<PAGE> 1
Seeking new opportunities for
investors in a more competitive
utilities environment.
COLONIAL UTILITIES FUND ANNUAL REPORT
November 30, 1999
<PAGE> 2
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The year ended November 30, 1999 will go down in the books as another strong one
for the U.S. economy and a year of rebound and rebuilding for global economies.
In the U.S., consumer confidence, personal income and employment remained high
while inflation edged up from 2.1% to 2.6%. Although that's still below
inflation's long-term historical average, the Federal Reserve stepped in to
raise interest rates three times between June and November and put the nation on
notice that it would continue to take steps to balance economic growth and
inflation in the months ahead.
The stock market logged another year of impressive gains. However, the major
indexes masked the market's volatility as well as its selectivity. A narrow band
of technology companies led the market for most of the year. In general, large
companies fared better than small companies. However, small- and mid-sized
companies rallied near the end of the period, raising investor hopes that the
market was finally broadening. For the 12-month period ended November 30, 1999,
the Fund's Class A shares, without a sales charge, generated a total return of
13.15%.
The following report will provide you with more specific information about your
Fund's performance and the strategies that your managers used during the period.
As always, we thank you for choosing Colonial Utilities Fund. We look forward to
continuing to serve your investment needs.
Sincerely,
/s/Stephen E. Gibson
Stephen E. Gibson
President
January 12, 2000
Not FIDC Insured
May Lose Value
No Bank Guarantee
Because economic and market conditions change frequently, there can be no
assurance that the trends described above or on the following pages will
continue.
<PAGE> 3
HIGHLIGHTS
- - STRONG GLOBAL ECONOMIES, COUPLED WITH DRAMATIC GROWTH IN THE INTERNET, MADE
TELECOMMUNICATIONS ONE OF THE FASTEST GROWING INDUSTRIES.
Around the world, there has been increased acceptance of wireless telephony
as an adjunct or a replacement for traditional line-based communications.
- - MERGER AND ACQUISITION ACTIVITY AMONG MARKET LEADERS BOOSTED STOCK PRICES
for some of the largest companies in the telecommunications sector.
- - RISING INTEREST RATES HURT THE TRADITIONAL UTILITIES SECTOR after the Fed
raised short-term rates three times between June and November. However, the
stocks rallied in the last month on reports that inflation remained under
control.
- - FUND OUTPERFORMED INDEX.
The Fund's overweighting in telecommunications helped the Fund's Class A
shares, without a sales charge, outperform the Dow Jones Utility Average
significantly.
NET ASSET VALUE AS OF 11/30/99
<TABLE>
<S> <C>
Class A $22.85
- ------------------------------------------
Class B $22.82
- ------------------------------------------
Class C $22.81
- ------------------------------------------
Class Z $22.87
- ------------------------------------------
</TABLE>
DISTRIBUTIONS DECLARED PER SHARE AS OF 11/30/99
<TABLE>
<S> <C>
Class A $0.998
- ------------------------------------------
Class B $0.864
- ------------------------------------------
Class C $0.864
- ------------------------------------------
Class Z (1/29/99 - 11/30/99) $0.300
- ------------------------------------------
</TABLE>
1
COLONIAL UTILITIES FUND PERFORMANCE
VS. DOW JONES UTILITY AVERAGE
12/1/98 - 11/30/99
[BAR GRAPH]
<TABLE>
<CAPTION>
Colonial Utilities Fund, Class A Dow Jones Utility Average
<S> <C>
13.15 -3.95
</TABLE>
The Dow Jones Utility Average is an unmanaged index that tracks the performance
of utility stocks. Unlike mutual funds, indexes are not investments, do not
incur fees or expenses, and are not professionally managed. It is impossible to
invest directly in an index.
1
<PAGE> 4
PORTFOLIO MANAGERS' REPORT
TOP SECTOR BREAKDOWNS
11/30/99 vs. 11/30/98
<TABLE>
<CAPTION>
Telecom/ Electric Gas Water
Telephone
<S> <C> <C> <C> <C>
11/30/99 57.7% 23.2% 15.0% 0.7%
11/30/98 40.9% 39.0% 6.8% 0.0%
</TABLE>
Sector breakdowns are calculated as a percentage of net assets.Because the Fund
is actively managed, there can be no guarantee the Fund will maintain these
holdings.
Industry sectors in the following financial statements are based upon the
standard industrial classifications (SIC) as published by the U.S. Office of
Management and Budget. The sector classifications used on this page are based
upon the Advisor's defined criteria as used in the investment process.
BOUGHT
We invested in Frontier Corp., a high-quality, second-tier telecommunications
company. Under new management, the company performed well. Late in the period,
it was purchased by Global Crossing (4.5% of net assets) at a significant
premium, which contributed to the Fund's positive return.
STRONG RETURNS IN A CHALLENGING ENVIRONMENT
Colonial Utilities Fund delivered a strong return for the year ended November
30, 1999. For the 12-month period, the Fund's Class A shares returned 13.15%,
without a sales charge, outperforming the Dow Jones Utility Average, which lost
3.95%.
CONTINUED EMPHASIS ON TELECOMMUNICATIONS
We continued to emphasize stocks in the fast-growing telecommunications sector,
which has benefited from a strong global economic environment, increased
acceptance of wireless communications and the boom in the Internet.
Telecommunications accounted for over 50% of the Fund's assets during the
period, up from 40.9% six months ago. Our investments included companies such as
MCI WorldCom (3.8% of net assets), one of the leading Internet "backbone"
companies, i.e., it provides the lines over which Internet transactions and
connections travel. We have not invested directly in Internet content providers
or retailers, which we believe fall outside of the scope of this portfolio.
ELECTRIC UTILITIES, REITS PROVIDED YIELD
Our investments in electric utilities provided exposure to high quality
companies and yields that ranged between 5% and 7%. We added a small investment
in real estate investment trusts (REITs). Although the stocks have not had a
spectacular year, we believe their valuations remain attractive, they provide
diversification for the portfolio, and their high yields helped raise the Fund's
income during the year.
In general, the utility stocks we owned did better than the industry average,
which was hurt by rising short-term interest rates and factors associated with
deregulation. Deregulation has spurred an increase in merger and acquisition
activity, as electric utility companies seek to position themselves for a
changing competitive environment. And although we see these changes as positive
in the long run, the uncertainty they have created has been negative for the
stocks in the recent period.
2
<PAGE> 5
PORTFOLIO MANAGER'S REPORT (CONTINUED)
GAS AND WATER UTILITIES DELIVER ATTRACTIVE RETURNS
The Fund's investments in gas and water companies also performed well during the
year. Our focus has been on investing in companies that are at the leading edge
of their businesses. For example, we invested in Enron (3.8% of net assets), a
natural gas company that has become a leader in a number of sectors, including
gas trading and distribution. We also own a stake in Williams Companies, Inc.
(3.3% of net assets) which has just spun off its telecommunications business,
but is still a leader in natural gas.
A POSITIVE OUTLOOK
We're optimistic about the prospects for the utilities sector in the period
ahead. We expect the sector to benefit from a stable world environment --
despite some pockets of unrest -- and to prosper if forecasts for strong
economic growth going forward are met. We plan to concentrate the majority of
the Fund's assets in the telecommunications industry in the U.S., Europe and
Asia, because that is where we expect the growth to be the strongest for this
sector. We will continue to seek out market leaders with strong management in
the natural gas industry and to support the portfolio with yield provided by our
investments in electric utilities and REITs.
/s/ Ophelia Barsketis /s/ Deborah Jansen
Ophelia Barsketis and Deborah Jansen are co-managers of Colonial Utilities Fund
and are senior vice presidents of Stein Roe & Farnham Incorporated.
TOP 10 HOLDINGS AS OF 11/30/99
<TABLE>
<S> <C>
1. SBC
Communications 4.9%
- ------------------------------
2. Sonera Group 4.5%
- ------------------------------
3. Global Crossing 4.5%
- ------------------------------
4. GTE 4.3%
- ------------------------------
5. Bell Atlantic 4.2%
- ------------------------------
6. BellSouth 4.0%
- ------------------------------
7. MCI WorldCom 3.8%
- ------------------------------
8. Enron Corp. 3.8%
- ------------------------------
9. William Cos. 3.3%
- ------------------------------
10. Telefonica de Espana 3.3%
- ------------------------------
</TABLE>
Portfolio holdings are calculated as a percentage of net assets. Because the
Fund is actively managed, there can be no guarantee the Fund will maintain these
holdings in the future.
SOLD
We reduced our investment in Azurix (0.7% of net assets), a U.S. water utility.
The company has stumbled in making the transition from a private to a public
company. As a result, we have sold part of our original investment and continue
to monitor the company's progress.
An investment in the Fund involves certain risks, including fluctuations in
utility stock prices, which may occur in response to changes in interest rates
and regulatory, economic and business developments.
3
<PAGE> 6
PERFORMANCE INFORMATION
PERFORMANCE OF A $10,000
INVESTMENT IN ALL SHARE
CLASSES 11/30/89 - 11/30/99
<TABLE>
<CAPTION>
Without With
sales sales
charge charge
- ------------------------------
<S> <C> <C>
Class A $33,824 $32,218
- ------------------------------
Class B $31,987 $31,987
- ------------------------------
Class C $33,230 $33,230
- ------------------------------
Class Z $33,907 $33,907
- ------------------------------
</TABLE>
PERFORMANCE OF A $10,000 INVESTMENT IN CLASS A SHARES 11/30/89 - 11/30/99
[LINE CHART]
<TABLE>
<CAPTION>
Dow Jones
S&P 500 Without sales With sales Utility
Index charge charge Average
<S> <C> <C> <C> <C>
11/30/89 10000 10000 9525 10000
12/31/89 10240 10036 9559 10521
01/31/90 9553 9741 9278 10043
02/28/90 9676 9785 9320 9960
03/31/90 9933 9704 9243 9773
04/30/90 9685 9497 9046 9277
05/31/90 10628 9754 9291 9716
06/30/90 10556 9785 9321 9726
07/31/90 10523 9787 9323 9760
08/31/90 9572 9616 9159 9157
09/30/90 9107 9410 8963 9339
10/31/90 9069 9290 8849 10082
11/30/90 9654 9527 9074 10081
12/31/90 9922 9521 9069 10043
01/31/91 10353 9752 9289 9936
02/28/91 11092 10223 9737 10282
03/31/91 11361 10512 10012 10560
04/30/91 11388 10903 10385 10261
05/31/91 11877 11046 10521 10404
06/30/91 11333 10897 10379 9749
07/31/91 11862 11191 10659 10014
08/31/91 12142 11379 10838 10406
09/30/91 11939 11495 10949 10718
10/31/91 12099 11665 11111 10902
11/30/91 11612 11777 11218 11114
12/31/91 12939 11990 11421 11572
01/31/92 12698 12371 11784 10786
02/29/92 12862 12693 12090 10614
03/31/92 12612 12720 12116 10702
04/30/92 12982 12980 12364 11009
05/31/92 13045 13288 12657 11202
06/30/92 12851 13398 12762 11168
07/31/92 13375 14100 13431 11953
08/31/92 13102 14075 13406 11678
09/30/92 13257 14158 13486 11843
10/31/92 13302 14168 13495 11849
11/30/92 13754 14152 13480 11838
12/31/92 13924 14509 13820 12046
01/31/93 14040 14780 14078 12375
02/28/93 14231 15537 14799 13192
03/31/93 14532 15657 14913 13350
04/30/93 14180 15621 14879 13257
05/31/93 14559 15596 14855 13277
06/30/93 14601 16040 15278 13714
07/31/93 14542 16329 15553 14039
08/31/93 15094 16744 15948 14475
09/30/93 14977 16593 15805 14180
10/31/93 15287 16351 15574 13694
11/30/93 15142 15594 14853 12897
12/31/93 15325 15857 15104 13206
01/31/94 15847 15599 14858 13037
02/28/94 15417 14877 14170 12218
03/31/94 14746 14476 13789 11475
04/30/94 14935 14798 14095 11679
05/31/94 15179 14170 13497 10985
06/30/94 14807 13847 13190 10539
07/31/94 15292 14361 13679 11110
08/31/94 15918 14403 13719 11363
09/30/94 15529 14038 13371 10985
10/31/94 15877 14224 13548 11003
11/30/94 15299 14181 13507 10982
12/31/94 15526 14219 13544 11188
01/31/95 15928 15148 14428 11927
02/28/95 16548 15237 14513 12059
03/31/95 17036 15117 14399 11748
04/30/95 17537 15428 14695 12209
05/31/95 18236 16124 15358 13047
06/30/95 18659 16177 15409 12860
07/31/95 19277 16281 15507 13005
08/31/95 19325 16660 15869 12976
09/30/95 20141 17581 16746 13825
10/31/95 20068 17963 17110 13873
11/30/95 20947 18283 17414 14053
12/31/95 21351 19164 18253 14767
01/31/96 22077 19534 18606 15159
02/29/96 22283 19059 18154 14484
03/31/96 22497 18866 17970 14133
04/30/96 22827 18661 17774 13992
05/31/96 23414 18687 17799 14066
06/30/96 23503 19388 18467 14854
07/31/96 22464 18632 17747 13865
08/31/96 22938 18723 17834 14573
09/30/96 24227 18762 17871 14821
10/31/96 24896 19526 18598 15531
11/30/96 26776 20160 19203 16231
12/31/96 26245 20320 19354 16110
01/31/97 27883 20744 19759 16135
02/28/97 28103 21105 20103 15858
03/31/97 26951 20316 19351 15333
04/30/97 28557 20476 19504 15218
05/31/97 30302 21177 20171 15708
06/30/97 31651 21799 20764 16104
07/31/97 34167 22111 21061 16753
08/31/97 32254 21607 20581 16584
09/30/97 34018 22739 21659 17111
10/31/97 32882 22851 21765 17448
11/30/97 34404 24855 23674 18703
12/31/97 34996 26065 24827 19815
01/31/98 35381 26036 24800 19134
02/28/98 37932 26656 25390 19838
03/31/98 39874 28815 27446 20945
04/30/98 40281 28017 26686 20874
05/31/98 39588 27605 26294 20982
06/30/98 41195 27989 26659 21740
07/31/98 40758 27857 26534 20650
08/31/98 34869 26303 25053 20721
09/30/98 37104 28078 26745 22915
10/31/98 40117 28887 27515 22560
11/30/98 42548 29904 28483 22812
12/31/98 44999 31856 30343 23554
01/31/99 46879 31465 29970 22850
02/28/99 45422 30709 29251 22276
03/31/99 47238 30129 28698 22236
04/30/99 49067 32624 31074 23732
05/31/99 47909 33371 31786 25182
06/30/99 50567 34032 32415 24301
07/31/99 48990 33678 32078 24165
08/31/99 48745 32556 31010 24363
09/30/99 47409 32319 30783 23074
10/31/99 50410 33295 31713 23764
11/30/99 51434 33824 32218 21906
</TABLE>
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of 500 widely held, large capitalization U.S. stocks. The Dow Jones
Utility Average is an unmanaged index that tracks the performance of utility
stocks. Unlike mutual funds, indexes are not investments, do not incur fees or
expenses, and are not professionally managed. It is impossible to invest
directly in an index.
AVERAGE ANNUAL TOTAL RETURNS AS OF 11/30/99
<TABLE>
<CAPTION>
Share Class A B C Z
Inception 3/4/92(1) 5/5/92 8/1/97 1/29/99
- -----------------------------------------------------------------------------------------------
w/o sales with sales w/o sales with sales w/o sales with sales w/o sales
charge charge charge charge charge charge charge
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 13.15% 7.78% 12.32% 7.32% 12.28% 11.28% 13.43%
- -----------------------------------------------------------------------------------------------
5 years 18.99 17.83 18.11 17.90 18.57 18.57 19.05
- -----------------------------------------------------------------------------------------------
10 years 12.96 12.41 12.33 12.33 12.76 12.76 12.99
- -----------------------------------------------------------------------------------------------
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF 9/30/99
<TABLE>
<CAPTION>
Share Class A B C Z
w/o sales with sales w/o sales with sales w/o sales with sales w/o sales
charge charge charge charge charge charge charge
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 15.13% 9.66% 14.30% 9.30% 14.25% 13.25% 15.37%
- -----------------------------------------------------------------------------------------------
5 years 18.15 17.00 17.28 17.07 17.76 17.76 18.19
- -----------------------------------------------------------------------------------------------
10 years 12.44 11.90 11.83 11.83 12.26 12.26 12.47
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Change in investment policies.
Past performance cannot predict future investment results. Returns and value of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 4.75% charge for Class A shares and the contingent deferred sales
charge (CDSC) maximum charge of 5% for one year and 2% for five years for Class
B shares and 1% for one year for Class C shares.
Performance for different share classes will vary based on differences in sales
charges and fees associated with each class.
Class B, C and Z share (newer class shares) performance information includes
returns of the Fund's Class A shares (the oldest existing fund class) for
periods prior to the inception of the newer class shares. These Class A share
returns were not restated to reflect any expense differential (e.g., Rule 12b-1
fees) between Class A shares and the newer class shares. Had the expense
differential been reflected, the returns for the periods prior to the inception
of Class B and C shares would have been lower.
4
<PAGE> 7
INVESTMENT PORTFOLIO
November 30, 1999 (In thousands)
<TABLE>
<CAPTION>
COMMON STOCKS AND
CONVERTIBLES 93.8% COUNTRY SHARES VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C>
FINANCE, INSURANCE &
REAL ESTATE 1.3%
REAL ESTATE INVESTMENT
TRUSTS
Prologis Trust 760 $ 13,822
----------
- ----------------------------------------------------------------
MANUFACTURING 2.0%
COMMUNICATIONS EQUIPMENT
Lucent Technologies, Inc. 300 21,919
----------
- ----------------------------------------------------------------
MINING & ENERGY 3.8%
OIL & GAS FIELD SERVICES
Enron Corp. 835 31,787
Enron Corp., 8.000% MIPS 400 9,550
----------
41,337
----------
- ----------------------------------------------------------------
SERVICES 1.5%
COMPUTER RELATED SERVICES
Thus PLC (a) UK 2,550 15,978
----------
- ----------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES 84.6%
COMMUNICATIONS 4.3%
Eircom PLC UK 3,400 13,544
McLeodUSA, Inc., Series A 80 33,375
----------
46,919
----------
ELECTRIC GAS & SANITARY SERVICES 0.4%
Sempra Energy 240 4,437
----------
ELECTRIC SERVICES 19.7%
AES Corp. (a) 600 34,762
Citizens Utilities Co.,
5.000% Convertible Preferred 100 5,250
DPL, Inc. 800 14,300
Duke Power Co. 370 18,754
Edison International 1,000 26,500
Entergy Corp. 350 9,647
FPL Group, Inc. 672 29,396
FirstEnergy Corp. 350 8,159
Interstate Energy Corp. 108 2,919
Pinnacle West Capital Corp. 235 7,799
Public Service Company of
New Mexico 406 6,750
Public Service Enterprise
Group, Inc. 100 3,500
Reliant Energy, Inc. 679 16,858
Scottish Power PLC ADR UK 480 16,770
Sierra Pacific Resources 396 7,103
Southern Co. 300 7,012
----------
215,479
----------
GAS SERVICES 10.8%
Coastal Corp. 900 31,725
El Paso Energy Corp. 289 11,127
K N Energy, Inc., 8.250% PEP 375 12,234
MCN Energy Group., 8.750%
PRIDES 848 21,157
MDU Resources Group, Inc. 263 5,742
Williams Cos, Inc. 1,082 36,515
---------
118,500
---------
TELECOMMUNICATIONS 49.4%
AT&T Corp. 345 19,277
Bell Atlantic Corp. 716 45,344
BellSouth Corp. 934 43,125
BroadWing, Inc. (a) 450 13,106
Century Telephone Enterprises, Inc. 120 5,520
Charter Communications, Inc. (a) 1,000 23,188
GTE Corp. 636 46,392
Global Crossing Ltd. (a) 1,128 49,187
MCI WorldCom, Inc. (a) 500 41,344
NTL, Inc. (a) 106 9,666
Nippon Telegraph &
Telephone Corp. Ja 1 16,835
SBC Communications, Inc.,
Class A 1,024 53,186
Sonera Group Oyj Fi 1,200 49,630
Tele Danmark A/S ADR Sz 524 16,735
Tele Norte Leste
Participacoes SA ADR Bz 245 4,364
Telecom Corp. of New Zealand NZ 150 5,025
Telecom Italia SPA ADR It 315 33,938
Telefonica de Espana ADR Sp 573 35,601
Telefonos de Mexico SA Mx 300 27,769
---------
539,232
---------
WATER TRANSPORTATION 0.6%
Azurix Corp. (a) 1,000 7,125
---------
TOTAL COMMON STOCKS AND CONVERTIBLES
(cost of $662,726) 1,024,748
---------
</TABLE>
5
<PAGE> 8
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
PREFERRED STOCKS 4.1% SHARES VALUE
- ----------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION, COMMUNICATION,
ELECTRIC, GAS & SANITARY
SERVICES 4.1%
COMMUNICATIONS 1.0%
Qwest Trends Trust
5.750% 186 $ 10,579
---------
ELECTRIC SERVICES 3.1%
Entergy Arkansas, Inc.:
7.800% 10 988
7.880% 9 887
Entergy Gulf States Utilities
7.560% 18 1,826
Entergy Louisiana, Inc.
8.000% 30 697
NiSource, Inc., 7.750% 120 4,575
Northern Indiana Public Service Co.,
7.440% 9 910
Ohio Edison Co., 7.750% 240 6,060
Pennsylvania Power Co., 7.750% 15 1,520
TXU Electric Capital, TOPRS,
8.250% 680 16,150
---------
33,613
---------
TOTAL PREFERRED STOCKS
(cost of $46,045) 44,192
---------
ADJUSTABLE RATE PREFERRED STOCKS 0.8%
- ------------------------------------------------------------
TRANSPORTATION, COMMUNICATION,
ELECTRIC, GAS & SANITARY
SERVICES 0.8%
Electric Services
Cleveland Electric Illuminating Co.,
Series L 65 6,468
Entergy Gulf States Utilities
Series A 14 1,425
Toledo Edison Co., Series A 40 995
---------
TOTAL ADJUSTABLE RATE PREFERRED STOCKS
(cost of $8,434) 8,888
---------
TOTAL INVESTMENTS 98.7%
(cost of $717,205)(b) 1,077,828
---------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM OBLIGATIONS 2.0% PAR VALUE
- --------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement with SBC
Warburg Ltd., dated 11/30/99 due
12/01/99 at 5.670% collateralized
by U.S. Treasury bonds and/or
notes with maturities to 2026,
market value $22,011 (repurchase
proceeds $21,534) $21,531 $ 21,531
----------
OTHER ASSETS & LIABILITIES, NET (0.7%) (7,974)
- --------------------------------------------------------------------
NET ASSETS 100.0% $1,091,385
----------
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF SECURITIES
BY COUNTRY COUNTRY VALUE % OF TOTAL
- -----------------------------------------------------------------
<S> <C> <C> <C>
United States $ 841,639 78.1
Finland Fi 49,630 4.6
United Kingdom UK 46,292 4.3
Spain Sp 35,601 3.3
Italy It 33,938 3.1
Mexico Mx 27,769 2.6
Japan Ja 16,835 1.6
Switzerland Sz 16,735 1.5
New Zealand NZ 5,025 0.5
Brazil Bz 4,364 0.4
---------- -----
$1,077,828 100.0
---------- -----
</TABLE>
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing.
(b) Cost for federal income tax purposes is the same.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
MIPS Monthly Income Preferred Stock
PEPS Premium Equity Participating Security
PRIDES Preferred Redeemable Increased
Dividend Equity Security
TOPRS Trust Originated Preferred
Redeemable Securities
6 See notes to financial statements.
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1999
(In thousands except for per share amounts and footnotes)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $717,205) $ 1,077,828
Short-term obligations 21,531
-----------
1,099,359
Receivable for:
Dividends $3,305
Investments sold 1,573
Fund shares sold 323
Interest 3
Other 23 5,227
------ -----------
Total Assets 1,104,586
LIABILITIES
Payable for:
Investments purchased 9,906
Fund shares repurchased 2,284
Accrued:
Management fee 587
Transfer agent fee 182
Bookkeeping fee 32
Deferred Trustees fee 18
Other 192
Total Liabilities ------
13,201
-----------
NET ASSETS $ 1,091,385
===========
Net asset value & redemption price per share --
Class A ($354,053/15,494) $ 22.85(a)
===========
Maximum offering price per share--
Class A ($22.85/0.9525) $ 23.99(b)
===========
Net asset value & offering price per share--
Class B ($733,031/32,127) $ 22.82(a)
===========
Net asset value & offering price per share --
Class C ($3,777/166) $ 22.81(a)
===========
Net asset value & offering price per share--
Class Z ($524/23) $ 22.87
===========
COMPOSITION OF NET ASSETS
Capital paid in $ 650,650
Undistributed net investment income 892
Accumulated net realized gain 79,225
Net unrealized appreciation (depreciation) on:
Investments 360,623
Foreign currency transactions (5)
-----------
$ 1,091,385
===========
</TABLE>
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
STATEMENT OF OPERATIONS
For the Year Ended November 30, 1999
(In thousands)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 32,700
Interest 966
-----------
Total Investment Income (net of
nonreclaimable foreign taxes
withheld at source which
amounted to $380) 33,666
EXPENSES
Management fee $ 7,181
Service fee-- Class A, Class B, Class C 2,790
Distribution fee-- Class B 5,634
Distribution fee-- Class C 24
Transfer agent fee 2,656
Bookkeeping fee 388
Registration fee 45
Custodian fee 103
Audit fee 66
Trustees fee 69
Reports to shareholders 35
Legal fee 13
Other 189 19,193
------- ------------
Net Investment Income 14,473
-----------
NET REALIZED & UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain
(loss) on:
Investments 85,507
Foreign currency transactions (339)
-------
Net realized gain 85,168
Net change in unrealized appreciation/
depreciation during the period on:
Investments 32,141
Foreign currency transactions (5)
-------
Net change in Unrealized
appreciation/depreciation 32,136
-----------
Net Gain 117,304
-----------
Increase in Net Assets from Operations $ 131,777
===========
</TABLE>
See notes to financial statements. 7
<PAGE> 10
STATEMENT OF CHANGES IN NET ASSETS
(In thousands)
<TABLE>
<CAPTION>
YEARS ENDED NOVEMBER 30
----------------------------
INCREASE (DECREASE) IN NET ASSETS 1999(a) 1998
- -----------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 14,473 $ 22,348
Net realized gain 85,168 91,358
Net change in unrealized
appreciation/depreciation 32,136 76,078
----------- -----------
Net Increase from Operations 131,777 189,784
DISTRIBUTIONS:
From net investment income -- Class A (5,557) (9,180)
In excess of net investment income --
Class A -- (228)
From net realized gains -- Class A (10,862) (239)
From net investment income -- Class B (7,066) (13,843)
In excess of net investment income --
Class B -- (344)
From net realized gains -- Class B (22,812) (507)
From net investment income -- Class C (30) (28)
In excess of net investment income --
Class C -- (1)
From net realized gains -- Class C (82) (1)
From net investment income -- Class Z (5)
----------- -----------
85,363 165,413
----------- -----------
FUND SHARE TRANSACTIONS:
Receipts for shares sold -- Class A 14,107 66,629
Value of distributions reinvested --
Class A 13,579 7,574
Cost of shares repurchased -- Class A (52,627) (104,245)
----------- -----------
(24,941) (30,042)
----------- -----------
Receipts for shares sold -- Class B 47,658 48,893
Value of distributions reinvested --
Class B 25,209 12,446
Cost of shares repurchased -- Class B (133,371) (120,361)
----------- -----------
(60,504) (59,022)
----------- -----------
Receipts for shares sold -- Class C 1,646 2,231
Value of distributions reinvested --
Class C 106 28
Cost of shares repurchased-- Class C (786) (443)
----------- -----------
966 1,816
----------- -----------
Receipts for shares sold -- Class Z 526 --
Value of distributions reinvested --
Class Z 5
Cost of shares repurchased -- Class Z (27) --
----------- -----------
504 --
----------- -----------
Net Decrease from Fund
Share Transactions (83,975) (87,248)
----------- -----------
Total Increase 1,388 78,165
Beginning of period $ 1,089,997 $ 1,011,832
----------- -----------
End of period (including undistributed
and net of overdistributed net
investment income of $892 and
$585, respectively) 1,091,385 1,089,997
=========== ===========
NUMBER OF FUND SHARES
Sold-- Class A 644 3,463
Issued for distributions
reinvested-- Class A 623 385
Repurchased-- Class A (2,387) (5,374)
----------- -----------
(1,120) (1,526)
----------- -----------
Sold-- Class B 2,171 2,464
Issued for distributions
reinvested-- Class B 1,161 634
Repurchased-- Class B (6,054) (6,112)
----------- -----------
(2,722) (3,014)
----------- -----------
Sold-- Class C 75 112
Issued for distributions
reinvested-- Class C 5 2
Repurchased-- Class C (36) (22)
----------- -----------
44 92
----------- -----------
Sold -- Class Z 24 --
Issued for distributions
reinvested -- Class Z (b) --
Repurchased -- Class Z (1) --
----------- -----------
23 --
----------- -----------
</TABLE>
(a) Class Z shares were initially offered on January 29, 1999.
(b) Rounds to less than one.
8 See notes to financial statements.
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
November 30, 1999
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION:
Colonial Utilities Fund (the Fund), a series of Liberty Funds Trust IV, formerly
Colonial Trust IV, is a diversified portfolio of a Massachusetts business trust,
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund's investment objective is to seek
current income and long-term growth. The Fund may issue an unlimited number of
shares. The Fund offers four classes of shares: Class A, Class B, Class C and
Class Z. Class A shares are sold with a front-end sales charge. A 1.00%
contingent deferred sales charge is assessed on redemptions made within eighteen
months on an original purchase of $1 million to $5 million. Class B shares 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. Class C shares are subject to a contingent deferred
sales charge on redemptions made within one year after purchase and an annual
distribution fee. Effective January 29, 1999, the Fund began offering Class Z
shares which are offered continuously at net asset value. There are certain
restrictions on the purchase of Class Z shares, as described in the Fund's
prospectus.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS:
Equity securities generally 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.
Forward currency contracts are valued based on the weighted value of the
exchange traded contracts with similar durations.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
The value of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates.
In certain countries, the Fund may hold portfolio positions for which market
quotations are not readily available. Such securities are valued at fair value
under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS:
All income, expenses (other than the Class A, Class B, and Class C service fees
and the Class B and Class C distribution fees), 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.
The per share data was calculated using average shares outstanding during the
period. In addition, Class A, Class B and Class C net investment income per
share data reflects the service fee per share applicable to Class A, Class B and
Class C shares and the distribution fee applicable to Class B and Class C shares
only.
Class A, Class B and Class C ratios are calculated by adjusting the expense and
net investment income ratios for the Fund for the entire period by the service
fee applicable to Class A, Class B and Class C and the distribution fee
applicable to Class B and Class C 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:
As of March 22, 1999, distributions to shareholders are recorded on the ex-date.
Prior to March 22, 1999, the Fund declared and recorded distributions daily and
paid monthly.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforwards) under income tax regulations.
FOREIGN CURRENCY TRANSACTIONS:
Net realized and unrealized gains (losses) on foreign currency transactions
includes the gains (losses) arising from the fluctuations in exchange rates
between trade and settlement dates on securities transactions, gains (losses)
arising from the disposition of foreign currency and currency gains (losses)
between the accrual and payment dates on dividends and interest income and
foreign withholding taxes.
The Fund does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included with
the net realized and unrealized gains (losses) on investments.
FORWARD CURRENCY CONTRACTS:
The Fund may enter into forward currency contracts to purchase or sell foreign
currencies at predetermined exchange rates in connection with the settlement of
purchases and sales of securities. The Fund may also enter into forward currency
contracts to hedge certain other foreign currency denominated assets. The
contracts are used to minimize the exposure to foreign exchange rate
fluctuations during the period between trade and settlement date of the
contracts. All contracts are marked-to-market daily, resulting in unrealized
gains (losses) which become realized at the time the forward currency contracts
are closed or mature. Realized and unrealized gains (losses) arising from such
transactions are included
9
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 1999
in net realized and unrealized gains (losses) on foreign currency transactions.
Forward currency contracts do not eliminate fluctuations in the prices of the
Fund's portfolio securities. While the maximum potential loss from such
contracts is the aggregate face value in U.S. dollars at the time the contract
was opened, exposure is typically limited to the change in value of the contract
(in U.S. dollars) over the period it remains open. Risks may also arise if
counterparties fail to perform their obligations under the contracts.
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 Advisor), is the investment Advisor 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 Advisor 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 FEE:
Liberty Funds Services, Inc. (the Transfer Agent), an affiliate of the Advisor,
provides shareholder services for a monthly fee equal to 0.20% annually of the
Fund's average net assets and receives reimbursement for certain out-of-pocket
expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES:
Liberty Funds Distributor, Inc. (the Distributor), a subsidiary of the Advisor,
is the Fund's principal underwriter. During the year ended November 30, 1999,
the Fund has been advised that the Distributor retained net underwriting
discounts of $36,264 on sales of the Fund's Class A shares and received
contingent deferred sales charges (CDSC) of $1,225, $647,036 and $1,051 on Class
A, Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires the payment of a service fee to
the Distributor equal to 0.25% annually on Class A, Class B and Class C net
assets as of the 20th of each month. The plan also requires the payment of a
distribution fee to the Distributor equal to 0.75% annually of the average net
assets attributable to Class B and Class C 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.
OTHER:
The Fund pays no compensation to its officers, all of whom are employees of the
Advisor.
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, 1999, purchases and sales of investments,
other than short-term obligations, were $304,154,750 and $412,279,193,
respectively.
Unrealized appreciation (depreciation) at November 30, 1999, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 388,792,229
Gross unrealized depreciation (28,168,964)
----------------
Net unrealized appreciation $ 360,623,265
================
</TABLE>
OTHER:
The Fund concentrates its investments in utility securities, subjecting it to
greater risk than a fund that is more diversified.
There are certain additional risks involved when investing in foreign securities
that are not inherent with investments in domestic securities. These risks may
involve foreign currency exchange rate fluctuations, adverse political, and
economic developments and the possible prevention of foreign currency exchange
or the imposition of other foreign government laws or restrictions.
NOTE 4. LINE OF CREDIT
The Fund may borrow up to 33 1/3% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit during
the year ended November 30, 1999.
10
<PAGE> 13
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, 1999
CLASS A CLASS B CLASS C CLASS Z(a)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.130 $ 21.130 $ 21.130 $ 21.500
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.399 0.234 0.232 0.369
Net realized and unrealized gain 2.319 2.320 2.312 1.301
-------- -------- -------- --------
Total from Investment Operations 2.718 2.554 2.544 1.670
-------- -------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.341) (0.207) (0.207) (0.300)
In excess of net investment income -- -- -- --
From net realized gain (0.657) (0.657) (0.657) --
-------- -------- -------- --------
Total Distributions Declared to Shareholders (0.998) (0.864) (0.864) (0.300)
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 22.850 $ 22.820 $ 22.810 $ 22.870
======== ======== ======== ========
Total return (b) 13.15% 12.32% 12.33% 7.82%(c)
======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (d) 1.22% 1.97% 1.97% 0.97%(e)
Net investment income (d) 1.80% 1.05% 1.05% 1.99%(e)
Portfolio turnover 28% 28% 28% 28%
Net assets at end of period (in millions) $ 354 $ 733 $ 4 $ 1
</TABLE>
(a) Class Z shares were initially offered on January 29, 1999. Per share
amounts reflect activity from that date.
(b) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(c) Not annualized.
(d) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(e) Annualized.
1999 Federal Tax information (unaudited)
100% of the ordinary income distributed by the Fund in the year ended November
30, 1999 qualifies for the corporate dividends received deduction.
For the fiscal year ended November 30, 1999 the Fund earned $85,506,003 of long
term capital gains.
11
<PAGE> 14
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
YEARS ENDED NOVEMBER 30
-----------------------------------------------------------------------------------
1998 1997 1996
--------------------------- ------------------------------ --------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C(a) CLASS A CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $18.060 $18.060 $18.060 $15.210 $15.210 $16.260 $14.370 $14.370
------- ------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.516 0.365 0.365 0.599 0.481 0.166 0.612 0.502
Net realized and unrealized gain 3.111 3.111 3.111 2.852 2.852 1.794(b) 0.831 0.831
------- ------- ------- ------- ------- ------- ------- -------
Total from Investment Operations 3.627 3.476 3.476 3.451 3.333 1.960 1.443 1.333
------- ------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.530) (0.382) (0.382) (0.601) (0.483) (0.160) (0.603) (0.493)
In excess of net investment income (0.013) (0.010) (0.010) -- -- -- -- --
From net realized gain (0.014) (0.014) (0.014) -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total Distributions Declared to Shareholders (0.557) (0.406) (0.406) (0.601) (0.483) (0.160) (0.603) (0.493)
------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $21.130 $21.130 $21.130 $18.060 $18.060 $18.060 $15.210 $15.210
======= ======= ======= ======= ======= ======= ======= =======
Total return (c) 20.32% 19.41% 19.41% 23.26% 22.36% 12.12%(d) 10.27% 9.45%
======= ======= ======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.19% 1.94% 1.94% 1.22% 1.97% 1.97%(f) 1.20% 1.95%
Net investment income (e) 2.63% 1.88% 1.88% 3.76% 3.01% 2.96%(f) 4.16% 3.41%
Portfolio turnover 22% 22% 22% 7% 7% 7% 8% 8%
Net assets at end of period (in millions) $ 351 $ 736 $ 3 $ 327 $ 684 $ 1 $ 348 $ 729
</TABLE>
(a) Class C shares were initially offered on August 1, 1997. Per share
amounts reflect activity from that date.
(b) The amount shown for a share outstanding does not correspond with the
aggregate net gain on investments for the period due to the timing of
sales and repurchases of Fund shares in relation to fluctuating market
values of the investments of the Fund.
(c) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(d) Not annualized.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(f) Annualized.
12
<PAGE> 15
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, 1995
----------------------------
CLASS A CLASS B
- --------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.720 $ 11.720
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.640 0.544
Net realized and unrealized gain 2.659 2.659
-------- --------
Total from Investment Operations 3.299 3.203
-------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.649) (0.553)
-------- --------
NET ASSET VALUE, END OF PERIOD $ 14.370 $ 14.370
======== ========
Total return (a) 28.90% 27.96%
======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (b) 1.21% 1.96%
Net investment income (b) 5.00% 4.25%
Portfolio turnover 7% 7%
Net assets at end of period (in millions) $ 400 $ 821
</TABLE>
(a) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(b) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
13
<PAGE> 16
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF LIBERTY FUNDS 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, (the
"Fund") (a series of Liberty Funds Trust IV, formerly Colonial Trust IV), at
November 30, 1999, 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, 1999
by correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 12, 2000
14
<PAGE> 17
This page intentionally blank.
15
<PAGE> 18
This page intentionally blank.
16
<PAGE> 19
TRUSTEES & TRANSFER AGENT
ROBERT J. BIRNBAUM
Consultant (formerly Special Counsel, Dechert, Price & Rhoads; President and
Chief Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
JOHN V. CARBERRY
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President - Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Development Capital, LLC (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Academic Vice President and Dean of Faculties, Boston College (former Dean,
Boston College School of Management)
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ROBERT L. SULLIVAN
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Utilities Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call 1-800-426-3750 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 and with the most recent copy of
the Liberty Funds Distributor, Inc. Performance Update.
ANNUAL REPORT:
COLONIAL UTILITIES FUND
<PAGE> 20
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clients build diversified investment portfolios for long-term financial goals.
LIBERTY FUNDS
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Distributor, Inc.
BEFORE YOU INVEST, CONSULT YOUR FINANCIAL ADVISOR.
Your financial advisor can help you develop a long-term plan for reaching your
financial goals.
COLONIAL UTILITIES FUND ANNUAL REPORT
[LIBERTY FUNDS LOGO]
Liberty Funds Distributor, Inc. (C)2000
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
www.libertyfunds.com
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