<PAGE>
[LOGO]
__________________
COLONIAL
UTILITIES FUND
__________________
SEMINANNUAL REPORT
MAY 31, 1995
[GRAPHIC]
SECURE THE POWER
OF UTILITIES:
FOR INCOME, FOR GROWTH
<PAGE>
COLONIAL UTILITIES FUND HIGHLIGHTS
December 1, 1994 -- May 31, 1995
INVESTMENT OBJECTIVE: Colonial Utilities Fund seeks primarily current income
and, secondarily, long-term growth.
STRATEGY: The Fund pursues its objective by investing in domestic common and
preferred stocks issued by utility companies.
THE FUND IS DESIGNED TO OFFER:
+ Monthly income
+ Long-term growth potential
+ Diversification
PORTFOLIO MANAGER COMMENTARY: "Utility stocks improved during the period,
with significant growth occurring in January and May. The strength of the bond
market rally -- reflecting expectations that the Federal Reserve Board will ease
monetary policy over the second half of 1995 -- as well as recent
competition-related developments in California that were better than originally
expected, both had a positive influence on the market."
<TABLE>
COLONIAL UTILITIES FUND PERFORMANCE
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
Inception date 3/4/92* 5/5/92
Distributions declared per share $0.334 $0.289
SEC yield at 5/31/95 4.75% 4.24%
Total returns, assuming
reinvestment of all distributions
and no sales charge or CDSC
+ 6 month 13.69% 13.28%
+ 12 month 13.81% 12.97%
Net asset value per share at 5/31/95 $12.97 $12.97
<FN>
* Date Fund adopted current investment policies.
</TABLE>
<TABLE>
TOP FIVE PORTFOLIO HOLDINGS SECTOR BREAKDOWN**
<S> <C> <C> <C>
1. NYNEX Corp. Electrics 63%
2. FPL Group, Inc. Telephones 27%
3. Southern Co. Natural Gas 10%
4. Detroit Edison Co.
5. GTE Corp.
<FN>
** Percentage of common stock holdings.
</TABLE>
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[PHOTO]
Investors benefited from favorable developments in the utility stock market
during the six months ended May 31, 1995. Despite some swings in the
performance of individual sectors on a month-to-month basis, electric, natural
gas, and telephone company stocks all contributed to the market's positive
performance.
Several factors influenced the performance of utility stocks during the
semiannual period. For instance, although unseasonably warm weather during the
winter months had a negative impact on the usage and price of natural gas,
there was improvement in natural gas prices later in the period. In addition,
telephone stocks reacted to proposed legislation that would increase
competition in local and long distance markets. And while competition concerns
continued to cause some uncertainty for electric utilities, these concerns
moderated late in the period. The result was improving prices for electric
utility stocks. Finally, declining interest rates provided a boost to the
utilities market as a whole. Because of their relatively high yields, utility
stocks generally benefit more from declining interest rates than other equity
investments.
Lead Portfolio Manager John Lennon believes the economy will slow over the
course of 1995. Historically, economic weakness has brought an easing of
inflationary pressures and lower interest rates, developments that generally
have a favorable impact on utility stock prices. In the following report, John
comments on the Fund's management strategy and on key issues affecting the
three sectors of the utility market in which the Fund invests.
Respectfully,
/s/ John A. McNeice, Jr.
John A. McNeice, Jr.
President
July 15, 1995
3
<PAGE>
PORTFOLIO MANAGEMENT REPORT
JOHN LENNON is a Vice President of Colonial Management Associates, Inc. and
Lead Portfolio Manager of the Colonial Utilities Fund. Mr. Lennon has more
than 30 years of experience as an investment professional. He is a Chartered
Financial Analyst, and is a member of the Boston Security Analysts Society and
the Public Utility Analysts Society of Boston. John received an A.B. from
Harvard College in 1958 and an M.B.A. from Harvard Business School in 1964.
DECLINING INTEREST RATES BENEFIT FUND PERFORMANCE: As was mentioned in the
President's letter, utility stock prices have historically performed well in a
declining interest rate environment, and the most recent semiannual period was
no exception. Utility stock prices began to improve in January, as interest
rates, and especially long-term interest rates, began moving lower.
DIVERSIFIED PORTFOLIO REDUCES RISK: Although the relatively high yields paid
by electric utility stocks may enhance the flow of income to shareholders,
these stocks are also somewhat volatile because of their sensitivity to
interest rates. To reduce the possible impact of fluctuating interest rates,
we have gradually increased the diversity of the portfolio. We've reduced
exposure to electric stocks, which two years ago made up more than 90% of
common stock holdings, and have placed greater emphasis on telephone and
natural gas stocks. We believe this shift in emphasis may improve growth
prospects over the long term.
CONCERNS ABOUT DEREGULATION OF ELECTRICS EASE: In April 1994 California's
Public Utility Commission unveiled its plan to introduce competition to the
state's electric utility industry on a step by step basis starting in 1996. As
we stated in the Fund's two most recent reports, we believe that while
competition will happen, the changes will be evolutionary, not revolutionary.
A little over a year later, it appears that events bear out our analysis.
Although many of the states with publicly owned electric utilities, including
California, are reviewing strategies for introducing competition, for the time
being this activity has slowed and the market's competition-related concerns
have eased.
NEW SERVICES & TECHNOLOGIES MAY BENEFIT TELEPHONE STOCKS: From the beginning
to the end of the period, investments in telephone stocks were increased from
21% to 27%. Because these stocks tend to be the least interest rate sensitive
of the three sectors represented in the portfolio, they may help maintain
stability over the long term. Also, we believe this sector is poised to
benefit from new services and technologies that may be introduced in coming
years. Over the short term, legislation pending in Congress to increase
competition in local and long distance markets may be a source of concern. The
companies that will benefit from this legislation will become clearer in the
second half of 1995.
LONG-TERM PROSPECTS MAY BE GOOD FOR NATURAL GAS: Prices for natural gas stocks
have recovered much of the ground lost after the lows reached during the
unusually warm winter. A return to more normal weather patterns in the coming
winter would further strengthen prices of natural gas stocks. Over the long
term, we believe natural gas stocks hold promise for investors. Natural gas
will likely become America's fuel of choice. As demand increases, so too
should revenue and earnings.
4
<PAGE>
LOOKING AHEAD: We believe that inflation will remain under control and interest
rates will continue to move lower through the end of 1995. Such an environment
should prove favorable for utility stock prices. Utility stocks should remain
solid performers and provide attractive returns over the long term.
COLONIAL UTILITIES FUND INVESTMENT PERFORMANCE
Change in Value of $10,000 from 5/85 -- 5/95
Based on Maximum Offering Price for Class A Shares
[MOUNTAIN CHART]
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS
- -------------------------------------------------------------------------------
<CAPTION>
CLASS A SHARES CLASS B SHARES
Objective Change 3/4/92 Inception 5/5/92
NAV MOP NAV w/CDSC
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 13.81% 8.40% 12.97% 7.97%
- -------------------------------------------------------------------------------
5 YEARS 10.58% 9.51% -- --
- -------------------------------------------------------------------------------
10 YEARS 8.66% 8.13% -- --
- -------------------------------------------------------------------------------
SINCE INCEPTION/
OBJECTIVE CHANGE 7.67% 6.07% 6.37% 5.51%
- -------------------------------------------------------------------------------
<FN>
Past performance cannot predict future results. Return and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. Net asset value (NAV) return does not
include sales charges or contingent deferred sales charges (CDSC). Maximum
offering price (MOP) return includes the maximum sales charge of 4.75%. The
CDSC return reflects the maximum charge of 5.00% for one year and 3.00% since
inception. Performance for different share classes will vary based on
differences in sales charges and fees associated with each class.
</TABLE>
5
<PAGE>
<TABLE>
INVESTMENT PORTFOLIO
MAY 31, 1995 (UNAUDITED, IN THOUSANDS)
<CAPTION>
COMMON STOCKS -83.9% SHARES VALUE
------------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION, COMMUNICATION, ELECTRIC
GAS & SANITARY SERVICES - 83.9%
COMMUNICATIONS - 22.3%
AT&T Corp. 225 $ 11,419
Ameritech Corp. 700 31,063
Bell Atlantic Corp. 550 30,663
BellSouth Corp. 500 30,687
Frontier Corp. 300 6,825
GTE Corp. 1,150 38,381
MCI Communications Corp. 400 8,100
NYNEX Corp. 1,050 43,837
Southwestern Bell Corp. 725 32,625
Sprint Corp. 125 4,187
US West, Inc. 650 26,812
--------
264,599
--------
ELECTRIC SERVICES - 52.9%
American Electric Power Co., Inc. 450 15,412
Baltimore Gas & Electric Co. 200 5,200
Boston Edison Co. 775 20,053
Cincinnati Gas & Electric Co. 1,140 30,352
Consolidated Edison Co. of New York 125 3,734
DPL, Inc. 1,500 33,000
Detroit Edison Co. 1,300 39,162
Duke Power Co. 75 3,131
Entergy Corp. 650 16,087
FPL Group, Inc. 1,100 43,175
Florida Progress Corp. 275 8,766
General Public Utilities Corp. 1,200 36,000
Hawaiian Electric Industries, Inc. 550 19,662
Houston Industries, Inc. 125 5,391
IES Industries, Inc. 650 14,381
KU Energy Corp. 225 6,216
Kansas City Power & Light Co. 750 17,719
Long Island Lighting Co. 700 10,938
Montana Power Co. 300 6,863
New York State Electric & Gas Corp. 400 9,300
Northeast Utilities 600 14,325
Ohio Edison Co. 900 19,688
PacifiCorp 1,650 32,588
Pacific Gas & Electric Co. 200 5,800
Peco Energy Co. 350 9,844
Pinnacle West Capital Corp. 150 3,450
6
<PAGE>
</TABLE>
<TABLE>
Investment Portfolio/May 31, 1995
------------------------------------------------------------------------------------
<S> <C> <C>
Portland General Corp. 600 $ 13,650
Public Service Co. of Colorado 575 18,831
Public Service Enterprise Group, Inc. 400 11,900
Puget Sound Power & Light Co. 200 4,575
Rochester Gas & Electric Corp. 150 3,206
SCE Corp. 325 5,647
Scana Corp. 400 8,900
Sierra Pacific Resources 250 5,219
Southern Co. 1,800 39,825
Texas Utilities Co. 950 34,319
Union Electric Co. 250 9,469
UtiliCorp United, Inc. 600 17,100
Western Resources, Inc. 750 23,625
--------
626,503
--------
GAS SERVICES - 8.7%
Energen Corp. 193 4,007
MCN Corp. 875 16,406
MDU Resources Group, Inc. 149 4,191
Pacific Enterprises 450 11,363
Panhandle Eastern Corp. 600 15,075
People's Energy Corp. 400 10,700
UGI Corp. 650 13,650
Williams Companies, Inc. 800 27,200
--------
102,592
--------
TOTAL COMMON STOCKS (cost of $1,025,090) 993,694
--------
PREFERRED STOCKS -14.4%
------------------------------------------------------------------------------------
MANUFACTURING - 0.2%
PETROLEUM REFINING - 0.2%
USX Corp. A.R.P. 40 1,985
--------
------------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC
GAS & SANITARY SERVICES -14.2%
ELECTRIC SERVICES - 12.8%
Appalachian Power Co., 7.40% 13 1,217
Arizona Public Service Co., $1.8125, Series W 180 4,028
Arkansas Power & Light Co:
7.80% 10 925
7.88% 9 831
Baltimore Gas & Electric Co.,
6.75% Sinking Fund 29 2,745
Boston EdisonCo., 7.75% 100 2,350
Carolina Power & Light Co., 7.72% 30 3,075
Central Maine Power Co., 7.875% 16 1,451
Central Power & Light Co., 7.12% 16 1,562
Cincinnati Gas & Electric Co., 7.44% 65 4,615
7
<PAGE>
</TABLE>
<TABLE>
Investment Portfolio/May 31, 1995
------------------------------------------------------------------------------------
<CAPTION>
PREFERRED STOCKS - CONT. SHARES VALUE
------------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION, COMMUNICATION, ELECTRIC
GAS & SANITARY SERVICES - CONT.
ELECTRIC SERVICES - CONT.
Cleveland Electric Illuminating Co.,A.R.P.,Series L 25 $2,484
Commonwealth Edison Co., 7.24% 52 4,410
Detroit Edison Co.:
7.36% 45 4,185
7.45% 31 2,974
7.68% 30 2,885
7.75% 100 2,500
7.74% 100 2,525
Duke Power Co., 7.04% 20 2,017
Duquesne Light Co., $7.20 21 1,890
Florida Power & Light Co:
7.40%, Series G 24 2,328
7.40% 4 402
7.76% 110 2,585
Georgia Power Co.:
A.R.P. 17 1,716
7.80% 11 1,147
Gulf States Utilities Co.:
$8.80, Series A 17 1,645
7.18% 20 1,977
7.56% 18 1,549
8.52% 25 978
Illinois Power Co.:
A.R.P., Series A 30 1,320
A.R.P., Series B 8 762
7.56% 30 1,395
7.75% 50 2,416
Jersey Central Power & Light Co., 7.88% 15 1,511
Louisiana Power & Light Co.,8.00%, Series 92 90 2,126
Montana Power Co., $6.875 161 3,932
Niagara Mohawk Power Corp.:
A.R.P., Series B 30 2,632
7.72%, Series I 26 2,159
Northern Indiana Public ServiceCo., 7.44% 9 855
Ohio Edison Co:
7.24% 13 1,085
7.36% 21 1,797
7.75% 240 5,880
Ohio Power Co., 7.60% 30 2,790
PSI Energy, Inc.:
6.875% 36 3,384
7.44% 235 5,846
Peco Energy Co., 7.48% 30 2,797
Pennsylvania Power & Light Co., 6.75% 51 4,488
Pennsylvania Power Co., 7.75% 15 1,327
8
<PAGE>
</TABLE>
<TABLE>
Investment Portfolio/May 31, 1995
------------------------------------------------------------------------------------
<S> <C> <C>
Portland General Electric Co., 7.95% 18 $ 1,816
Public Service Electric & Gas Co.:
7.52% 32 3,161
7.70% 24 2,412
Southern California Edison Co.:
7.36% 125 3,084
7.58% 45 4,551
Tampa Electric Co., 7.44%, Series F 11 1,077
Texas Utilities Co.:
7.50% 480 11,760
7.22% 200 4,800
7.98% 40 790
Toledo Edison Co., A.R.P., Series A 35 3,657
Union Electric Co., $7.44 18 1,728
Virginia Electric & Power Co., $7.45 19 1,908
----------
152,242
----------
GAS SERVICES - 1.0%
Enron Corp., 8.00% 400 9,700
Pacific Enterprises, $4.50 4 238
Williams Co , Inc., $3.50 37 2,192
----------
12,130
----------
PIPELINES - 0.4%
Enserch Corp., A.R.P. 48 4,365
----------
TOTAL PREFERRED STOCKS (cost of $179,531) 170,722
----------
TOTAL INVESTMENTS - 98.3% (cost of $1,204,621)(a) 1,164,416
----------
SHORT-TERM OBLIGATIONS - 1.6% PAR
------------------------------------------------------------------------------------
Repurchase agreement with Bankers Trust
Securities Corp., dated 05/31/95, due 06/01/95
at 6.150% collateralized by U.S. Treasury
notes with various maturities to 1999, market
value $20,838 (repurchase proceeds $18,299) $18,296 18,296
----------
OTHER ASSETS & LIABILITIES, NET - 0.1% 1,327
------------------------------------------------------------------------------------
NET ASSETS - 100.0% $1,184,039
----------
<FN>
NOTES TO INVESTMENT PORTFOLIO:
------------------------------------------------------------------------------------
(a) Cost for federal income tax purposes is the same.
Acronym Name
-------------- ----------
A.R.P. Adjustable Rate Preferred
</TABLE>
See notes to financial statements
9
<PAGE>
<TABLE>
STATEMENT OF ASSETS & LIABILITIES
MAY 31, 1995 (UNAUDITED)
(In thousands except for per share amounts and footnote)
<S> <C> <C>
ASSETS
Investments at value (cost $1,204,621) $1,164,416
Short-term obligations 18,296
----------
1,182,712
Receivable for:
Dividends $6,813
Investments sold 1,500
Fund shares sold 925
Interest 3
Other 47 9,288
------ ----------
Total Assets 1,192,000
LIABILITIES
Payable for:
Distributions 4,347
Fund shares repurchased 3,464
Accrued:
Deferred Trustees fees 18
Other 132
------
Total Liabilities 7,961
----------
NET ASSETS $1,184,039
==========
Net asset value & redemption price per share -
Class A ($391,290/30,165) $12.97
==========
Maximum offering price per share - Class A
($12.97/0.9525) $13.62*
==========
Net asset value & offering price per share -
Class B ($792,749/61,116) $12.97
==========
COMPOSITION OF NET ASSETS
Capital paid in $1,319,400
Undistributed net investment income 1,047
Accumulated net realized loss (96,203)
Net unrealized depreciation during the period (40,205)
----------
$1,184,039
==========
<FN>
*On sales of $50,000 or more the offering price is reduced.
</TABLE>
See notes to financial statements.
10
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<S> <C> <C>
(in thousands)
INVESTMENT INCOME
Dividends $ 37,189
Interest 521
--------
37,710
EXPENSES
Management fee $ 3,680
Service fee 1,424
Distribution fee - Class B 2,861
Transfer agent 1,448
Bookkeeping fee 198
Trustees fee 29
Custodian fee 27
Audit fee 25
Legal fee 5
Registration fee 31
Reports to shareholders 11
Other 128 9,867
-------- --------
Net Investment Income 27,843
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized loss (15,627)
Net unrealized appreciation during
the period 132,161
--------
Net Gain 116,534
--------
Net Increase in Net Assets From Operations $144,377
========
</TABLE>
See notes to financial statements.
11
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
(Unaudited)
Six months ended Year ended
(in thousands) May 31 November 30
---------- ----------
INCREASE (DECREASE) IN NET ASSETS 1995 1994
<S> <C> <C>
Operations:
Net investment income $ 27,843 $ 64,059
Net realized loss (15,627) (38,551)
Net unrealized appreciation (depreciation) 132,161 (164,651)
---------- ----------
Net Increase (Decrease) from Operations 144,377 (139,143)
Distributions:
From net investment income - Class A (10,404) (23,148)
From net investment income - Class B (18,021) (39,378)
---------- ----------
115,952 (201,669)
---------- ----------
Fund Share Transactions:
Receipts for shares sold - Class A 27,026 63,527
Value of distributions reinvested - Class A 7,806 17,112
Cost of shares repurchased - Class A (54,940) (143,099)
---------- ----------
(20,108) (62,460)
---------- ----------
Receipts for shares sold - Class B 38,121 143,384
Value of distributions reinvested - Class B 14,289 31,354
Cost of shares repurchased - Class B (80,777) (267,909)
---------- ----------
(28,367) (93,171)
---------- ----------
Net Decrease from Fund Share Transactions (48,475) (155,631)
---------- ----------
Total Increase (Decrease) 67,477 (357,300)
NET ASSETS
Beginning of period 1,116,562 1,473,862
---------- ----------
End of period (including undistributed net
investment income of $1,047 and $1,754, respectively) $1,184,039 $1,116,562
========== ==========
NUMBER OF FUND SHARES
Sold - Class A 2,204 5,014
Issued for distributions reinvested - Class A 643 1,373
Repurchased - Class A (4,517) (11,531)
---------- ----------
(1,670) (5,144)
---------- ----------
Sold - Class B 3,118 11,245
Issued for distributions reinvested - Class B 1,177 2,517
Repurchased - Class B (6,625) (21,694)
---------- ----------
(2,330) (7,932)
---------- ----------
Net Decrease in Shares Outstanding (4,000) (13,076)
========== ==========
</TABLE>
See notes to financial statements.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
In the opinion of management of Colonial Utilities Fund, a series of Colonial
Trust IV, the accompanying financial statements contain all normal and
recurring adjustments necessary for the fair presentation of the financial
position of the Fund at May 31, 1995, and the results of its operations, the
changes in its net assets and the financial high- lights for the six months then
ended.
NOTE 2. ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
ORGANIZATION: The Fund is a Massachusetts business trust, registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end,
management investment company. The Fund may issue an unlimited number of
shares. The Fund offers Class A shares sold with a front-end sales charge and
Class B shares which are subject to an annual distribution fee and a contingent
deferred sales charge. Class B shares will convert to Class A shares when they
have been outstanding approximately eight years. The following significant
accounting policies are consistently followed by the Fund in the preparation of
its financial statements and conform to generally accepted accounting
principles.
SECURITY VALUATION AND TRANSACTIONS: Equity securities 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.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at fair
value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are purchased
or sold.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS: All income,
expenses (other than the Class B distribution fee), realized and
unrealized gains(losses), are allocated to each class proportionately on a daily
basis for purposes of determining the net asset value of each class.
Class B per-share data and ratios are calculated by adjusting the expense and
net invest- ment income per-share data and ratios for the Fund for the entire
period by the annualized distribution fee applicable to Class B shares only.
FEDERAL INCOME TAXES: Consistent with the Fund's policy to qualify as a
regulated investment company and to distribute all of its taxable income,
no federal income tax has been accrued.
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.
13
<PAGE>
Notes to Financial Statements/May 31, 1995
- --------------------------------------------------------------------------------
NOTE 2. ACCOUNTING POLICIES - CONT.
OTHER: Corporate actions are recorded on the ex-date. Interest income is
recorded on the accrual basis.
The Fund'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 Fund. The Fund may experience costs and
delays in liquidating the collateral if the issuer defaults or enters
bankruptcy.
<TABLE>
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
- --------------------------------------------------------------------------------
MANAGEMENT FEE: Colonial Management Associates, Inc. (the Adviser) is the
investment adviser of the Fund and furnishes accounting and other services and
office facilities for a monthly fee based on the Fund's average net assets as
follows:
<CAPTION>
Average Net Assets Annual Fee Rate
------------------ ---------------
<S> <C>
First $1 billion.............................. 0.65%
Over $1 billion............................... 0.60%
</TABLE>
<TABLE>
BOOKKEEPING FEE: The Adviser provides bookkeeping and pricing services for
$27,000 per year plus a percentage of the Fund's average net assets as follows:
<CAPTION>
Average Net Assets Annual Fee Rate
------------------ ---------------
<S> <C>
First $50 million............................. No charge
Next $950 million............................. 0.035%
Next $1 billion............................... 0.025%
Next $1 billion............................... 0.015%
Over $3 billion............................... 0.001%
</TABLE>
TRANSFER AGENT: Colonial Investors Service Center, Inc., (the Transfer Agent),
an affiliate of the Adviser, provides shareholder services and receives a
monthly fee equal to 0.20% annually of the Fund's average net assets, and
receives a reimburse- ment for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: The Adviser, through
Colonial Investment Services, Inc., (the Distributor), is the Fund's principal
underwriter. For the six months ended May 31, 1995, the Distributor retained
net underwriting discounts of $46,027 on sales of the Fund's Class A shares
and received contingent deferred sales charges (CDSC) of $1,714,023 on Class B
share redemptions.
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a
service fee equal to 0.25% annually of the Fund's net assets as of the 20th of
each month. The plan also requires the payment of a distribution fee to the
Distributor equal to 0.75% of the average net assets attributable to Class B
shares.
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers
who sold such shares.
OTHER: The Fund pays no compensation to its officers, all of whom are employees
of the Adviser.
14
<PAGE>
Notes to Financial Statements/May 31, 1995
- --------------------------------------------------------------------------------
The Fund's Trustees may participate in a deferred compensation plan which may
be terminated at any time. Obligations of the plan will be paid solely out of
the the Fund's assets.
NOTE 4. PORTFOLIO INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT ACTIVITY: During the six months ended May 31, 1995, purchases and
sales of investments, other than short-term obligations, were $60,855,024 and
$122,609,237, respectively.
<TABLE>
Unrealized appreciation (depreciation) at May 31, 1995, based on cost of
investments for both financial statement and federal income tax purposes was:
<S> <C>
Gross unrealized appreciation $ 46,570,715
Gross unrealized depreciation (86,775,913)
--------------
Net unrealized depreciation $ (40,205,198)
==============
</TABLE>
<TABLE>
At November 30, 1994, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<CAPTION>
Year of Capital loss
expiration carryforward
---------- ------------
<S> <C>
1996.................................... $ 3,427,000
1997.................................... 32,911,000
1998.................................... 9,759,000
1999.................................... 3,592,000
2000.................................... 6,425,000
2001.................................... 6,391,000
2002.................................... 38,551,000
------------
$101,056,000
============
</TABLE>
The loss carryforwards expiring in 1996, and $11,630,000 and $5,427,000 of the
loss carryforwards expiring in 1997 and 1998, respectively, were acquired in the
merger with Colonial Corporate Cash Trust II.
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: The Fund concentrates its investments in utility securities and certain
other industries, subjecting it to greater risk than a fund that is more
diversified.
NOTE 5. RESULTS OF SPECIAL SHAREHOLDERS MEETING
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On February 15, 1995, a special meeting of shareholders was held and a new
Management Agreement between the Trust and Colonial Management Associates, Inc.
was approved that became effective upon the completion of the merger of The
Colonial Group, Inc. and Apple Merger Corporation, a subsidiary of Liberty
Financial Companies, Inc. on March 24, 1995. Out of the shares of beneficial
interest outstanding on December 9, 1994, 64,919,130 voted for the new
Management Agreement, 1,022,377 voted against and 3,123,337 abstained. Of the
shares of beneficial interest outstanding that abstained, 293,147 represented
broker non-votes.
15
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS(a)
Selected data for a share of each class outstanding throughout each period
are as follows:
<CAPTION>
(Unaudited)
Six months ended
May 31 Year ended November 30
------------------------- --------------------------
1995 1994
Class A Class B Class A Class B
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $11.720 $11.720 $13.600 $13.600
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.328 0.283 0.681 0.587
Net realized and
unrealized gain (loss) 1.256 1.256 (1.896) (1.896)
------- ------- ------- -------
Total from Investment
Operations 1.584 1.539 (1.215) (1.309)
------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.334) (0.289) (0.665) (0.571)
From capital
paid in --- --- --- ---
------- ------- ------- -------
Total Distributions
Declared to
Shareholders (0.334) (0.289) (0.665) (0.571)
Net asset value -
End of period $12.970 $12.970 $11.720 $11.720
======= ======= ======= =======
Total return (d) 13.69% (e) 13.28% (e) (9.04%) (9.73%)
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses 1.23%(f) 1.98%(f) 1.23% 1.98%
Net investment income 5.37%(f) 4.62%(f) 5.49% 4.74%
Portfolio turnover 11%(f) 11%(f) 16% 16%
Net assets at end
of period (in millions) $ 391 $ 793 $ 373 $ 744
<FN>
(a) All per share amounts have been restated to reflect the 4-for-1 stock split effective
February 10, 1992.
(b) Class B shares were initially offered on May 5, 1992. Per-share amounts reflect
activity from that date.
(c) The return of capital is for book purposes only and is a result of book-tax differences
from the merger of Colonial Utilities Fund (formerly Colonial Corporate Cash I)
and Colonial Corporate Trust II in a prior year. The 1992 amount represents a
reclassification for book purposes only relating to that merger.
(d) Total return at net asset value assuming all distributions reinvested and no initial
sales charge or CDSC.
(e) Not annualized.
(f) Annualized.
</TABLE>
16
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS(a) - CONTINUED
<CAPTION>
Year ended November 30
--------------------------------------------------------------------------------------
1993 1992 1991 1990
Class A Class B Class A Class B(b) Class A Class A
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$12.960 $12.960 $11.440 $12.310 $10.090 $11.600
------- ------- ------- ------- ------- -------
0.713 0.612 0.741 0.296 0.917 0.930
0.616 0.616 1.517 0.691 1.377 (1.472)
------- ------- ------- ------- ------- -------
1.329 1.228 2.258 0.987 2.294 (0.542)
------- ------- ------- ------- ------- -------
(0.689) (0.588) (0.727) (0.337) (0.941) (0.968)
--- --- (0.011)(c) --- (0.003)(c) ---
------- ------- ------- ------- ------- -------
(0.689) (0.588) (0.738) (0.337) (0.944) (0.968)
------- ------- ------- ------- ------- -------
$13.600 $13.600 $12.960 $12.960 $11.440 $10.090
======= ======= ======= ======= ======= =======
10.20% 9.42% 20.21% 6.06% (e) 23.56% (4.74%)
======= ======= ======= ======= ======= =======
1.19% 1.94% 1.16% 1.91%(f) 1.11% 1.17%
4.92% 4.17% 5.52% 4.77%(f) 8.50% 8.69%
6% 6% 35% 35% 1% 2%
$ 503 $ 971 $ 232 $ 156 $ 135 $ 162
</TABLE>
17
<PAGE>
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SHAREHOLDER SERVICES AND TRANSFER AGENT
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial Utilities Fund mails one shareholder report to each shareholder
address. If you would like more than one report, please call our Literature
Department at 1-800-248-2828 and additional reports will be sent to you.
- --------------------------------------------------------------------------------
<PAGE>
[logo] COLONIAL
MUTUAL FUNDS
Earning Your Trust for
More Than 60 Years
- --------------------------------------------------------------------------------
TRUSTEES
ROBERT J. BIRNBAUM
Trustee (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Trustee (formerly Chairman of the Board and Chief Executive
Officer, Shore Bank & Trust Company)
LORA S. COLLINS
Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Trustee (formerly Chairman of the Board, Bank of New England-Worcester)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
WILLIAM E. MAYER
Dean, College of Business and Management, University of Maryland (formerly Dean,
Simon Graduate School of Business, University of Rochester; Chairman and Chief
Executive Officer, C.S. First Boston Merchant Bank; and President and Chief
Executive Officer, The First Boston Corporation)
JOHN A. MCNEICE, JR.
Chairman of the Board and Director, The Colonial Group, Inc. and Colonial
Management Associates, Inc. (formerly Chief Executive Officer, The Colonial
Group, Inc. and Colonial Management Associates, Inc.)
JAMES L. MOODY, JR.
Chairman of the Board, Hannaford Bros. Co. (formerly Chief Executive Officer,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
GEORGE L. SHINN
Financial Consultant (formerly Chairman, Chief Executive Officer and Consultant,
The First Boston Corporation)
ROBERT L. SULLIVAN
Management Consultant (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
SINCLAIR WEEKS, JR.
Chairman of the Board, Reed & Barton Corporation
COLONIAL INVESTMENT SERVICES, INC. [COPYRIGHT]1995
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
UF-03/065B-0595
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