<PAGE>
[COLONIAL LOGO]
================================================================================
COLONIAL
UTILITIES FUND
================================================================================
ANNUAL REPORT
NOVEMBER 30, 1995
<PAGE>
COLONIAL UTILITIES FUND HIGHLIGHTS
DECEMBER 1, 1994 - NOVEMBER 30, 1995
Investment Objective: Colonial Utilities Fund seeks primarily current income and
secondarily long-term growth.
Strategy: The Fund pursues its objective by investing at least 65% of its total
assets in common and preferred equity stocks of domestic utility companies.
The Fund is Designed to Offer:
+ Monthly income
+ Long-term growth potential
+ Diversification
Portfolio Manager Commentary: "All three sectors of the utilities market in
which the Fund invested -- telephone, electric power, and natural gas --
provided strong returns during the Fund's fiscal year, reflecting in part a
decline in interest rates. When investors became concerned about stock market
volatility during the period, utility stocks benefited because of their
defensive characteristics."
Colonial Utilities Fund Performance
<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
Inception dates 3/4/92* 5/5/92
Distributions declared per share $0.649 $0.553
30-day SEC yields on November 30, 1995** 3.82% 3.26%
Total returns, assuming reinvestment
of all distributions and no sales charge or
contingent deferred sales charge (CDSC) --
12 months 28.90% 27.96%
Net asset value per share at 11/30/95 $14.37 $14.37
</TABLE>
* Since adoption of the Fund's current investment policies on 3/4/92.
** Reflects the portfolio's earning power and net of expenses, expressed as an
annualized percentage of the maximum offering price per share at the end of
the period.
Top Five Holdings
(as of 11/30/95)
1. NYNEX Corp.
2. GTE Corp.
3. FPL Group Inc.
4. Southern Co.
5. BellSouth Corp.
Sector Breakdown - Utility Common Stocks
(as of 11/30/95)
<TABLE>
<S> <C>
Electric......................... 58.1%
Telephone........................ 31.0%
Natural Gas...................... 10.9%
</TABLE>
+ Because the Fund is actively managed, there can be no guarantee the Fund will
continue to hold these securities or maintain these sector weightings in the
future. Sector weightings are based on total common stocks.
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[PHOTO OF JOHN A. McNEICE, JR. IN UPPER LEFT-HAND CORNER]
For utility stocks in the United States, 1995 was a good year. After a
disappointing year in 1994, the utility market rebounded strongly in 1995. The
favorable performance exhibited by most types of equity investments, including
large capitalization "blue chip" stocks and stocks of small companies, reflected
a general increase in corporate earnings and profitability. Common stocks, and
particularly utility stocks, also benefited from declining interest rates
throughout 1995. In addition, demand for electricity was stimulated by warmer
than normal temperatures during the summer. Along with firm cost controls, this
improved demand led to better earnings reports from electric companies.
Regarding deregulation, utility investors became less concerned about the
potential impact of the introduction of competition to the electric power
industry, and viewed proposed Congressional telecommunications legislation
favorably.
With this update, I encourage you to read the following report on your Fund,
including an interview with the Fund's Portfolio Co-managers. We appreciate the
opportunity to help you meet your investment goals.
Respectfully,
/s/ JOHN A. McNEICE, JR.
- ------------------------
John A. McNeice, Jr.
President
January 12, 1996
3
<PAGE>
PORTFOLIO MANAGEMENT REPORT
John Lennon and James Haynie are Vice Presidents of Colonial Management
Associates, Inc. and Portfolio Co-managers of the Colonial Utilities Fund.
How did utilities perform during 1995? "The utilities market rebounded strongly
in 1995 from a disappointing 1994. The Dow Jones Utilities Index posted a return
of 28% for the 12 months ended November 30, 1995. Telephone, electric, and
natural gas stocks all contributed to the market's performance, with telephone
stocks doing especially well."
What factors contributed to the strong performance of utilities? "Two factors
predominated. First, there was a significant decline in interest rates.
Long-term rates, as measured by the 30-year Treasury bond, declined from 8.01%
to 6.14%. The second factor was a desire by investors to become more defensive
at certain times during the year. During these periods, assets were shifted into
high-yielding, low volatility stocks, such as utilities. Electric utility stocks
also benefited from a reduced level of concern about the impact of competition
in the electric market. In addition, the market reacted favorably to proposed
Congressional legislation for deregulating the local and long distance telephone
industries. Finally, a weather-induced increase in demand and prices helped
natural gas stocks."
What was your investment strategy during the period? "We remained fully invested
throughout the period. We reduced investments in electric utility stocks and
increased investments in the natural gas and telephone sectors to improve our
total return potential."
What is your outlook for the utilities market? "We see room for further gains in
the market. If economic growth remains moderate and inflation stays under
control, interest rates may continue to decline in the months ahead. This would
have a favorable impact on utility stock prices. However, after the strong
recovery in 1995, the utilities market will likely produce less dramatic returns
in 1996."
How did the Fund's performance compare to the Dow Jones Utilities Average and
the Standard & Poor's 500 Index? "During the period, the Fund outperformed the
Dow Jones Utilities Average and underperformed the Standard & Poor's 500 Index,
two broad based, unmanaged indexes that track the performance of utility stocks
and U.S. stocks, respectively. The total return for the Fund's Class A shares,
based on net asset value, was 28.9%, while the Dow Utilities Average posted a
return of 27.9% and the return from the S&P 500 was 36.9%.
Almost all U.S. stocks benefited from increased corporate earnings. In the case
of the Dow Utilities Average, which the Fund outperformed, the Fund benefited
from its ability to invest in a broader range of utility stocks than
4
<PAGE>
the Index. The Fund invests in telephone, electric, and natural gas stocks,
while the Index tracks only the latter two sectors. Certain sectors, including
technology stocks, did especially well. This explains why the Fund
underperformed the S&P 500, which tracks the broader stock market."
Colonial Utilities Performance vs.
The Dow Jones Utilities Average and The Standard & Poor's 500 Index
Change in Value of $10,000 from 3/92-11/95
Based on NAV and MOP for Class A Shares
<TABLE>
<CAPTION>
MOP NAV Dow Jones Standard & Poor's
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
9525 10000 10000 10000
9608 10087 10657 10483
10069 10571 11810 11962
10122 10626 12199 12667
10584 11112 12175 11783
10639 11170 12559 12440
10818 11358 12966 15096
11079 11631 12552 15854
11536 12112 12006 16900
11474 12046 10673 13093
11584 12162 10453 13836
10174 10681 11038 14756
10615 11144 11067 14806
11154 11710 11356 15262
11436 12006 11219 16343
11586 12164 12784 17783
12316 12930 13178 19685
12976 13624 14329 20090
13598 14276 13086 19485
13640 14320 12803 20708
13189 13847 12105 17866
13301 13964 12784 19465
12789 13427 13240 22288
12943 13588 12002 22235
14277 14989 12974 23421
14803 15541 13787 25383
15621 16400 12535 24742
16297 17109 12871 25212
17289 18151 13447 26007
18208 19116 13474 27314
19243 20203 14722 28506
19721 20704 14923 28642
21276 22337 15228 29380
21797 22884 13979 30061
22550 23675 11966 28923
21556 22630 10801 29044
19678 20659 11062 30461
18821 19760 11066 30456
19085 20037 11440 33418
19333 20297 12319 36603
20552 21577 13063 39510
21921 23014 13155 41095
</TABLE>
A $10,000 investment in Class B shares made on May 5, 1992, at net asset value
would have been valued at $13,659 on November 30, 1995. The same investment
after deducting the applicable CDSC would have grown to $13,359 on November 30,
1995.
Average Annual Total Returns
As of 12/31/95 (Most Recent Quarter End)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Class A Shares Class B Shares
Inception 3/4/92* Inception 5/5/92
NAV MOP NAV w/CDSC
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 34.75% 28.35% 33.77% 28.77%
- --------------------------------------------------------------------------------
5 YEARS 15.02% 13.90% -- --
- --------------------------------------------------------------------------------
10 YEARS 9.94% 9.41% -- --
- --------------------------------------------------------------------------------
SINCE INCEPTION 11.37% 9.96% 10.28% 9.65%
- --------------------------------------------------------------------------------
</TABLE>
*Change in investment objective on 3/4/92.
The Dow Jones Utilities Average and the Standard & Poor's 500 Index are two
broad based, unmanaged indexes that track the performance of utility stocks and
U.S. stocks, respectively. The performance of each Index does not reflect fees
or expenses associated with an actual investment.
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 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.
5
<PAGE>
INVESTMENT PORTFOLIO
NOVEMBER 30, 1995 (IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCKS - 86.2% SHARES VALUE
- ----------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES
COMMUNICATIONS - 26.7%
AT&T Corp. 200 $ 13,200
Ameritech Corp. 700 38,500
Bell Atlantic Corp. 550 34,650
BellSouth Corp. 1,050 40,819
Frontier Corp. 275 7,116
GTE Corp. 1,150 49,019
MCI Communications Corp. 300 8,025
NYNEX Corp. 1,050 52,106
Pacific Telesis Group, Inc. 100 3,000
SBC Communications, Inc. 725 39,150
Sprint Corp. 125 5,000
US West, Inc. 750 23,437
US West Media Group 700 12,600
----------
326,622
----------
ELECTRIC SERVICES - 50.1%
American Electric Power Co., Inc. 450 16,931
Baltimore Gas & Electric Co. 100 2,663
Boston Edison Co. 725 20,209
Carolina Power & Light Co. 150 4,931
Cincinnati Gas & Electric Co. 1,100 32,450
Consolidated Edison Co. of New York 50 1,444
DPL, Inc. 1,500 36,000
Detroit Edison Co. 1,225 39,966
Eastern Utilities Association 125 2,873
Entergy Corp. 500 13,938
FPL Group, Inc. 1,100 47,713
Florida Progress Corp. 275 9,453
General Public Utilities Corp. 1,200 37,950
Hawaiian Electric Industries, Inc. 488 18,647
Houston Industries, Inc. 125 5,719
IES Industries, Inc. 650 18,038
KU Energy Corp. 200 5,875
Kansas City Power & Light Co. 700 17,500
Long Island Lighting Co. 550 9,419
New York State Electric & Gas Corp. 400 10,400
Northeast Utilities 600 14,325
Ohio Edison Co. 325 7,394
PacifiCorp 1,700 33,363
Peco Energy Co. 350 10,150
</TABLE>
6
<PAGE>
Investment Portfolio/November 30, 1995
<TABLE>
- ----------------------------------------------------------------------------------
<S> <C> <C>
Pinnacle West Capital Corp. 200 $ 5,450
Portland General Corp. 600 16,950
Public Service Co. of Colorado 575 19,838
Public Service Enterprise Group, Inc. 400 11,850
Puget Sound Power & Light Co. 200 4,650
Rochester Gas & Electric Corp. 125 2,938
SCE Corp. 300 4,688
Scana Corp. 325 8,774
Sierra Pacific Resources 250 5,781
Southern Co. 1,800 41,174
Texas Utilities Co. 775 29,837
Union Electric Co. 100 4,012
Utilicorp United, Inc. 600 16,724
Western Resources, Inc. 650 21,531
----------
611,548
----------
GAS SERVICES - 9.4%
Energen Corp. 193 4,490
KN Energy, Inc. 100 2,913
MCN Corp. 875 19,031
MDU Resources Group, Inc. 225 4,528
Pacific Enterprises 450 12,038
Panhandle Eastern Corp. 600 17,025
People's Energy Corp. 217 6,612
UGI Corp. 700 14,524
Williams Companies, Inc. 800 33,600
----------
114,761
----------
TOTAL COMMON STOCKS (cost of $965,481) 1,052,931
----------
PREFERRED STOCKS - 12.7 %
- ----------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES
ELECTRIC SERVICES - 11.2%
Appalachian Power Co., 7.40% 13 1,274
Arizona Public Service Co., $1.8125, Series W 180 4,590
Arkansas Power & Light Co.:
7.80% 10 990
7.88% 9 890
Baltimore Gas & Electric Co.,
6.75% Sinking Fund 29 2,952
Boston Edison Co., 7.75% 100 2,500
Carolina Power & Light Co., 7.72% 30 3,030
Central Maine Power Co., 7.875% 16 1,564
Central Power & Light Co., 7.12% 16 1,546
Cleveland Electric Illuminating Co., A.R.P.,
Series L 65 4,778
Commonwealth Edison Co., 7.24% 52 5,130
</TABLE>
7
<PAGE>
Investment Portfolio/November 30, 1995
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
PREFERRED STOCKS - CONT. SHARES VALUE
- ----------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - CONT.
ELECTRIC SERVICES - CONT.
Detroit Edison Co.:
7.36% 45 $ 4,545
7.45% 31 3,130
7.68% 30 3,001
7.74% 100 2,500
7.75% 100 2,563
Duke Power Co., 7.04% 20 2,158
Florida Power & Light Co.:
7.40%, Series G 24 2,415
7.40% 4 400
7.76% 17 1,743
Georgia Power Co.:
A.R.P. 110 2,613
7.80% 11 1,161
Gulf States Utilities Co.:
8.80%, Series A 17 1,679
A.R.P., Series A 19 1,823
7.56% 18 1,604
8.52% 8 780
Illinois Power Co.:
A.R.P., Series A 25 1,125
A.R.P., Series B 30 1,459
7.75% 50 2,606
Jersey Central Power & Light Co., 7.88% 15 1,470
Louisiana Power & Light Co., 8.00%, Series 1992 90 2,295
Montana Power Company, $6.875 30 3,060
Niagara Mohawk Power Corp.:
A.R.P., Series B 161 3,186
7.72% 26 1,917
Northern Indiana Public Service Co., 7.44% 9 911
Ohio Edison Co., 7.75% 240 6,000
PSI Energy, Inc.:
6.88% 36 3,708
7.44% 235 5,992
Peco Energy Company, 7.48% 30 3,142
Pennsylvania Power & Light Co., 6.75% 51 5,227
Pennsylvania Power Co., 7.75% 15 1,425
Public Service Electric & Gas Co., 7.52% 32 3,095
Southern California Edison Co., 7.36% 125 3,147
Tampa Electric Company, 7.44%, Series F 11 1,089
Texas Utilities Co.:
7.22% 200 5,500
7.50% 480 13,320
7.98% 35 3,841
</TABLE>
8
<PAGE>
Investment Portfolio/November 30, 1995
<TABLE>
- ----------------------------------------------------------------------------------
<S> <C> <C>
Toledo Edison Co., A.R.P., Series A 40 $ 740
Union Electric Co., $7.44 18 1,809
----------
137,423
----------
GAS SERVICES - 1.1%
Enron Corp., 8.00% 400 10,100
Pacific Enterprises, $4.50 4 264
Williams Co., Inc., $3.50 37 2,683
----------
13,047
----------
PIPELINES - 0.4%
Enserch Corp. A.R.P., Series E 48 4,579
----------
TOTAL PREFERRED STOCKS (cost of $154,644) 155,049
----------
TOTAL INVESTMENTS - 98.9% (cost of $1,120,125) (a) 1,207,980
----------
SHORT-TERM OBLIGATIONS - 1.0% PAR
---------------------------------------------------------------------------------
Repurchase agreement with Bankers Trust Securities
Corp. dated 11/30/95, due 12/01/95 at 5.90% collateralized
by U.S. Treasury notes with various maturities to 1997,
market value $12,194 (repurchase proceeds $11,969) $11,967 11,967
----------
OTHER ASSETS & LIABILITIES, NET - 0.1% 1,355
- ----------------------------------------------------------------------------------
NET ASSETS - 100.0% $1,221,302
==========
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- --------------------------------------------------------------------------------
(a) Cost for federal income tax purposes is the same.
Acronym Name
A.R.P. Adjustable Rate Preferred
See notes to financial statements.
9
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
NOVEMBER 30, 1995
<TABLE>
<CAPTION>
(in thousands except for per share amounts and footnotes)
<S> <C> <C>
ASSETS
Investments at value (cost $1,120,125) $1,207,980
Short-term obligations 11,967
----------
1,219,947
Receivable for:
Dividends $5,362
Fund shares sold 2,265
Investments sold 1,551
Interest 2
Other 32 9,212
------ ----------
Total Assets 1,229,159
LIABILITIES
Payable for:
Distributions 3,974
Fund shares repurchased 3,750
Accrued:
Deferred Trustees fees 22
Transfer Agent Out-of-Pocket fees 100
Other 11
------
Total Liabilities 7,857
----------
NET ASSETS $1,221,302
==========
Net asset value & redemption price per share -
Class A ($400,349/27,851) $14.37
==========
Maximum offering price per share - Class A
($14.37/0.9525) $15.09 (a)
==========
Net asset value & offering price per share -
Class B ($820,953/57,110) $14.37 (b)
==========
COMPOSITION OF NET ASSETS
Capital paid in $1,234,731
Undistributed net investment income 796
Accumulated net realized loss (102,080)
Net unrealized appreciation 87,855
----------
$1,221,302
==========
</TABLE>
(a) On sales of $50,000 or more the offering price is reduced.
(b) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See notes to financial statements.
10
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1995
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 71,455
Interest 859
--------
72,314
EXPENSES
Management fee $ 7,486
Service fee 2,905
Distribution fee - Class B 5,843
Transfer agent 2,955
Bookkeeping fee 401
Trustees fee 47
Custodian fee 38
Audit fee 53
Legal fee 13
Registration fee 33
Reports to shareholders 19
Other 139 19,932
-------- --------
Net Investment Income 52,382
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized loss (21,504)
Net unrealized appreciation during
the period 260,221
--------
Net Gain 238,717
--------
Net Increase in Net Assets from Operations $291,099
========
</TABLE>
See notes to financial statements.
11
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year ended November 30
(in thousands) ------------------------
INCREASE (DECREASE) IN NET ASSETS 1995 1994
<S> <C> <C>
Operations:
Net investment income $ 52,382 $ 64,059
Net realized loss (21,504) (38,551)
Net unrealized appreciation (depreciation) 260,221 (164,651)
---------- ----------
Net Increase (Decrease) from Operations 291,099 (139,143)
Distributions:
From net investment income - Class A (19,543) (23,148)
From net investment income - Class B (33,675) (39,378)
---------- ----------
237,881 (201,669)
---------- ----------
Fund Share Transactions:
Receipts for shares sold - Class A 41,022 63,527
Value of distributions reinvested - Class A 14,696 17,112
Cost of shares repurchased - Class A (106,875) (143,099)
---------- ----------
(51,157) (62,460)
---------- ----------
Receipts for shares sold - Class B 62,927 143,384
Value of distributions reinvested - Class B 27,317 31,354
Cost of shares repurchased - Class B (172,228) (267,909)
---------- ----------
(81,984) (93,171)
---------- ----------
Net Decrease from Fund Share Transactions (133,141) (155,631)
---------- ----------
Total Increase (Decrease) 104,740 (357,300)
NET ASSETS
Beginning of period 1,116,562 1,473,862
---------- ----------
End of period (including undistributed net investment
income of $796 and $1,754, respectively) $1,221,302 $1,116,562
========== ==========
NUMBER OF FUND SHARES
Sold - Class A 3,230 5,014
Issued for distributions reinvested - Class A 1,156 1,373
Repurchased - Class A (8,370) (11,531)
---------- ----------
(3,984) (5,144)
---------- ----------
Sold - Class B 4,945 11,245
Issued for distributions reinvested - Class B 2,147 2,517
Repurchased - Class B (13,428) (21,694)
---------- ----------
(6,336) (7,932)
---------- ----------
</TABLE>
See notes to financial statements.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
November 30, 1995
NOTE 1. ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
ORGANIZATION: Colonial Utilities Fund (the Fund), a series of Colonial Trust IV,
is a diversified portfolio of a Massachussets business trust registered under
the Investment Company Act of 1940, as amended, as a 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, sold, or mature.
Cost is determined and gains (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 investment 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: The Fund declares and records distributions daily
and pays monthly.
The 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 Fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations.
13
<PAGE>
Notes to Financial Statements/November 30, 1995
NOTE 1. 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.
NOTE 2. 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:
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
------------------ ---------------
<S> <C>
First $1 billion 0.65%
Over $1 billion 0.60%
</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:
<TABLE>
<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
reimbursement for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Colonial Investment
Services, Inc. (the Distributor), an affiliate of the Adviser, is the Fund's
principal underwriter. For the year ended November 30, 1995, the Fund has been
advised that the Distributor retained net underwriting discounts of $74,182 on
sales of the Fund's Class A shares and received contingent deferred sales
charges (CDSC) of $3,596,980 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 only.
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.
14
<PAGE>
Notes to Financial Statements/November 30, 1995
- --------------------------------------------------------------------------------
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 3. PORTFOLIO INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT ACTIVITY: During the year ended November 30, 1995, purchases and
sales of investments, other than short-term obligations, were $83,598,066 and
$223,972,181, respectively.
Unrealized appreciation (depreciation) at November 30, 1995, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $132,876,705
Gross unrealized depreciation (45,021,216)
------------
Net unrealized appreciation $ 87,855,489
------------
</TABLE>
At November 30, 1995, 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>
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
2003 21,504,000
------------
$122,560,000
------------
</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.
15
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
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 0.640 0.544 0.681 0.587
Net realized and
unrealized gain (loss) 2.659 2.659 (1.896) (1.896)
------- ------- ------- -------
Total from Investment
Operations 3.299 3.203 (1.215) (1.309)
------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.649) (0.553) (0.665) (0.571)
From capital
paid in --- --- --- ---
------- ------- ------- -------
Total Distributions
Declared to
Shareholders (0.649) (0.553) (0.665) (0.571)
------- ------- ------- -------
Net asset value -
End of period $14.370 $14.370 $11.720 $11.720
======= ======= ======= =======
Total return (d) 28.90% 27.96% (9.04)% (9.73)%
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses 1.21% (e) 1.96% (e) 1.23% 1.98%
Net investment income 5.00% (e) 4.25% (e) 5.49% 4.74%
Portfolio turnover 7% 7% 16% 16%
Net assets at end
of period (in millions) $ 400 $ 821 $ 373 $ 744
</TABLE>
(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 Trust I) and Colonial Corporate Cash 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 contingent deferred sales charge.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior year ratios are net of benefits received,
if any.
(f) Not annualized.
(g) Annualized.
16
<PAGE>
FINANCIAL HIGHLIGHTS - continued
<TABLE>
<CAPTION>
Year ended November 30
================================================================================
1993 1992(a) 1991(a)
Class A Class B Class A Class B (b) Class A
- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
$12.960 $12.960 $11.440 $12.310 $10.090
- ------- ------- ------- ------- -------
0.713 0.612 0.741 0.296 0.917
0.616 0.616 1.517 0.691 1.377
- ------- ------- ------- ------- -------
1.329 1.228 2.258 0.987 2.294
- ------- ------- ------- ------- -------
(0.689) (0.588) (0.727) (0.337) (0.941)
--- --- (0.011)(c) --- (0.003)(c)
- ------- ------- ------- ------- -------
(0.689) (0.588) (0.738) (0.337) (0.944)
- ------- ------- ------- ------- -------
$13.600 $13.600 $12.960 $12.960 $11.440
======= ======= ======= ======= =======
10.20% 9.42% 20.21% 6.06%(f) 23.56%
======= ======= ======= ======= =======
1.19% 1.94% 1.16% 1.91%(g) 1.11%
4.92% 4.17% 5.52% 4.77%(g) 8.50%
6% 6% 35% 35% 1%
$ 503 $ 971 $ 232 $ 156 $ 135
</TABLE>
- --------------------------------------------------------------------------------
Federal Income Tax Information (unaudited)
100% of the distributions paid by the Fund from investment income earned in the
year ended November 30, 1995, qualify for the corporate dividends received
deduction.
17
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
T0 THE TRUSTEES OF COLONIAL TRUST IV AND THE SHAREHOLDERS OF
COLONIAL UTILITIES FUND
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 Utilities Fund (a series
of Colonial Trust IV) at November 30, 1995, the results of its operations, the
changes in its net assets and the financial highlights for the periods indicated
in conformity with generally accepted accounting principles. These financial
statements and the financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of portfolio positions at November 30, 1995
by correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
January 12, 1996
18
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Utilities Fund is:
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.
This report has been prepared for shareholders of Colonial Utilities Fund. This
report may also be used as sales literature when preceded or accompanied by the
current prospectus which provides details of sales charges, investment
objectives and operating policies of the Fund.
19
<PAGE>
[COLONIAL MUTUAL FUNDS LOGO]
Mutual Funds for
Planned Portfolios
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)
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. (C)1996
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
UF-02/502B-1195 (1/96)
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