<PAGE>
LETTER FROM THE PRESIDENT
Dear Shareholder:
Following is Colonial Tax-Exempt Insured Fund's semiannual report for the six
months ended May 31, 1995. During this period, your Fund provided investors with
tax-exempt income and competitive total return.
FUND PERFORMANCE (12/1/94 - 5/31/95)(1)
<TABLE>
<CAPTION>
CLASS A CLASS B
11/20/85 5/5/92
-------- -------
<S> <C> <C>
Inception
- --------------------------------------------------------
Distributions declared
per share $0.215 $0.186
- --------------------------------------------------------
SEC yield on 5/31/95 4.60% 4.08%
- --------------------------------------------------------
Taxable-equivalent SEC yield
on 5/31/95 7.62% 6.75%
- --------------------------------------------------------
Six-month total return, assuming
reinvestment of all distributions
and no sales charge or CDSC 12.81% 12.40%
- --------------------------------------------------------
Net asset value per share
on 5/31/95 $ 8.18 $ 8.18
- --------------------------------------------------------
</TABLE>
ECONOMIC/MARKET OVERVIEW
It appears that the U.S. economy may be coming in for the "soft landing" that
has been the Federal Reserve Board's goal for the last two years. Annualized
gross domestic product (GDP) for the first three months of 1995 was 2.8%, down
significantly from the annualized GDP of 5.1% for the final quarter of 1994.
Among other factors, this reflects a slowdown in consumer spending and
residential construction. This weakness in the U.S. economy, which translated
into lower interest rates, had a favorable impact on the municipal bond market.
As the pace of economic growth diminished, interest rates moved lower and prices
in the municipal bond market improved.
SUPPLY AND DEMAND
Although interest rates have declined in recent months, there has not been a
significant increase in refinancing activity. At the same time, the new issue
supply of municipal bonds remains limited. Colonial management believes that the
supply of new issue bonds may go as low as $114 billion by the end of 1995, down
from a high of $292 billion in 1993.
[Photo]
John A. McNeice, Jr.
President
INVESTMENT STRATEGY
During the fiscal year management remained fully invested at all times, with
assets allocated in a diverse selection of municipal bonds issued by states and
local municipalities. On May 31, the Fund owned 167 individual issues in 18
public sectors. In keeping with its investment strategy, almost 100% of
portfolio holdings were rated AAA, the highest quality rating available.
The top five public sectors in the portfolio were water & sewer (16.3% of
investments), municipal electric (13.2%), hospital (11.3%), general obligation
(8.8%), and education (8.0%).
If you would like additional information about this or any other Colonial
fund, please contact your full-service financial adviser or call Colonial at
1-800-426-3750.
Sincerely,
/s/ John A. McNeice, Jr.
- ------------------------
John A. McNeice, Jr.
President
July 15, 1995
(1) A portion of the Fund's income may be subject to the alternative minimum
tax. The 30-day SEC yield on May 31, 1995, of 4.60% for Class A shares and 4.08%
for Class B shares reflects the portfolio's earning power, net of expenses, and
does not include changes in Fund price. Taxable-equivalent yields are based on
the maximum 39.6% federal income tax rate.
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. Performance for different share classes will vary based
on differences in sales charges and fees associated with each class.
<PAGE>
INVESTMENT PORTFOLIO (UNAUDITED, IN THOUSANDS) MAY 31, 1995
<TABLE>
<CAPTION>
===========================================================================
MUNICIPAL BONDS - 100.7% PAR VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - 8.0%
AL State Higher Education Loan Corp.,
Series 1994-C,
5.850% 09/01/04 . . . . . . . . . . . $ 1,000 $ 1,016
DC Catholic University of America,
6.200% 10/01/08 . . . . . . . . . . . 1,000 1,024
IL Chicago Board of Education,
Lease Certificates, Series 1992-A,
6.250% 01/01/15 (a). . . . . . . . . 6,000 6,315
IL State University,
Auxiliary Facilities System, Series 1993,
5.750% 04/01/14 . . . . . . . . . . . 1,350 1,331
MA Health and Educational Facilities,
Northeastern University,
Series E:
6.500% 10/01/12 . . . . . . . . . . . 1,580 1,685
6.550% 10/01/22 . . . . . . . . . . . 1,500 1,588
NH Higher Educational and Health Facilities,
University Systems of New Hampshire:
Dartmouth College,
5.375% 06/01/23 . . . . . . . . . . . 5,000 4,687
Series 1992,
6.250% 07/01/20 . . . . . . . . . . . 2,000 2,055
NY State Dormitory Authority,
Series 1993-A,
6.000% 07/01/20 . . . . . . . . . . . 3,000 3,086
PA State Higher Educational Facilities,
Temple University, Series 1,
6.500% 04/01/21 . . . . . . . . . . . 250 260
UT State Municipal Finance Co-Operative
Local Government, Pooled Capital
Improvement, 4-1-1992,
6.800% 05/01/12 . . . . . . . . . . . 1,000 1,080
-------
24,127
- ---------------------------------------------------------------------------
GENERAL OBLIGATIONS - 8.8%
AZ Maricopa County School District,
Number 8 Osborn,
7.500% 07/01/08 . . . . . . . . . . . 1,235 1,490
AZ Mohave County Unified High School
District, Series B,
8.500% 07/01/06 . . . . . . . . . . . 250 317
CA State,
5.750% 03/01/19 . . . . . . . . . . . 5,000 4,837
DC District Columbia,
Series 1993-B1,
5.500% 06/01/09 . . . . . . . . . . . 1,000 965
GA Columbia County School District,
Series A,
6.750% 04/01/08 . . . . . . . . . . . 1,695 1,915
IL Chicago Board of Education,
Lease Certificates,
Series 1992-A,
6.000% 01/01/20 . . . . . . . . . . . 2,000 2,025
IL Decatur,
6.900% 10/01/14 . . . . . . . . . . . 250 266
IL State Dedicated Tax,
Civic Center, Series A,
7.000% 12/15/13 . . . . . . . . . . . 200 214
IN Whitko Middle School,
Corporation First Mortgage, Series 1991,
6.750% 07/15/12 . . . . . . . . . . . 1,000 1,069
LA State, Series 1991,
(b) 09/01/16 . . . . . . . . . . . 2,000 570
MD Baltimore,
7.000% 10/15/08 . . . . . . . . . . . 300 346
MI Brighton Area School District,
Series II,
(b) 05/01/17 . . . . . . . . . . . 10,340 2,856
MI Royal Oak City School District,
Building and Site,
(b) 05/01/08 . . . . . . . . . . . 3,500 1,654
NV Las Vegas-Clark County Library District,
7.500% 02/01/02 . . . . . . . . . . . 1,000 1,144
TX Grapevine Colleyville Independent,
School District, Series 1994,
5.125% 08/15/22 . . . . . . . . . . . 5,000 4,525
WA Bellevue Convention Center,
(b) 02/01/24 . . . . . . . . . . . 5,000 894
-------
26,307
- ---------------------------------------------------------------------------
HEALTH - 12.1%
HOSPITALS - 11.3%
AZ Scottsdale Industrial Development
Authority, Scottsdale Memorial Hospital,
Series 1987-A,
8.500% 09/01/17 . . . . . . . . . . . 500 551
IL Health Facilities Authority:
Methodist Health Services Corp.:
Series 1985-G,
8.000% 08/01/15 . . . . . . . . . . . 975 1,080
Series 1992 B, RIB,
9.274% 05/01/21 . . . . . . . . . . . 500 566
Rockford Memorial Hospital,
Series B,
6.750% 08/15/18 . . . . . . . . . . . 50 53
MA Health and Educational Facilities:
McLean Hospital,
Series C,
6.625% 07/01/15 . . . . . . . . . . . 500 534
</TABLE>
See notes to investment portfolio.
2
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
===========================================================================
MUNICIPAL BONDS - CONT. PAR VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
HOSPITALS - CONT.
New England Deaconess Hospital,
Series D,
6.875% 04/01/22 . . . . . . . . . . . $ 2,500 $ 2,697
Northeastern University,
Series 1988-B,
7.600% 10/01/10 . . . . . . . . . . . 1,000 1,089
North Shore Medical Center,
Series A,
5.625% 07/01/14 . . . . . . . . . . . 10,000 9,787
Valley Regional Health System,
Series C,
7.000% 07/01/08 . . . . . . . . . . . 1,585 1,799
MS State Hospital Equipment and
Facilities Authority,
Rush Medical Foundation Project,
6.700% 01/01/18 . . . . . . . . . . . 250 262
NH Higher Educational and Health Facilities,
Lakes Region Hospital Association,
Series 1993,
5.500% 01/01/17 . . . . . . . . . . . 3,000 2,895
NV Reno Hospital, St. Mary's Regional
Medical Center, Series 1991-A,
6.700% 07/01/21 . . . . . . . . . . . 1,000 1,071
OK State Industrial Authority,
Baptist Medical Center:
Series A,
7.000% 08/15/14 . . . . . . . . . . . 150 160
Series C,
7.000% 08/15/04 . . . . . . . . . . . 1,500 1,680
TN Knox City Health, Education and
Housing Facilities,
5.250% 01/01/15 . . . . . . . . . . . 5,000 4,737
TX Harris County Health Facilities
Development Corp.,
Texas Children's Hospital, Series A,
7.000% 10/01/19 . . . . . . . . . . . 50 53
WI State Health and Educational
Facilities Authority:
Bellin Memorial Hospital,
6.625% 02/15/08 . . . . . . . . . . . 1,000 1,103
Milwaukee Regional Medical Center,
6.500% 08/01/13 . . . . . . . . . . . 1,500 1,575
Series 1990,
7.500% 08/01/11 . . . . . . . . . . . 1,000 1,091
Waukesha Memorial Hospital, Series 1990-B,
7.250% 08/15/19 . . . . . . . . . . . 1,000 1,088
-------
33,871
- ---------------------------------------------------------------------------
NURSING HOME - 0.8%
WA State Housing Finance Commission,
Franciscan Elder Care,
Series 1991,
6.875% 01/01/21 . . . . . . . . . . . 2,250 2,393
- ---------------------------------------------------------------------------
HOUSING - 4.8%
MULTI-FAMILY - 1.9%
KY Housing Corp., Series 1985-A,
8.875% 07/01/19 . . . . . . . . . . . 235 241
MA State Housing Finance Agency:
Housing Project, Series 1993-A,
6.150% 10/01/15 . . . . . . . . . . . 3,000 3,000
Series A,
6.400% 01/01/09 . . . . . . . . . . . 2,000 2,065
MD Howard County Medical Mortgage,
Heartlands Elderly Apartments,
Series 1985,
8.875% 12/01/10 . . . . . . . . . . . 495 523
-------
5,829
SINGLE FAMILY - 2.9%
AK State Housing Finance Corp.,
Series 1990 A-2,
7.000% 12/01/11 . . . . . . . . . . . 235 249
FL Brevard County Housing Finance Authority,
Series C,
7.000% 09/01/23 . . . . . . . . . . . 40 42
FL Duval County Housing Finance Authority,
Series 1991,
7.350% 07/01/24 . . . . . . . . . . . 860 909
IL Onterie Center Housing Finance Authority,
Mortgage Revenue Bonds, Onterie Center,
Series 1992-A,
7.050% 07/01/27 . . . . . . . . . . . 2,000 2,107
MA State Housing Finance Agency:
Series 21:
6.300% 06/01/25 . . . . . . . . . . . 445 449
7.125% 06/01/25 . . . . . . . . . . . 1,310 1,374
Series 1985-A,
9.250% 12/01/14 . . . . . . . . . . . 25 26
MS Housing Finance Corp.,
8.250% 10/15/18 . . . . . . . . . . . 3,365 3,554
NM Mortgage Finance Authority,
Series 1985-A,
9.250% 07/01/12 . . . . . . . . . . . 10 10
PR Housing Finance Corp.,
6.850% 10/15/24 . . . . . . . . . . . 55 58
-------
8,778
- ---------------------------------------------------------------------------
POLLUTION CONTROL REVENUE - 3.4%
FL Dunedin Hospital, Mease Health Care,
6.750% 11/15/11 . . . . . . . . . . . 100 113
</TABLE>
See notes to investment portfolio.
3
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
===========================================================================
MUNICIPAL BONDS - CONT. PAR VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
POLLUTION CONTROL REVENUE - CONT.
FL Hollywood Water and Sewer Revenue,
6.750% 10/01/11 . . . . . . . . . . . $ 50 $ 57
FL State Municipal Power Agency,
Series 1993,
5.100% 10/01/25 . . . . . . . . . . . 5,000 4,531
MA Bay Transportation Authority,
Series 1990-A,
7.650% 08/01/15 . . . . . . . . . . . 1,000 1,113
NY New York Energy Research and
Development, Adjusted Gas Facilities,
Brooklyn Union Gas Company, Series 1989-B,
6.750% 02/01/24 . . . . . . . . . . . 2,000 2,123
PA Pittsburgh Water & Sewer Authority,
Series A,
6.500% 09/01/14 . . . . . . . . . . . 270 301
TX Coastal Water Authority,
Water Conveyance System, Series 1991,
6.250% 12/15/17 . . . . . . . . . . . 1,750 1,813
TX Colorado River Municipal Water District,
Series 1991-A,
6.625% 01/01/21 . . . . . . . . . . . 250 273
-------
10,324
- ---------------------------------------------------------------------------
PUBLIC FACILITIES IMPROVEMENT - 3.8%
AL Birmingham Jefferson Civic Center
Authority, Special Tax, Series 1992,
5.500% 09/01/14 . . . . . . . . . . . 2,500 2,456
CA Fairs Financing Authority,
Series 1991,
6.500% 07/01/11 . . . . . . . . . . . 1,300 1,365
CA Palm Springs Finance Authority,
Convention Center Project,
Series A,
6.750% 11/01/21 . . . . . . . . . . . 1,500 1,611
FL Gulf Breeze,
Local Government Loan Program,
Series 1985-B,
8.000% 12/01/15 . . . . . . . . . . . 1,000 1,124
MI Municipal Bond Authority, Local
Government Loan Program:
Series 1991-C,
(b) 06/15/15 . . . . . . . . . . . 3,380 1,048
Series G,
(b) 05/01/18 . . . . . . . . . . . 2,000 515
SC State Ports Authority,
Series 1991,
6.750% 07/01/21 . . . . . . . . . . . 3,000 3,142
WV School Building Authority, Capital
Import Revenue Bonds, Series 1990-B,
6.750% 07/01/17 . . . . . . . . . . . 75 79
-------
11,340
- ---------------------------------------------------------------------------
PUBLIC INFRASTRUCTURE - 11.4%
AIRPORT - 7.5%
GA Atlanta Airport Facilites Revenue,
Series A,
6.500% 01/01/07 . . . . . . . . . 1,000 1,107
HI State Airport System Revenue,
Series 2,
6.750% 07/01/21 . . . . . . . . . 250 264
IL Chicago O'Hare International Airport
Special Facility, International Terminal,
6.750% 01/01/12 . . . . . . . . . 300 319
IL Regional Transportation Authority,
Series C,
7.750% 06/01/20 . . . . . . . . . 5,000 6,281
MI Wayne Charter County Airport,
5.500% 12/01/21 . . . . . . . . . 3,000 2,820
NV Clark County Airport Improvements:
Series A,
7.500% 06/01/07 . . . . . . . . . 350 412
Series 1988,
8.250% 07/01/15 (a). . . . . . . 3,500 3,872
OR Portland International Airport,
Series Seven-B,
7.100% 07/01/21 . . . . . . . . . 1,000 1,101
PA Allegheny County Airport,
Greater Pittsburgh International:
Series 1988-C,
8.250% 01/01/16 (c). . . . . . . 3,250 3,555
Series 1992-B,
6.625% 01/01/22 . . . . . . . . . 1,000 1,041
TX Dallas-Fort Worth Regional Airport,
Series A,
7.375% 11/01/11 . . . . . . . . . 1,380 1,575
TX Houston Airport System Revenue,
Series A,
6.750% 07/01/21 . . . . . . . . . 200 211
-------
22,558
-------
TURNPIKE/TOLL ROAD/BRIDGE - 3.9%
KY State Turnpike Authority, Economic
Development Road Revitalization Projects,
Series 1993,
5.500% 07/01/09 . . . . . . . . . 500 508
Series 1993-A,
5.125% 01/01/23 . . . . . . . . . 5,000 4,556
NV Clark County Passenger Facility,
Las Vegas McCarran International Airport,
Series B,
6.250% 07/01/11 . . . . . . . . . 500 514
</TABLE>
See notes to investment portfolio.
4
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
===========================================================================
MUNICIPAL BONDS - CONT. PAR VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
TURNPIKE/TOLL ROAD/BRIDGE - CONT.
NY Triborough Bridge and Tunnel Authority,
Series A,
6.625% 01/01/17 . . . . . . . . . $ 250 $ 266
PR Commonwealth of Puerto Rico,
Highway and Transportation Authority,
3.680% 07/01/09 (d) . . . . . . . 2,300 (e) 914
TX Harris County, Toll Road Revenue,
Series 1994:
5.375% 08/15/20 . . . . . . . . . 5,000 4,725
6.500% 08/15/11 . . . . . . . . . 120 127
-------
11,610
- ---------------------------------------------------------------------------
REFUNDED/ESCROW/SPECIAL OBLIGATIONS (F) - 9.3%
CA Alameda County,
Series 1985-1,
7.250% 12/01/08 . . . . . . . . . 1,300 1,489
CA East Bay Municipal Utilities District,
Series 1990,
7.500% 06/01/18 . . . . . . . . . 2,500 2,866
CA Los Angeles County Transport Commission,
Sales Tax, Metropolitan Train,
Series 1991-A,
6.750% 07/01/18 . . . . . . . . . 1,000 1,128
CA University Revenues, 1989 Multiple
Purpose Projects, Series 1991-B,
6.750% 09/01/23 . . . . . . . . . 1,000 1,104
IL Chigago,
Central Public Library Project,
Series 1988-C,
6.850% 01/01/17 . . . . . . . . . 1,000 1,135
IN Marion County Convention
and Recreational Facilities Authority,
Series 1991-B,
7.000% 06/01/21 . . . . . . . . . 1,000 1,134
IN State Educational Facilities Authority,
Butler University, Series 1988-B,
8.000% 11/01/09 . . . . . . . . . 1,000 1,128
LA New Orleans International Airport,
General Purpose, Series 1987-A,
8.875% 08/01/17 . . . . . . . . . 5,000 5,538
MA Bay Transportation Authority,
General Transportation System,
Series 1990-A,
7.625% 03/01/15 . . . . . . . . . 2,000 2,288
NY New York City Municipal Finance
Authority, Water and Sewer Systems,
Series 1991-C,
7.000% 06/15/16 . . . . . . . . . 1,500 1,704
NY State Dormitory Authority,
City University System,
Series 1990-F,
7.500% 07/01/20 . . . . . . . . . 2,000 2,295
NY State Medical Care Facilities
Finance Agency, St. Luke's-Roosevelt
Hospital Center, Series 1989-B,
7.450% 02/15/29 . . . . . . . . . 500 569
SC Charleston County Certificate
Of Participation, Series 1991,
7.100% 06/01/11 . . . . . . . . . 2,000 2,283
TN Chattanooga-Hamilton County,
Series 1991-B, RIB,
9.632% 05/25/21 . . . . . . . . . 1,000 1,249
UT State Municipal Cooperative Local
Government, Series June 5, 1991,
7.000% 06/01/16 . . . . . . . . . 1,750 1,971
-------
27,881
- ---------------------------------------------------------------------------
SOLID WASTE - 1.0%
RESOURCE RECOVERY
FL Palm Beach County Solid Waste Authority,
Series 1984,
8.375% 07/01/10 . . . . . . . . . 1,000 1,101
NJ Bergen County Utilities Authority,
Series A,
6.250% 06/15/07 . . . . . . . . . 230 251
SC Charleston County Solid Waste User Fee,
6.500% 01/01/09 . . . . . . . . . 1,405 1,524
-------
2,876
- ---------------------------------------------------------------------------
STUDENT LOAN - 1.1%
NM State Educational Assistance
Foundation, Series A,
6.700% 04/01/02 . . . . . . . . . 235 252
MA Educational Loan Authority,
Issue D, Series 1991-A,
7.250% 01/01/09 . . . . . . . . . 845 893
PA State Higher Education Assistance,
Student Loan RIB,
Series 1990-B,
10.697% 03/01/20 . . . . . . . . . 2,000 2,253
-------
3,398
- ---------------------------------------------------------------------------
TAX ALLOCATION - 1.5%
CA Los Angeles Community Redevelopment
Agency, Bunker Hill Project,
6.500% 12/01/14 . . . . . . . . . 1,500 1,573
NY State Local Government Assistance
Corp., Series 1993-E,
5.000% 04/01/21 . . . . . . . . . 3,175 2,838
-------
4,411
- ---------------------------------------------------------------------------
</TABLE>
See notes to investment portfolio.
5
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
===========================================================================
MUNICIPAL BONDS - CONT. PAR VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION - 0.8%
DC Metropolitan Area Transit Authority,
6.000% 07/01/10 . . . . . . . . . $ 1,000 $ 1,054
MA State Port Authority,
7.500% 07/01/20 . . . . . . . . . 1,000 1,094
SC State Port Authority,
Series 1991,
6.500% 07/01/06 . . . . . . . . . 250 267
-------
2,415
- ---------------------------------------------------------------------------
UTILITY - 17.7%
INVESTOR OWNED - 0.7%
DE State Economic Development Authority,
New Castle County Gas System,
Series 1991-C,
7.150% 07/01/21 . . . . . . . . . 1,000 1,096
MI St. Clair County Economic
Development Corp., Detroit Edison Co.,
Series 1993-AA
6.400% 08/01/24 . . . . . . . . . 1,000 1,060
-------
2,156
-------
JOINT POWER AUTHORITY - 3.7%
TX State Municipal Power Agency:
(b) 09/01/10 . . . . . . . . . 5,000 2,075
(b) 09/01/12 . . . . . . . . . 3,000 1,091
(b) 09/01/13 . . . . . . . . . 3,000 1,027
(b) 09/01/15 . . . . . . . . . 8,975 2,704
UT State Municipal Power Agency
Electric Systems, Series 1993-A,
5.250% 07/01/18 . . . . . . . . . 3,000 2,790
WA Snohomish County Public Utilities, 1993,
5.500% 01/01/20 . . . . . . . . . 1,500 1,446
-------
11,133
-------
MUNICIPAL ELECTRIC - 13.3%
AK Anchorage Electric Utilities Revenue,
8.000% 12/01/09 . . . . . . . . . 1,000 1,242
CA Northern California Power Agency,
Hydroelectric Project No. 1,
Series 1992-A,
5.500% 07/01/23 . . . . . . . . . 3,000 2,872
GA Municipal Electrical Authority,
6.400% 01/01/13 . . . . . . . . . 1,000 1,082
IN State Development Finance Authority,
PSI-Energy Inc.,
Series B,
5.750% 02/15/28 . . . . . . . . . 5,000 4,925
NC Municipal Power Agency, Number 1,
Catawba Electric Revenue Bonds,
Series 1992,
5.750% 01/01/15 . . . . . . . . . 3,000 2,992
NV Clark County Pollution Control,
Nevada Power Co., Series 1992-B,
6.600% 06/01/19 . . . . . . . . . 3,500 3,697
NY New York State Power Authority
General Purpose Bonds, Series V,
7.875% 01/01/13 . . . . . . . . . 3,950 4,365
SC Piedmont Municipal Power Agency,
Series A,
6.125% 01/01/07 . . . . . . . . . 500 536
SC State Public Service Authority:
5.125% 01/01/32 . . . . . . . . . 5,000 4,331
Series A,
6.250% 01/01/22 (g). . . . . . . 3,500 3,574
SD Heartland Consumers Power District,
6.000% 01/01/09 . . . . . . . . . 300 311
TX Austin Utilities System:
5.750% 05/15/24 (a)(c). . . . . . 5,000 4,931
7.000% 05/15/16 . . . . . . . . . 1,200 1,294
TX Municipal Power Agency,
(b) 09/01/11 . . . . . . . . . 7,900 3,071
WA Clark County,
6.500% 01/01/11 . . . . . . . . . 200 211
WA State Public Power Supply System,
Nuclear Project No. 2,
Series A,
6.500% 07/01/05 . . . . . . . . . 200 216
-------
39,650
- ---------------------------------------------------------------------------
WATER & SEWER - 16.3%
CA Contra Costa Water District,
Series G,
5.500% 10/01/19 . . . . . . . . . 5,000 4,800
CA Los Angeles Waste Water System:
Series 1990 A,
5.700% 06/01/20 . . . . . . . . . 5,000 4,925
Series 1993-C,
5.600% 06/01/15 . . . . . . . . . 3,000 2,944
Series D,
6.000% 11/01/14 . . . . . . . . . 1,000 1,010
FL Reedy Creek Improvement District,
Series 1,
5.000% 10/01/19 . . . . . . . . . 5,000 4,525
FL Saint John's County Water and Sewer,
Saint Augustine Shores System,
Series 1991-A:
(b) 06/01/13 . . . . . . . . . 2,600 916
(b) 06/01/14 . . . . . . . . . 1,500 499
</TABLE>
See notes to investment portfolio.
6
<PAGE>
INVESTMENT PORTFOLIO - CONTINUED
<TABLE>
<CAPTION>
===========================================================================
MUNICIPAL BONDS - CONT. PAR VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
WATER & SEWER - CONT.
GA Fulton County Water and Sewer,
6.375% 01/01/14 . . . . . . . . . $ 6,000 $ 6,502
IL Kankakee Sewer,
Series 1991,
7.000% 05/01/16 . . . . . . . . . 1,000 1,089
MA Boston Water & Sewer Commission,
Series A,
5.250% 11/01/19 . . . . . . . . . 3,465 3,235
MD Baltimore,
Water Project, Series A,
5.000% 07/01/24 (a). . . . . . . 5,000 4,506
OH State Water Development,
Series 1985,
9.375% 12/01/18 . . . . . . . . . 5 5
PA Philadelphia Water and Waste
Revenue, Series 1993,
5.250% 06/15/23 . . . . . . . . . 1,150 1,058
PA Pottstown Borough Authority Sewer,
Guaranteed Sewer Revenue,
Series 1991,
(b) 11/01/16 . . . . . . . . . 1,000 285
TX Houston Water & Sewer System
Revenue, Series D,
6.375% 12/15/06 . . . . . . . . . 500 549
VA Prince William County Services
Authority,
5.000% 07/01/21 . . . . . . . . . 4,900 4,361
VA Roanoke County Water System,
5.000% 07/01/21 . . . . . . . . . 3,500 3,163
VA Virginia Beach Water and Sewer,
5.125% 02/01/19 . . . . . . . . . 4,880 4,496
--------
48,868
- ---------------------------------------------------------------------------
OTHER - 0.7%
MI Mona Shores School District,
5.500% 05/01/14 (g). . . . . . . . 2,000 1,950
- ---------------------------------------------------------------------------
Total investments (cost $281,439)(h) 301,875
- ---------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - (0.7)% (2,088)
- ---------------------------------------------------------------------------
NET ASSETS - 100% $299,787
- ---------------------------------------------------------------------------
</TABLE>
Notes to investment portfolio:
(a) These securities, or a portion thereof, with a total market value of $7,678,
are being used to collateralize open futures contracts.
(b) Zero coupon bond.
(c) This security is being used to collateralize the delayed delivery purchase
indicated in note (g).
(d) This security is a variable rate instrument. Interest income is accrued
daily on the notional amount at the applicable interest rate.
(e) Notional amount.
(f) The Fund has been informed that the issuer has placed direct obligations of
the U.S. Government in an irrevocable trust, solely for the payment of the
interest and principal.
(g) This security has been purchased on a delayed delivery basis for settlement
at a future date beyond the customary settlement time.
(h) Cost for federal income tax purposes is the same.
Short futures contracts open at May 31, 1995:
<TABLE>
<CAPTION>
Par value Unrealized
covered Expiration depreciation
Type by contracts month at 5/31/95
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Treasury bond $60,000 September $148
- -------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
ACRONYM NAME
- ------- ----------------------
<S> <C>
RIB Residual Interest Bond
</TABLE>
SUMMARY OF SECURITIES BY INSURER
<TABLE>
<CAPTION>
% of
Insurer net assets
------- ----------
<S> <C>
Municipal Bond................................................. 40.0
Financial Guarantee Insurance Company.......................... 27.0
AMBAC Indemnity Corporation.................................... 19.7
Financial Security Assurance................................... 3.2
Uninsured Securities........................................... 7.3
Capital Guarantee Insurance Company............................ 1.5
Bond Investment Guarantee Insurance............................ 1.3
----------
100.0
----------
</TABLE>
See notes to financial statements.
7
<PAGE>
FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
STATEMENT OF ASSETS & LIABILITIES (UNAUDITED)
May 31, 1995
(in thousands except for per share amounts and footnote)
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments at value (cost $281,439)................................. $301,875
Receivable for:
Interest................................................ $ 5,994
Fund shares sold........................................ 111
Investments sold........................................ 30
Other.................................................... 25 6,160
-------- --------
Total assets.................................................... 308,035
LIABILITIES
Payable for:
Investments purchased................................... 5,319
Distributions........................................... 1,277
Fund shares repurchased................................. 739
Variation margin on futures............................. 6
Accrued:
Deferred Trustees fees.................................. 3
Other.................................................... 904
--------
Total liabilities............................................... 8,248
--------
NET ASSETS........................................................... $299,787
--------
Net asset value & redemption price per share -
Class A ($250,082/30,563)........................................... $8.18
--------
Maximum offering price per share - Class A
($8.18/0.9525)...................................................... $8.59*
--------
Net asset value & offering price per share -
Class B ($49,705/6,074)............................................. $8.18
--------
COMPOSITION OF NET ASSETS
Capital paid in..................................................... $288,438
Undistributed net investment income................................. 267
Accumulated net realized loss....................................... (9,206)
Net unrealized appreciation (depreciation) on:
Investments........................................................ 20,436
Open futures contracts............................................. (148)
--------
$299,787
========
STATEMENT OF OPERATIONS (UNAUDITED)
Six months ended May 31, 1995
(in thousands)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest............................................................. $ 8,670
EXPENSES
Management fee........................................... $ 747
Service fee.............................................. 338
Distribution fee - Class B............................... 180
Transfer agent........................................... 218
Bookkeeping fee.......................................... 52
Trustees fees............................................ 11
Custodian fee............................................ 4
Audit fee................................................ 17
Legal fee................................................ 4
Registration fees........................................ 29
Reports to shareholders.................................. 3
Other.................................................... 14 1,617
-------- --------
Net investment income........................................... 7,053
--------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments............................................. 2,815
Closed futures contracts................................ (4,696)
--------
Net realized loss............................................... (1,881)
Net unrealized appreciation
(depreciation) during the period on:
Investments............................................. 26,646
Open futures contracts.................................. (27)
--------
Net unrealized appreciation..................................... 26,619
--------
Net gain....................................................... 24,738
--------
Net increase in net assets from
operations.......................................................... $ 31,791
========
</TABLE>
* On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
8
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
================================================================================
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
- ---------------------------------------------------------------------------------------------
(unaudited)
Six months Year
ended ended
May 31 November 30
----------- -----------
1995 1994
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income............................................ $ 7,053 $ 14,576
Net realized loss................................................ (1,881) (2,726)
Net unrealized appreciation (depreciation)....................... 26,619 (30,613)
-------- --------
Net increase (decrease) from operations...................... 31,791 (18,763)
Distributions
From net investment income - Class A............................. (6,052) (12,079)
From net investment income - Class B............................. (1,132) (2,287)
-------- --------
24,607 (33,129)
-------- --------
Fund share transactions
Receipts for shares sold - Class A............................... 13,789 23,583
Receipts for shares issued in the acquisition
of Liberty Financial Insured Municipal Fund..................... 42,751
Value of distributions reinvested - Class A...................... 3,357 6,917
Cost of shares repurchased - Class A............................. (28,844) (46,210)
-------- --------
31,053 (15,710)
-------- --------
Receipts for shares sold - Class B............................... 3,184 12,774
Value of distributions reinvested - Class B...................... 651 1,291
Cost of shares repurchased - Class B............................. (4,418) (8,161)
-------- --------
(583) 5,904
-------- --------
Net increase (decrease) from Fund share transactions......... 30,470 (9,806)
-------- --------
Total increase (decrease).......................... 55,077 (42,935)
NET ASSETS
Beginning of period.............................................. 244,710 287,645
-------- --------
End of period (including undistributed net investment
income of $267 and $397, respectively).......................... $299,787 $244,710
======== ========
NUMBER OF FUND SHARES
Sold - Class A................................................... 1,785 2,945
Issued in acquisition of Liberty Financial
Insured Municipal Fund.......................................... 5,319
Issued for distributions reinvested - Class A.................... 429 858
Repurchased - Class A............................................ (3,671) (5,793)
-------- --------
3,862 (1,990)
-------- --------
Sold - Class B................................................... 408 1,552
Issued for distributions reinvested - Class B.................... 83 161
Repurchased - Class B............................................ (566) (1,031)
-------- --------
(75) 682
-------- --------
Net increase (decrease) in shares outstanding................ 3,787 (1,308)
======== ========
</TABLE>
See notes to financial statements.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS - (UNAUDITED)
================================================================================
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial Tax-Exempt Insured Fund (the
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 highlights for the
six months then ended.
- --------------------------------------------------------------------------------
NOTE 2. ACCOUNTING POLICIES
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
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.
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.
The Fund may trade securities on other than normal settlement terms. This
may increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
- --------------------------------------------------------------------------------
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 investment income per share data and ratios for the Fund for the entire
period by the 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 and tax-exempt income, no federal
income tax has been accrued.
- --------------------------------------------------------------------------------
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount
is accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
===============================================================================
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares and records distributions daily and pays monthly.
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.
- -------------------------------------------------------------------------------
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 each fund's pro rata portion of the
combined average net assets of the Fund, Colonial Tax-Exempt Fund, and Colonial
High Yield Municipal Fund as follows:
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
------------------ ---------------
<S> <C>
First $1 billion............................ 0.60%
Next $2 billion............................. 0.55%
Next $1 billion............................. 0.50%
Over $4 billion............................. 0.45%
</TABLE>
- -------------------------------------------------------------------------------
BOOKKEEPING FEE
The Adviser provides bookkeeping and pricing services for $27,000 per year
plus 0.035% of the Fund's average net assets over $50 million.
- -------------------------------------------------------------------------------
TRANSFER AGENT
Colonial Investors Service Center, Inc. (the Transfer Agent), an affiliate
of the Adviser, provides shareholder services for a monthly fee equal to 0.14%
annually of the Fund's average net assets, and receives a reimbursement 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 $12,630 on sales of the
Fund's Class A shares and received contingent deferred sales charges (CDSC) of
$94,799 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% annually 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.
The Fund's Trustees may participate in a deferred compensation plan which
may be terminated at any time. Obligations of the plan will be paid solely out
of the Fund's assets.
- -------------------------------------------------------------------------------
NOTE 4. PORTFOLIO INFORMATION
During the six months ended May 31, 1995, purchases and sales of
investments, other than short-term obligations, were $88,012,772 and
$57,126,189, respectively.
Unrealized appreciation (depreciation) at May 31, 1995, based on cost of
investments for both financial statement and federal income tax purposes was
approximately:
<TABLE>
<S> <C>
Gross unrealized appreciation............... $20,973,000
Gross unrealized depreciation............... (537,000)
-----------
Net unrealized appreciation.............. $20,436,000
===========
</TABLE>
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
CAPITAL LOSS CARRYFORWARDS
At November 30, 1994, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
---------- ------------
<S> <C>
1995.............. $3,650,000
1996.............. 414,000
1998.............. 180,000
2000.............. 171,000
2002.............. 2,571,000
----------
$6,986,000
==========
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized
gains, it is unlikely that such gains would be distributed since they may be
taxable to shareholders as ordinary income.
- -------------------------------------------------------------------------------
OTHER
The Fund has greater than 10% of its net assets at May 31, 1995 invested in
Massachusetts and Texas.
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Fund sells municipal and Treasury bond futures contracts to manage
overall portfolio interest rate exposure and not for trading purposes. The use
of futures contracts involves certain risks, which include (1) imperfect
correlation between the price movement of the contracts 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 contract or the
underlying securities, or (3) an inaccurate prediction by the Adviser of the
future direction of interest rates. Any of these risks may involve amounts
exceeding the initial or variation margin recorded in the Fund's Statement of
Assets and Liabilities at any given time.
- -------------------------------------------------------------------------------
NOTE 5. RESULTS OF SPECIAL SHAREHOLDERS MEETING
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, 20,667,620 voted for the new
Management Agreement, 516,556 voted against and 1,665,127 abstained. Of the
shares of beneficial interest outstanding that abstained 56,104 represented
broker non-votes.
- -------------------------------------------------------------------------------
NOTE 6. MERGER INFORMATION
On March 24, 1995, Liberty Financial Insured Municipal Fund (LFIMF) was
merged into the Fund by a non-taxable exchange of 5,318,858 shares of the Fund
(valued at $42,750,988) for the 4,080,498 of LFIMF shares then outstanding. The
assets of LFIMF acquired included unrealized appreciation of $282,748. The
aggregate net assets of the Fund and LFIMF immediately after the merger were
$300,749,659.
- -------------------------------------------------------------------------------
12
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are as follows:
- -----------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS
ENDED
MAY 31 YEAR ENDED NOVEMBER 30
--------------------- --------------------------------------------------------------------
1995 1994 1993 1992
--------------------- --------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B(a)
------- ------- ------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -
Beginning of period............. $ 7.450 $ 7.450 $ 8.420 $ 8.420 $ 8.080 $ 8.080 $ 7.880 $ 7.910
-------- ------- -------- -------- -------- --------- -------- ---------
Income (loss) from investment
operations:
Net investment income.......... 0.210 0.181 0.439 0.378 0.456 0.395 0.480 0.240
Net realized and unrealized
gain (loss) on investments.. 0.735 0.735 (0.977) (0.977) 0.338 0.338 0.200 0.170
-------- ------- -------- -------- -------- --------- -------- ---------
Total from investment
operations............. 0.945 0.916 (0.538) (0.599) 0.794 0.733 0.680 0.410
-------- ------- -------- -------- -------- --------- -------- ---------
Less distributions declared to
shareholders:
From net investment income..... (0.215) (0.186) (0.432) (0.371) (0.454) (0.393) (0.480) (0.240)
-------- ------- -------- -------- -------- --------- -------- ---------
Net asset value - End of period.. $ 8.180 $ 8.180 $ 7.450 $ 7.450 $ 8.420 $ 8.420 $ 8.080 $ 8.080
======== ======= ======== ======== ======== ========= ======== =========
Total return (b).................. 12.81%(c) 12.40%(c) (6.61)% (7.31)% 10.00% 9.20% 8.85% 5.23%
======== ======= ======== ======== ======== ========= ======== =========
Ratios to average net assets:
Expenses........................ 1.06%(d) 1.81%(d) 1.05% 1.80% 1.07% 1.82% 1.10% 1.85%
Net investment income........... 5.34%(d) 4.59%(d) 5.44% 4.69% 5.44% 4.69% 5.97% 5.22%
Portfolio turnover................ 42%(d) 42%(d) 36% 36% 12% 12% 7% 7%
Net assets at end of period
(000)........................... $250,082 $49,705 $198,909 $ 45,801 $241,610 $ 46,035 $217,782 $ 16,519
</TABLE>
(a) Class B shares were initially offered on May 5, 1992. Per share amounts
reflect activity from that date.
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or CDSC.
(c) Not annualized.
(d) Annualized.
13
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS - CONTINUED
Selected data for a share of each class outstanding throughout each period are as follows:
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED NOVEMBER 30
----------------------
1991 1990
-------- --------
CLASS A CLASS A
-------- --------
<S> <C> <C>
Net asset value -
Beginning of period........................ $ 7.660 $ 7.680
-------- --------
Income (loss) from investment
operations:
Net investment income..................... 0.496 0.506
Net realized and unrealized
gain (loss) on investments............. 0.222 (0.016)
-------- --------
Total from investment
operations........................ 0.718 0.490
-------- --------
Less distributions declared to
shareholders:
From net investment income............... (0.498) (0.510)
-------- --------
Net asset value - End of period............. $ 7.880 $ 7.660
======== ========
total return (a)............................. 9.66% 6.65%
======== ========
Ratios to average net assets:
Expenses................................... 1.08% 1.10%
Net investment income...................... 6.35% 6.66%
Portfolio turnover........................... 8% 15%
Net assets at end of period
(000)...................................... $189,483 $142,525
</TABLE>
(a) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or CDSC.
14
<PAGE>
================================================================================
ABOUT OUR COVER...
[FIGURE] The symbol on the cover of this Report
represents the Fund's primary investment
focus on municipal bonds.
================================================================================
Colonial Tax-Exempt Insured 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.
SHAREHOLDER SERVICES AND TRANSFER AGENT
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
This material may be used with potential investors if it is preceded
or accompanied by a current Fund prospectus containing more
complete information including fees, risks, and expenses.
15
<PAGE>
[LOGO]
[FIGURE]
COLONIAL
TAX-EXEMPT
INSURED FUND
===========================================
SEMIANNUAL REPORT
MAY 31, 1995
[LOGO]
[LOGO] Printed on recycled paper.
TI-03/060B-0595
COLONIAL INVESTMENT SERVICES, INC. (C)1995
