<PAGE> 1
COLONIAL HIGH YIELD MUNICIPAL FUND ANNUAL REPORT
November 30, 1999
[GRAPHIC CAPITAL]
<PAGE> 2
President's Message
Dear Shareholder:
The U.S. bond market continued to show negative returns during the past year, as
interest rates across the board rose steadily throughout the 12-month period.
The rise in bond yields over the past year has come primarily in response to
continued economic strength in the U.S. and a dramatic recovery in the economies
of Southeast Asia and Japan. This growth has caused concern among bond investors
that inflation could potentially begin to increase if the economy becomes
"overheated."
In the bond market, rising interest rates can hurt performance because as rates
rise, prices fall. During the period, the Fund's performance was affected not
only by the general decline in the bond market, but also by unforeseen
disappointments with certain holdings and strategies we undertook to help the
Fund improve its returns over the long term. The holdings that experienced
difficulties have been sold, and we believe the Fund is positioned well for the
economic environment that we are forecasting for the coming year.
In the pages that follow, the Fund's portfolio manager will provide more
specific information about its performance and the strategies employed during
the fiscal year. As always, thank you for choosing Liberty Funds, and for giving
us the opportunity to serve your investment needs.
Sincerely,
/s/ Stephen E. Gibson
- -------------------------------
Stephen E. Gibson
January 12, 2000
Because market and economic conditions change frequently, there can be no
assurance that the trends described in this report will continue or come to
pass.
Not FDIC Insured
May Lose Value
No Bank Guarantee
<PAGE> 3
Highlights
- - RISING RATES MADE FOR A CHALLENGING YEAR IN THE BOND MARKET
During the 12-month period, short-, intermediate- and long-term interest
rates rose dramatically. These increases significantly affected bond
performance in every sector because bond prices move in the opposite
direction of yields. Municipal bonds were no exception, although their
declines were stemmed somewhat by a reduction in supply.
- - MUNICIPALS OUTPERFORMED TREASURY BONDS DURING THE PERIOD
Municipal bonds were slightly undervalued at the start of the period,
although they gained value relative to Treasury bonds during the year. The
yield on the 30-year AAA-rated general obligation (GO) bond -- a benchmark
of municipal bond market performance -- rose from 4.82% on November 30,
1998 to 5.73% on November 30, 1999.
- - INDEX PERFORMANCE REFLECTED THE DIFFICULT MARKET ENVIRONMENT
The declines in the Fund and the Lehman Brothers Municipal Bond Index
reflect the difficult conditions in the bond market during the past year.
TOTAL RETURN FOR THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX, 11/30/98 - 11/30/99
<TABLE>
<S> <C>
11/30/98 10000
12/31/98 10025
1/31/99 10144
2/28/99 10100
3/31/99 10114
4/30/99 10139
5/31/99 10080
6/30/99 9935
7/31/99 9971
8/31/99 9891
9/30/99 9895
10/31/99 9788
11/30/99 9892
</TABLE>
12-MONTH CUMULATIVE TOTAL RETURNS FOR THE PERIOD ENDED 11/30/1999
<TABLE>
<CAPTION>
WITHOUT WITH
SALES SALES
CHARGE CHARGE
- --------------------------------------------------------------------------------
<S> <C> <C>
Class A (4.36)% (8.90)%
- --------------------------------------------------------------------------------
Class B (5.08)% (9.61)%
- --------------------------------------------------------------------------------
Class C(1) (4.94)% (5.84)%
- --------------------------------------------------------------------------------
</TABLE>
1 Performance results reflect any voluntary waivers or reimbursements of Fund
expenses by the Advisor or its affiliates. Absent these waivers or
reimbursement arrangements, performance results would have been lower.
NET ASSET VALUE PER SHARE AS OF 11/30/1999
<TABLE>
<S> <C>
Class A $ 9.59
- --------------------------------------------------------------------------------
Class B $ 9.59
- --------------------------------------------------------------------------------
Class C $ 9.59
- --------------------------------------------------------------------------------
</TABLE>
DISTRIBUTIONS DECLARED FROM 12/1/1998 TO 11/30/1999(2)
<TABLE>
<S> <C>
Class A $ 0.545
- --------------------------------------------------------------------------------
Class B $ 0.469
- --------------------------------------------------------------------------------
Class C $ 0.484
- --------------------------------------------------------------------------------
</TABLE>
2 A portion of the Fund's income may be subject to the alternative minimum
tax. The Fund may at times purchase tax-exempt securities at a discount.
Some or all of this discount may be included in the Fund's ordinary income,
and is taxable when distributed.
The Lehman Brothers Municipal Bond Index is a broad-based, unmanaged index that
tracks the performance of the municipal bond market. Unlike mutual funds,
indexes are not investments and do not incur fees or expenses. It is not
possible to invest directly in an index.
1
<PAGE> 4
PORTFOLIO MANAGER'S REPORT
FUND PERFORMANCE AFFECTED BY HOLDINGS AND INCREASED LEVERAGE
For the 12-month period ended November 30, 1999 the Fund's Class A shares had a
total return of negative 4.36%, without a sales charge. By comparison, the
Lipper High Yield Municipal Debt Funds category had an average total return of
negative 2.55% for the same period.(1) In addition to a difficult market
environment, the Fund's performance was hurt by a couple of factors. First, a
few of the Fund's holdings had trouble making payments and were on "non-accrual"
status. Second, to enhance the Fund's yield, we employed a leveraging strategy.
While the yield was enhanced as planned, this strategy hurt the Fund's price
performance when the bond market declined.
CERTAIN PROBLEMATIC HOLDINGS HAVE BEEN SOLD
There were two primary holdings that experienced difficulty during the year and
caused the Fund's net asset value to decline. The first was Woodlands, a health
care facility in Clayton, Georgia, that failed to make payment on its bonds. The
value of the Woodlands holding continued to decline during the period as
additional financial and operational problems arose while the facility was being
sold. Those bonds are no longer held by the Fund. The other bond was Indiantown
Cogeneration, an independent power producer in Florida, which had legal and
contractual problems that impacted its market valuation. The Fund sold this
position in May.
EXPLANATION OF LEVERAGE -- POSITIONING THE FUND FOR LONG-TERM PERFORMANCE
In the past six months, we increased the Fund's investment in "inverse
floaters," a yield-enhancing investment, representing a significant change in
the past six months. Inverse floaters are investment instruments that are
designed to enhance the Fund's yield. These securities have risks, however. For
example, they typically lose more value than a bond of similar maturity in a
rising interest rate environment. This hurt the Fund's performance in the past
year, when interest rates rose dramatically. Nevertheless, we believe we are now
in an environment that favors this type of investment. Moreover, since our
outlook suggests rates will remain relatively stable next year, we believe these
investments can help the Fund's performance if our forecast holds true. If
short-term rates rise significantly, the yields and prices on these securities
are likely to drop.
SEC YIELDS ON 11/30/1999
<TABLE>
<S> <C>
Class A 5.47%
- --------------------------------------------------------------------------------
Class B 4.98%
- --------------------------------------------------------------------------------
Class C 5.14%
- --------------------------------------------------------------------------------
</TABLE>
The 30-day SEC yields reflect the portfolio's earning power, net of expenses,
expressed as an annualized percentage of the public offering price at the end of
the period. If the Advisor or its affiliates had not waived certain Fund
expenses, the SEC yield would have been 4.88% for Class C shares.
TAXABLE-EQUIVALENT SEC YIELDS ON 11/30/1999
<TABLE>
<S> <C>
Class A 9.06%
- --------------------------------------------------------------------------------
Class B 8.25%
- --------------------------------------------------------------------------------
Class C 8.51%
- --------------------------------------------------------------------------------
</TABLE>
Taxable-equivalent SEC yields are based on the maximum effective 39.6%
federal income tax rate. This tax rate does not reflect the phase out of
exemptions or the reduction of otherwise allowable deductions which occur when
Adjusted Gross Income exceeds certain levels.
BOUGHT
HOLY FAMILY CATHOLIC HIGH SCHOOL, VICTORIA, MINNESOTA (0.5% of net assets) is a
non-rated bond that has many attractive features. As a non-rated bond, it pays a
higher yield, but the payments have been guaranteed by the Archdiocese of
Minneapolis/ St. Paul. The proceeds will pay for a new Catholic high school, for
which there is significant demand in the Minneapolis/ St. Paul metropolitan
area.
1 Lipper, Inc., a widely respected data provider for the industry, calculates
an average total return for mutual funds with similar objectives as the
Fund.
2
<PAGE> 5
PORTFOLIO MANAGER'S REPORT (CONTINUED)
OUTLOOK FOR 2000
Despite the continued expansion of the U.S. economy and the tight labor market
that has existed for the past few years, inflation has been kept at bay because
of significant increases in productivity driven by technological advances. We
believe that this productivity rise, along with the Fed's rate increases (which
have a slowing effect on economic growth), may have a positive impact on bonds
over the long term by keeping inflation under control.
Our longer-term outlook is for interest rates to stabilize. We believe that the
increases in interest rates in the past year will begin to have an effect on
economic growth as we go into next year. Many companies do not have the ability
to raise prices because of competition from overseas. The efficiencies that
companies and consumers have derived from the Internet and technology continue
to have a major impact on productivity. In the near-term, the economy looks as
though it will remain fairly strong. Whatever the economy does, however, we will
continue to work on structuring the portfolio, while leaving some room to make
adjustments as conditions change.
/s/ Maureen Newman
Maureen Newman
Maureen Newman is portfolio manager of Colonial High Yield Municipal Fund and a
senior vice president of Colonial Management Associates, Inc. (CMA).
QUALITY BREAKDOWN AS OF 11/30/1999
<TABLE>
<S> <C>
AAA 13.3%
- --------------------------------------------------------------------------------
AA 3.3%
- --------------------------------------------------------------------------------
A 1.0%
- --------------------------------------------------------------------------------
BBB 23.5%
- --------------------------------------------------------------------------------
BB 3.4%
- --------------------------------------------------------------------------------
CC 1.1%
- --------------------------------------------------------------------------------
Non-rated 52.5%
- --------------------------------------------------------------------------------
Cash equivalents 1.9%
- --------------------------------------------------------------------------------
</TABLE>
MATURITY BREAKDOWN
<TABLE>
<S> <C>
0-1 year 0.5%
- --------------------------------------------------------------------------------
1-3 years 0.5%
- --------------------------------------------------------------------------------
3-5 2.0%
- --------------------------------------------------------------------------------
5-7 0.8%
- --------------------------------------------------------------------------------
7-10 4.4%
- --------------------------------------------------------------------------------
10-15 9.7%
- --------------------------------------------------------------------------------
15-20 23.2%
- --------------------------------------------------------------------------------
20-25 25.1%
- --------------------------------------------------------------------------------
25+ 31.9%
- --------------------------------------------------------------------------------
Cash equivalents 1.9%
- --------------------------------------------------------------------------------
</TABLE>
Quality and maturity breakdowns are calculated as a percentage of total
investments, including short-term obligations. Ratings shown in the Quality
Breakdowns represent the highest rating assigned to a particular bond by one of
the following nationally-recognized rating agencies: Standard & Poor's
Corporation, Moody's Investors Service, Inc. or Fitch Investors Service, Inc.
Maturity breakdown is based on each security's effective maturity, which
reflects pre-refundings, mandatory puts and other conditions that affect a
bond's maturity.
Because the Fund is actively managed, there can be no guarantee the Fund will
continue to maintain these quality and maturity breakdowns in the future.
BOUGHT
STONEYBROOK COMMUNITY DEVELOPMENT DISTRICT, FLORIDA (0.5% of net assets) is a
new housing project that is being developed by U.S. Homes, one of the largest
developers in the nation. The construction is going very well, and there is
tremendous demand for the homes. We believe these bonds represent a good credit
risk, and they provide an attractive yield due to their non-rated status.
By increasing the Fund's duration, inverse floaters can increase the Fund's
sensitivity to changes in interest rates and, by paying a short-term variable
rate to other investors, can increase the potential for volatility in the
dividend rate. However, we employ certain hedging techniques that are designed
to reduce these risks.
The Fund involves certain risks such as credit risks associated with lower-rated
bonds and changes in interest rates. High-yield municipal bond investing carries
increased credit risks.
3
<PAGE> 6
FUND HIGHLIGHTS
CHANGE IN VALUE OF A $10,000 INVESTMENT IN ALL SHARE CLASSES FROM
6/30/1992 - 11/30/1999
<TABLE>
<CAPTION>
Without With
sales sales
charge charge
- --------------------------------------------------------------------------------
<S> <C> <C>
Class A $14,894 $14,187
- --------------------------------------------------------------------------------
Class B $14,318 $14,318
- --------------------------------------------------------------------------------
Class C $14,369 $14,369
- --------------------------------------------------------------------------------
</TABLE>
PERFORMANCE INFORMATION
COLONIAL HIGH YIELD MUNICIPAL FUND INVESTMENT PERFORMANCE VS.
LEHMAN BROTHERS MUNICIPAL BOND INDEX
PERFORMANCE OF A $10,000 INVESTMENT IN CLASS A SHARES FROM 6/30/92 TO 11/30/99
<TABLE>
<CAPTION>
Liberty Liberty Lehman
Municipal A Municipal A Municipal
Without Load With Load Bond IX
------------ --------- -------
<S> <C> <C> <C>
6/30/92 10000 9525 10000
7/31/92 10251 9764 10300
8/31/92 10194 9709 10200
9/30/92 10226 9740 10266
10/31/92 10180 9697 10166
11/30/92 10263 9775 10348
12/31/92 10367 9875 10453
1/31/93 10432 9936 10575
2/28/93 10651 10145 10957
3/31/93 10623 10118 10841
4/30/93 10709 10200 10951
5/31/93 10743 10233 11012
6/30/93 10872 10356 11196
7/31/93 10907 10389 11210
8/31/93 11101 10574 11444
9/30/93 11200 10668 11574
10/31/93 11236 10702 11596
11/30/93 11185 10654 11494
12/31/93 11260 10725 11737
1/31/94 11368 10828 11870
2/28/94 11225 10692 11563
3/31/94 10849 10334 11092
4/30/94 10825 10311 11187
5/31/94 10901 10383 11284
6/30/94 10921 10402 11215
7/31/94 11076 10550 11420
8/31/94 11096 10568 11460
9/30/94 11015 10491 11292
10/31/94 10894 10377 11091
11/30/94 10739 10229 10890
12/31/94 10895 10378 11130
1/31/95 11157 10627 11448
2/28/95 11431 10888 11781
3/31/95 11567 11018 11917
4/30/95 11586 11036 11931
5/31/95 11901 11336 12312
6/30/95 11873 11309 12204
7/31/95 11951 11383 12320
8/31/95 12066 11493 12477
9/30/95 12194 11614 12555
10/31/95 12370 11783 12737
11/30/95 12597 11998 12949
12/31/95 12739 12134 13073
1/31/96 12795 12187 13173
2/29/96 12752 12146 13083
3/31/96 12605 12006 12916
4/30/96 12609 12010 12879
5/31/96 12613 12013 12874
6/30/96 12744 12138 13015
7/31/96 12811 12203 13132
8/31/96 12854 12243 13129
9/30/96 13000 12383 13313
10/31/96 13147 12522 13463
11/30/96 13334 12700 13710
12/31/96 13311 12679 13652
1/31/97 13342 12708 13678
2/28/97 13475 12835 13804
3/31/97 13369 12734 13620
4/30/97 13449 12810 13735
5/31/97 13610 12964 13942
6/30/97 13772 13118 14091
7/31/97 14098 13429 14482
8/31/97 14029 13363 14345
9/30/97 14192 13518 14516
10/31/97 14300 13621 14609
11/30/97 14393 13709 14695
12/31/97 14641 13945 14910
1/31/98 14847 14142 15063
2/28/98 14857 14152 15068
3/31/98 14868 14162 15081
4/30/98 14822 14118 15014
5/31/98 15032 14318 15251
6/30/98 15142 14423 15310
7/31/98 15177 14456 15349
8/31/98 15404 14673 15586
9/30/98 15558 14819 15781
10/31/98 15496 14760 15781
11/30/98 15561 14822 15837
12/31/98 15606 14865 15876
1/31/99 15700 14954 16065
2/28/99 15601 14860 15994
3/31/99 15631 14888 16017
4/30/99 15684 14939 16057
5/31/99 15605 14864 15964
6/30/99 15415 14683 15734
7/31/99 15438 14705 15790
8/31/99 15231 14508 15664
9/30/99 15160 14440 15670
10/31/99 14784 14082 15501
11/30/99 14894 14187 15665
</TABLE>
The Lehman Brothers Municipal Bond Index is an unmanaged index that tracks the
performance of the municipal bond market. Unlike mutual funds, indexes are not
investments and do not incur fees or expenses. It is not possible to invest
directly in an index.
AVERAGE ANNUAL TOTAL RETURNS AS OF 11/30/1999
<TABLE>
<CAPTION>
Share Class A B C
Inception Date 9/1/1994 6/8/1992 8/1/1997
- -------------------------------------------------------------------------------------
w/o sales with sales w/o sales with sales w/o sales with sales
charge charge charge charge charge charge
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
One year (4.36)% (8.90)% (5.08)% (9.61)% (4.94)% (5.84)%
- ------------------------------------------------------------------------------------
Five years 6.74 5.71 5.94 5.63 6.02 6.02
- -----------------------------------------------------------------------------------
Life of Fund 5.63 4.94 5.07 5.07 5.12 5.12
- -----------------------------------------------------------------------------------
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF 9/30/1999
<TABLE>
<CAPTION>
Share Class A B C
- --------------------------------------------------------------------------------------
w/o sales with sales w/o sales with sales w/o sales with sales
charge charge charge charge charge charge
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
One year (2.55)% (7.18)% (3.28)% (7.90)% (3.14)% (4.06)%
- ------------------------------------------------------------------------------------
Five years 6.60 5.57 5.80 5.48 5.87 5.87
- ------------------------------------------------------------------------------------
Life of fund 6.03 5.32 5.47 5.47 5.52 5.52
- ------------------------------------------------------------------------------------
</TABLE>
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 maximum contingent deferred
sales charges (CDSC) 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.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Class A and C share (newer class shares) performance information includes
returns of the Fund's Class B shares (the oldest existing Fund class) for
periods prior to its inception date. These Class B share returns are not
restated to reflect any expense differential (e.g., Rule 12b-1 fees) between
Class B shares and the newer class shares.
4
<PAGE> 7
INVESTMENT PORTFOLIO
NOVEMBER 30, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL BONDS (98.9%) PAR VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
EDUCATION (2.4%)
EDUCATION (1.7%)
CA Statewide Communities
Development Authority, Crossroads
School for Arts & Sciences,
Series 1998,
6.000% 8/1/28 (a)(b) $1,180 $1,104
MA Industrial Finance Agency,
St. John's High School,
Series 1998,
5.350% 6/1/28 400 341
MI Southfield Economic Development
Corp., Lawrence University,
Series 1998 A,
5.400% 2/1/18 750 664
MN Victoria,
Holy Family Catholic High School,
Series 1999 A,
5.875% 9/1/29 1,000 914
------
3,023
------
STUDENT LOAN (0.7%)
OH Cincinnati Student Loan
Funding Corp., Series B,
6.750% 1/1/07 1,225 1,216
------
- --------------------------------------------------------------------------------
HEALTHCARE (27.3%)
CONGREGATE CARE RETIREMENT (4.6%)
FL Lee County Industrial Development
Authority, Shell Point Village Project,
Series 1999 A,
5.500% 11/1/29 250 207
KY Economic Development
Finance Authority, Christian
Church Homes of Kentucky, Inc.,
Series 1998,
5.500% 11/15/30 530 440
MA Boston Industrial Development
Finance Authority, Springhouse, Inc.,
Series 1988,
5.875% 7/1/20 500 434
MA Development Finance
Agency, Series 1999 A,
5.625% 7/1/15 250 223
MI Strategic Fund,
Holland Home,
Series 1998,
5.750% 11/15/28 400 329
MN Columbia Heights,
Crest View Corp.,
Series 1998,
6.000% 3/1/33 740 660
NH Higher Educational &
Health Facilities Authority, Rivermead
at Peterborough, Series 1998:
5.625% 7/1/18 $ 500 $ 439
5.750% 7/1/28 665 572
PA Philadelphia Authority for
Industrial Development,
Baptist Home of Philadelphia,
Series 1998 A:
5.500% 11/15/18 530 464
5.600% 11/15/28 860 733
TN Metropolitan Government,
Nashville & Davidson County,
Blakeford at Green Hills, Series 1998,
5.650% 7/1/24 575 492
TX Abilene Health Facilities
Development Corp., Sears Methodist
Retirement Obligation Group:
Series 1998 A,
5.900% 11/15/25 1,000 883
Series 1999,
5.875% 11/15/18 500 450
WI Health & Educational Facilities
Authority:
Attic Angel Obligated Group,
5.750% 11/15/27 875 758
Clement Manor, Series 1998,
5.750% 8/15/24 450 395
United Lutheran Program for
Aging, Inc.,
5.700% 3/1/28 750 660
------
8,139
------
HEALTH SERVICES (0.4%)
IL Health Facilities Authority,
Midwest Physician Group Ltd.,
Series 1998,
5.500% 11/15/19 90 76
MA Development Finance Agency,
Boston Biomedical Research Institute,
Series 1999:
5.650% 2/1/19 120 106
5.750% 2/1/29 550 474
------
656
------
HOSPITALS (12.8%)
AL Alabama Special Care Facilities
Authority, Montgomery Healthcare,
Series 1989,
11.000% 10/1/19 (c) 295 162
</TABLE>
See notes to financial statements.
5
<PAGE> 8
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
MUNICIPAL (BONDS CONTINUED) PAR VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
HOSPITALS (CONTINUED)
CO La Junta, Arkansas Valley
Regional Medical Center
Series 1999,
6.100% 4/1/24 $ 500 $ 453
CO Health Care Facilities
Authority, National Jewish
Medical & Research Center,
Series 1998,
5.375% 1/1/23 830 693
GA Baldwin County Hospital
Authority, Oconee Regional Medical
Center, Series 1998,
5.450% 12/1/16 500 450
GA Forsyth County Hospital Authority
Georgia Baptist Healthcare System,
Series 1998,
6.000% 10/1/08 1,000 939
IL Health Facilities Authority,
Thorek Hospital & Medical Center,
5.375% 8/15/28 500 410
IL Southwestern Illinois Development
Authority, Anderson Hospital,
Series 1999,
5.375% 8/15/15 500 432
IN Health Facilities Financing
Authority, Riverview Hospital,
Series 1999,
5.500% 8/1/24 275 234
MI Dickinson County Health,
Series 1999,
5.800% 11/1/24 800 700
MI Flint Hospital Building Authority,
Hurley Medical Center,
Series 1998 A,
5.375% 7/1/20 625 530
MI Hospital Finance Authority,
Detroit Medical Center,
Series 1998 A,
5.250% 8/15/28 600 462
MN Washington County Housing &
Redevelopment Authority,
Healtheast, Inc., Series 1998,
5.250% 11/15/12 1,250 1,058
MS Business Finance Corp.,
Medical Foundation, Inc., Series 1998,
5.625% 7/1/23 1,150 983
NC Medical Care Commission,
Stanly Memorial Hospital,
Series 1999,
6.375% 10/1/29 1,000 997
NH Higher Educational &
Health Facilities Authority,
Littleton Hospital Association, Inc.:
5.900% 5/1/18 $ 500 $ 446
5.900% 5/1/28 675 580
OH Belmont County, East Ohio
Regional Hospital, Series 1998,
5.700% 1/1/13 (b) 1,500 1,327
OH Franklin County, Doctors
OhioHealth Corp., Series 1998 A,
5.600% 12/1/28 1,600 1,340
OH Highland County Joint Township
Hospital District, Series 1999,
6.750% 12/1/29 750 710
OH Miami County, Upper Valley
Medical Center, Inc.:
Series 1996 A,
6.250% 5/15/16 500 476
Series 1996 C,
6.250% 5/15/13 495 474
OH Sandusky County,
Series 1998,
5.150% 1/1/10 250 236
PA Allegheny County Hospital
Development, Ohio Valley General
Hospital, Series 1998 A,
5.450% 1/1/28 (b) 1,550 1,309
PA Pottsville Hospital Authority,
Pottsville Hospital & Warne Clinic,
Series 1998,
5.625% 7/1/24 1,000 852
TX Harris Count Health Facilities
Development Authority,
Series 1999,
7.101% 7/1/19 5,000 4,275
TX Lufkin Health Facilities
Development Corp., Memorial Health
Systems of East Texas,
Series 1998,
5.700% 2/15/28 750 646
TX Richardson Hospital Authority,
Baylor Richardson Medical Center,
Series 1998,
5.625% 12/1/28 600 507
VT Educational & Health Buildings
Authority Finance Agency:
Brattleboro Memorial Hospital,
5.375% 3/1/28 750 622
Springfield Hospital, Series A,
7.750% 1/1/13 425 460
------
22,763
------
</TABLE>
See notes to financial statements.
6
<PAGE> 9
INVESTMENT PORTFOLIO (CONTINUED)
November 30, 1999
(In thousands)
<TABLE>
<CAPTION>
MUNICIPAL (BONDS CONTINUED) PAR VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
INTERMEDIATE CARE FACILITIES (1.6%)
IN Health Facilities Financing
Authority, Hoosier Care, Inc.,
Series 1999 A,
7.125% 6/1/34 $1,095 $1,022
PA Economic Development
Financing Authority, Northwestern
Human Services, Inc.,
Series 1998 A,
5.250% 6/1/14 2,150 1,914
------
2,936
------
NURSING HOMES (7.9%)
AK Juneau, St. Ann's Care Center,
Series 1999,
6.875% 12/1/25 600 564
CO Health Facilities Authority,
Volunteers of America Care
Facilities, Inc.:
Series 1998 A:
5.450% 7/1/08 250 236
5.750% 7/1/20 700 616
Series 1999 A,
6.000% 7/1/29 520 461
DE Economic Development
Authority, Churchman Village Project,
Series 1994 A,
10.000% 3/1/21 730 868
DE Sussex County, Healthcare Facility,
Delaware Health Corp.,
Series 1994-A,
7.600% 1/1/24 990 999
FL Gadsden County Industrial
Development Authority, Florida
Properties, Inc., Series 1988 A,
10.450% 10/1/18 330 332
IA Finance Authority,
Care Initiatives Project:
Series 1996,
9.250% 7/1/25 500 624
Series 1998 B:
5.750% 7/1/18 600 544
5.750% 7/1/28 1,475 1,302
IN Health Facilities Financing
Authority, Metro Health Indiana, Inc.,
Series 1998,
6.400% 12/1/33 1,000 887
MA Development Finance Agency:
Alliance Health Care Facilities,
Series 1999,
7.100% 7/1/32 1,000 961
GF/Massachusetts, Inc., Series 1994,
8.300% 7/1/23 970 1,042
MI Cheboygan County Economic
Development Corp., Metro Health
Foundation Project, Series 1993,
10.000% 11/1/22 (c) $ 600 $ 480
MN Minneapolis, Walker Methodist
Senior Services Group, Series 1998 A,
6.000% 11/15/28 (d) 250 215
MN New Hope, North Ridge Care
Center, Inc., Series 1999,
5.875% 3/1/29 500 434
MN Sartell, Foundation for Healthcare,
Series 1999 A,
6.625% 9/1/29 1,000 917
NJ Economic Development Authority,
Geriatric and Medical Service, Inc.,
Series A,
10.500% 5/1/04 70 71
PA Chester County Industrial
Development, Pennsylvania Nursing
Home, Inc., Series 1989,
10.125% 5/1/19 (c) 434 326
PA Delaware County Authority, Main
Line and Haverford Nursing, Series 1992,
9.000% 8/1/22 50 54
PA Lackawanna County Industrial
Authority, Greenridge Nursing Center,
10.500% 12/1/10 175 185
PA Luzerne County Industrial
Development Authority,
Millville Nursing Center,
10.500% 12/1/12 210 220
TX Kirbyville Health Facilities
Development Corp., Heartway III
Project:
Series 1997 A,
10.000% 3/20/18 581 543
Series 1997 B,
(e) 3/20/04 100 58
WA Kitsap County Housing Authority,
Martha & Mary Nursing Home,
7.100% 2/20/36 1,000 1,101
------
14,040
------
- --------------------------------------------------------------------------------
HOUSING (18.5%)
ASSISTED LIVING/SENIOR (7.1%)
CA Abag Finance Authority for
Nonprofit Corps., Eskaton Gold
River Lodge, Series 1998:
6.375% 11/15/15 (f) 750 707
6.375% 11/15/28 (g) 550 500
</TABLE>
See notes to financial statements.
7
<PAGE> 10
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
MUNICIPAL (BONDS CONTINUED) PAR VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
ASSISTED LIVING/SENIOR (CONTINUED)
DE Kent County, Heritage at Dover,
Series 1999,
7.625% 1/1/30 $1,000 $ 994
GA Columbus Housing Authority,
The Gardens at Calvary, Series 1999,
7.000% 11/15/29 1,000 949
IL Clarendon Hills Residential
Facilities, Churchill Estate,
Series 1998 A:
6.750% 3/1/31 1,365 1,266
6.750% 3/1/24 1,050 979
IL Development Finance
Authority, Care Institute, Inc.,
8.250% 6/1/25 2,000 2,165
MN Roseville, Care Institute, Inc.,
Series 1993,
7.750% 11/1/23 1,270 1,187
NC Medical Care Commission,
DePaul Community Facilities Project,
Series 1999,
7.625% 11/1/29 (h) 750 750
NY Glen Cove Housing Authority,
8.250% 10/1/26 2,000 2,165
TX Bell County Health Facilities
Development Corp., Care
Institutions, Inc.,
9.000% 11/1/24 (b) 1,000 1,096
------
12,758
------
MULTI-FAMILY (7.4%)
DE Wilmington, Electra Arms
Senior Association Project,
6.250% 6/1/28 1,000 883
GA Clayton County Housing
Authority, Magnolia Park
Apartments, Series 1999 A,
6.250% 6/1/30 (b) 750 691
MN Lakeville, Southfork Apartment
Project, Series 1989 A,
9.875% 2/1/20 700 700
MN Washington County Housing &
Redevelopment Authority,
Cottages of Aspen, Series 1992,
9.250% 6/1/22 490 519
MN White Bear Lake, Birch Lake
Townhomes Project, Series 1989 A,
9.750% 7/15/19 750 750
NC Eastern Carolina Regional Housing
Authority, New River Apartments-
Jacksonville, Series 1994,
8.250% 9/1/14 1,335 1,378
Resolution Trust Corp., Pass Through
Certificates, Series 1993-A,
9.250% 12/1/16 (d) $4,248 $ 4,284
SC State Housing Finance and
Development, Multi-Family Housing
Finance Revenue, Westbridge
Apartments, Series A,
9.500% 9/1/20 600 598
TN Franklin Industrial Board, Landings
Apartment Project, Series 1996 B,
8.750% 4/1/27 1,745 1,797
TX Galveston Health Facilities Center,
Driftwood Apartments,
8.000% 8/1/23 1,000 1,026
VA Alexandria Redevelopment &
Housing Authority, Courthouse
Commons Apartments, Series 1990 A,
10.000% 1/1/21 500 490
------
13,116
------
SINGLE FAMILY (4.0%)
CO Housing Finance Authority:
Series D-1,
7.375% 6/1/26 (b) 1,410 1,492
Series 1997 A-2,
7.250% 5/1/27 (b) 800 859
MO Housing Development
Commission, Series C,
7.250% 9/1/26 2,195 2,349
PA Housing Finance Agency,
Series 1994-42,
6.850% 4/1/25 (b) 2,435 2,527
------
7,227
------
- --------------------------------------------------------------------------------
INDUSTRIAL (11.0%)
CHEMICALS (1.9%)
WY Sweetwater County,
FMC Corp. Project,
Series 1994 A,
7.000% 6/1/24 3,325 3,398
------
FOOD PRODUCTS (2.9%)
IN Hammond, American Maize
Products Co., Series 1994,
8.000% 12/1/24 2,000 2,181
LA Port New Orleans Industrial
Development Continental
Grain Co., Series 1993,
7.500% 7/1/13 2,000 2,003
MI State Strategic Fund, Michigan
Sugar Co., Sebewaing Project,
Series 1998 A,
6.250% 11/1/15 1,000 933
------
5,117
------
</TABLE>
See notes to financial statements.
8
<PAGE> 11
INVESTMENT PORTFOLIO (CONTINUED)
November 30, 1999
(In thousands)
<TABLE>
<CAPTION>
MUNICIPAL BONDS (CONTINUED) PAR VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
FOREST PRODUCTS (1.3%)
GA Rockdale County Development
Authority, Solid Waste Disposal,
Visy Paper, Inc., Series 1993,
7.500% 1/1/26 $1,800 $1,872
GA Wayne County Development
Authority, Solid Waste Disposal,
ITT Royonier, Inc., Series 1990,
8.000% 7/1/15 500 515
------
2,387
------
MANUFACTURING (2.1%)
IL Will-Kankakee Regional Development
Authority, Flanders Corp./Precisionaire
Project, Series 1997,
6.500% 12/15/17 940 926
MN Brooklyn Park, TL Systems Corp.,
Series 1991,
10.000% 9/1/16 495 569
MN Buffalo, Von Ruden
Manufacturing, Inc., Series 1989,
10.500% 9/1/14 715 742
NV Henderson Public Improvement
Trust, Dongsung America Co., Inc.,
Series 1998,
7.000% 11/1/10 (c) 287 238
TN McKenzie Individual Development
Board, American Lantern Co.,
10.500% 5/1/16 (c) 454 240
VA Small Business Financing
Authority, Donsung America,
Series 1998,
7.250% 11/1/15 (c) 156 129
WA Pilchuck Public Development Corp.,
Goodrich (B.F.) Co. Tramco Project,
Series 1993,
6.000% 8/1/23 950 874
------
3,718
------
METALS & MINING (1.8%)
MD Baltimore County, Bethlehem Steel
Corp. Project, Series B,
7.500% 6/1/15 2,000 2,065
NV Department of Business &
Industry, Wheeling-Pittsburgh
Steel Corp., Series 1999 A,
8.000% 9/1/14 250 242
VA Greensville County Industrial
Development Authority,
Wheeling Steel, Series 1999 A:
6.375% 4/1/04 75 73
7.000% 4/1/14 375 349
VA Peninsula Ports Authority, Ziegler
Coal Project, Series 1997,
6.900% 5/2/22 $ 500 $ 440
------
3,169
------
OIL & GAS (1.0%)
WA Pierce County Economic
Development Corp., Occidental
Petroleum Co.,
5.800% 9/1/29 2,000 1,762
------
- --------------------------------------------------------------------------------
OTHER (5.5%)
OTHER (0.3%)
MD Baltimore, Park Charles Project,
Series 1986,
8.000% 1/1/10 540 565
------
REFUNDED/ESCROWED (I) (5.2%)
CA Colton Public Financing Authority,
Series 1995,
7.500% 10/1/20 980 1,082
CA San Joaquin Hills Transportation
Corridor Agency, Series 1993,
(e) 1/1/23 5,250 1,323
FL Clearwater Housing Authority,
Hampton Apartments, Series 1994,
8.250% 5/1/24 1,400 1,613
ID Health Facilities Authority,
IHC Hospitals, Inc.,
6.650% 2/15/21 1,000 1,092
MA Health & Educational
Facilities Authority, Corp. for
Independent Living,
8.100% 7/1/18 580 658
MA Industrial Finance
Agency, Series 1990,
9.000% 10/1/20 895 945
MN Mille Lacs Capital Improvement
Authority, Mille Lacs Band of
Chippewa, Series 1992 A,
9.250% 11/1/12 585 674
NC Lincoln County, Lincoln
County Hospital,
9.000% 5/1/07 275 312
PA Montgomery County Industrial
Development Authority, Assisted
Living Facility, Series 1993A,
8.250% 5/1/23 600 665
TN Shelby County, Health, Education, &
Housing Facilities Board, Open Arms
Development Center:
Series 1992-A,
9.750% 8/1/19 325 422
Series 1992-C,
9.750% 8/1/19 320 416
</TABLE>
See notes to financial statements.
9
<PAGE> 12
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
MUNICIPAL BONDS (CONTINUED) PAR VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
REFUNDED/ESCROWED (CONTINUED)
WA Health Care Facilities
Authority, Grays Harbor Community
Hospital, Series 1993,
7.200% 7/1/03 $ 170 $ 175
------
9,377
------
- --------------------------------------------------------------------------------
OTHER REVENUE (2.7%)
HOTELS (1.1%)
PA Philadelphia Authority for Industrial
Development, Doubletree Project,
6.500% 10/1/27 2,000 1,953
------
RECREATION (0.5%)
NM Red River Sports Facility,
Red River Ski Area Project, Series 1998,
6.450% 6/1/07 915 882
------
RETAIL (1.1%)
OH Lake County, North Madison
Properties, Series 1993,
8.819% 9/1/11 545 599
VA Virginia Beach Development Authority,
SC Diamond Associates, Inc.,
8.000% 12/1/10 1,210 1,295
------
1,894
------
- --------------------------------------------------------------------------------
RESOURCE RECOVERY (4.3%)
DISPOSAL (2.9%)
CT Development Authority,
Sewer Sludge Disposal Facilities
Revenue:
NETCO New Haven Residuals,
Series 1996,
8.250% 12/1/06 840 927
NETCO Waterbury Ltd., Series 1995,
9.375% 6/1/16 1,400 1,563
MA Industrial Finance Agency:
Massachusetts Environmental Services,
Series 1994 A,
8.750% 11/1/21 980 784
Peabody Monofill Associates, Inc.,
Series 1995,
9.000% 9/1/05 765 806
UT Carbon County,
Laidlaw Environmental, Series A,
7.450% 7/1/17 1,000 1,048
------
5,128
------
RESOURCE RECOVERY (1.4%)
MA Industrial Finance Agency,
Ogden Hill Project, Series 1998 A,
5.500% 12/1/13 500 461
PA Delaware County Industrial
Development Authority, Series A,
6.200% 7/1/19 2,225 2,030
------
2,491
------
- --------------------------------------------------------------------------------
TAX BACKED (4.3%)
LOCAL GENERAL OBLIGATIONS (0.2%)
CA Roseville Unified High School
District, Series B,
(e) 6/1/20 (b) $1,000 $ 291
------
SPECIAL NON-PROPERTY TAX (0.5%)
IL Development Finance
Authority, City of Marion Project,
Series 1991,
9.625% 9/15/21 1,145 859
------
SPECIAL PROPERTY TAX (3.6%)
CA Carson, Series 1992,
7.375% 9/2/22 920 959
CA Orange County Community
Facilities District, Ladera Ranch,
Series 1999 A,
6.700% 8/15/29 300 300
CA Pleasanton Joint Powers Financing
Reassurement Subordinated Revenue,
Series 1993-B,
6.750% 9/2/17 1,740 1,784
CA Poway Community Facilities
District, No. 88-1 Parkway Business
Center, Series 1998,
6.750% 8/15/15 575 596
FL Lexington Oaks Community
Development District:
Series 1998 A,
6.125% 5/1/19 300 288
Series 1998 B,
5.500% 5/1/05 570 555
FL Northern Palm Beach County
Improvement District, Series 1999,
5.900% 8/1/19 500 474
FL Orlando, Conroy Road
Interchange Project, Series 1998 A:
5.500% 5/1/10 125 120
5.800% 5/1/26 500 454
FL Stoneybrook Community
Development District, Series 1998 B,
5.700% 5/1/08 975 947
------
6,477
------
- --------------------------------------------------------------------------------
TRANSPORTATION (7.1%)
AIR TRANSPORTATION (2.0%)
IN Indianapolis Airport Authority,
Federal Express Corp., Series 1994,
7.100% 1/15/17 3,000 3,173
PA Philadelphia Authority for
Industrial Development, Aero
Philadelphia, Series 1999,
5.250% 1/1/09 500 467
------
3,640
------
</TABLE>
See notes to financial statements.
10
<PAGE> 13
INVESTMENT PORTFOLIO (CONTINUED)
November 30, 1999
(In thousands)
<TABLE>
<CAPTION>
MUNICIPAL (BONDS CONTINUED) PAR VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
AIRPORTS (5.1%)
CO Denver City and County Airport:
Series A,
8.500% 11/15/23 $ 225 $ 236
Series C,
6.750% 11/15/22 (b) 985 995
MN Minneapolis & St. Paul
Metropolitan Airports Commission,
Series 1999, IFRN (variable rate),
6.145% 1/1/22 4,900 3,975
NC Charlotte Apartments,
Series 1999, IFRN (variable rate),
8.295% 4/20/19 (h) 4,000 3,928
---------
9,135
---------
- --------------------------------------------------------------------------------
UTILITY (15.8%)
INDEPENDENT POWER PRODUCER (5.1%)
NY Port Authority of New York &
New Jersey, KIAC Partners,
Series 1996 IV,
6.750% 10/1/11 2,000 2,108
OH Water Development
Authority, Bay Shore Power Project,
Series 1998 A,
5.875% 9/1/20 2,500 2,265
PA Economic Development
Finance Authority:
Colver Project, Series D,
7.150% 12/1/18 3,650 3,813
Northampton Generating, Series A,
6.500% 1/1/13 1,000 1,007
---------
9,193
---------
INVESTOR OWNED (2.5%)
CT Development Authority
Connecticut Light & Power Co.,
Series 1993 B,
5.950% 9/1/28 300 273
LA Calcasieu Parish Industrial
Development Board, Entergy Gulf
States, Inc., Series 1999,
5.450% 7/1/10 500 472
MS Business Finance Corp.,
Systems Energy Resources Project,
Series 1998,
5.875% 4/1/22 1,500 1,324
NM Farmington, San Juan Public
Service Co. Project, Series D,
6.375% 4/1/22 2,000 1,947
OH Water Development
Authority, Pennsylvania Power Co.,
8.100% 1/15/20 $ 500 $ 511
---------
4,527
---------
MUNICIPAL ELECTRIC (3.7%)
TX Lower Colorado River Authority,
Series 1999,
7.400% 5/15/21 7,500 6,647
---------
WATER & SEWER (4.5%)
FL Tampa Bay, IFRN,
7.900% 10/1/29 7,500 7,172
LA Public Facility Belmont
Water Authority,
9.000% 3/15/24 (j) 585 497
MS Five Lakes Utility District,
8.250% 7/15/24 400 320
-------
7,989
-------
TOTAL MUNICIPAL BONDS
(cost of $182,559)(k) 176,472
-------
SHORT-TERM OBLIGATIONS (2.0%)
- --------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (l)
IL Galesburg, Knox College,
Series 1999,
3.350% 7/1/24 500 500
IL Development Finance Authority,
Ulich Children's Home Project,
3.900% 4/1/07 400 400
IN Hospital Equipment Finance
Authority, Series A,
3.900% 12/1/15 100 100
MI Farmington Hills Hospital Finance
Authority, Botsford General Hospital,
Series 1991 B,
3.450% 2/15/16 1,400 1,400
NM Farmington, Arizona Public
Service Co., Series 1994 A,
3.600% 5/1/24 1,100 1,100
---------
TOTAL SHORT-TERM OBLIGATIONS 3,500
---------
OTHER ASSETS & LIABILITIES, NET (0.9%) (1,608)
---------
NET ASSETS (100.0%) $ 178,364
---------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
(a) This is a restricted security which was acquired on August 21, 1998 and
August 31, 1998 at an aggregate cost of $1,180. This security represents
0.6% of the Fund's net assets as of November 30, 1999.
(b) These securities, or a portion thereof, with a total market value of
$11,336, are being used to collateralize the delayed delivery purchase
indicated in note (h) below and open futures contracts.
(c) This issuer is in default of certain debt covenants. Income is not being
accrued.
See notes to financial statements.
11
<PAGE> 14
INVESTMENT PORTFOLIO (CONTINUED)
(d) These securities are exempt from registration under Rule 144A of the
Securities Act of 1933. This security may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At November
30, 1999, the value of these securities amounted to $4,499 or 2.5% of net
assets.
(e) Zero coupon bond.
(f) This is a restricted security which was acquired on July 30, 1998 at a cost
of $746. This security represents 0.4% of the Fund's net assets as of
November 30, 1999.
(g) This is a restricted security which was acquired on July 30, 1998 at a cost
of $541. This security represents 0.3% of the Fund's net assets as of
November 30, 1999.
(h) This security has been purchased on a delayed delivery basis for settlement
at a future date beyond the customary settlement date.
(i) The Fund has been informed that each issuer has placed direct obligations
of the U.S. Government in an irrevocable trust, solely for the payment of
the principal and interest.
(j) This is a restricted security which was acquired on March 22, 1994 at a
cost of $585. This security represents 0.3% of the Fund's net assets as of
November 30, 1999.
(k) Cost for federal income tax purposes is $182,565.
(l) 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,
1999.
Short futures contracts open at November 30, 1999:
<TABLE>
<CAPTION>
Unrealized
Par value appreciation/
covered by Expiration depreciation
Type contracts month at 11/30/99
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Treasury Bond $5,300 March $65
</TABLE>
Acronym Name
IFRN Inverse Floating Rate Note
See notes to financial statements.
12
<PAGE> 15
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1999
(In thousands except for per share amount and footnotes)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $182,559) $176,472
Short-term obligations 3,500
--------
179,972
Receivable for:
Investments sold $ 8,388
Interest 3,708
Fund shares sold 375
Other 31 12,502
-------- --------
Total Assets 192,474
LIABILITIES
Payable for:
Investments purchased 12,822
Distributions 682
Fund shares repurchased 408
Variation margin on futures 18
Accrued:
Management fee 85
Transfer Agent fee 30
Bookkeeping fee 6
Deferred Trustees fee 5
Other 54
--------
Total Liabilities 14,110
--------
NET ASSETS $178,364
========
Net asset value & redemption price per share --
Class A ($64,458/6,724) $ 9.59(a)
========
Maximum offering price per share --
Class A ($9.59/0.9525) $ 10.07(b)
========
Net asset value & offering price per share --
Class B ($110,939/11,572) $ 9.59(a)
========
Net asset value & offering price per share --
Class C ($2,967/309) $ 9.59(a)
========
COMPOSITION OF NET ASSETS
Capital paid in $189,036
Overdistributed net investment income (445)
Accumulated net realized loss (4,205)
Net unrealized appreciation (depreciation) on:
Investments (6,087)
Open futures contracts 65
--------
$178,364
========
</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
Interest $ 12,671
EXPENSES
Management fee $ 1,106
Service fee 488
Distribution fee -- Class B 943
Distribution fee -- Class C 25
Transfer agent fee 313
Bookkeeping fee 78
Trustees fee 19
Custodian fee 3
Audit fee 58
Legal fee 22
Registration fee 53
Reports to shareholders 26
Other 53
-------
3,187
Fees waived by the Distributor -- Class C (5) 3,182
------- --------
Net Investment Income 9,489
--------
NET REALIZED & UNREALIZED GAIN (LOSS) ON
PORTFOLIO POSITIONS
Net realized loss on:
Investments (758)
Closed futures contracts (1,012)
-------
Net realized loss (1,770)
Net change in unrealized appreciation/
depreciation during the period on:
Investments (17,242)
Open futures contracts (144)
-------
Net change in unrealized appreciation/
depreciation (17,386)
--------
Net Loss (19,156)
--------
Decrease in Net Assets from Operations $ (9,667)
========
</TABLE>
See notes to financial statements.
13
<PAGE> 16
STATEMENT OF CHANGES IN NET ASSETS
(In thousands)
<TABLE>
<CAPTION>
YEARS ENDED
NOVEMBER 30,
INCREASE (DECREASE) IN NET ASSETS 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income $ 9,489 $ 9,522
Net realized gain (loss) (1,770) 4,432
Net change in unrealized appreciation/depreciation (17,386) 375
--------- ---------
Net Increase (Decrease) from Operations (9,667) 14,329
Distributions:
From net investment income -- Class A (3,564) (3,168)
In excess of net investment income -- Class A -- (87)
From net investment income -- Class B (5,760) (6,290)
In excess of net investment income -- Class B -- (172)
From net investment income -- Class C (160) (64)
In excess of net investment income -- Class C -- (2)
--------- ---------
(19,151) 4,546
--------- ---------
Fund Share Transactions:
Receipts for shares sold -- Class A 21,332 22,822
Value of distributions reinvested -- Class A 1,688 1,460
Cost of shares repurchased -- Class A (16,678) (13,666)
--------- ---------
6,342 10,616
--------- ---------
Receipts for shares sold -- Class B 20,850 18,931
Value of distributions reinvested -- Class B 2,640 2,939
Cost of shares repurchased -- Class B (31,059) (36,706)
--------- ---------
(7,569) (14,836)
--------- ---------
Receipts for shares sold -- Class C 2,470 2,628
Value of distributions reinvested -- Class C 107 46
Cost of shares repurchased -- Class C (1,904) (406)
--------- ---------
673 2,268
--------- ---------
Net Decrease from Fund Share
Transactions (554) (1,952)
--------- ---------
Total Increase (Decrease) (19,705) 2,594
NET ASSETS
Beginning of period 198,069 195,475
--------- ---------
End of period (net of overdistributed
net investment income of $445 and
$461, respectively) $ 178,364 $ 198,069
--------- ---------
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED
NOVEMBER 30,
NUMBER OF FUND SHARES 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Sold -- Class A 2,086 2,165
Issued for distributions reinvested -- Class A 166 139
Repurchased -- Class A (1,647) (1,297)
------ ------
605 1,007
------ ------
Sold -- Class B 2,019 1,798
Issued for distributions reinvested -- Class B 259 280
Repurchased -- Class B (3,056) (3,489)
------ ------
(778) (1,411)
------ ------
Sold -- Class C 239 250
Issued for distributions reinvested -- Class C 10 4
Repurchased -- Class C (188) (39)
------ ------
61 215
------ ------
</TABLE>
See notes to financial statements.
14
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS
November 30, 1999
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION:
Colonial High Yield Municipal 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 a high level of after-tax total return by pursuing current income exempt
from ordinary federal income tax and opportunities for long-term appreciation
from a portfolio primarily invested in municipal bonds. The Fund may issue an
unlimited number of shares. The Fund offers three classes of shares: Class A,
Class B and Class C. Class A shares are sold with a front-end sales charge and a
1.00% contingent deferred sales charge 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.
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 that are consistently followed by the Fund in
the preparation of its financial statements.
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 for which market quotations are not readily available 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:
All income, expenses (other than the Class B and Class C distribution fees), and
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 and Class C 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 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 and tax-exempt income, no federal income
tax has been accrued.
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM:
Interest income is recorded on the accrual basis. Original issue discount is
accreted to interest income over the life of a security with a corresponding
increase in the cost basis; market discount is not accreted. Premium is
amortized against interest income with a corresponding decrease in the cost
basis.
DISTRIBUTIONS TO SHAREHOLDERS:
The Fund declares and records distributions daily and pays monthly.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. 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.
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 each fund's pro-rata portion of the combined average net
assets of the Fund, Colonial Tax-Exempt Fund and Colonial Tax-Exempt Insured
Fund as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS ANNUAL FEE RATE
- --------------------------------------------------------------
<S> <C>
First $1 billion 0.60%
Next $2 billion 0.55%
Next $1 billion 0.50%
Over $4 billion 0.45%
</TABLE>
BOOKKEEPING FEE:
The Advisor provides bookkeeping and pricing services for $27,000 annually plus
0.035% of the Fund's average net assets over $50 million.
15
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1999
TRANSFER AGENT FEE:
Liberty Funds Services, Inc. (the Transfer Agent), an affiliate of the Advisor,
provides shareholder services for a monthly fee equal to 0.13% 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. For the year ended November 30, 1999, the
Fund has been advised that the Distributor retained net underwriting discounts
of $37,013 on sales of the Fund's Class A shares and received contingent
deferred sales charges (CDSC) of $4,025, $326,421 and $5,577 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 of the Fund's net assets as of the 20th
of each month. The plan also requires the payment of a distribution fee to the
Distributor equal to 0.75% annually of the average net assets attributable to
Class B and Class C shares. The Distributor has voluntarily agreed, until
further notice, to waive a portion of the Class C share distribution fee so that
it does not exceed 0.60% annually.
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 $94,087,391 and $95,242,519,
respectively.
Unrealized appreciation (depreciation) at November 30, 1999, based on cost of
investments for federal income tax purposes was approximately:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 3,759,000
Gross unrealized depreciation (9,852,000)
-----------
Net unrealized depreciation $(6,093,000)
===========
</TABLE>
CAPITAL LOSS CARRYFORWARDS:
At November 30, 1999, capital loss carryforwards, available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
<TABLE>
<CAPTION>
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD
- --------------------------------------------------------------
<S> <C>
2003 $ 684,000
2005 1,526,000
2007 1,932,000
----------
$4,142,000
==========
</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:
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Fund may invest in municipal and Treasury bond futures contracts and
purchase and write options on futures. The Fund will invest in these instruments
to hedge against the effects of changes in the value of portfolio securities due
to anticipated changes in interest rates and/or market conditions, for duration
management, or when the transactions are economically appropriate to the
reduction of risk inherent in the management of the Fund and not for trading
purposes. The use of futures contracts and options involves certain risks which
include (1) imperfect correlation between the price movement of the instruments
and the underlying securities, (2) inability to close out a position due to
different trading hours or the temporary absence of a liquid market for either
the instrument or the underlying securities or (3) an inaccurate prediction by
the Advisor of the future direction of interest rates. Any of these risks may
involve amounts exceeding the variation margin recognized in the Fund's
Statement of Assets and Liabilities at any given time.
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.
16
<PAGE> 19
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
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.580 $ 10.580 $10.580
------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.546 0.470 0.485(a)
Net realized and unrealized loss (0.991) (0.991) (0.991)
------- -------- -------
Total from Investment Operations (0.445) (0.521) (0.506)
------- -------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.545) (0.469) (0.484)
======= ======== =======
NET ASSET VALUE, END OF PERIOD $ 9.590 $ 9.590 $ 9.590
======= ======== =======
Total return (b) (4.36%) (5.08%) (4.94%)(c)
======= ======== =======
RATIOS TO AVERAGE NET ASSETS
Expenses (d) 1.13% 1.88% 1.73%(a)
Net investment income (d) 5.35% 4.60% 4.75%(a)
Portfolio turnover 50% 50% 50%
Net assets at end of period (000) $64,458 $110,939 $ 2,967
</TABLE>
(a) Net of fees waived by the Distributor which amounted to $0.015 per share
and 0.15%.
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(c) Had the Distributor not waived a portion of expenses, total return would
have been reduced.
(d) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
- --------------------------------------------------------------------------------
Federal Income Tax Information (unaudited)
All of the income distributions will be treated as exempt income for federal
income tax purposes.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, 1998
CLASS A CLASS B CLASS C
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.340 $ 10.340 $10.340
------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.561 0.480 0.496(a)
Net realized and unrealized gain 0.260 0.260 0.260
------- -------- -------
Total from Investment Operations 0.821 0.740 0.756
------- -------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.565) (0.487) (0.502)
In excess of net investment income (0.016) (0.013) (0.014)
------- -------- -------
Total Distributions Declared to Shareholders (0.581) (0.500) (0.516)
======= ======== =======
NET ASSET VALUE, END OF PERIOD $10.580 $ 10.580 $10.580
======= ======== =======
Total return (b) 8.11% 7.29% 7.45%(c)
======= ======== =======
RATIOS TO AVERAGE NET ASSETS
Expenses (d) 1.07% 1.82% 1.67%(a)
Net investment income (d) 5.37% 4.62% 4.77%(a)
Portfolio turnover 36% 36% 36%
Net assets at end of period (000) $64,749 $130,691 $ 2,629
</TABLE>
(a) Net of fees waived by the Distributor which amounted to $0.016 per share
and 0.15%.
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(c) Had the Distributor not waived a portion of expenses, total return would
have been reduced.
(d) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
17
<PAGE> 20
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, 1997
CLASS A CLASS B CLASS C (a)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.160 $ 10.160 $10.320
------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.592 0.516 0.176
Net realized and unrealized gain 0.188 0.188 0.018(b)
------- -------- -------
Total from Investment Operations 0.780 0.704 0.194
------- -------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.594) (0.518) (0.174)
In excess of net investment income (0.006) (0.006) --
------- -------- -------
Total Distributions Declared to Shareholders (0.600) (0.524) (0.174)
------- -------- -------
NET ASSET VALUE, END OF PERIOD $10.340 $ 10.340 $10.340
======= ======== =======
Total return (c) 7.95% 7.15% 1.90%(d)
======= ======== =======
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.11% 1.86% 1.72%(f)
Net investment income (e) 5.83% 5.08% 5.14%(f)
Portfolio turnover 23% 23% 23%
Net assets at end of period (000) $52,847 $142,287 $ 341
</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.
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
1996 1995
CLASS A CLASS B CLASS A CLASS B
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.230 $ 10.230 $ 9.330 $ 9.330
------- -------- ------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.624 0.548 0.656 0.583
Net realized and unrealized gain (loss) (0.051) (0.051) 0.912 0.912
------- -------- ------- --------
Total from Investment Operations 0.573 0.497 1.568 1.495
------- -------- ------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.643) (0.567) (0.668) (0.595)
------- -------- ------- --------
NET ASSET VALUE, END OF PERIOD $10.160 $ 10.160 $10.230 $ 10.230
======= ======== ======= ========
Total return (a) 5.86% 5.07% 17.28% 16.42%
======= ======== ======= ========
RATIOS TO AVERAGE NET ASSETS
Expenses (b) 1.10% 1.85% 1.17% 1.92%
Net investment income (b) 6.19% 5.44% 6.67% 5.92%
Portfolio turnover 8% 8% 26% 26%
Net assets at end of period (000) $37,420 $145,200 $17,997 $137,893
</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.
18
<PAGE> 21
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF LIBERTY FUNDS TRUST IV (FORMERLY COLONIAL TRUST IV) AND
THE SHAREHOLDERS OF COLONIAL HIGH YIELD MUNICIPAL 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 High Yield Municipal 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
19
<PAGE> 22
This page left intentionally blank.
<PAGE> 23
TRUSTEES & TRANSFER AGENT
- --------------------------------------------------------------------------------
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 High Yield Municipal 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 High Yield Municipal
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 HIGH YIELD MUNICIPAL FUND
<PAGE> 24
Liberty offers the independent thinking and collective strength of six financial
specialists. Our distinguished product line helps financial advisors and their
clients build diversified investment portfolios for long-term financial goals.
LIBERTY
-------
FUNDS
<TABLE>
<S> <C>
ALL-STAR Institutional money management approach for individual investors.
COLONIAL Fixed income and value style equity investing.
CRABBE
HUSON A contrarian approach to fixed income and equity investing.
NEWPORT A leader in international investing.(SM)
STEIN ROE
ADVISOR Growth style equity investing.
[KEYPORT LOGO] A leading provider of innovative annuity products.
</TABLE>
Liberty's mutual funds are offered by prospectus through Liberty Funds
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 HIGH YIELD MUNICIPAL FUND ANNUAL REPORT
[LIBERTY FUNDS LETTERHEAD]
-------------
BULK RATE
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
-------------
HM-02/265I-1199 (1/00) 99/1605
