--------------------------------------------------------------------------------
COLONIAL HIGH INCOME MUNICIPAL TRUST ANNUAL REPORT
--------------------------------------------------------------------------------
NOVEMBER 30, 2001
[graphic omitted]
President's Message
Dear Shareholder:
I wanted to take this opportunity to let you know that the sale of Liberty
Financial's asset management companies -- including Colonial Management
Associates -- to FleetBoston Financial was completed effective November 1, 2001.
In light of this change and recent turmoil in the markets, I think it is
important to assure you that only the ownership of Colonial has changed. The
trust will continue to be guided by the same investment principles which
attracted you in the first place.
The past year has been an interesting time for US investment markets. At the
beginning of 2001, the Federal Reserve began lowering interest rates in hopes of
stimulating the sagging economy. In total, we saw ten rate cuts in the first 11
months of the year, bringing the short-term interest rate down from 6.5% to
2.0%. An additional cut in December brought rates to a historic low of 1.75%.
These aggressive rate cuts raised some concerns that inflationary pressures
could surface, but inflation has thus far been kept in check. At the same time,
economic weakness and stock market volatility has prompted investors to shift
assets into the bond market - a move which has benefited municipal bond prices.
The following report will provide you with more detailed information about the
trust's performance and the strategies used by portfolio manager Maureen Newman.
As always, we thank you for choosing Colonial High Income Municipal Trust and
for giving us the opportunity to serve your investment needs.
Sincerely,
/s/ Keith T. Banks
Keith T. Banks
President
--------------------------------------------------------------------------------
MEET THE NEW PRESIDENT
Effective November 1, 2001, Mr. Keith Banks has taken on the position of
president of Colonial High Income Municipal Trust. Mr. Banks is currently chief
investment officer of Fleet Asset Management, a position he has held since 2000.
Prior to joining Fleet, he was managing director and head of US equity for J.P.
Morgan Investment Management from 1996 to 2000. He began his investment career
in 1981 as an equity analyst at Home Insurance. A chartered financial analyst,
Mr. Banks earned his BA from Rutgers University and his MBA from Columbia
Business School.
--------------------------------------------------------------------------------
--------------------------- Economic and market conditions change
NOT FDIC MAY LOSE VALUE frequently. There is no assurance that trends
INSURED NO BANK GUARANTEE described herein will continue or commence.
--------------------------
--------------------------------------------------------------------------------
PORTFOLIO MANAGER'S REPORT
--------------------------------------------------------------------------------
During the 12 months ended November 30, 2001, the generally weak economy caused
investors to seek out more defensive investments, and demand for bonds
increased. Colonial High Income Municipal Trust delivered a total return of
7.01% (based on net asset value) for the 12 months ended November 30, 2001.
However, this return falls short of the trust's benchmark, the Lehman Brothers
Municipal Bond Index, which returned 8.75% for the same period.
The trust benefited from its holdings of longer-maturity bonds, as well as
holdings in the multi-family housing sector. On the negative side, the trust was
hurt by defaults of certain nursing home bonds and by the bankruptcy of
Bethlehem Steel (0.02% of net assets). The income available for distribution to
common shareholders was helped as the short-term rates paid out to preferred
shareholders dropped. If short-term rates rise, we could see a decline in the
income available for distribution to common shareholders. While the issuance of
preferred shares provides the possibility of higher tax-exempt income, it also
adds price volatility to the portfolio.
We believe that the economic recovery is forthcoming, but the process may be
long and slow with little measurable improvement until late 2002. Consumer
spending remains cautious, but consumer confidence has begun to increase and
inflation remains in check. We expect bonds to perform well in the coming
months, and we have positioned the portfolio to take advantage of continued low
interest rates and a slow economic recovery.
/s/ Maureen G. Newman
Maureen G. Newman
Maureen G. Newman is portfolio manager of Colonial High Income Municipal Trust
and a senior vice president of Colonial Management Associates, Inc. (CMA). Prior
to joining Colonial, she worked at Fidelity Investments for 11 years, managing
several mutual funds. Ms. Newman received her BA in economics from Boston
College and her MBA from Babson College. She is a chartered financial analyst, a
member of the Boston Security Analysts Society and former chairman of the
National Federation of Municipal Analysts.
Tax-exempt investing offers current tax-free income but also involves certain
risks. The value of the trust will be affected by interest rate changes and the
creditworthiness of issues held in the trust. The municipal bond management team
identifies problems and opportunities and reacts quickly to market changes.
Interest income from certain tax-exempt bonds may be subject to the federal
alternative minimum tax for individuals and corporations.
TWELVE-MONTH TOTAL RETURN, ASSUMING REINVESTMENT OF ALL DISTRIBUTIONS FOR THE
PERIOD ENDED 11/30/01 (%)
NAV 7.01
---------------------------------------
Market price 18.56
---------------------------------------
Distributions declared
per common share
12/1/00-11/30/01(1) ($) 0.44
---------------------------------------
(1) A portion of the trust's income may be subject to the alternative minimum
tax. The trust may at times purchase tax-exempt securities at a discount
from their original issue price. Some or all of this discount may be
included in the trust's ordinary income, and any market discount is taxable
when distributed.
PRICE PER SHARE AS OF 11/30/01 ($)
NAV 6.93
---------------------------------------
Market price 6.38
---------------------------------------
QUALITY BREAKDOWN
AS OF 11/30/01 (%)
AAA 31.7
---------------------------------------
AA 6.0
---------------------------------------
A 8.8
---------------------------------------
BBB 13.1
---------------------------------------
BB 3.3
---------------------------------------
CCC 0.2
---------------------------------------
Non-rated 33.9
---------------------------------------
Cash equivalents 3.0
---------------------------------------
Quality 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 nationally recognized rating agencies: Standard & Poor's Corporation,
Moody's Investors Service, Inc. or Fitch Investors Service, Inc.
Because the trust is actively managed, there can be no guarantee that the trust
will continue to maintain these quality breakdowns in the future.
--------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
--------------------------------------------------------------------------------
November 30, 2001
MUNICIPAL BONDS - 95.0% PAR VALUE
----------------------------------------------------------------------------------------------------
EDUCATION - 2.5%
CA Loyola Marymount University,
(a) 10/01/19 $ 2,025,000 $ 791,066
CA Statewide Community Development Authority, Crossroads
School for Arts & Sciences,
Series 1998,
6.000% 08/01/28 (c) 1,340,000 1,367,993
IL State Development Finance Authority, Latin School of
Chicago, Series 1998,
5.650% 08/01/28 230,000 223,624
IL University of Illinois,
Series 2001 A,
5.500% 08/15/17 685,000 714,243
MA State Industrial Finance Agency:
Cambridge Friends School,
Series 1998,
5.800% 09/01/28 1,000,000 972,510
St. John's High School, Series 1998,
5.350% 06/01/28 300,000 282,456
MI Southfield Economic Development Corp., Lawrence University,
Series 1998 A,
5.400% 02/01/18 1,000,000 953,470
NC State Capital Facilities Finance Authority, Meredith
College, Series 2001,
5.130% 06/01/16 1,000,000 1,020,780
VT State Educational & Health Buildings Finance Agency,
Norwich University, Series 1998,
5.500% 07/01/21 1,500,000 1,449,345
WV State University, Series 2000 A,
(a) 04/01/19 1,000,000 399,720
------------
8,175,207
------------
----------------------------------------------------------------------------------------------------
HEALTHCARE - 25.7%
CONGREGATE CARE RETIREMENT - 3.4%
CA Statewide Community Development Authority, Eskaton Village
- Grass Valley, 2000,
8.250% 11/15/31 (c) 1,000,000 1,062,500
IL State Health Facilities Authority, Lutheran Senior
Ministries,
Series 2001 A,
7.380% 08/15/31 300,000 303,000
KS Manhattan, Meadowlark Hills Retirement Home, Series 1999 A,
6.375% 05/15/20 650,000 646,750
KY State Economic Development Finance Authority, Christian
Church Homes of Kentucky, Inc.,
Series 1998,
5.500% 11/15/30 320,000 278,480
MA Boston Industrial Development Financing Authority,
Springhouse, Inc., Series 1988,
5.875% 07/01/20 605,000 511,225
MA State Development Finance Agency, Series 1999 A:
5.625% 07/01/15 500,000 460,885
5.750% 07/01/23 250,000 221,783
MN Columbia Heights, Crest View Corp., Series 1998,
6.000% 03/01/33 740,000 646,575
NH State Higher Educational & Health Facilities Authority,
Rivermead at Peterborough,
Series 1998:
5.625% 07/01/18 500,000 445,625
5.750% 07/01/28 500,000 429,375
NJ Economic Development Authority, Seabrook Village, Inc.,
Series 2000 A,
8.250% 11/15/30 625,000 669,531
PA Lancaster Industrial Development Authority, Garden Spot
Village, Series 2000 A,
7.625% 05/01/31 500,000 516,250
PA Philadelphia Authority for Industrial Development, Baptist
Home of Philadelphia,
Series 1998 A:
5.500% 11/15/18 360,000 305,550
5.600% 11/15/28 500,000 408,750
TN Metropolitan Government, Nashville & Davidson Counties,
Blakeford at Green Hills,
Series 1998,
5.650% 07/01/24 600,000 516,000
TX Abilene Health Facilities Development Corp., Sears
Methodist Retirement Obligation Group:
Series 1998 A,
5.900% 11/15/25 1,000,000 833,750
Series 1999,
6.000% 11/15/29 500,000 425,625
WI State Health & Educational Facilities Authority:
Attic Angel Obligated Group,
5.750% 11/15/27 1,000,000 808,750
Clement Manor, Series 1998,
5.750% 08/15/24 1,300,000 1,101,750
United Lutheran Program for
Aging, Inc.,
5.700% 03/01/28 1,000,000 840,000
------------
11,432,154
------------
HEALTH SERVICES - 0.5%
IL State Health Facilities Authority, Midwest Physician Group,
Ltd., Series 1998,
5.500% 11/15/19 120,000 98,261
MA State Development Finance Agency, Boston Biomedical
Research Institute, Series 1999:
5.650% 02/01/19 200,000 189,570
5.750% 02/01/29 450,000 419,607
TX Galveston Health Facilities Center,
8.000% 08/01/23 1,000,000 1,041,250
------------
1,748,688
------------
HOSPITALS - 12.6%
AR Conway Health Facilities Board, Conway Regional
Medical Center:
Series 1999 A,
6.400% 08/01/29 425,000 442,863
Series 1999 B,
6.400% 08/01/29 1,000,000 1,042,030
AZ Maricopa County Industrial Development Authority:
Mayo Clinic Hospital, Series 1998,
5.250% 11/15/37 4,000,000 4,002,880
National Voluntary Health Project,
5.100% 01/01/33 4,500,000 4,421,250
CA State Health Facilities Financing Authority, Cedars-Sinai
Medical Center, Series 1999 A,
6.125% 12/01/30 750,000 804,382
CO State Health Care Facilities Authority, National Jewish
Medical & Research Center, Series 1998,
5.375% 01/01/23 330,000 297,112
CO State Health Facilities Authority, Parkview Medical Center,
Inc., Series 2001,
6.600% 09/01/25 300,000 327,375
FL Tampa, H. Lee Moffitt Cancer Center, Series 1999 A,
5.750% 07/01/29 2,000,000 2,014,540
FL West Orange Healthcare District, Series 2001 A,
5.650% 02/01/22 525,000 528,182
GA Forsyth County Hospital Authority, Georgia Baptist
Healthcare System, Series 1998,
6.000% 10/01/08 1,000,000 1,005,000
IL Health Facilities Authority, Thorek Hospital & Medical
Center,
5.250% 08/15/18 600,000 533,706
IL Southwestern Illinois Development Authority, Anderson
Hospital,
Series 1999,
5.500% 08/15/20 225,000 209,327
IL State Health Facilities Authority, Swedish American
Hospital,
Series 2000,
6.875% 11/15/30 500,000 537,185
LA State Public Facilities Authority, Touro Infirmary, Series
1999,
5.625% 08/15/29 600,000 588,390
MI Dickinson County Healthcare System, Series 1999,
5.700% 11/01/18 750,000 706,507
MI Flint Hospital Building Authority, Hurley Medical Center,
Series 1998 A,
5.375% 07/01/20 450,000 406,588
MI State Hospital Finance Authority, Detroit Medical Center,
Series 1998 A,
5.250% 08/15/28 650,000 535,542
MN St. Paul Housing & Redevelopment Authority, Healtheast
Project, Series A,
5.700% 11/01/15 1,000,000 770,000
MN Washington County Housing & Redevelopment Authority,
Healtheast, Inc., Series 1998,
5.250% 11/15/12 1,500,000 1,216,875
MS State Business Finance Corp., Rush Medical Foundation,
Inc., Series 1998,
5.625% 07/01/23 910,000 771,671
NC Medical Care Commission:
Gaston Health Care, Series 1998,
5.000% 02/15/29 3,000,000 2,797,350
Stanly Memorial Hospital,
Series 1999,
6.375% 10/01/29 1,915,000 2,022,623
NH State Higher Educational & Health Facilities Authority,
Littleton Hospital Association, Inc.,
Series 1998 A:
5.900% 05/01/28 780,000 598,650
6.000% 05/01/28 625,000 486,719
NY City Industrial Development Agency, Staten Island
University Hospital, Series 2001 B,
6.380% 07/01/31 500,000 498,775
NY Yonkers Industrial Development Agency, St. John's Riverside
Hospital, Series 2001 A,
7.125% 07/01/31 1,000,000 1,029,480
OH Belmont County, East Ohio Regional Hospital, Series 1998,
5.700% 01/01/13 1,875,000 1,682,812
OH Highland County Joint Township Hospital District,
Series 1999,
6.750% 12/01/29 980,000 902,825
OH Miami County, Upper Valley Medical Center, Inc.,
Series 1996 A,
6.375% 05/15/26 1,000,000 1,004,940
OH Sandusky County, Memorial Hospital, Series 1998,
5.150% 01/01/10 250,000 243,035
PA Allegheny County Hospital Development, Ohio Valley General
Hospital, Series 1998 A,
5.450% 01/01/28 1,000,000 882,490
PA Pottsville Hospital Authority, Pottsville Hospital & Warne
Clinic, Series 1998,
5.500% 07/01/18 1,000,000 869,130
TX Lufkin Health Facilities Development Corp., Memorial Health
Systems of East Texas, Series 1998,
5.700% 02/15/28 1,120,000 876,355
TX Richardson Hospital Authority, Baylor Richardson Medical
Center, Series 1998,
5.625% 12/01/28 1,200,000 1,160,412
TX Tyler Health Facilities Development Corp., Mother Frances
Hospital, Series 2001,
6.000% 07/01/31 1,000,000 983,620
UT Weber County, IHC Health Services, Inc., Series 1999,
5.000% 08/15/30 1,500,000 1,433,880
VT State Educational & Health Buildings Authority:
Brattleboro Memorial Hospital,
5.375% 03/01/28 1,075,000 954,299
Springfield Hospital, Series A,
7.750% 01/01/13 910,000 954,417
WA State Health Care Facilities Authority, Kadlec Medical
Center, Series 2001,
5.875% 12/01/21 600,000 619,674
WV Hospital Finance Authority, Charleston Medical Center,
Series 2000 A,
6.750% 09/01/30 1,000,000 1,079,010
------------
42,241,901
------------
INTERMEDIATE CARE FACILITIES - 1.0%
IL State Development Finance Authority, Hoosier Care, Inc.,
Series 1999 A,
7.125% 06/01/34 1,220,000 1,069,025
IN State Health Facilities Financing Authority, Hoosier Care,
Inc.,
Series 1999 A,
7.125% 06/01/34 150,000 131,437
PA State Economic Development Financing Authority,
Northwestern Human Services, Inc.,
Series 1998 A,
5.250% 06/01/14 2,510,000 2,090,203
------------
3,290,665
------------
NURSING HOME - 8.2%
AK Juneau, St. Ann's Care Center, Series 1999,
6.875% 12/01/25 700,000 689,500
CO Healthcare Facilities Authority:
American Housing Foundation, Inc., Series 1990 A,
10.250% 12/01/20 (b) 1,300,000 481,000
Pioneer Healthcare, Series 1989,
10.500% 05/01/19 1,925,000 1,900,938
CO State Health Facilities Authority, Volunteers of America
Care Facilities, Inc.:
Series 1998 A:
5.450% 07/01/08 300,000 284,250
5.750% 07/01/20 865,000 734,169
Series 1999 A,
6.000% 07/01/29 350,000 294,875
FL Gadsden County Industrial Development Authority, Florida
Properties, Inc., Series 1988 A,
10.450% 10/01/18 (b) 1,805,000 992,750
IA State Finance Authority, Care Initiatives Project:
Series 1996,
9.250% 07/01/25 1,000,000 1,233,750
Series 1998 B:
5.750% 07/01/18 550,000 495,687
5.750% 07/01/28 1,475,000 1,268,500
IN Gary Industrial Economic Development, West Side Health Care
Center, Series 1987 A,
11.500% 10/01/17 1,365,000 1,377,230
IN Michigan City Health Facilities, Metropolitan Health
Foundation, Inc. Project,
10.000% 11/01/22 (b) 3,085,000 1,172,300
IN State Health Facilities Financing Authority, Metro Health
Indiana, Inc., Series 1998,
6.400% 12/01/33 1,210,000 786,500
MA State Development Finance Agency, Alliance Health Care
Facilities, Series 1999,
7.100% 07/01/32 1,300,000 1,285,375
MA State Industrial Finance Agency, Woodlawn Nursing Home:
7.750% 01/01/28 1,598,135 1,430,331
10.250% 07/01/27 336,372 319,974
MN Carlton, Inter-Faith Social Services, Inc., Series 2000,
7.750% 04/01/29 750,000 774,375
MN Minneapolis, Walker Methodist Senior Services Group,
Series 1998 A,
6.000% 11/15/28 600,000 532,500
MN New Hope, North Ridge Care Center, Inc., Series 1999,
5.875% 03/01/29 800,000 693,000
MN Sartell, Foundation for Healthcare, Series 1999 A,
6.625% 09/01/29 1,145,000 1,056,263
NJ State Economic Development Authority, Geriatric & Medical
Service, Inc., Series B,
10.500% 05/01/20 2,000,000 2,005,000
PA Chester County Industrial Development, Pennsylvania Nursing
Home, Inc., Series 1989,
10.125% 05/01/19 (b) 2,548,000 1,401,400
PA Washington County Industrial Development Authority, Central
States Project, Series 1989,
10.250% 11/01/19 1,750,000 875,000
TN Metropolitan Government, Nashville & Davidson Counties
Health & Education Facilities, Central States, Series 1989,
10.250% 11/01/19 1,650,000 825,000
TX Kirbyville Health Facilities Development Corp., Heartway
III Project:
Series 1997 A,
10.000% 03/20/18 689,471 634,313
Series 1997 B,
6.000% 03/20/04 (b) 106,000 5,300
TX Whitehouse Health Facilities Development Corp., Oak Brook
Healthcare Center, Series 1989,
10.000% 12/01/19 1,655,000 1,694,819
WA Kitsap County Housing Authority, Martha & Mary Nursing
Home,
7.100% 02/20/36 1,000,000 1,128,450
WI State Health & Educational Facilities Authority, Metro
Health Foundation, Inc., Series 1993,
10.000% 11/01/22 (b) 2,775,000 1,054,500
------------
27,427,049
------------
----------------------------------------------------------------------------------------------------
HOUSING - 11.4%
ASSISTED LIVING/SENIOR - 3.7%
CA Abag Finance Authority for Nonprofit Corps., Eskaton Gold
River Lodge, Series 1998:
6.375% 11/15/15 750,000 695,625
6.375% 11/15/28 550,000 480,562
DE Kent County, Heritage at Dover, Series 1999,
7.625% 01/01/30 1,750,000 1,561,875
GA Columbus Housing Authority, The Gardens at Calvary,
Series 1999,
7.000% 11/15/19 500,000 444,375
IL Clarendon Hills Residential Facilities, Churchill Estate,
Series 1998 A:
6.750% 03/01/24 1,050,000 787,500
6.750% 03/01/31 1,370,000 1,027,500
IL State Development Finance Authority, Care Institute, Inc.,
8.250% 06/01/25 1,285,000 1,301,062
MN Roseville, Care Institute, Inc., Series 1993,
7.750% 11/01/23 (b) 1,740,000 1,468,125
NC State Medical Care Commission, DePaul Community Facilities
Project, Series 1999,
7.625% 11/01/29 1,500,000 1,507,500
NY Huntington Housing Authority, Gurwin Jewish Senior Center,
Series 1999:
5.875% 05/01/19 700,000 625,625
6.000% 05/01/29 775,000 682,000
TX Bell County Health Facilities Development Corp., Care
Institute, Inc.,
9.000% 11/01/24 1,760,000 1,839,200
------------
12,420,949
------------
MULTI-FAMILY - 6.9%
DE Wilmington, Electra Arms Senior Association Project,
6.250% 06/01/28 970,000 794,188
FL Broward County Housing Finance Authority, Chaves Lake
Apartment Project, Series 2000,
7.500% 07/01/40 750,000 767,812
FL Clay County Housing Finance Authority, Madison Commons
Apartments, Series 2000 A,
7.450% 07/01/40 750,000 767,813
GA Clayton County Housing Authority, Magnolia Park Apartments,
Series 1999 A,
6.250% 06/01/30 955,000 883,050
MN Lakeville, Southfork Apartments Project:
Series 1989 A,
9.875% 02/01/20 2,570,000 2,582,773
Series 1989 B,
(a) 02/01/20 916,000 1,190,922
MN Robbinsdale Economic Development Authority, Broadway Court,
Series 1999 A,
6.875% 01/01/26 500,000 468,750
MN Washington County Housing & Redevelopment Authority,
Cottages of Aspen, Series 1992,
9.250% 06/01/22 1,020,000 1,060,800
MN White Bear Lake, Birch Lake Townhome Project:
Series 1989 A,
10.250% 07/15/19 2,200,000 2,271,500
Series 1989 B,
(a) 07/15/19 (d) 716,000 311,606
NC Eastern Carolina Regional Housing Authority, New River
Apartments - Jacksonville,
Series 1994,
8.250% 09/01/14 1,655,000 1,677,756
NY Nyack Housing Assistance Corp., Nyack Plaza Apartments,
7.375% 06/01/21 330,435 331,466
Resolution Trust Corp., Pass-Through Certificates, Series 1993
A,
8.750% 12/01/16 (e) 4,154,935 4,176,665
TN Franklin Industrial Board, Landings Apartment Project,
Series 1996 B,
8.750% 04/01/27 885,000 935,887
TX El Paso County Housing Finance Corp., American Village
Communities:
Series 2000 C,
8.000% 12/01/32 395,000 399,444
Series 2000 D,
10.000% 12/01/32 425,000 429,250
TX State Affordable Housing Corp., NHT/GTEX Project, Series
2001 C,
10.000% 10/01/31 880,000 874,799
TX State Department of Housing & Community Affairs, Pebble
Brooks Apartments, Series 1998,
5.500% 12/01/18 1,000,000 1,013,460
VA Alexandria Redevelopment & Housing Authority, Courthouse
Commons Apartments,
Series 1990 A,
10.000% 01/01/21 1,500,000 1,350,000
WA Vancouver Housing Authority, Series I,
5.500% 03/01/28 1,000,000 974,170
------------
23,262,111
------------
SINGLE FAMILY - 0.8%
LA State Housing Finance Agency, Residual Lien Mortgage,
Series 1992,
7.375% 09/01/13 65,000 65,880
TX Bexar County Housing Finance Corp., GNMA Collateralized
Mortgage, Series 1989 A,
8.200% 04/01/22 1,450,000 1,460,222
WA State Housing Finance Commission, Series 1992 D1,
6.150% 01/01/26 920,000 1,004,180
------------
2,530,282
------------
----------------------------------------------------------------------------------------------------
INDUSTRIAL - 3.4%
FOOD PRODUCTS - 1.1%
IN Hammond, American Maize Products Co., Series 1994,
8.000% 12/01/24 1,760,000 1,821,987
LA Southern Louisiana Port Commission, Cargill, Inc., Project,
5.850% 04/01/17 1,000,000 1,044,970
MI State Strategic Fund, Michigan Sugar Co., Sebewang Project,
Series 1998 A,
6.250% 11/01/15 1,250,000 762,500
------------
3,629,457
------------
FOREST PRODUCTS - 0.8%
GA Effingham County Industrial Development Authority, Georgia
Pacific Corp., Series 2001,
6.500% 06/01/31 1,000,000 1,033,030
GA Rockdale County Development Authority, Solid Waste
Disposal, Visy Paper, Inc., Series 1993,
7.500% 01/01/26 1,800,000 1,827,000
------------
2,860,030
------------
MANUFACTURING - 0.9%
IL Will-Kankakee Regional Development Authority, Flanders
Corp./Precisionaire Project,
Series 1997,
6.500% 12/15/17 920,000 861,350
MA State Industrial Finance Agency, House of Bianchi, Inc.,
8.750% 06/01/18 (c) 285,000 279,300
MN Brooklyn Park, TL Systems Corp., Series 1991,
10.000% 09/01/16 705,000 777,262
TX Trinity River Authority, Texas Instruments Project, Series
1996,
6.200% 03/01/20 1,000,000 1,043,870
------------
2,961,782
------------
METALS & MINING - 0.4%
MD Baltimore County, Bethlehem Steel Corp. Project, Series B,
7.500% 06/01/15 (b) 500,000 60,000
NV State Department of Business & Industry, Wheeling-
Pittsburgh Steel Corp., Series 1999 A,
8.000% 09/01/14 1,000,000 800,000
VA Greensville County Industrial Development Authority,
Wheeling-Pittsburgh Steel Corp.,
Series 1999 A:
6.375% 04/01/04 95,000 76,000
7.000% 04/01/14 500,000 389,375
------------
1,325,375
------------
OIL & GAS - 0.2%
CA Los Angeles Regional Airport, LAXFuel Corp., Series 2001,
5.250% 01/01/23 750,000 733,133
------------
----------------------------------------------------------------------------------------------------
OTHER - 6.3%
OTHER - 0.2%
MD Baltimore, Park Charles Project, Series 1986,
8.000% 01/01/15 695,000 703,222
------------
POOL/BOND BANK - 0.2%
MI State Municipal Bond Authority, Local Government Loan
Project, Series 2001 A,
5.375% 11/01/17 750,000 777,690
------------
REFUNDED/ESCROWED (f) - 5.9%
CA Colton Public Financing Authority, Series 1995,
7.500% 10/01/20 1,880,000 2,049,200
CA San Joaquin Hills Transportation Corridor Agency, Series
1993,
7.000% 01/01/30 775,000 832,195
CO Denver City and County Airport:
Series B,
7.250% 11/15/23 580,000 618,866
Series C,
6.125% 11/15/25 2,280,000 2,560,212
CT State Development Authority, Sewer Sludge Disposal
Facilities, Series 1996,
8.250% 12/01/06 715,000 803,481
FL Clearwater Housing Authority, Hampton Apartments, Series
1994,
8.250% 05/01/24 2,430,000 2,761,088
ID State Health Facilities Authority, IHC Hospitals, Inc.,
6.650% 02/15/21 1,750,000 2,113,440
MA State Health & Educational Facilities Authority,
Corporation for Independent Living,
8.100% 07/01/18 680,000 753,100
MN Mille Lacs Capital Improvement Authority, Mille Lacs Band
of Chippewa, Series 1992 A,
9.250% 11/01/12 940,000 1,024,036
NC Lincoln County, Lincoln County Hospital,
9.000% 05/01/07 340,000 393,550
PA Delaware County Authority, Southeastern Pennsylvania
Obligated Group, Series 1996:
6.000% 12/15/16 1,400,000 1,539,468
6.000% 12/15/26 1,000,000 1,061,760
PA Montgomery County Industrial Development Authority,
Assisted Living Facility, Series 1993 A,
8.250% 05/01/23 815,000 889,369
TN Shelby County, Health, Education, & Housing Facilities
Board, Open Arms Development Center, Series 1992 A,
9.750% 08/01/19 1,720,000 2,210,200
------------
19,609,965
------------
OTHER REVENUE - 1.2%
HOTELS - 0.3%
PA Philadelphia Authority for Industrial Development,
Doubletree Project A,
6.500% 10/01/27 1,000,000 1,002,500
------------
RECREATION - 0.3%
CT Gaming Authority, Mohegan Tribe Indians, Series 2001,
6.250% 01/01/31 275,000 272,830
NM Red River Sports Facility, Red River Ski Area Project,
Series 1998,
6.450% 06/01/07 945,000 939,094
------------
1,211,924
------------
RETAIL - 0.6%
NJ State Economic Development Authority, Glimcher Properties
L.P. Project,
6.000% 11/01/28 1,250,000 1,221,875
OH Lake County, North Madison Properties, Series 1993,
8.819% 09/01/11 765,000 734,400
------------
1,956,275
------------
----------------------------------------------------------------------------------------------------
RESOURCE RECOVERY - 1.2%
DISPOSAL - 0.4%
MA State Industrial Finance Agency, Peabody Monofill
Associates, Inc., Series 1995,
9.000% 09/01/05 755,000 798,413
UT Carbon County, Laidlaw Environmental, Series A,
7.450% 07/01/17 500,000 518,750
------------
1,317,163
------------
RESOURCE RECOVERY - 0.8%
MA State Industrial Finance Agency, Ogden Haverhill Project,
Series 1998 A,
5.500% 12/01/13 500,000 498,260
PA Delaware County Industrial Development Authority, Series A,
6.200% 07/01/19 2,000,000 2,070,000
------------
2,568,260
------------
----------------------------------------------------------------------------------------------------
TAX-BACKED - 19.7%
LOCAL GENERAL OBLIGATIONS - 9.7%
CA Montbello Unified School District, Series 2001:
(a) 08/01/21 1,435,000 501,217
(a) 08/01/23 1,505,000 469,364
CA San Juan Unified School District, Series 2001,
(a) 08/01/19 2,210,000 870,939
IL Chicago Board of Education,
Series 1997 A,
5.250% 12/01/30 (g) 14,470,000 14,479,261
IL Cook County, Series 1997 A,
5.625% 11/15/22 4,200,000 4,347,462
NY New York City:
Series 1997 A,
7.000% 08/01/07 1,000,000 1,155,700
Series 1997 H,
6.000% 08/01/17 1,400,000 1,489,530
TX Irving Independent School District, Series 1997,
(a) 02/15/18 1,000,000 422,960
TX San Antonio Independent School District, Series 1997,
5.000% 08/15/27 9,000,000 8,738,190
------------
32,474,623
------------
SPECIAL NON-PROPERTY TAX - 2.1%
CA San Diego Redevelopment Agency,
(a) 09/01/22 1,910,000 625,754
IL Metropolitan Pier & Exposition Authority, McCormick Place
Expansion Project, Series A,
(a) 06/15/16 10,000,000 4,753,700
OH Hamilton County, Series 2000 B,
(a) 12/01/21 5,000,000 1,718,850
------------
7,098,304
------------
SPECIAL PROPERTY TAX - 2.4%
CA Carson, Series 1992,
7.375% 09/02/22 50,000 51,950
CA Orange County Community Facilities District, Ladera Ranch,
Series 1999 A,
6.700% 08/15/29 500,000 528,750
CA Placer Unified High School District, Series 2000 A,
(a) 08/01/19 1,700,000 671,109
CA Riverside County Public Financing Authority, Redevelopment
Projects,
Series A,
5.500% 10/01/22 650,000 649,948
FL Heritage Palms Community Development District:
Series 1999,
6.250% 11/01/04 1,175,000 1,191,156
Series 1999 B,
6.250% 05/01/05 785,000 796,775
FL Lexington Oaks Community Development District:
Series 1998 A,
6.125% 05/01/19 380,000 381,425
Series 1998 B,
5.500% 05/01/05 245,000 245,613
Series 2000 A,
7.200% 05/01/30 300,000 313,875
Series 2000 D,
6.700% 05/01/07 175,000 180,906
FL Northern Palm Beach County Improvement District, Series
1999,
6.000% 08/01/29 750,000 755,625
FL Orlando, Conroy Road Interchange Project, Series 1998 A:
5.500% 05/01/10 180,000 179,550
5.800% 05/01/26 300,000 289,500
FL Stoneybrook Community Development District,
Series 1998 B,
5.700% 05/01/08 580,000 583,625
MI Taylor Tax Increment Finance Authority, Series 2001,
5.375% 05/01/17 1,220,000 1,258,601
------------
8,078,408
------------
STATE APPROPRIATED - 0.3%
NY State Urban Development Corp., University Facilities
Grants,
Series 1995,
5.875% 01/01/21 1,000,000 1,105,460
------------
STATE GENERAL OBLIGATIONS - 5.2%
DC District of Columbia,
Series 1999 A,
5.375% 06/01/18 2,395,000 2,458,635
TX Board of Regents Filing System, University of Texas, Series
2001 B,
5.375% 08/15/18 650,000 669,019
TX State, Series 1999 ABC,
5.500% 08/01/35 4,200,000 4,300,380
WA State, Series 1999 B,
5.000% 01/01/24 10,000,000 9,803,000
------------
17,231,034
------------
----------------------------------------------------------------------------------------------------
TRANSPORTATION - 11.8%
AIR TRANSPORTATION - 1.7%
CO Denver City & County Airport, United Airlines, Inc., Series
1992 A,
6.875% 10/01/32 1,645,000 1,128,881
KY Kenton County Airport Board, Delta Airlines, Inc., Series
1992 A,
7.500% 02/01/20 500,000 485,950
MN Minneapolis & St. Paul Metropolitan Airport Commission,
Northwest Airlines Corp.:
Series 2001 A,
7.000% 04/01/25 500,000 393,125
Series 2001 B,
6.500% 04/01/25 250,000 239,063
NC Charlotte, US Airways, Inc.:
Series 1998,
5.600% 07/01/27 250,000 104,375
Series 2000,
7.750% 02/01/28 750,000 328,125
TX Alliance Airport Authority:
American Airlines Project,
7.500% 12/01/29 1,600,000 1,502,672
Federal Express Corp., Series 1996,
6.375% 04/01/21 1,000,000 1,009,990
WA Seattle, Northwest Airways, Inc., Series 2000,
7.250% 04/01/30 500,000 400,000
------------
5,592,181
------------
AIRPORT - 8.3%
CO Denver City & County Airport:
Series 1997 E,
5.250% 11/15/23 4,590,000 4,598,767
Series 1998 B,
5.000% 11/15/25 2,940,000 2,844,274
Series B,
7.250% 11/15/23 2,275,000 2,395,347
Series C,
6.125% 11/15/25 2,840,000 3,005,231
MA State Port Authority,
Series 1998 D,
5.000% 07/01/28 5,950,000 5,709,025
MO St. Louis Airport,
5.000% 07/01/26 4,200,000 4,072,656
OH Cleveland Airport, Series 2001 A,
5.000% 01/01/31 5,500,000 5,351,830
------------
27,977,130
------------
TOLL FACILITIES - 1.5%
CO Northwest Parkway Public Highway Authority, Series 2001 D,
7.130% 06/15/41 1,000,000 1,017,500
CO State Public Highway Authority, E-470 Series 2000 B:
(a) 09/01/18 3,000,000 1,244,850
(a) 09/01/35 8,750,000 735,875
VA Richmond Metropolitan Authority, Series 1998,
5.250% 07/15/22 2,000,000 2,076,880
------------
5,075,105
------------
TRANSPORTATION - 0.3%
NV State Department of Business & Industry, Las Vegas Monorail
Project, Series 2000,
7.375% 01/01/40 1,000,000 1,012,500
------------
----------------------------------------------------------------------------------------------------
UTILITY - 11.8%
INDEPENDENT POWER PRODUCER - 2.8%
MI Midland County Economic Development Corp., Series 2000,
6.875% 07/23/09 1,000,000 1,042,500
NY Port Authority of New York & New Jersey, KIAC Partners,
Series 1996 IV,
6.750% 10/01/11 2,000,000 2,092,500
PA State Economic Development Finance Authority:
Colver Project, Series D,
7.125% 12/01/15 3,000,000 3,125,640
Northampton Generating, Series A,
6.500% 01/01/13 1,000,000 1,012,770
PR Commonwealth of Puerto Rico Industrial, Educational,
Medical & Environmental Cogeneration Facilities, AES
Project, Series 2000,
6.625% 06/01/26 650,000 705,536
VA Pittsylvania County Industrial Development Authority,
Multi-trade of Pittsylvania,
Series 1994 A:
7.450% 01/01/09 1,000,000 1,008,750
7.550% 01/01/09 500,000 502,500
------------
9,490,196
------------
INVESTOR OWNED - 4.4%
AZ Pima County Industrial Development Authority, Tucson
Electric Power Co., Series A,
6.100% 09/01/25 750,000 729,375
CT State Development Authority, Connecticut Light & Power Co.,
Series 1993 B,
5.950% 09/01/28 400,000 404,740
IL Bryant, Central Illinois Light Co., Series 1993,
5.900% 08/01/23 5,000,000 5,084,100
LA Calcasieu Parish Industrial Development Board, Entergy Gulf
States, Inc., Series 1999,
5.450% 07/01/10 500,000 493,125
LA West Feliciana Parish, Entergy Gulf States, Inc., Series
1999 B,
6.600% 09/01/28 500,000 505,000
MS State Business Finance Corp., Systems Energy Resources
Project, Series 1998,
5.875% 04/01/22 2,000,000 1,955,000
TX Brazos River Authority, TXU Electric Co., Series 2001 C,
5.750% 05/01/36 900,000 899,280
WV Pleasant County, Western Pennsylvania Power Co.,
Series 1999 E,
5.500% 04/01/29 4,750,000 4,809,803
------------
14,880,423
------------
JOINT POWER AUTHORITY - 0.2%
NC Eastern Municipal Power Agency, Series 1999 D,
6.700% 01/01/19 500,000 533,875
------------
MUNICIPAL ELECTRIC - 1.6%
NY Long Island Power Authority, Series 1998 A,
5.250% 12/01/26 2,000,000 2,009,520
WA Chelan County Public Utilities District No. 1, Columbia
River Rock Hydroelectric,
(a) 06/01/14 5,000,000 2,693,300
WA Seattle, Series 2001,
5.500% 03/01/17 750,000 779,138
------------
5,481,958
------------
WATER & SEWER - 2.8%
LA Public Facility Belmont Water Authority,
9.000% 03/15/24 (b) 760,000 608,000
MA State Water Resources Authority, Series 1997 D,
5.000% 08/01/24 4,000,000 3,935,760
MO Water & Sewer, Lee's Summit, Series 2002,
5.250% 07/01/15 (h) 500,000 514,340
MS Five Lakes Utility District,
8.250% 07/15/24 500,000 463,125
NH State Industrial Development Authority, Pennichuck Water
Works, Inc., Series 1988,
7.500% 07/01/18 535,000 585,156
WA King County, Series 1999,
5.250% 01/01/30 3,250,000 3,245,092
------------
9,351,473
------------
TOTAL MUNICIPAL BONDS
(cost of $325,945,820) 318,568,452
------------
MUNICIPAL PREFERRED STOCKS - 1.3% SHARES
----------------------------------------------------------------------------------------------------
Charter Mac Equity Issue Trust,
6.625% 06/30/09 (e) 2,000,000 2,060,000
MuniMae Equity Issue Trust,
7.750% 11/01/10 (e) 2,000,000 2,140,000
------------
TOTAL MUNICIPAL PREFERRED STOCKS
(cost of $4,000,000) 4,200,000
------------
SHORT-TERM OBLIGATIONS - 3.0% PAR
----------------------------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 3.0% (i)
CO State Educational & Cultural Facilities Authority, National
Cable Televison Center, Series 1999,
1.55% 10/01/06 $ 500,000 500,000
IA State Finance Authority:
Burlington Medical Center, Series 1997,
1.60% 06/01/27 200,000 200,000
Diocese of Sioux City, Series 1999,
1.55% 03/01/19 300,000 300,000
IA State Higher Education Loan Authority, St. Ambrose
University, Series 1995,
1.65% 02/01/05 1,600,000 1,600,000
IL Sauget Pollution Control, Monsanto Co. Project:
Series 1993,
1.60% 05/01/28 1,000,000 1,000,000
Series 1996,
1.60% 09/01/14 1,300,000 1,300,000
MN Brooklyn Center, Brookdale Corp. III Project, Series 2001,
1.65% 12/01/07 300,000 300,000
MN Minneapolis Convention Center, Series 1999,
1.40% 12/01/18 1,075,000 1,075,000
MO St. Charles County Industrial Development Authority,
Monsanto Co. Project, Series 1996,
1.45% 07/01/21 800,000 800,000
MO State Health & Educational Facilities Authority, Bethesda
Health Group, Series 2001 A,
1.65% 08/01/31 500,000 500,000
NM Farmington Pollution Control, Arizona Public Service Co.,
Four Corners Project, Series 1994 B,
1.60% 09/01/24 300,000 300,000
NY Long Island Power Authority, Series 2001 2B,
1.50% 05/01/33 1,000,000 1,000,000
NY New York City, Series 1994 A-5,
1.55% 08/01/20 500,000 500,000
UT Eagle Mountain Gas & Electric, Series 2001,
1.45% 12/15/25 600,000 600,000
WI State Health & Educational Facilities Authority, Riverview
Hospital Association, Series 2001,
1.65% 10/01/30 100,000 100,000
------------
TOTAL SHORT-TERM OBLIGATIONS
(cost of $10,075,000) 10,075,000
------------
----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.3%
(cost of $340,020,820) (j) $332,843,452
------------
OTHER ASSETS & LIABILITIES, NET - 0.7% 2,504,916
----------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $335,348,368
------------
NOTES TO INVESTMENT PORTFOLIO:
----------------------------------------------------------------------------------------------------
(a) Zero coupon bond.
(b) This issuer is in default of certain debt covenants. Income is not being accrued.
(c) Denotes a restricted security, which is subject to restrictions on resale under Federal
Securities laws. At November 30, 2001, these securities amounted to $2,709,793, which represents
0.8% of net assets.
Additional information on these restricted securities is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
------------------------------------------------------------------
CA St. Comm. Dev. Auth:
Crossroads School 08/31/98 $1,340,000
Eskaton Village 09/08/00 1,000,000
MA State Indus. Fin. Agency, House
of Bianchi 06/30/92 285,000
----------
$2,625,000
----------
(d) Accrued interest accumulates in the value of the security and is payable at redemption.
(e) These securities are exempt from registration under Rule 144A of the Securities Act of 1933 and
may be resold in transactions exempt from registration, normally to qualified institutional
buyers. At November 30, 2001, the value of these securities amounted to $8,376,665, which
represented 2.5% of net assets.
(f) 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.
(g) This security, or a portion thereof, with a market value of $2,801,792, is being used to
collateralize open futures contracts.
(h) Settlement of this security is on a delayed delivery basis.
(i) Variable rate demand notes are considered short-term obligations. Interest rates change
periodically on specified dates. These securities are payable on demand and are secured by
either letters of credit or other credit support agreements from banks. The rates listed are as
of November 30, 2001.
(j) Cost for federal income tax purposes is $340,059,345.
Short futures contracts open at November 30, 2001:
PAR VALUE UNREALIZED
COVERED BY EXPIRATION APPRECIATION
TYPE CONTRACTS MONTH AT 11/30/01
-------------------------------------------------------------------------
Municipal Bond Index $42,700,000 March $ 934,282
U.S. Treasury Bond 52,000,000 March 2,528,133
U.S. Treasury Note 36,300,000 March 1,082,439
----------
$4,544,854
----------
ACRONYM NAME
-----------------------------------------------------------------------------
GNMA Government National Mortgage Association
See notes to financial statements.
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
November 30, 2001
ASSETS
Investments, at cost $340,020,820
------------
Investments, at value $332,843,452
Cash 49,274
Receivable for:
Investments sold 350,957
Interest 5,867,011
Futures variation margin 24,311
Deferred Trustees' compensation plan 8,492
Other assets 27
------------
Total assets 339,143,524
------------
LIABILITIES
Payable for:
Investments purchased 1,851,943
Investments purchased on a delayed delivery basis 514,715
Distributions -- common shares 1,118,806
Distributions -- preferred shares 18,441
Management fee 207,176
Bookkeeping fee 10,777
Audit fee 29,000
Reports to shareholders 15,755
Trustees' fee 313
Deferred Trustees' fee 8,492
Other liabilities 19,738
------------
Total liabilities 3,795,156
------------
NET ASSETS $335,348,368
------------
COMPOSITION OF NET ASSETS
Auction Preferred Shares (4,800 shares issued and outstanding
at $25,000 per share) $120,000,000
Paid-in capital -- common shares 274,733,509
Undistributed net investment income 259,160
Accumulated net realized loss (57,011,787)
Net unrealized appreciation (depreciation) on:
Investments (7,177,368)
Futures contracts 4,544,854
------------
NET ASSETS $335,348,368
------------
Net assets at value including undeclared dividends applicable
to 4,800 preferred shares outstanding $120,000,000
------------
Net assets at value applicable to 31,078,027 common shares of
beneficial interest outstanding $215,348,368
------------
Net asset value per common share $ 6.93
------------
See notes to financial statements.
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
For the Year Ended November 30, 2001
INVESTMENT INCOME
Interest $ 22,437,429
------------
EXPENSES
Management fee 2,638,026
Bookkeeping fee 103,176
Trustees' fee 15,159
Preferred shares remarketing commissions 300,343
Other expenses 413,071
------------
Total expenses 3,469,775
Custody earnings credit (331)
------------
Net expenses 3,469,444
------------
Net Investment Income 18,967,985
------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FUTURES CONTRACTS
Net realized loss on:
Investments (55,925)
Futures contracts (15,373,004)
------------
Net realized loss (15,428,929)
------------
Net change in unrealized appreciation/
depreciation on:
Investments 6,911,706
Futures contracts 7,215,548
------------
Net change in unrealized appreciation/
depreciation 14,127,254
------------
Net Loss (1,301,675)
------------
Increase in Net Assets from Operations $ 17,666,310
------------
See notes to financial statements.
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
------------------------------
INCREASE (DECREASE) IN NET ASSETS 2001 2000
-----------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 18,967,985 $ 19,146,997
Net realized loss on investments and futures contracts (15,428,929) (16,825,430)
Net change in unrealized appreciation/depreciation on
investments and futures contracts 14,127,254 137,081
------------- -------------
Net Increase from Operations 17,666,310 2,458,648
------------- -------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income to common shareholders (13,643,254) (14,824,209)
From net investment income to preferred shareholders (3,649,679) (5,015,808)
------------- -------------
Total Distributions Declared to Shareholders (17,292,933) (19,840,017)
------------- -------------
CAPITAL TRANSACTIONS
Preferred share offering costs -- (282,640)
------------- -------------
Total Increase (Decrease) in Net Assets 373,377 (17,664,009)
NET ASSETS
Beginning of period 334,974,991 352,639,000
------------- -------------
End of period (including undistributed net investment
income and overdistributed net investment income of
$259,160 and ($1,483,052), respectively) $ 335,348,368 $ 334,974,991
------------- -------------
NUMBER OF FUND SHARES
Common Shares
End of period 31,078,027 31,078,027
------------- -------------
Preferred Shares
End of period 4,800 4,800
------------- -------------
See notes to financial statements.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
November 30, 2001
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 (the "Act"), 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. The Trust's secondary investment objective
is to seek total return. The Trust authorized an unlimited number of common
shares of beneficial interest and 4,800 Auction Preferred Shares ("APS").
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 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.
Investments 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.
At November 30, 2001, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD
------------------ -------------------------
2002 $ 6,578,630
2003 5,267,623
2004 2,815,387
2005 5,926,653
2007 3,941,668
2008 14,340,573
2009 4,198,716
-----------
$43,069,250
-----------
Expired capital loss carryforwards, if any, are recorded as a reduction of
paid-in capital.
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 the 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.
Effective December 1, 2001, the Trust will adopt the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and will be required to
amortize premium and discount on all debt securities. Upon the effective date,
this accounting principle change will not have an impact on total net assets,
but will result in a reclassification between cost of securities held and net
unrealized appreciation/depreciation. Management of the Trust currently
believes that the impact of adopting this principle will not be material to
the financial statements.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to common and preferred 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.
The following reclassifications have been made to the financial statements:
INCREASE (DECREASE)
----------------------------------------------------------------------
UNDISTRIBUTED ACCUMULATED NET
PAID-IN CAPITAL NET INVESTMENT INCOME REALIZED LOSS
----------------------------------------------------------------------
$(5,580,052) $67,160 $5,512,892
These differences are primarily due to expiring capital loss carryforwards and
market discount reclassifications. Net investment income, net realized gains
(losses) and net assets were not affected by this reclassification.
Distributions to preferred shareholders are recorded daily and are payable at
the end of each dividend period. Each dividend payment period for the APS is
generally seven days. The applicable dividend rate for the APS on November 30,
2001 was 1.95% for Series T and 1.70% for Series W. For the year ended
November 30, 2001, the Trust declared dividends to Auction Preferred
shareholders amounting to $3,649,679 representing an average APS dividend rate
for such period of 3.04%.
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 daily net
assets. Effective July 1, 2001, the management fee was reduced to 0.75%
annually of the Trust's average daily net assets.
On November 1, 2001, Liberty Financial Companies, Inc., the former parent of
the Advisor, completed the sale of its asset management business, including
the Advisor, to Fleet National Bank ("Fleet"). This transaction resulted in a
change of control of the Advisor and, therefore, an assignment of the
Advisor's investment advisory contract with the Trust to Fleet. The Trust had
obtained approval of a new investment advisory contract by the Trust's Board
of Trustees and shareholders, which became effective upon completion of the
sale. The new contract is identical to the prior contract in all material
respects except for its effective and termination dates.
BOOKKEEPING FEE
The Advisor is responsible for providing pricing and bookkeeping services to
the Trust under a Pricing and Bookkeeping Agreement. Under a separate
agreement (the "Outsourcing Agreement"), the Advisor has delegated those
functions to State Street Bank and Trust Company ("State Street"). The Advisor
pays fees to State Street under the Outsourcing Agreement.
During the period December 1, 2000 to June 30, 2001, the Advisor provided
bookkeeping and pricing services weekly to the Trust for a monthly fee equal
to $18,000 annually plus 0.0233% annually of the Trust's average daily net
assets over $50 million. Effective July 1, 2001, under its pricing and
bookkeeping agreement with the Trust, the Advisor receives from the Trust an
annual flat fee of $10,000, paid monthly, and in any month that the Trust's
average daily net assets are more than $50 million, a monthly fee equal to the
average daily net assets of the Trust for that month multiplied by a fee rate
that is calculated by taking into account the fees payable to State Street
under the Outsourcing Agreement.
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.
The Trust has an agreement with its custodian bank under which $331 of custody
fees were reduced by balance credits for the year ended November 30, 2001. The
Trust could have invested a portion of the assets utilized in connection with
the expense offset arrangements in an income producing asset if it had not
entered into such agreements.
NOTE 3. PREFERRED SHARE OFFERING
On August 26, 1999, the Trust offered and currently has outstanding 4,800 APS
(2,400 shares each of Series T and W). The APS 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.
APS commissions of $1,500,000 from the offering and costs incurred by the
Trust in connection with the offering of the APS totaling $282,640 and
$106,148 for fiscal years 2000 and 1999, respectively, were recorded as a
reduction of capital paid in excess of par applicable to common shares.
Under the Act, the Trust is required to maintain asset coverage of at least
200% with respect to the APS as of the last business day of each month in
which any APS are outstanding. Additionally, the Trust is required to meet
more stringent asset coverage requirements under the terms of the APS and in
accordance with the guidelines prescribed by the rating agencies. Should these
requirements not be met, or should dividends accrued on the APS 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 APS. At November 30,
2001 there were no such restrictions on the Trust.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY
During the year ended November 30, 2001, purchases and sales of investments,
other than short-term obligations, were $49,947,879 and $64,642,329,
respectively.
Unrealized appreciation (depreciation) at November 30, 2001, based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $ 15,539,279
Gross unrealized depreciation (22,755,172)
------------
Net unrealized depreciation $ (7,215,893)
============
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 trust 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 may 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.
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data throughout each period is as follows
(common shares unless otherwise noted):
PERIOD
ENDED
YEAR ENDED NOVEMBER 30, NOVEMBER 30, YEAR ENDED DECEMBER 31,
------------------------------- ------------------------- -----------------------------
2001 2000 1999(a) 1998 1997
------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 6.92 $ 7.49 $ 8.49 $ 8.56 $ 8.34
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.61(b) 0.62(c) 0.46 0.52 0.55
Net realized and unrealized gain
(loss) on investments and
futures contracts (0.04) (0.54) (0.92) (0.07) 0.22
------- ------- ------- ------- -------
Total from Investment
Operations 0.57 0.08 (0.46) 0.45 0.77
------- ------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income to
common shareholders (0.44) (0.48) (0.45) (0.52) (0.55)
From net investment income to
preferred shareholders (0.12) (0.16) (0.04) -- --
------- ------- ------- ------- -------
Total Distributions Declared to
Shareholders (0.56) (0.64) (0.49) (0.52) (0.55)
------- ------- ------- ------- -------
LESS CAPITAL TRANSACTIONS
Commissions and offering costs --
preferred shares -- (0.01) (0.05) -- --
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 6.93 $ 6.92 $ 7.49 $ 8.49 $ 8.56
----------- ----------- ----------- ----------- -----------
Market price per share -- common
shares $ 6.38 $ 5.75 $ 6.13 $ 8.31 $ 8.63
------- ------- ------- ------- -------
Total return -- based on market
value -- common shares (d) 18.56% 1.05% (21.72)%(e) 2.47% 11.60%
----------- ----------- ----------- ----------- -----------
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 1.59% 1.60% 1.13%(i) 0.93% 0.96%
Net investment income (f)(g) 8.67% 8.63% 6.18%(i) 6.02% 6.54%
Net investment income (f)(g) 7.00%(h) 6.37%(h) 5.67%(h)(i) 6.02% 6.54%
Portfolio turnover rate 15% 10% 16%(e) 29% 17%
Net assets, end of period (000's)
-- common shares $215,348 $214,975 $232,540 $263,705 $265,190
(a) The Trust changed its fiscal year end from December 31 to November 30.
(b) Per share data was calculated using average shares outstanding during the period.
(c) The per share net investment income amount does not reflect the period's reclassification of differences between book and tax
basis net investment income.
(d) Total return at market value assuming all distributions reinvested at prices obtained by the dividend reinvestment plan.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had no impact.
(g) Ratios reflect average net assets available to common shares only.
(h) Ratios reflect reduction for dividend payments to preferred shareholders.
(i) Annualized.
-----------------------------------------------------------------------------------------------------------------------------
ASSET COVERAGE REQUIREMENTS
TOTAL AMOUNT ASSET COVERAGE INVOLUNTARY LIQUIDATING AVERAGE MARKET
NOVEMBER 30, OUTSTANDING PER SHARE PREFERENCE PER SHARE VALUE PER SHARE
----------------------- ------------------------ ------------------------ -------------------------- --------------------
2001 $120,000,000 $69,864 $25,004 $25,000
2000 120,000,000 69,786 25,009 25,000
1999* 120,000,000 73,466 25,021 25,000
*On August 26, 1999, the Trust began offering Auction Preferred Shares.
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data throughout each period is as follows
(common shares unless otherwise noted):
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 8.55 $ 7.96 $ 8.67 $ 8.78 $ 8.91
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.56 0.60 0.62 0.67 0.69
Net realized and unrealized gain
(loss) on investments and
futures contracts (0.19) 0.58 (0.72) (0.11) (0.14)
------- ------- ------- ------- -------
Total from Investment
Operations 0.37 1.18 (0.10) 0.56 0.55
------- ------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income --
common shares (0.58) (0.59) (0.61) (0.67) (0.68)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 8.34 $ 8.55 $ 7.96 $ 8.67 $ 8.78
------- ------- ------- ------- -------
Market price per share -- common
shares $ 8.25 $ 7.38 $ 6.88 $ 8.25 $ 8.25
------- ------- ------- ------- -------
Total return -- based on market
value -- common shares (a) 20.09% 15.65% (9.83)% 7.96% 3.51%
------- ------- ------- ------- -------
RATIOS TO AVERAGE NET ASSETS
Expenses (b) 1.00% 1.06% 1.03% 0.97% 0.96%
Net investment income (b) 6.74% 7.15% 7.44% 7.58% 7.86%
Portfolio turnover rate 15% 23% 20% 29% 15%
Net assets, end of period (000's)
-- common shares $257,768 $264,467 $245,967 $268,130 $269,848
(a) Total return at market value assuming all distributions reinvested at prices obtained by the dividend reinvestment plan.
(b) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had no impact.
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
TO THE TRUSTEES AND SHAREHOLDERS 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
and of 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, 2001, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with accounting principles generally accepted
in the United States of America. 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 auditing standards
generally accepted in the United States of America 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, 2001 by correspondence
with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 10, 2002
--------------------------------------------------------------------------------
UNAUDITED INFORMATION
--------------------------------------------------------------------------------
RESULTS OF THE ANNUAL MEETING OF SHAREHOLDERS
On September 26, 2001, the Annual Meeting of Shareholders of the Colonial High
Income Municipal Trust was held to conduct a vote for or against the approval
of the following Items listed on the Trust's Proxy Statement for said Meeting.
On July 16, 2001, the record date for the Meeting, the Trust had 31,078,028
common shares outstanding. The votes cast were as follows:
PROPOSAL 1:
% OF SHARES TO % OF SHARES TO
TO APPROVE A NEW INVESTMENT TOTAL OUTSTANDING TOTAL SHARES
ADVISORY AGREEMENT: SHARES SHARES VOTED
--------------------------------------------------------------------------------
For 25,868,031.596 83.24% 95.48%
Against 653,134.220 2.10% 2.41%
Abstain 572,308.958 1.84% 2.11%
PROPOSAL 2:
ELECTION OF TRUSTEES: FOR WITHHELD
--------------------------------------------------------------------------------
Douglas A. Hacker 26,530,407.846 563,066.928
Janet Langford Kelly 26,517,382.846 576,091.928
Richard W. Lowry 26,532,662.846 560,811.928
William E. Mayer 26,531,397.846 562,076.928
Charles R. Nelson 26,534,231.846 559,242.928
John J. Neuhauser 26,529,732.846 563,741.928
Joseph R. Palombo 26,526,315.846 567,158.928
Thomas C. Theobald 26,533,195.846 560,278.928
Anne-Lee Verville 26,539,159.846 554,314.928
On July 16, 2001, the record date for the Meeting, the Trust had 4,800
preferred shares outstanding. The votes cast were as follows:
PROPOSAL 1:
% OF SHARES TO % OF SHARES TO
TO APPROVE A NEW INVESTMENT TOTAL OUTSTANDING TOTAL SHARES
ADVISORY AGREEMENT: SHARES SHARES VOTED
--------------------------------------------------------------------------------
For 4,750 98.96% 99.21%
Against 4 0.08% 0.08%
Abstain 34 0.71% 0.71%
PROPOSAL 2:
ELECTION OF TRUSTEES: FOR WITHHELD
--------------------------------------------------------------------------------
Douglas A. Hacker 4,763 25
Janet Langford Kelly 4,763 25
Richard W. Lowry 4,763 25
Salvatore Macera 4,763 25
William E. Mayer 4,763 25
Charles R. Nelson 4,763 25
John J. Neuhauser 4,763 25
Joseph R. Palombo 4,763 25
Thomas E. Stitzel 4,763 25
Thomas C. Theobald 4,763 25
Anne-Lee Verville 4,763 25
--------------------------------------------------------------------------------
FEDERAL TAX INFORMATION
99.71% of the distributions from net investment income will be treated as
exempt income for federal income tax purposes.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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 monthly and capital
gains annually. Under the trust's Dividend Reinvestment Plan (the "plan") all
distributions will be 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 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 are incurred on
shares issued directly by the trust. Participants will bear a pro-rata share
of brokerage charges incurred on open market purchases.
A plan participant may terminate his or her participation by written notice to
the plan 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.
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TRANSFER AGENT
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial High Income Municipal Trust is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
800-345-6611
The Colonial High Income Municipal Trust mails one shareholder report to each
shareholder address. If you would like more than one report, please call
800-426-3750 and additional reports will be sent to you.
This report has been prepared for shareholders of Colonial High Income Municipal
Trust.
TRUSTEES
DOUGLAS A. HACKER
President of UAL Loyalty Services and Executive Vice President of United
Airlines (formerly Executive Vice President, Senior Vice President and Chief
Financial Officer of UAL, Inc.)
JANET LANGFORD KELLY
Executive Vice President-Corporate Development and Administration, General
Counsel and Secretary, Kellogg Company (formerly Senior Vice President,
Secretary and General Counsel, Sara Lee Corporation)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President and Director of Itek Corp.)
WILLIAM E. MAYER
Managing Partner, Park Avenue Equity Partners (formerly Founding Partner,
Development Capital LLC; Dean and Professor, College of Business and Management,
University of Maryland)
CHARLES R. NELSON
Van Voorhis Professor, Department of Economics, University of Washington;
consultant on econometric and statistical matters (formerly Department Chairman
and Director of the Institute for Economic Research)
JOHN J. NEUHAUSER
Academic Vice President and Dean of Faculties, Boston College (formerly Dean,
Boston College School of Management)
JOSEPH R. PALOMBO
Chief Operating Officer, Fleet Asset Management; Executive Vice President and
Director of Colonial Management Associates, Inc. and Stein Roe & Farnham
Incorporated; Executive Vice President and Chief Administrative Officer of
Liberty Funds Group LLC (formerly Chief Operations Officer, Mutual Funds,
Liberty Financial Companies, Inc.; Vice President of Liberty Mutual Funds, Stein
Roe Mutual Funds and All-Star Funds, and Chief Operating Officer, Putnam Mutual
Funds)
THOMAS E. STITZEL
Business Consultant and Chartered Financial Analyst (formerly Professor of
Finance, College of Business, Boise State University)
THOMAS C. THEOBALD
Managing Director, William Blair Capital Partners (formerly Chief Executive
Officer and Chairman of the Board of Directors, Continental Bank Corporation)
ANNE-LEE VERVILLE
Chairman of the Board of Directors, Enesco Group, Inc. and author and speaker on
educational systems needs (formerly General Manager, Global Education Industry,
and President, Applications Solutions Division, IBM Corporation)
--------------------------------------------------
COLONIAL HIGH INCOME MUNICIPAL TRUST ANNUAL REPORT
--------------------------------------------------
120-02/452H-0901 (1/02) 01/2473