generally are valued at the last sale price or, in the case of
unlisted or listed securities for which there were no sales during the day, at
current quoted bid prices.
Forward currency contracts are valued based on the weighted value of the
exchange traded contracts with similar durations.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
The value of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates.
Portfolio positions for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
The 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 income, no federal income tax has been
accrued.
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount is
accreted to interest income over the life of a security with a corresponding
increase in the cost basis; premium and market discount are not amortized or
accreted.
The value of additional securities received as an interest payment is recorded
as income and as the cost basis of such securities.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-date.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the Trust's capital
accounts to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
FOREIGN CURRENCY TRANSACTIONS
Net realized and unrealized gains (losses) on foreign currency transactions
includes gains (losses) arising from the fluctuation in exchange rates between
trade and settlement dates on securities transactions, gains (losses) arising
from the disposition of foreign currency and currency gains (losses) between the
accrual and payment dates on dividends, interest income and foreign withholding
taxes.
The Trust does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included with
the net realized and unrealized gains (losses) on investments.
FORWARD CURRENCY CONTRACTS
The Trust may enter into forward currency contracts to purchase or sell foreign
currencies at predetermined exchange rates in connection with the settlement of
purchases and sales of securities.
The Trust may also enter into forward currency contracts to hedge certain other
foreign currency denominated assets. The contracts are used to minimize the
exposure to foreign exchange rate fluctuations during the period between trade
and settlement date of the contracts. All contracts are marked-to-market daily,
resulting in unrealized gains and losses which become realized at the time the
forward currency contracts are closed or mature. Realized and unrealized gains
(losses) arising from such transactions are included in net realized and
unrealized gains (losses) on foreign currency transactions. Forward currency
contracts do not eliminate fluctuations in the prices of the Trust's portfolio
securities. While the maximum potential loss from such contracts is the
aggregate face value in U.S. dollars at the time the contract was opened,
exposure is typically limited to the change in value of the contract (in U.S.
dollars) over the period it remains open. Risks may also arise if counterparties
fail to perform their obligations under the contracts.
OTHER
Corporate actions are recorded on the ex-date (except for certain foreign
securities which are recorded as soon after ex-date as the Trust becomes aware
of such), net of nonreclaimable tax withholdings. Where a high level of
uncertainty as to collection exists, income on securities is recorded net of all
tax withholdings with any rebates recorded when received.
The Trust's custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-
market daily to ensure that the market value of the underlying assets remains
sufficient to protect the Trust. The Trust may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
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 0.75% 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% of the Trust's average 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 year ended November 30, 1999, purchases and sales of investments,
other than short-term obligations, were $58,629,593 and $64,817,235,
respectively, of which $3,175,877 and $8,490,668, respectively, were U.S.
government securities.
Unrealized appreciation (depreciation) at November 30, 1999, based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $ 1,625,674
Gross unrealized depreciation (9,269,722)
-----------
Net unrealized depreciation $(7,644,048)
===========
CAPITAL LOSS CARRYFORWARDS
At November 30, 1999, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
---------- ------------
2006 $ 58,000
2007 1,621,000
----------
$1,679,000
----------
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 additional risks involved when investing in foreign securities
that are not inherent with investments in domestic securities. These risks may
involve foreign currency exchange rate fluctuations, adverse political and
economic developments and the possible prevention of currency exchange or the
imposition of other foreign governmental laws or restrictions.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
<PAGE>
- --------------------
FINANCIAL HIGHLIGHTS
- --------------------
Selected per share data, total return, ratios and supplements data throughout
each period are as follows:
<TABLE>
<CAPTION>
YEARS ENDED NOVEMBER 30,
---------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 11.130 $ 11.450 $ 11.520 $ 11.270 $ 10.410
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.909 0.945 0.911 1.003 0.986
Net realized and unrealized gain
(loss) (0.875) (0.251) (0.004) 0.242 0.822
--------- --------- --------- --------- ---------
Total from Investment
Operations 0.034 0.694 0.907 1.245 1.808
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.904) (0.930) (0.977) (0.995) (0.948)
In excess of net investment income -- (0.002) -- -- --
From net realized gains -- (0.028) -- -- --
In excess of net realized gains -- (0.054) -- -- --
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS DECLARED TO
SHAREHOLDERS (0.904) (1.014) (0.977) (0.995) (0.948)
========= ========= ========= ========= =========
NET ASSET VALUE, END OF PERIOD $ 10.260 $ 11.130 $ 11.450 $ 11.520 $ 11.270
========= ========= ========= ========= =========
Market price per share, end of
period $ 8.312 $ 10.562 $ 10.940 $ 10.630 $ 10.750
========= ========= ========= ========= =========
Total return, based on market
value (a) (13.51)% 6.26% 12.62% 8.30% 17.67%
========= ========= ========= ========= =========
RATIOS TO AVERAGE NET ASSETS
Expenses (b) 1.00% 0.93% 0.96% 0.95% 0.97%
Net investment income (b) 8.51% 8.22% 8.06% 8.33% 8.73%
Portfolio turnover 52% 99% 154% 117% 77%
Net assets at end of period (000) $113,005 $122,490 $ 126,011 $ 126,835 $ 124,097
(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.
</TABLE>
- --------------------------------------------------------------------------------
1999 FEDERAL TAX INFORMATION (UNAUDITED)
Approximately 24% of the Fund's distributions (21% of gross income) were derived
from interest on direct investments in U.S. Treasury bonds, notes and bills.
An average of 24% of the Fund's investments as of the end of each quarter were
in direct obligations of the U.S. Treasury.
- --------------------------------------------------------------------------------
<PAGE>
- ---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------
TO THE TRUSTEES AND SHAREHOLDERS OF COLONIAL INTERMARKET INCOME TRUST I
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial InterMarket Income Trust I
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
<PAGE>
- --------------------------
DIVIDEND REINVESTMENT PLAN
- --------------------------
As a shareholder in the Fund you are eligible to participate in the Dividend
Reinvestment Plan.
The Fund generally distributes net investment income monthly and capital gains
annually. Under the Fund's Dividend Reinvestment Plan (the "Plan") all
distributions will be reinvested automatically in additional shares of the Fund,
unless the shareholder elects to receive cash or the shares are held in broker
or nominee name and a reinvestment service is not provided by the broker or
nominee. All cash distributions will be mailed by check directly to the record
holder by the dividend paying agent.
If the market price of the shares on the distribution payment date is equal to
or greater than the net asset value, Plan participants will be issued shares at
the higher of net asset value or 95% of the market price. The aggregate market
value of the shares may constitute income to shareholders for federal income tax
purposes. However, if the market price of the shares is less than the net asset
value, shares will be bought as soon as practicable (but no more than 30 days
after the distribution, except as may be required to comply with federal
securities laws) in the open market for the accounts of Plan participants. If,
during this purchase period, the market price surpasses the net asset value, the
average per share price paid may exceed the net asset value of the shares,
resulting in the acquisition of fewer shares than if the distribution had been
in newly-issued shares.
All Plan accounts receive written confirmations of all transactions. Shares
purchased under the Plan are held in uncertificated form. Each shareholder's
proxy includes shares purchased pursuant to the Plan. The automatic reinvestment
of distributions does not relieve participants of any income tax payable on the
distributions.
Fees and expenses of the Plan other than brokerage charges will be paid by the
Fund. No brokerage charges are incurred on shares issued directly by the Fund.
Participants will bear a pro-rata share of brokerage charges incurred on open
market purchases.
A Plan participant may terminate his or her participation by written notice to
the Plan agent. The Plan may be amended or terminated on 30 days written notice
to the Plan participants. All correspondence concerning the Plan should be
directed to State Street Bank and Trust Company, the Plan agent, by mail at P.O.
Box 8200, Boston, MA 02266-8200 or by phone at 1-800-426-5523.
<PAGE>
TRANSFER AGENT
- --------------------------------------------------------------------------------
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial InterMarket Income Trust I is:
State Street Bank and Trust Company
P.O. Box 8200
Boston, MA 02266-8200
1-800-426-5523
Colonial InterMarket Income Trust I 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 InterMarket Income
Trust I.
<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 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 INTERMARKET INCOME TRUST I ANNUAL REPORT
- -------------------------------------------------
CI-02/254I-1299 (1/00) 99/1630
