<PAGE>
COLONIAL INTERMEDIATE TAX-EXEMPT FUND
COLONIAL SHORT-TERM TAX-EXEMPT FUND
FPO
ANNUAL REPORT
NOVEMBER 30, 1995
<PAGE>
COLONIAL SHORT-TERM TAX-EXEMPT FUND
COLONIAL INTERMEDIATE TAX-EXEMPT FUND
DECEMBER 1, 1994 - NOVEMBER 30, 1995
INVESTMENT OBJECTIVE: Colonial Short-Term Tax-Exempt Fund seeks as high a level
of current income exempt from federal income tax as is consistent with
relatively low volatility by investing primarily in investment-grade, short-term
municipal securities.
Colonial Intermediate Tax-Exempt Fund seeks as high a level of after-tax total
return, as is consistent with moderate volatility, by pursuing current income
exempt from federal income tax and opportunities for appreciation from a
portfolio primarily invested in investment-grade, intermediate-term municipal
bonds.
FUND PERFORMANCE
<TABLE>
<CAPTION>
SHORT-TERM INTERMEDIATE
CLASS A CLASS A CLASS B
<S> <C> <C> <C>
Inception date 2/1/93 2/1/93 2/1/93
Distributions declared per share* $0.290 $0.388 $0.339
SEC yield on 11/30/95** 3.51% 4.18% 3.67%
Taxable-equivalent SEC Yield*** 5.81% 6.92% 6.08%
Total return, assuming reinvestment of
all distributions and no sales charge or
contingent deferred sales charge (CDSC) --
12 months 5.47% 14.56% 13.82%
Net asset value per share at 11/30/95 $7.53 $7.85 $7.85
</TABLE>
*A portion of the Fund's income may be subject to the alternative minimum tax.
**The SEC yields on November 30, 1995, reflect the portfolio's earning power,
net of expenses, expressed as an annualized percentage of the maximum offering
price per share at the end of the period. ***Taxable-equivalent SEC yield is
based on the maximum federal income tax rate of 39.6%.
<TABLE>
<CAPTION>
SHORT-TERM TAX-EXEMPT FUND
MATURITY BREAKDOWN
(as of 11/30/95)
<S> <C>
0-1 year..................... 2.6%
1-3 years....................93.2%
Cash and equivalents......... 4.2%
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE TAX-EXEMPT FUND
MATURITY BREAKDOWN
(as of 11/30/95)
<S> <C>
1-3 years.................... 0.8%
3-5 years.................... 4.4%
5-7 years....................19.9%
7-10 years...................35.9%
10-15 years..................24.9%
15-20 years.................. 4.1%
20-25 years.................. 5.6%
Cash and equivalents......... 4.4%
</TABLE>
Because the funds are actively managed, maturity weightings will change.
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[PHOTO OF JOHN A. McNEICE, JR.]
In general, conditions in the municipal bond market were favorable during the 12
months ended November 30, 1995. Those investors who stayed the course through
1994's difficult environment were amply rewarded.
The impasse between President Clinton and the Congress over the federal
government's debt ceiling produced some volatility in the fixed-income markets.
The tax-exempt market has been focusing on this issue as well. However, tax
reform, including the flat tax proposal, may have much larger implications for
this market.
Of course, while these political issues have commanded our attention, it must be
pointed out that, over the past 12 months, the positive impact of declining
interest rates overcame almost all of the market's other concerns. This
favorable trend reflects what we believe to be the Federal Reserve Board's
success at slowing the economy and keeping inflation under control. The federal
government's stated resolve to balance the budget added further downward
momentum to interest rates.
With this update, I encourage you to read the following report on your Fund,
including an interview with the Fund's Portfolio Manager. 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
WILLIAM LORING is a Vice President of Colonial Management Associates, Inc., and
Portfolio Manager of Colonial Short-Term Tax-Exempt Fund, Colonial Intermediate
Tax-Exempt Fund and three other Colonial funds.
WHAT WAS YOUR INVESTMENT STRATEGY DURING THE PERIOD? "The Short-Term Fund
invests in securities with maturities of three years or less. The Intermediate
Fund has an average maturity normally ranging from three to ten years. We
managed the maturities of the securities in each Fund's portfolio to benefit
from declining interest rates. The average maturity of the Short-Term Fund was
lengthened throughout the year and the average maturity of the Intermediate Fund
was maintained near the upper end of its maturity range."
DID YOUR STRATEGIES FOR THE TWO FUNDS HAVE A POSITIVE OR NEGATIVE IMPACT ON
THEIR PERFORMANCE? "Our strategy had a positive impact on both funds. For Class
A shares, based on net asset value, the Short-Term Fund posted a total return of
5.47% and the Intermediate Fund posted a return of 14.56%. While each fund
provided positive returns, both underperformed the Lehman Brothers Municipal
Bond Index, a broad-based, unmanaged index that tracks the performance of the
municipal bond market. This was due to the shorter average maturities of the
securities in each Fund's portfolio relative to the Index. The Short-Term Fund's
average maturity is approximately 1.7 years, the Intermediate Fund's average
maturity is approximately 9.2 years, and the average maturity for the Index is
approximately 14 years."
WHAT INFLUENCED EACH FUND'S PERFORMANCE DURING THE PERIOD? "The biggest
influence was the downward movement in interest rates. From the beginning to the
end of the period, intermediate-term interest rates as tracked by 10-year
Treasury notes, declined from 7.91% to approximately 5.75%, and short-term
interest rates as tracked by 3-year Treasury bills, declined from 7.63% to
5.41%.
"Although both funds maintain diverse portfolios, avoiding large positions in
individual issues, the Intermediate Fund benefited from certain investments in
the transportation sector. Among these were bonds issued by the San Joaquin
Hills Transportation Corridor Agency, which realized a price gain after the
successful resolution of concerns raised about the project's environmental
impact."
WHAT IS YOUR OUTLOOK FOR THE TAX-EXEMPT BOND MARKET? "We believe that if
economic growth remains moderate and inflation stays under control, interest
rates may continue to decline in the months ahead. Tax reform will remain a
source of concern. However, barring a radical change in the tax code, municipal
bonds should continue to provide investors with attractive yields and total
returns."
4
<PAGE>
COLONIAL SHORT-TERM TAX-EXEMPT INVESTMENT PERFORMANCE
Change in Value of $10,000 from 2/93 - 11/95
Based on NAV and MOP for Class A Shares
AVERAGE ANNUAL TOTAL RETURNS*
Inception 2/1/93
<TABLE>
<CAPTION>
NAV MOP
<S> <C> <C>
1 YEAR 5.41% 4.35%
SINCE INCEPTION 3.45% 3.09%
</TABLE>
[CHART]
<TABLE>
<CAPTION>
Label A B C
------ --- --- ------
Label CSTTEF MOP NAV LEHMAN
- ----- ------ --- --- ------
<S> <C> <C> <C> <C>
1 2/1/93 9900 10000 10000
2 9979 10080 10362
3 9965 10065 10252
4 9987 10088 10356
5 10023 10124 10414
6 10072 10174 10588
7 10082 10183 10601
8 10132 10234 10822
9 10169 10271 10945
10 10180 10282 10966
11 10177 10280 10870
12 10242 10346 11099
13 10305 10409 11225
14 10235 10338 10935
15 10178 10281 10490
16 10217 10321 10579
17 10242 10345 10671
18 10253 10356 10606
19 10305 10409 10800
20 10331 10435 10838
21 10315 10419 10678
22 10314 10418 10488
23 10327 10432 10298
24 10369 10473 10525
25 10397 10502 10826
26 10468 10574 11141
27 10515 10622 11269
28 10535 10642 11283
29 10641 10748 11643
30 10663 10771 11541
31 10743 10852 11651
32 10780 10889 11799
33 10803 10912 11873
34 10840 10950 12045
35 10892 11002 12245
</TABLE>
COLONIAL INTERMEDIATE TAX-EXEMPT INVESTMENT PERFORMANCE
Change in Value of $10,000 from 2/93 - 11/95
Based on NAV and MOP for Class A Shares
AVERAGE ANNUAL TOTAL RETURNS*
Inception 2/1/93
<TABLE>
<CAPTION>
NAV MOP
<S> <C> <C>
1 YEAR 13.38% 9.70%
SINCE INCEPTION 6.68% 5.48%
</TABLE>
[CHART]
<TABLE>
<CAPTION>
Label
-------- A B C
CITEF --- --- ------
Label A Shares MOP NAV LEHMAN
- ----- -------- --- --- ------
<S> <C> <C> <C> <C>
1 2/1/93 9675 10000 10000
2 9973 10308 10362
3 9882 10214 10252
4 9985 10320 10356
5 10036 10373 10414
6 10193 10535 10588
7 10232 10575 10601
8 10415 10765 10822
9 10507 10860 10945
10 10534 10888 10966
11 10466 10818 10870
12 10654 11011 11099
13 10775 11137 11225
14 10533 10886 10935
15 10180 10522 10490
16 10289 10635 10579
17 10357 10705 10671
18 10371 10719 10606
19 10484 10836 10800
20 10528 10882 10838
21 10448 10799 10678
22 10312 10658 10488
23 10146 10487 10298
24 10304 10650 10525
25 10463 10815 10826
26 10681 11039 11141
27 10799 11162 11269
28 10803 11166 11283
29 11066 11437 11643
30 10997 11367 11541
31 11147 11521 11651
32 11295 11674 11799
33 11370 11752 11873
34 11504 11890 12045
35 11623 12014 12245
</TABLE>
COLONIAL INTERMEDIATE TAX-EXEMPT INVESTMENT PERFORMANCE
Change in Value of $10,000 from 2/93 - 11/95
Based on NAV and Maximum CDSC for Class B Shares
AVERAGE ANNUAL TOTAL RETURNS*
Inception 2/1/93
<TABLE>
<CAPTION>
NAV W/CDSC
<S> <C> <C>
1 YEAR 12.66% 8.66%
SINCE INCEPTION 6.00% 5.38%
</TABLE>
[CHART]
<TABLE>
<CAPTION>
Label
-------- A B C
CITEF ---- --- ------
Label B Shares CDSC NAV LEHMAN
- ----- -------- ---- --- ------
<S> <C> <C> <C> <C>
1 2/1/93 10000 10000 10000
2 10302 10302 10362
3 10202 10202 10252
4 10303 10303 10356
5 10351 10351 10414
6 10507 10507 10588
7 10541 10541 10601
8 10725 10725 10822
9 10814 10814 10945
10 10836 10836 10966
11 10760 10760 10870
12 10948 10948 11099
13 11066 11066 11225
14 10811 10811 10935
15 10444 10444 10490
16 10550 10550 10579
17 10614 10614 10671
18 10622 10622 10606
19 10732 10732 10800
20 10772 10772 10838
21 10684 10684 10678
22 10539 10539 10488
23 10364 10364 10298
24 10519 10519 10525
25 10676 10676 10826
26 10892 10892 11141
27 11007 11007 11269
28 11005 11005 11283
29 11267 11267 11643
30 11191 11191 11541
31 11338 11338 11651
32 11482 11482 11799
33 11552 11552 11873
34 11682 11682 12045
35 11597 11797 12245
</TABLE>
The Lehman Brothers Municipal Bond Index is a broad-based, unmanaged index that
tracks the performance of the municipal bond market. The performance of the
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 return does not include
sales charges or contingent deferred sales charge (CDSC). Maximum offering price
return includes the maximum sales charge of 1.00% for Colonial Short-Term
Tax-Exempt Fund, and 3.25% for Colonial Intermediate Tax-Exempt Fund. The CDSC
return reflects the maximum charge of 4.00% for one year and 2.00% since
inception. Performance for different share classes will vary based on
differences in sales charges and fees associated with each class. *As of
12/31/95 (most recent quarter end).
5
<PAGE>
COLONIAL INTERMEDIATE TAX-EXEMPT FUND
INVESTMENT PORTFOLIO
NOVEMBER 30, 1995 (IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 100.2% PAR VALUE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
CERTIFICATES OF PARTICIPATION - 1.8%
SC Spartanburg County School District,
5.00% 07/01/04 $ 500 $ 513
------
...................................................................................
CONSTRUCTION - 0.3%
BUILDING CONSTRUCTION
IA State Finance Authority,
Mason County Shopping Center:
6.000% 12/01/95 40 40
8.000% 12/01/04 50 53
------
93
------
...................................................................................
EDUCATION - 6.8%
MN State Higher Education Facilities
Authority, MacAlester College, Series 4-C,
6.000% 03/01/01 500 532
NY State Dormitory Authority,
State University of New York, Series A:
5.500% 07/01/00(a) 500 523
5.625% 07/01/16(a) 500 493
TX Brazos, Higher Educational
Facilities Authority, Series 1992-A,
6.600% 03/01/00 345 362
------
1,910
------
...................................................................................
GENERAL OBLIGATION - 35.4%
AZ Maricopa Paradise Valley,
6.350% 07/01/10(a) 500 560
AZ Phoenix,
6.125% 07/01/03 500 559
HI Honolulu City & County,
6.000% 11/01/01 500 541
6.000% 11/01/10 500 540
IL Joliet,
Series 1993-A,
5.300% 01/01/02 65 68
LA New Orleans,
(b) 09/01/16(c) 2,000 1,165
LA State,
Series 1993-A,
5.300% 08/01/04 145 152
MA Haverhill, Series A,
5.900% 06/15/02 200 216
</TABLE>
6
<PAGE>
Investment Portfolio/November 30, 1995
<TABLE>
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
MA New Bedford,
6.000% 10/15/02 $ 625 $ 680
MI Berkley, City School District,
7.000% 01/01/09 500 588
MN West St. Paul, Independent School,
District No. 197,
(b) 02/01/04 1,585 1,066
NJ State, Series D,
(b) 02/15/04 90 61
OH Big Walnut Local School District,
Delaware County, Series 1993,
5.200% 06/01/02(d) 585 605
OH Olmstead Falls Local School District,
6.850% 12/15/11 550 617
OH State, Higher Education Commission,
Series II-B,
5.750% 11/01/04 500 539
OH Trumbull County,
5.100% 12/01/03 500 521
TX State, Series A,
5.800% 10/01/04 1,000 1,094
WI Racine, District Number 8,
5.400% 12/01/03 375 393
------
9,965
------
...................................................................................
HEALTH - 7.5%
HOSPITALS - 6.8%
AL East Health Care Authority,
Health Care Facilities and Tax Anticipation,
Series 1993,
5.625% 09/01/04 50 53
HI State Department Budget and Finance
Special Purpose Mortgage, Kapiolani
Health Care System, Series 1993,
5.500% 07/01/01 110 113
MI Dickinson County Memorial Hospital,
7.625% 11/01/05 300 319
MN Brainerd, Health Care Facilities,
St. Joseph Medical Center, Series 1993-D,
5.300% 02/15/02 50 52
NJ Health Care Facilities Financing Authority,
Raritan Bay Medical Center,
5.800% 07/01/97 70 70
OH Cuyahoga County, Meridia Health Systems,
6.300% 08/15/06 890 969
OH Green Springs Health Care
Facilities, St. Francis Health Care Center,
Series A,
7.000% 05/15/04 100 107
</TABLE>
7
<PAGE>
Investment Portfolio/November 30, 1995
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
HEALTH - CONT.
HOSPITALS - CONT.
PA Philadelphia, Hospitals & Higher
Educational Facilities, Temple
University Hospital, Series 1993,
5.750% 11/15/99 $ 100 $ 102
TX Health Facilities Development
Corp., All Saints Episcopal Hospitals,
Series 1993-A,
5.800% 08/15/04 80 86
TX Tarrant County Health Facilities
Development Corp., Fort Worth
Osteopathic Hospital, Series 1993,
5.800% 05/15/04 50 54
------
1,925
------
NURSING HOMES - 0.7%
KY Jefferson County Health Facilities,
Beverly Enterprises, Inc., Series 1985-B,
9.750% 08/01/07 95 105
MA State, Industrial Finance Agency,
Belmont Home Care Project, Series A,
7.970% 01/01/99 100 103
------
208
------
...................................................................................
HOUSING - 2.8%
MULTI-FAMILY - 1.9%
MA State Housing Finance Agency,
Series 1992 C,
6.350% 05/15/03 200 213
RI Housing & Mortgage Finance
Corp., Homeownership Opportunity,
Series 6-B:
6.500% 04/01/03 100 107
6.500% 10/01/03 200 214
------
534
------
SINGLE-FAMILY - 0.9%
NH State Housing Finance Authority,
Single-family Mortgage, Series 1990-A,
6.850% 07/01/98 165 170
NJ State Housing & Mortgage Finance
Agency,
6.500% 05/01/03 85 92
------
262
------
</TABLE>
8
<PAGE>
Investment Portfolio/November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
PUBLIC FACILITIES IMPROVEMENT - 9.4%
FL Homestead, Special Insurance
Assessment,
5.125% 09/01/02 $ 425 $ 439
KS State Development Authority,
Lease Juvenile Detention Facility
Project, Series 1992-H,
5.750% 06/01/02 60 64
LA State Correctional Facilities
Corp. Lease, Series 1993,
5.400% 12/15/01 65 68
LA Sulphur, Public Import Sales and Use
Tax, Series 1993-ST,
5.650% 04/01/04 50 53
NY State, Urban Development Corp:
5.700% 04/01/09 500 503
6.250% 04/01/02 500 531
SC Rock Hill, Tax Increment Revenue,
Manchester Redevelopment Project,
Series 1992-B,
5.500% 05/01/03 450 473
VA State Public Building Authority,
5.625% 08/01/02 500 533
------
2,664
------
...................................................................................
PUBLIC INFRASTRUCTURE - 10.9%
AIRPORTS - 1.0%
CO Denver City & County Airport,
Series 1992-C,
6.250% 11/15/00 50 52
NV Washoe County Airport Authority
System, Series 1993-B,
5.000% 07/01/01 225 231
------
283
------
TURNPIKES/TOLL ROADS/BRIDGES - 9.9%
CA Foothill, Eastern Transportation
Corridor Agency, State Toll Road,
Senior Lien, Series A,
(b) 01/01/04 500 306
KY State Turnpike Authority Economic
Development Revitalization Projects:
6.500% 07/01/08 1,000 1,135
Series 1992,
5.500% 01/01/01 50 52
NV Clark County Highway Improvement,
5.700% 07/01/03 500 530
</TABLE>
9
<PAGE>
Investment Portfolio/November 30, 1995
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
PUBLIC INFRASTRUCTURE - CONT.
TURNPIKES/TOLL ROADS/BRIDGES - CONT.
NY Triborough Bridge and Tunnel
Authority, Series A,
5.000% 01/01/07 $ 750 $ 748
------
2,771
------
...................................................................................
REFUNDED/ESCROW/SPECIAL OBLIGATION - 0.4%
NY New York Dormitory Authority,
State University of New York,
Series 1989-B,
7.100% 05/15/01 100 110
------
...................................................................................
RETAIL TRADE - 0.6%
MISCELLANEOUS RETAIL
OH Lake County, North Madison
Properties,
8.069% 09/01/01 90 92
VA Virginia Beach Development Authority,
SC Diamond Associates, Inc.,
8.000% 12/01/10 75 77
------
169
------
...................................................................................
SOLID WASTE - 5.8%
LAND FILL - 0.4%
MA State Industrial Finance Agency,
Peabody Monofill Associates, Inc. Project,
9.000% 09/01/05 100 107
------
RESOURCE RECOVERY - 5.4%
MA State Industrial Finance Agency,
Resource Recovery, Refusetch,
Series 1993-A:
5.350% 07/01/00 100 104
5.450% 07/01/01 300 316
NJ Bergen County Utilities Authority,
Series A,
6.250% 06/15/07(c) 1,000 1,100
------
1,520
------
...................................................................................
STUDENT LOAN - 5.1%
NM State Educational Assistance
Foundation, Series 1-A,
6.200% 12/01/01 500 533
OH State Student Loan Funding Corp.,
Series A,
5.750% 08/01/03 800 840
</TABLE>
10
<PAGE>
Investment Portfolio/November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
STUDENT LOAN - CONT.
SC State Education Assistance Authority,
Student Loan Revenue Bonds, Series 1991,
6.200% 09/01/99 $ 50 $ 52
-------
1,425
-------
...................................................................................
TAX ALLOCATION - 1.8%
FL Lake County Resources Industrial
Development, Recovery Group,
Series 1993-A,
5.400% 10/01/03 500 497
-------
...................................................................................
UTILITY - 3.5%
CO-GENERATION - 1.9%
CA Sacramento Co-generation Authority,
Procter & Gamble Project,
6.500% 07/01/14 500 524
-------
MUNICIPAL ELECTRIC - 1.6%
PR Commonwealth of Puerto Rico,
Electric Power Authority, Series X,
4.900% 07/01/03 300 305
WA Grant County Public Utilities,
District Number 002,
Electric System, Series 1993-E,
5.300% 01/01/03 50 52
WA Snohomish County Washington Public
Utilities, Generation System Revenue Bonds,
District Number 001, Series 1993,
5.250% 01/01/02 80 83
-------
440
-------
...................................................................................
WATER & SEWER - 8.1%
AZ Phoenix, Civic Improvement Corp.,
Waste Water Lease, Series 1993,
5.750% 07/01/04 50 54
PA Center Township Sewer Authority,
Series A,
6.000% 04/15/03 1,035 1,123
TX Houston Water & Sewer System,
Series C,
5.900% 12/01/05(d) 1,000 1,090
-------
2,267
-------
TOTAL MUNICIPAL BONDS (cost of $26,964) (e) $28,187
-------
</TABLE>
11
<PAGE>
Investment Portfolio/November 30, 1995
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS - 4.6% PAR VALUE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
VARIABLE RATE DEMAND NOTES (f)
NY New York City Water & Sewer,
4.000% 06/15/25 $1,200 1,200
WY City of Green River,
3.900% 06/01/07 100 100
-------
TOTAL SHORT-TERM OBLIGATIONS 1,300
-------
OTHER ASSETS & LIABILITIES, NET - (4.8)% (1,350)
- --------------------------------------------------------------------------------
NET ASSETS - 100.0% $28,137
-------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- --------------------------------------------------------------------------------
(a) These securities have been purchased on a delayed delivery basis for
settlement at a future date beyond the customary settlement time.
(b) Zero coupon bond.
(c) These securities, with a total market value of $2,265, are being used to
collateralize the delayed delivery purchases indicated in note (a) above.
(d) These securities, with a total market value of $1,695, are being used to
collateralize open futures contracts.
(e) Cost for federal income tax purposes is the same.
(f) Variable rate demand notes are considered short-term obligations. Interest
rates change periodically on specified dates. These securities are payable
on demand and are secured by either letters of credit or other credit
support agreements from banks. The rates listed are as of November 30,
1995.
Short futures contracts open at November 30, 1995 are as follows:
<TABLE>
<CAPTION>
Par value Unrealized
covered by Expiration depreciation
Type contracts month at 11/30/95
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Municipal bonds $ 1,000 December $ 61
</TABLE>
See notes to financial statements.
12
<PAGE>
COLONIAL INTERMEDIATE TAX-EXEMPT FUND
STATEMENT OF ASSETS & LIABILITIES
NOVEMBER 30, 1995
(in thousands except for per share amounts and footnotes)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $26,964) $28,187
Short-term obligations 1,300
-------
29,487
Receivable for:
Interest $ 424
Fund shares sold 9
Other 62 495
------ -------
Total Assets 29,982
LIABILITIES
Payable for:
Investments purchased 1,561
Fund shares repurchased 145
Distributions 104
Variation margin on futures 7
Payable to Adviser 7
Accrued:
Deferred Trustees fees 1
Other 20
------
Total Liabilities 1,845
-------
NET ASSETS $28,137
-------
Net asset value & redemption price per share -
Class A ($13,317/1,697) $ 7.85
-------
Maximum offering price per share - Class A
($7.85/0.9675) $ 8.11(a)
-------
Net asset value & offering price per share -
Class B ($14,820/1,888) $ 7.85(b)
-------
COMPOSITION OF NET ASSETS
Capital paid in $27,773
Undistributed net investment income 26
Accumulated net realized loss (824)
Net unrealized appreciation (depreciation) on:
Investments 1,223
Open futures contracts (61)
-------
$28,137
-------
</TABLE>
(a) On sales of $100,000 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.
13
<PAGE>
COLONIAL INTERMEDIATE TAX-EXEMPT FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1995
<TABLE>
(in thousands)
INVESTMENT INCOME
<S> <C> <C>
Interest $1,532
EXPENSES
Management fee $ 157
Service fee 56
Distribution fee - Class B 95
Transfer agent 50
Bookkeeping fee 27
Trustees fee 10
Custodian fee 9
Audit fee 12
Legal fee 7
Registration fee 19
Reports to shareholders 3
Amortization of deferred organization expenses 15
Other 10
470
------
Fees and expenses waived or borne by the Adviser (273) 197
------ ------
Net Investment Income 1,335
------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized loss on:
Investments (239)
Closed futures contracts (318)
------
Net Realized Loss (557)
Net unrealized appreciation (depreciation)
during the period on:
Investments 3,124
Open futures contracts (98)
------
Net Unrealized Appreciation 3,026
------
Net Gain 2,469
------
Net Increase in Net Assets from Operations $3,804
------
</TABLE>
See notes to financial statements.
14
<PAGE>
COLONIAL INTERMEDIATE TAX-EXEMPT FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year ended
(in thousands) November 30
---------------------
INCREASE (DECREASE) IN NET ASSETS 1995 1994
-------- --------
<S> <C> <C>
Operations:
Net investment income $ 1,335 $ 1,353
Net realized loss (557) (266)
Net unrealized appreciation (depreciation) 3,026 (2,168)
-------- --------
Net Increase (Decrease) from Operations 3,804 (1,081)
Distributions:
From net investment income - Class A (707) (818)
From net investment income - Class B (656) (543)
-------- --------
2,441 (2,442)
-------- --------
Fund Share Transactions:
Receipts for shares sold - Class A 3,913 6,586
Value of distributions reinvested - Class A 478 578
Cost of shares repurchased - Class A (9,071) (3,713)
-------- --------
(4,680) 3,451
-------- --------
Receipts for shares sold - Class B 2,057 7,656
Value of distributions reinvested - Class B 449 338
Cost of shares repurchased - Class B (3,059) (2,170)
-------- --------
(553) 5,824
-------- --------
Net Increase (Decrease) from Fund Share
Transactions (5,233) 9,275
-------- --------
Total Increase (Decrease) (2,792) 6,833
NET ASSETS
Beginning of period 30,929 24,096
-------- --------
End of period (including undistributed net
investment income of $26 and $33, respectively) $ 28,137 $ 30,929
-------- --------
NUMBER OF FUND SHARES
Sold - Class A 524 862
Issued for distributions reinvested - Class A 63 76
Repurchased - Class A (1,219) (492)
-------- --------
(632) 446
-------- --------
Sold - Class B 273 1,004
Issued for distributions reinvested - Class B 59 45
Repurchased - Class B (405) (291)
-------- --------
(73) 758
-------- --------
</TABLE>
See notes to financial statements
15
<PAGE>
COLONIAL INTERMEDIATE TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each
period are as follows:
<TABLE>
<CAPTION>
Period ended
Year ended November 30 November 30
--------------------------------------------------- ----------------------
1995 1994 1993 (b)
Class A Class B Class A Class B Class A Class B
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 7.210 $ 7.210 $ 7.810 $ 7.810 $ 7.500 $ 7.500
----------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income (a) 0.387 0.338 0.366 0.317 0.305 0.263
Net realized and
unrealized gain (loss) 0.641 0.641 (0.596) (0.596) 0.302 0.302
----------------------------------------------------------------------------
Total from Investment
Operations 1.028 0.979 (0.230) (0.279) 0.607 0.565
----------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.388) (0.339) (0.370) (0.321) (0.297) (0.255)
----------------------------------------------------------------------------
Total Distributions
Declared to
Shareholders (0.388) (0.339) (0.370) (0.321) (0.297) (0.255)
----------------------------------------------------------------------------
Net asset value -
End of period $ 7.850 $ 7.850 $ 7.210 $ 7.210 $ 7.810 $ 7.810
============================================================================
Total return (c)(d) 14.56% 13.82% (3.05%) (3.68%) 8.18%(e) 7.61%(e)
============================================================================
RATIOS TO AVERAGE NET ASSETS
Expenses 0.36%(f) 1.01%(f) 0.20% 0.85% 0.20%(g) 0.85%(g)
Fees and expenses
waived or borne by
the Adviser 0.96%(f) 0.96%(f) 1.07% 1.07% 1.33%(g) 1.33%(g)
Net investment income 5.03%(f) 4.38%(f) 4.85% 4.20% 4.53%(g) 3.88%(g)
Portfolio turnover 69% 69% 26% 26% 5%(g) 5%(g)
Net assets at end
of period (000) $13,317 $14,820 $16,791 $14,138 $14,700 $ 9,396
(a)Net of fees and expenses waived or
borne by the Adviser which
amounted to $ 0.074 $ 0.074 $ 0.080 $ 0.080 $ 0.090 $ 0.090
</TABLE>
(b)The Fund commenced investment operations on February 1, 1993
(c)Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(d)Had the Adviser not waived or reimbursed a portion of expenses, total return
would have been reduced.
(e)Not annualized.
(f)The benefits derived from custody credits and directed brokerage arrangements
had no impact. Prior year ratios are net of benefits received, if any.
(g)Annualized.
- --------------------------------------------------------------------------------
Federal Income Tax Information (unaudited)
All of the distributions will be treated as exempt income for federal income
tax purposes.
- --------------------------------------------------------------------------------
16
<PAGE>
COLONIAL SHORT-TERM TAX-EXEMPT FUND
INVESTMENT PORTFOLIO
NOVEMBER 30, 1995 (IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 100.1% PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
CERTIFICATES OF PARTICIPATION - 5.1%
CA Los Angeles Unified School District,
Multiple Properties Project,
Series B,
5.000% 12/01/95(a) $ 400 $400
SC Spartanburg County School District,
No. 005:
3.900% 07/01/96 100 100
4.300% 07/01/98 100 100
----
600
----
................................................................................
CONSTRUCTION - 0.4%
BUILDING CONSTRUCTION
IA Economic Development Finance Authority,
Mason City Shopping Center,
6.250% 12/01/96 50 51
----
................................................................................
EDUCATION - 6.1%
NY State Dormitory Authority,
State University Educational Facilities,
Series A,
4.750% 05/15/98 300 302
OH State Public Facilities Commission,
Higher Education Facilities, Series II-A,
5.200% 05/01/97 415 422
----
724
----
................................................................................
GENERAL OBLIGATION - 53.2%
CO Adams County School District,
Series B,
4.200% 12/15/96 500 503
CT State, Series B,
4.100% 09/15/97 500 501
IL Cook County High School District 225,
Northfield Township,
5.200% 12/01/97 450 461
MN Bloomington Highway,
4.650% 12/01/97 500 507
NJ Keansburg School District,
5.800% 01/15/96 45 45
NM Alberquerque, Series A,
4.600% 07/01/97 500 505
</TABLE>
17
<PAGE>
Investment Portfolio/November 30, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
GENERAL OBLIGATION - CONT.
OH Olmstead Falls Local School District,
5.000% 12/15/97(a) $ 225 $ 230
OH Trumbull County,
4.600% 12/01/97(a) 500 508
TX State Public Finance Authority,
Series A,
5.000% 10/01/97 500 509
UT Washington County,
St. George School District,
6.250% 09/01/97 490 510
VA Richmond,
5.250% 01/15/97 500 507
WA Everett, Tax Levy,
Series 1993,
3.800% 12/01/95 65 65
WA State, Series R-93B,
4.200% 10/01/97 500 502
WI Milwaukee Area Technical College
District, Series A,
4.300% 06/01/98 500 502
WI State, Series 1994-B,
4.500% 05/01/97 400 403
------
6,258
------
................................................................................
HEALTH - 5.0%
HOSPITALS - 4.7%
OH Cuyahoga County, Meridia
Health System,
5.450% 08/15/97 540 549
------
NURSING HOMES - 0.3%
MA State Industrial Finance Agency,
Belmont Home Care Project, Series A,
7.570% 01/01/97 35 35
------
................................................................................
HOUSING - 2.0%
SINGLE-FAMILY
WY Community Development Authority,
4.400% 06/01/98(b) 230 231
------
................................................................................
POLLUTION CONTROL REVENUE - 5.5%
MO State Environmental Improvement and
Energy Resources Authority, Series A,
5.400% 07/01/97 530 542
OH Air Quality Development Authority,
4.250% 08/01/96 100 100
------
642
------
</TABLE>
18
<PAGE>
Investment Portfolio/November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
PUBLIC FACILITIES IMPROVEMENT - 0.5%
LA State Correctional Facilities
Corporation Lease, Series 1993,
4.100% 12/15/95 $ 60 $ 60
-------
................................................................................
TRANSPORTATION, COMMUNICATION, ELECTRIC, GAS & SANITARY
SERVICES - 22.3%
WATER TRANSPORTATION - 4.2%
AK Anchorage Port & Terminal Facility,
4.300% 02/01/98(b) 500 500
-------
TRANSPORTATION - 4.4%
NJ State Transportation Trust Fund
Authority, Series B,
5.000% 06/15/98 500 512
-------
WATER & SEWER - 13.7%
OH Clyde Waterworks,
5.600% 05/01/97 580 593
OH Hamilton County Sewer System,
Series A,
4.100% 12/01/97 500 504
TX Water Development Board,
Senior Lien,
4.900% 07/15/97 500 510
-------
1,607
-------
TOTAL MUNICIPAL BONDS (cost of $11,648)(c) 11,769
-------
SHORT-TERM OBLIGATIONS - 4.3%
- --------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (d)
IL Health Facilities Authority,
Central Dupage Hospital,
4.100% 11/01/20 300 300
WY Green River,
3.900% 06/01/07 200 200
-------
TOTAL SHORT-TERM OBLIGATONS 500
-------
OTHER ASSETS & LIABILITIES, NET - (4.4)% (513)
- --------------------------------------------------------------------------------
NET ASSETS - 100% $11,756
-------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO :
- --------------------------------------------------------------------------------
(a) These securities, or a portion thereof, with a total market value of
$937, are being used to collateralize delayed delivery purchases indicated
in note (b) below.
19
<PAGE>
Investment Portfolio/November 30, 1995
- --------------------------------------------------------------------------------
NOTES TO INVESTMENT PORTFOLIO - CONT. :
- --------------------------------------------------------------------------------
(b) These securities have been purchased on a delayed delivery basis for
settlement at a future date beyond the customary settlement time.
(c) Cost for federal income tax purposes is the same.
(d) Variable rate demand notes are considered short-term obligations. Interest
rates change periodically on specified dates. These securities are payable
on demand and are secured by either letters of credit or other credit
support agreements from banks. The rates listed are as of November 30, 1995.
See notes to financial statements.
20
<PAGE>
COLONIAL SHORT-TERM TAX-EXEMPT FUND
STATEMENT OF ASSETS & LIABILITIES
NOVEMBER 30, 1995
<TABLE>
<CAPTION>
(in thousands except for per share amounts and footnote)
<S> <C> <C>
ASSETS
Investments at value (cost $11,648) $11,769
Short-term obligations 500
-------
12,269
Receivable for:
Interest $175
Expense reimbursement due
from Adviser 6
Other 94 275
---- -------
Total Assets 12,544
LIABILITIES
Payable for:
Investments purchased 732
Distributions 41
Fund shares repurchased 1
Accrued:
Deferred Trustees fees 3
Other 11
----
Total Liabilities 788
-------
NET ASSETS $11,756
Net asset value & redemption price per
share--Class A ($11,756/1,561) $ 7.53
-------
Maximum offering price per share--Class A
($7,530/0.9900) $ 7.61(a)
-------
COMPOSITION OF NET ASSETS
Capital paid in $11,756
Undistributed net investment income 19
Accumulated net realized loss (140)
Net unrealized appreciation 121
-------
$11,756
=======
</TABLE>
(a) On sales of $1,000,000 or more the offering price is reduced.
See notes to financial statements.
21
<PAGE>
COLONIAL SHORT-TERM TAX-EXEMPT FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1995
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
INVESTMENT INCOME
Interest $511
EXPENSES
Management fee $ 60
Service fee 12
Transfer agent 21
Bookkeeping fee 27
Trustees fee 9
Custodian fee 2
Audit fee 10
Legal fee 6
Registration fee 17
Reports to shareholders 3
Amortization of deferred
organization expenses 9
Other 2
-----
178
Fees and expenses waived or borne by the Adviser (118) 60
----- ----
Net Investment Income 451
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO
POSITIONS
Net realized loss (119)
Net unrealized appreciation during the period 304
-----
Net Gain 185
----
Net Increase in Net Assets from Operations $636
====
</TABLE>
See notes to financial statements.
22
<PAGE>
COLONIAL SHORT-TERM TAX-EXEMPT FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year ended
(in thousands) November 30
-------------------------
INCREASE (DECREASE) IN NET ASSETS 1995 1994
-------- --------
<S> <C> <C>
Operations:
Net investment income $ 451 $ 375
Net realized loss (119) (20)
Net unrealized appreciation (depreciation) 304 (190)
------- -------
Net Increase from Operations 636 165
Distributions:
From net investment income - Class A (465) (372)
------- -------
171 (207)
------- -------
Fund Share Transactions:
Receipts for shares sold - Class A 2,047 29,830
Value of distributions reinvested - Class A 390 295
Cost of shares repurchased - Class A (4,615) 21,116)
------- -------
Net Increase (Decrease) from Fund Share
Transactions (2,178) 9,009
------- -------
Total Increase (Decrease) (2,007) 8,802
NET ASSETS
Beginning of period 13,763 4,961
------- -------
End of period (including undistributed net
investment income of $19 and $24,
respectively) $11,756 $13,763
======= =======
NUMBER OF FUND SHARES
Sold - Class A 273 3,954
Issued for distributions reinvested - Class A 53 39
Repurchased - Class A (619) (2,798)
------- -------
(293) 1,195
------- -------
</TABLE>
See notes to financial statements.
23
<PAGE>
COLONIAL SHORT-TERM TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
Period
Year ended ended
November 30 November 30
------------------------- -------------
1995 1994 1993 (b)
---------- ----------- -------------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 7.420 $ 7.530 $7.500
------- ------- ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.289 0.215 0.196
Net realized and
unrealized gain (loss) 0.111 (0.105) 0.012
------- ------- ------
Total from Investment
Operations 0.400 0.110 0.208
------- ------- ------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.290) (0.220) (0.178)
------- ------- ------
Net asset value -
End of period $ 7.530 $ 7.420 $7.530
------- ------- ------
Total return (c)(d) 5.47% 1.48% 2.80%(e)
------- ------- ------
RATIOS TO AVERAGE NET ASSETS
Expenses 0.50%(f) 0.50% 0.50%(g)
Fees and expenses waived or borne
by the Adviser 0.98%(f) 0.85% 1.92%(g)
Net investment income 3.74%(f) 2.97% 2.85%(g)
Portfolio turnover 123% 16% 22%(g)
Net assets at end
of period (000) $11,756 $13,763 $4,961
(a) Net of fees and expenses waived or borne by the Adviser
which amounted to $0.076 $0.063 $0.132
</TABLE>
(b) The Fund commenced investment operations on February 1, 1993.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses, total
return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior year ratios are net of benefits
received, if any.
(g) Annualized.
- -------------------------------------------------------------------------------
Federal Income Tax Information (unaudited)
All of the distributions will be treated as exempt income for federal income
tax purposes.
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30,1995
NOTE 1. ACCOUNTING POLICIES
- -------------------------------------------------------------------------------
ORGANIZATION: Colonial Intermediate Tax-Exempt Fund (CITEF) and Colonial
Short-Term Tax-Exempt Fund (CSTTEF) (the Funds), each a series of Colonial Trust
IV, are diversified portfolios of a Massachusetts business trust, registered
under the Investment Company Act of 1940, as amended, as open-end management
investment companies. The Funds may issue an unlimited number of shares. CITEF
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. CSTTEF offers Class A shares sold with a
front-end sales charge. The following significant accounting policies are
consistently followed by the Funds in the preparation of their 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, 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.
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 FOR CITEF: 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 each 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.
25
<PAGE>
Notes to Financial Statements/November 30, 1995
- --------------------------------------------------------------------------------
NOTE 1. ACCOUNTING POLICIES - CONT.
- --------------------------------------------------------------------------------
DEFERRED ORGANIZATION EXPENSES: CITEF and CSTTEF incurred expenses of $75,021
and $45,089, respectively, in connection with their organization, initial
registration with the Securities and Exchange Commission and with various
states, and the initial public offering of their shares. These expenses were
deferred and are being amortized on a straight-line basis over five years.
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.
DISTRIBUTIONS TO SHAREHOLDERS: The Funds declare and record distributions daily
and pay 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 Funds' capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations.
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
- --------------------------------------------------------------------------------
MANAGEMENT FEE: Colonial Management Associates, Inc. (the Adviser) is the
investment Adviser of the Funds and furnishes accounting and other services and
office facilities for a monthly fee based on the average net assets of each Fund
as follows:
<TABLE>
<CAPTION>
Annual
Fund Fee Rate
---- --------
<S> <C>
Colonial Intermediate Tax-Exempt Fund 0.55%
Colonial Short-Term Tax-Exempt Fund 0.50%
</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 Funds' 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 each Fund's
principal underwriter. During the year ended November 30, 1995, each Fund has
been advised that the Distributor retained net underwriting discounts on CITEF
and CSTTEF of $5,753 and $805, respectively, on sales of the Funds' Class A
shares and received contingent deferred sales charges (CDSC) of $46,040 on
CITEF's Class B share redemptions.
26
<PAGE>
Notes to Financial Statements/November 30, 1995
- --------------------------------------------------------------------------------
CITEF and CSTTEF have adopted a 12b-1 plan which requires the payment of a
service fee to the Distributor equal to 0.20% and 0.10%, respectively, annually
of each Fund's net assets as of the 20th of each month. CITEF's plan also
requires the payment of a distribution fee to the Distributor equal to 0.65%
annually 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.
EXPENSE LIMITS: Through July 31, 1995, the Adviser agreed to reimburse CITEF for
all expenses. Effective August 1, 1995, and until further notice, the expense
limit changed to 0.40% of CITEF's average net assets. The Adviser has agreed to
waive fees and bear certain CSTTEF expenses to the extent that total expenses
exceed 0.40% annually of CSTTEF's average net assets, until further notice. Each
Fund's expense limit is exclusive of service fees, distribution fees, brokerage
commissions, interest, taxes, and extraordinary expenses, if any.
OTHER: The Funds pay no compensation to their officers, all of whom are
employees of the Adviser.
The Funds' 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 each
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 as follows:
<TABLE>
<CAPTION>
Purchases Sales
<S> <C> <C>
Colonial Intermediate Tax-Exempt Fund $19,189,120 $22,538,899
----------- -----------
Colonial Short-Term Tax-Exempt Fund $14,456,737 $15,477,525
----------- -----------
</TABLE>
Unrealized appreciation (depreciation) at November 30, 1995, based on cost of
investments for both financial statement and federal income tax purposes were as
follows:
<TABLE>
<CAPTION>
Colonial Colonial
Intermediate Short-Term
Tax-Exempt Fund Tax-Exempt Fund
--------------- ---------------
<S> <C> <C>
Gross unrealized appreciation $1,226,787 $121,050
Gross unrealized depreciation (3,524) (110)
---------- --------
Net unrealized appreciation $1,223,263 $120,940
========== ========
</TABLE>
27
<PAGE>
Notes to Financial Statements/November 30, 1995
- --------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION - CONT.
- --------------------------------------------------------------------------------
CAPITAL LOSS CARRYFORWARDS: At November 30, 1995, capital loss carryforwards
available (to the extent provided in regulations) to offset future realized
gains were approximately as follows:
Colonial Intermediate Tax-Exempt Fund:
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
---------- ------------
<S> <C>
2002 $151,000
2003 591,000
--------
$742,000
========
</TABLE>
Colonial Short-Term Tax-Exempt Fund:
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
---------- ------------
<S> <C>
2001 $ 1,000
2002 1,000
2003 137,000
--------
$139,000
========
</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: At November 30, 1995, CSTTEF had greater than 10% of its net assets
invested in Ohio.
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 Funds may focus their investments in certain industries, subjecting them to
greater risk than a fund that is more diversified.
CITEF 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 variation margin recorded in CITEF's Statement of Assets and
Liabilities at any given time.
NOTE 4. OTHER RELATED PARTY TRANSACTIONS
- --------------------------------------------------------------------------------
At November 30, 1995, CSTTEF had three shareholders who owned greater than 5% of
the Fund's shares outstanding.
28
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
T0 THE TRUSTEES OF COLONIAL TRUST IV AND THE SHAREHOLDERS OF
COLONIAL INTERMEDIATE TAX-EXEMPT FUND AND COLONIAL SHORT-TERM
TAX-EXEMPT FUND
In our opinion, the accompanying statements of assets and liabilities, including
the investment portfolios, 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 Intermediate Tax-Exempt
Fund and Colonial Short-Term Tax-Exempt Fund (each a series of Colonial Trust
IV) at November 30, 1995, the results of their operations, the changes in their
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 Funds' 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 and brokers, and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
January 12, 1996
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SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Colonial has one of the most extensive selections of shareholder services
available. Your financial adviser can help you arrange for any of these services
or you can call Colonial directly at 1-800-345-6611.
AFFORDABLE ADDITIONAL INVESTMENTS: Add to your account with as little as $50;
$25 for an IRA account.
FREE EXCHANGES*: Exchange all or part of your account into the same share class
of another Colonial fund, by phone or mail, as your needs change over time.
EASY ACCESS TO YOUR MONEY*: Make withdrawals from your account by phone, by mail
or for certain funds, by check.
ONE-YEAR REINSTATEMENT PRIVILEGE: If you need access to your money, but then
choose to return it to Colonial within one year, you can reinvest in any
Colonial fund of the same share class without any penalty or sales charge.
FUNDAMATIC: Make periodic investments as low as $50 from your checking account
to your Colonial account.
SYSTEMATIC WITHDRAWAL PLAN (SWP): Receive monthly, quarterly, or semiannual
payments via check or bank transmission. There is a $5,000 account value
required, but no minimum for the payment amount. The maximum annual withdrawal
is 12% of account balance at time SWP is established. SWPs by check are
processed on the 10th of each month.
AUTOMATED DOLLAR COST AVERAGING: Transfer money on a monthly basis from any
Colonial fund with a balance of $5,000 into the same share class of up to four
other Colonial funds. Minimum for each transfer is $100.
LOW COST IRAS: Choose from a broad range of retirement plans, including IRAs.
* Redemptions and exchanges are made at the next determined net asset value
after the request is received by Colonial. Proceeds may be more or less than
your original cost. The exchange privilege may be terminated at any time.
Investors who purchase Class B or Class D shares (for applicable funds), or $1
million or more of Class A shares, may be subject to a contingent deferred sales
charge.
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IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Short-Term Tax-Exempt Fund and
Colonial Intermediate Tax-Exempt Fund is:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Each 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 Short-Term Tax-Exempt
Fund and Colonial Intermediate Tax-Exempt 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.
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[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
IS-02/486B-1195 (1/96)
Printed on recycled paper
