<PAGE>
COLONIAL
OHIO TAX-EXEMPT FUND
[PICTURE OF BUILDING]
SEMIANNUAL REPORT
JULY 31, 1996
NOT FDIC- MAY LOSE VALUE
INSURED NO BANK GUARANTEE
<PAGE>
COLONIAL OHIO TAX-EXEMPT FUND HIGHLIGHTS
FEBRUARY 1, 1996 - JULY 31, 1996
INVESTMENT OBJECTIVE: Colonial Ohio Tax-Exempt Fund seeks as high a level of
after-tax total return, as is consistent with prudent risk, by pursuing current
income exempt from federal and Ohio state personal income tax. The Fund also
provides opportunities for long-term appreciation from a portfolio primarily
invested in investment grade municipal bonds.
THE FUND IS DESIGNED TO OFFER:
- High monthly double-tax-free income
- Long-term appreciation
- Emphasis on quality
PORTFOLIO MANAGER COMMENTARY: "A favorable economic and fiscal environment in
Ohio positions the State well to make a smooth transition to a slower economy.
An increasingly diversified economy, low unemployment, strong reserves and
conservative budgeting should result in continued good performance for Ohio
tax-exempt bonds." - Brian Hartford
COLONIAL OHIO TAX-EXEMPT FUND PERFORMANCE
<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
Inception dates 9/26/86 8/4/92
Distributions declared per share* $ 0.182 $ 0.155
SEC yields on 7/31/96** 4.76% 4.24%
Taxable-equivalent SEC yields*** 8.52% 7.59%
Total returns, assuming reinvestment
of all distributions and no sales charge or
contingent deferred sales charge (CDSC)
6 months (1.24)% (1.62)%
Net asset value per share at 7/31/96 $ 7.23 $ 7.23
</TABLE>
*A portion of the Fund's income may be subject to the alternative minimum tax.
**The 30-day SEC yields on July 31, 1996 reflect the portfolio's earning power,
net of expenses, expressed as an annualized percentage of the maximum offering
price per share at the end of the period. If the Adviser had not waived or borne
certain Fund expenses, SEC yields would have been lower; the yield for Class A
shares would have been 4.73% and the yield for Class B shares would have been
4.21%.
***Taxable-equivalent SEC yields are based on the maximum effective 44.1%
federal and Ohio income tax rates.
<TABLE>
<CAPTION>
QUALITY BREAKDOWN TOP FIVE SECTORS
(as of 7/31/96) (as of 7/31/96)
<S> <C> <C> <C>
AAA ........................... 52.6% School General Obligations .... 16.8%
AA ............................ 11.1% Water & Sewer ................. 16.4%
A ............................. 20.0% General Obligations ........... 10.9%
BBB ........................... 6.2% Hospitals ..................... 9.6%
BB ............................ 1.3% Education ..................... 8.2%
Non-rated ..................... 7.7%
Cash & Equivalents ............ 1.1%
</TABLE>
Sector classifications are based upon Colonial's defined criteria as used in the
investment process. Because the Fund is actively managed, quality and sector
weightings will change.
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[PICTURE OF HAROLD W. COGGER]
I am pleased to present your Fund's semiannual report for the period ended July
31, 1996. Your receipt of this report provides us with the opportunity to
reflect on the investment environment of the past six months.
In the bond market, significantly stronger than expected economic indicators
early in the period stirred inflation fears and propelled long-term interest
rates upward. The Federal Reserve Board lowered short-term interest rates in
January, but failed to continue the easing trend that the market anticipated. As
a result, long-term interest rates rose during the period, eliminating almost
half of the ground gained during 1995's bond market rally. Bond market
volatility continues, based upon receipt of conflicting economic reports and
changing expectations of Federal Reserve Board activity.
While market conditions put pressure on municipal bond prices as well, there was
some good news for the tax-exempt sector. Some of the significant reasons that
municipal bonds outperformed Treasury bonds were technical, such as low supply
and strong retail market support. Others were fundamental, such as the easing of
fears generated by tax-reform proposals, particularly those promoting a flat
tax.
In the stock market, generally favorable conditions prevailed throughout most of
the period, with both large company and small company stocks posting strong
performance until July, when a price correction took place. As a result of that
correction, stock indices generally posted negative total returns for July.
Our expectations for the remainder of 1996 include a moderating economy. We do
believe that the economy will continue to grow, although at a slower pace than
was indicated earlier this year. The lack of any appreciable wage and price
pressure should put the bond market's fears of inflation to rest. Therefore, we
are optimistic that market psychology will shift and volatility will decline by
year-end.
As always, we thank you for the opportunity to help you meet your investment
goals through the Colonial family of funds.
Respectfully,
/s/ Harold W. Cogger
Harold W. Cogger
President
September 11, 1996
3
<PAGE>
PORTFOLIO MANAGEMENT REPORT
BRIAN HARTFORD is portfolio manager of the Colonial Ohio Tax-Exempt Fund. Mr.
Hartford is vice president of Colonial Management Associates, Inc. and is the
Quantitative Risk Manager for Colonial's tax-exempt investments.
Q: WHAT WAS THE FUND'S STRATEGY DURING THE PAST SIX MONTHS?
A: We started the period with a positive outlook for fixed income investments,
based on expectations of a slowing economy and low inflation levels. However,
early in the period, stronger than expected reports of economic strength caused
interest rates to reverse direction and move upwards. We then implemented a
strategy designed to reduce the Fund's sensitivity to interest rates. First, we
reduced our investment in current coupon 30-year bonds that are priced to
maturity and moved into more defensive premium bonds that are priced to the
call. Callable bonds have maturities that are effectively the same as the call
date, typically much earlier than the 30-year final maturity. Second, we moved
down the yield curve by exchanging bonds with 30-year maturities for bonds with
15 to 20-year maturities. Both moves had the effect of increasing the Fund's
holdings of shorter effective maturities, reducing the expected price swings in
response to interest rate changes.
Q: HOW DID THE FUND'S SIX MONTH PERFORMANCE COMPARE TO THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX?
A: The Fund underperformed the Lehman Brothers Municipal Bond Index, a
broad-based, unmanaged index that tracks the performance of the municipal bond
market. In addition, the Index's holdings represent many states, not just Ohio.
The total return for the Fund's Class A shares, based on net asset value, was
down 1.24%, while the return on the Index was down 0.30%. This underperformance
is attributable to the Fund's longer average duration, which is more interest
rate sensitive than the Index, and to its narrower range of investments.
Q: WHAT FACTORS CONTRIBUTED TO PERFORMANCE DURING THIS PERIOD?
A: The biggest factor was the number of stronger than expected economic reports
which resulted in interest rates moving up close to 100 basis points over the
period, which had a negative effect on fixed income investments. During the
early part of the period, the Fund was overweighted in interest rate-sensitive
securities, such as zero-coupon and non-callable bonds. As a result, the Fund's
duration was longer than some of its competitors. Duration measures a fund's
sensitivity to interest rates; the longer the duration, the more bond prices
move with changes in interest rates.
Q: HOW IS THE STATE'S ECONOMY FARING?
A: Our outlook on the State of Ohio remains positive, as the State's general
obligation bond rating was raised during the past year. However, we expect the
State's growth to moderate in line with that of the nation as we near the end of
the current business cycle. The increasing presence of higher growth
service-oriented industries, particularly in the central and southern portions
of the State, helps to offset Ohio's historic dependence on more cyclical
manufacturing industries. We are focusing the Fund's investments on essential
service revenue bonds, such as water and sewer issues, which are less dependent
on tax revenue collections than general obligation issues.
4
<PAGE>
Q: WHAT IS YOUR OUTLOOK FOR THE REMAINDER OF 1996?
A: Despite reports during the period indicating stronger economic growth than we
expected, we have not seen any appreciable wage and price pressure, and believe
the market's fears of inflation should be calmed. We anticipate that these
issues will be resolved by the market as we see more signs of slow, steady
economic growth, leading to less market volatility by the end of the third
quarter. In addition, we believe that interest rates will be lower by year-end.
COLONIAL OHIO TAX-EXEMPT FUND INVESTMENT PERFORMANCE
Change in Value of $10,000 from 9/86 to 7/96
Based on Net Asset Value (NAV) and
Maximum Offering Price (MOP) for Class A Shares
NAV MOP LEHMAN
------ ------ ------
10,000 9,525 10,000 Date: 9/86
10,075 9,597 10,172
10,193 9,709 10,374
10,113 9,633 10,345
10,418 9,923 10,657
10,495 9,997 10,709
10,342 9,851 10,596
9,520 9,068 10,064
9,423 8,975 10,014
9,720 9,259 10,308
9,843 9,375 10,413
9,863 9,395 10,437
9,368 8,923 10,052
9,309 8,866 10,088
9,643 9,185 10,351
9,826 9,359 10,501
10,288 9,799 10,875
10,412 9,917 10,990
10,206 9,721 10,862
10,376 9,883 10,945
10,388 9,895 10,913
10,557 10,055 11,073
10,582 10,079 11,145
10,655 10,149 11,155
10,842 10,327 11,357
11,030 10,506 11,557
11,007 10,484 11,451
11,115 10,587 11,568
11,339 10,801 11,808
11,266 10,731 11,673
11,293 10,756 11,645
11,453 10,909 11,922
11,583 11,033 12,169
11,748 11,190 12,334
11,846 11,283 12,502
11,705 11,149 12,380
11,717 11,161 12,343
11,816 11,255 12,494
11,951 11,384 12,712
12,019 11,448 12,816
11,930 11,363 12,756
12,069 11,496 12,870
12,067 11,494 12,874
11,941 11,374 12,781
12,264 11,681 13,059
12,389 11,801 13,174
12,589 11,991 13,369
12,387 11,799 13,174
12,367 11,780 13,182
12,570 11,973 13,421
12,811 12,202 13,691
12,882 12,270 13,750
13,028 12,409 13,935
13,081 12,460 14,057
13,115 12,492 14,061
13,341 12,707 14,249
13,453 12,814 14,376
13,372 12,737 14,362
13,524 12,881 14,536
13,676 13,027 14,728
13,830 13,173 14,920
13,964 13,301 15,054
14,000 13,335 15,096
14,295 13,616 15,420
14,331 13,650 15,455
14,366 13,684 15,460
14,381 13,698 15,466
14,478 13,790 15,604
14,637 13,942 15,788
14,900 14,192 16,052
15,331 14,602 16,534
15,179 14,458 16,372
15,258 14,533 16,480
15,062 14,347 16,317
15,395 14,664 16,610
15,537 14,799 16,779
15,679 14,934 16,975
16,145 15,378 17,589
16,029 15,268 17,403
16,195 15,426 17,578
16,253 15,481 17,677
16,524 15,739 17,972
16,533 15,747 17,995
16,850 16,050 18,370
17,036 16,227 18,580
17,046 16,236 18,615
16,896 16,094 18,451
17,242 16,423 18,841
17,431 16,603 19,056
16,940 16,135 18,562
16,171 15,403 17,806
16,294 15,520 17,958
16,462 15,680 18,113
16,400 15,621 18,002
16,664 15,872 18,332
16,742 15,947 18,396
16,492 15,709 18,126
16,123 15,358 17,804
15,773 15,024 17,482
16,160 15,392 17,867
16,667 15,875 18,378
17,129 16,316 18,912
17,303 16,481 19,130
17,260 16,440 19,152
17,728 16,885 19,763
17,413 16,586 19,590
17,518 16,686 19,776
17,768 16,924 20,027
17,919 17,068 20,153
18,246 17,380 20,446
18,648 17,763 20,786
18,902 18,005 20,986
19,030 18,126 21,144
18,777 17,885 21,002
18,449 17,573 20,733
18,375 17,502 20,675
18,377 17,504 20,667
18,585 17,702 20,892
18,793 17,900 21,081 Date: 7/96
A $10,000 investment in Class B shares made on 8/92 (inception) at NAV would
have been valued at $11,926 on 7/31/96. The same investment after deducting the
applicable contingent deferred sales charge (CDSC) would have grown to $11,631
on 7/31/96.
AVERAGE ANNUAL TOTAL RETURNS
As of June 30, 1996 (most recent quarter end)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
Inception 9/26/86 Inception 8/4/92
NAV MOP NAV w/CDSC
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 year 6.72% 1.65% 5.93% 0.93%
- ----------------------------------------------------------------------------
5 years 6.80% 5.77% -- --
- ----------------------------------------------------------------------------
Since inception 6.55% 6.02% 4.33% 3.66%
- ----------------------------------------------------------------------------
</TABLE>
The Lehman Brothers Municipal Bond Index is a broad-based, unmanaged index that
tracks the performance of the municipal bond market. The performance of the
Index does not reflect fees or expenses associated with an actual investment.
Past performance cannot predict future results. Return and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. NAV return does not include sales charges
or CDSC. MOP return includes the maximum sales charge of 4.75%. The CDSC return
reflects the maximum charge of 5% for one year and 3% since inception. If the
Adviser had not waived or borne certain Fund expenses, total returns would have
been lower.
Performance for different share classes will vary based on differences in sales
charges and fees associated with each class.
5
<PAGE>
INVESTMENT PORTFOLIO
JULY 31, 1996 (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 99.1% PAR VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EDUCATION - 25.0%
EDUCATION - 8.2%
Miami University, Series 1993,
(a) 12/01/09 $ 400 $ 191
State Higher Education Facilities Commission:
Case Western Reserve, Series 1994:
6.125% 10/01/15 1,505 1,560
6.250% 10/01/17 4,340 4,541
Oberlin College, Series 1993,
5.375% 10/01/15 1,000 926
Ohio Dominican College, Series 1994,
6.625% 12/01/14 1,500 1,558
Wright State University, Series 1993,
5.150% 05/01/11 1,095 1,032
--------
9,808
--------
SCHOOL DISTRICT GENERAL OBLIGATION - 16.8%
Adams County Local School District,
Series 1995,
7.000% 12/01/15 (b) 3,000 3,480
Beaver Creek Local School District,
Series 1996,
6.600% 12/01/15 (b) 2,500 2,775
Brecksville-Broadview Heights School District,
Series 1996:
5.250% 12/01/21 1,500 1,402
6.500% 12/01/16 (b) 1,750 1,881
Columbus School District, Series 1993,
(a) 12/01/05 2,400 1,488
Crooksville, Exempted Village School District,
7.375% 12/01/07 25 28
Eastern School District,
Brown & Highland Counties, Series 1995,
6.250% 12/01/17 1,160 1,241
Gahanna-Jefferson City School District:
(a) 12/01/10 840 379
Series 1993,
(a) 12/01/11 795 337
Hilliard School District, Series 1995 A,
(a) 12/01/12 2,505 999
</TABLE>
6
<PAGE>
Investment Portfolio/July 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
Kings County Local School District,
Series 1995,
7.500% 12/01/16 (b) $2,110 $ 2,577
Lakota Local School District, Series 1994,
7.000% 12/01/08 1,000 1,156
Massillon City School District, Series 1994:
(a) 12/01/08 1,000 523
(a) 12/01/09 1,000 486
(a) 12/01/11 1,000 430
Shaker Heights School District, Series 1990 A,
7.100% 12/15/10 750 873
Tri-County North Local School District,
8.125% 12/01/06 75 88
--------
20,143
--------
- ----------------------------------------------------------------------------------------------
HEALTHCARE - 11.9%
HOSPITALS - 9.6%
Akron, Bath & Copley Townships,
Summa Health Systems, Series 1993 A,
5.500% 11/15/13 2,500 2,297
Cuyahoga County, Meridian Health Systems:
Series 1991,
7.000% 08/15/23 500 522
Series 1995,
6.250% 08/15/24 1,000 1,009
Franklin County:
Doctor's Hospital, Series 1993,
5.875% 12/01/23 1,000 945
Holy Cross Health System, Series 1991,
6.750% 06/01/19 500 525
Geauga County Hospital Association, Inc.,
Series 1988,
8.750% 11/15/13 600 634
Green Springs Health Care Facilities,
St. Francis Health Care Center,
Series 1994 A,
7.000% 05/15/04 700 732
Hamilton County:
Children's Hospital Medical Center,
Series 1993 F,
5.200% 05/15/09 1,000 965
Sisters of Charity Health Care System, Inc.,
Series 1992 A,
6.250% 05/15/14 500 518
</TABLE>
7
<PAGE>
Investment Portfolio/July 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
HEALTHCARE - CONT.
HOSPITALS - CONT.
Miami County:
Upper Valley Medical Center, Inc.:
Series 1987 A,
8.375% 05/01/13 $ 500 $ 520
Series 1996 C,
6.000% 05/15/06 (c) 1,000 1,001
Montgomery County,
St. Elizabeth Medical Center, Series B 1,
8.100% 07/01/18 500 551
Stark County, Doctor's Hospital, Inc.,
Series 1993,
6.000% 04/01/24 1,500 1,284
--------
11,503
--------
NURSING HOME - 2.3%
Franklin County, Columbus West Health
Care Co., Series 1986,
10.000% 09/01/16 100 95
Greene County, Fairview Extended Care
Services, Inc., Series 1990 A,
10.125% 01/01/11 225 254
Lucas County, Gericare Inc., Series 1988 B,
10.500% 06/01/18 500 497
Marion County, United Church Homes, Inc.,
Series 1993,
6.375% 11/15/10 1,000 989
Montgomery County, Grafton Oaks Limited
Partners, Series 1986,
9.750% 12/01/16 735 698
Westerville, Health Care & Retirement Corp.
of America, Series 1989,
10.000% 01/01/08 215 219
--------
2,752
--------
- ---------------------------------------------------------------------------------------------
HOUSING - 5.4%
ASSISTED LIVING/SENIOR - 0.4%
Cuyahoga County,
Judson Retirement Community, Series 1989,
8.875% 11/15/19 500 538
--------
MULTI-FAMILY - 4.1%
Columbus-Beckley Housing Corp.,
Section 8 Assisted Project:
7.375% 07/15/21 1,355 1,396
7.375% 10/15/21 1,317 1,343
</TABLE>
8
<PAGE>
Investment Portfolio/July 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
Connifers Housing Project, Series 1986,
8.450% 06/01/28 $1,000 $ 1,048
State Capital Corp. for Housing,
Series 1990-A,
7.500% 01/01/24 1,000 1,058
--------
4,845
--------
SINGLE FAMILY - 0.9%
State Housing Finance Agency:
Series A2, RIB (variable rate),
9.904% 03/24/31 550 579
Series 1994 B2,
6.700% 03/01/25 500 516
--------
1,095
--------
- ---------------------------------------------------------------------------------------------
OTHER -13.7%
PUBLIC FACILITIES IMPROVEMENT - 6.1%
State Building Authority, William Green Building,
Series 1993-A,
4.750% 04/01/14 5,750 5,074
PR Commonwealth of Puerto Rico
Public Buildings Authority, Series 1993-M,
stepped coupon, (5.700% 07/01/98)
3.750% 07/01/16 (d) 2,500 2,222
--------
7,296
--------
PUBLIC INFRASTRUCTURE - 0.8%
State Development Financing Commission,
Sponge, Inc. Project, Series 1989 5A,
8.375% 06/01/14 705 764
VI Virgin Islands Public Finance Authority,
Series 1992 A,
7.000% 10/01/02 125 135
--------
899
--------
REFUNDED/ESCROW/SPECIAL OBLIGATION (e) - 6.8%
Canton,
7.875% 12/01/08 500 556
Cleveland School District, Series 1991,
8.250% 12/01/08 500 592
Cuyahoga County:
Jail Facilities, Series 1991,
7.000% 10/01/13 1,000 1,124
Deaconess Hospital of Cleveland,
Series 1985 C,
7.450% 10/01/18 500 567
Delaware County, Series 1990,
7.250% 11/01/10 250 281
</TABLE>
9
<PAGE>
Investment Portfolio/July 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REFUNDED/ESCROW/SPECIAL OBLIGATION (e) - CONT.
Fostoria Sewer Systems, Series 1993,
5.350% 12/01/23 $1,735 $ 1,826
Franklin County,
Holy Cross Health System Corp.,
Series 1990 B,
7.650% 06/01/10 500 562
Lake County Water Systems, Series 1987-2,
8.125% 12/01/10 1,000 1,073
State Water Development Authority,
Series 1990 I,
6.000% 12/01/16 1,000 1,035
Toledo Waterworks, Series 1988 B,
7.750% 11/15/17 220 238
Warren, Series 1988,
8.625% 11/15/13 250 280
--------
8,134
--------
- ---------------------------------------------------------------------------------------------
OTHERS REVENUE - 5.7%
HOTELS/CAMPS/LODGING - 0.2%
Athens County, Athens Inn, Inc., Series 1986,
8.625% 11/01/11 250 258
--------
MANUFACTURING - 2.6%
Cuyahoga County,
Joy Technologies, Inc., Series 1992,
8.750% 09/15/07 500 532
State Economic Development Financing
Commission, Burrows Paper Corp.,
Series 1991,
7.450% 06/01/03 930 1,030
State Water Development Authority,
North Star BHP Steel Co. Ltd.,
Series 1995,
6.450% 09/01/20 1,500 1,519
--------
3,081
--------
MISCELLANEOUS RETAIL - 0.2%
Lake County Economic Development,
North Madison Properties, Series 1993,
8.819% 09/01/11 200 207
--------
</TABLE>
10
<PAGE>
Investment Portfolio/July 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
OTHER REVENUE - 2.7%
Hamilton County, Series 1993 A:
4.750% 10/15/23 $1,750 $ 1,472
5.000% 10/15/18 2,000 1,783
--------
3,255
--------
- ----------------------------------------------------------------------------------------------
RESOURCE RECOVERY - 1.2%
CO-GENERATION - 0.9%
State Air Quality Development Authority,
JMG Funding Ltd., Series 1994,
6.375% 01/01/29 1,000 1,031
--------
MISCELLANEOUS DISPOSAL - 0.3%
Lake County, North Madison Properties,
Series 1993,
8.069% 09/01/01 365 368
--------
- ---------------------------------------------------------------------------------------------
TAX-BACKED - 11.0%
GENERAL OBLIGATION
Adams County, Human Services Building,
7.250% 12/01/11 500 537
Bellefontaine, Series I,
7.050% 06/01/11 250 267
Cleveland,
New Capital Projects, Series 1993,
5.375% 09/01/11 (b) 1,300 1,279
Cuyahoga County, Jail Facilities:
Series 1993 A,
(a) 10/01/12 1,000 405
Series 1993,
5.250% 10/01/13 (b) 3,000 2,872
Series 1995,
5.250% 11/15/15 2,000 1,887
Fairborn,
Library Improvement, Series 1991,
7.200% 10/01/11 1,170 1,305
Franklin County, Series 1993,
5.375% 12/01/20 2,000 1,885
Mentor, Series 1991,
7.150% 12/01/11 1,000 1,085
Richland County, Series 1995,
6.950% 12/01/11 275 309
</TABLE>
11
<PAGE>
Investment Portfolio/July 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TAX-BACKED - CONT.
GENERAL OBLIGATION - CONT.
State Infrastructure:
Series 1992,
6.100% 08/01/12 $ 380 $ 404
Series 1994,
4.800% 08/01/13 1,000 889
--------
13,124
--------
- ---------------------------------------------------------------------------------------------
TRANSPORTAION - 6.2%
AIRPORT - 1.2%
Cleveland, Hopkins International Airport,
Series 1990-B,
7.250% 01/01/20 500 534
Dayton, James M. Cox International Airport,
Series 1995,
5.250% 12/01/15 1,000 942
--------
1,476
--------
TURNPIKE/TOLLROAD/BRIDGE - 5.0%
PR Commonwealth of Puerto Rico
Highway & Transportaion Authority:
Series W,
5.500% 07/01/09 410 414
Series 1996 Y,
6.250% 07/01/14 3,000 3,172
State Turnpike Commission,
Series 1996 A,
5.500% 02/15/26 2,500 2,394
--------
5,980
--------
- ---------------------------------------------------------------------------------------------
UTILITY - 19.0%
INVESTOR OWNED - 0.4%
State Air Quality Development Authority,
Toledo Edison Co., Series 1990 B,
8.000% 05/15/19 500 513
--------
MUNICIPAL ELECTRIC - 2.1%
Cleveland Public Power System,
Series 1994 A:
(a) 11/15/12 2,250 892
(a) 11/15/13 2,000 742
PR Puerto Rico Electric Power Authority,
Series 1989 O,
5.000% 07/01/12 1,000 909
--------
2,543
--------
WATER & SEWER - 16.5%
Akron, Series 1996,
5.850% 12/01/10 685 704
</TABLE>
12
<PAGE>
Investment Portfolio/July 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
Butler County, Series 1996 J,
5.125% 12/01/21 $ 500 $ 459
Clermont County, Sewer Systems,
Series 1993
5.200% 12/01/21 1,000 914
Cleveland Waterworks, Series 1993-G,
5.500% 01/01/21 (b) 8,750 8,542
Hamilton County Sewer Systems,
Metropolitan Sewer District,
Series 1993-A,
5.000% 12/01/14 1,000 918
Lakewood, Water & Sewer Systems Revenue,
5.850% 07/01/20 2,405 2,429
Montgomery County,
Moraine-Beaver Creek Sewer System,
Series 1993,
5.300% 11/15/08 495 493
Toledo Waterworks Revenue:
6.250% 11/15/10 1,130 1,203
Series 1996,
6.250% 11/15/09 1,050 1,122
Series 1988 B,
7.750% 11/15/17 280 308
PR Commonwealth of Puerto Rico
Aqueduct & Sewer Authority,
Series 1995:
6.250% 07/01/12 1,000 1,054
6.250% 07/01/13 1,500 1,575
--------
19,721
--------
TOTAL MUNICIPAL BONDS (cost of $115,795)(f) 118,570
--------
SHORT-TERM OBLIGATIONS - 1.2%
- ---------------------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (g)
CA State Pollution Control Finance Authority,
Ultrapower Rocklin,
Series A,
3.700% 06/01/17 100 100
MS Perry County, Leaf River Forest Project,
3.700% 03/01/02 1,000 1,000
Twinsburg, United Stationers Supply Co.,
Series 1986,
3.850% 12/01/11 300 300
--------
TOTAL SHORT-TERM OBLIGATIONS 1,400
--------
</TABLE>
13
<PAGE>
Investment Portfolio/July 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
OTHER ASSETS & LIABILITIES, NET - (0.3)% $ (402)
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $119,568
--------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- --------------------------------------------------------------------------------
(a) Zero coupon bond.
(b) These securities, or a portion thereof, with a total market value of
$23,406, are being used to collateralize the delayed delivery purchase
indicated in note (c) below and open futures contracts.
(c) This security has been purchased on a delayed delivery basis for
settlement at a future date beyond the customary settlement time.
(d) Shown parenthetically is the interest rate to be paid and the date the
Fund will begin accruing this rate.
(e) 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 interest and principal.
(f) Cost for federal income tax purposes is the same.
(g) 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
July 31, 1996.
Short futures contracts open at July 31, 1996:
<TABLE>
<CAPTION>
Par value Unrealized
covered by Expiration depreciation
Type contracts month at 7/31/96
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Treasury bonds $15,400 September $ 364
</TABLE>
Acronym Name
------- ----------------------
RIB Residual Interest Bond
See notes to financial statements.
14
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JULY 31, 1996 (UNAUDITED)
(in thousands except for per share amounts and footnotes)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $115,795) $ 118,570
Short-term obligations 1,400
---------
119,970
Receivable for:
Interest $1,523
Fund shares sold 42
Other 18 1,583
------ ---------
Total Assets 121,553
LIABILITIES
Payable for:
Investments bought 1,006
Distributions 475
Fund shares repurchased 370
Variation margin on futures 106
Payable to Adviser 9
Accrued Deferred Trustees fees 2
Other 17
------
Total Liabilities 1,985
---------
NET ASSETS $ 119,568
---------
Net asset value & redemption price per share -
Class A ($68,039,/9,414) $ 7.23
---------
Maximum offering price per share - Class A
($7.23/0.9525) $ 7.59(a)
---------
Net asset value & offering price per share -
Class B ($51,529/7,129) $ 7.23(b)
---------
COMPOSITION OF NET ASSETS
Capital paid in $ 119,064
Undistributed net investment income 1
Accumulated net realized loss (1,908)
Net unrealized appreciation (depreciation) on:
Investments 2,775
Open futures contracts (364)
---------
$ 119,568
---------
</TABLE>
(a) On sales of $50,000 or more the offering price is reduced.
(b) Redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
See notes to financial statements.
15
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 1996
(UNAUDITED)
<TABLE>
<S> <C> <C>
(in thousands)
INVESTMENT INCOME
Interest $ 3,675
EXPENSES
Management fee $ 331
Service fee 81
Distribution fee - Class B 199
Transfer agent 99
Bookkeeping fee 26
Registration fee 11
Custodian fee 5
Audit fee 15
Trustees fee 12
Reports to shareholders 5
Legal fee 5
Other 11
-------
800
Fees waived by the Adviser (60) 740
------- -------
Net Investment Income 2,935
-------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain on:
Investments 205
Closed futures contracts 1,346
-------
Net Realized Gain 1,551
Net unrealized depreciation
during the period on:
Investments (6,097)
Open futures contracts (347)
-------
Net Unrealized Loss (6,444)
-------
Net Loss (4,893)
-------
Net Decrease in Net Assets from Operations $(1,958)
-------
</TABLE>
See notes to financial statements.
16
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Unaudited)
Six months
ended Year ended
(in thousands) July 31 January 31
---------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS 1996 1996
Operations:
Net investment income $ 2,935 $ 6,277
Net realized gain (loss) 1,551 (2,577)
Net unrealized appreciation (depreciation) (6,444) 12,969
--------- ---------
Net Increase (Decrease) from Operations (1,958) 16,669
Distributions:
From net investment income - Class A (1,759) (3,859)
From net investment income - Class B (1,141) (2,516)
--------- ---------
(4,858) 10,294
--------- ---------
Fund Share Transactions :
Receipts for shares sold - Class A 1,302 3,598
Value of distributions reinvested - Class A 1,024 2,300
Cost of shares repurchased - Class A (5,904) (9,496)
--------- ---------
(3,578) (3,598)
--------- ---------
Receipts for shares sold - Class B 2,002 5,505
Value of distributions reinvested - Class B 698 1,561
Cost of shares repurchased - Class B (5,239) (8,889)
--------- ---------
(2,539) (1,823)
--------- ---------
Net Decrease from Fund Share
Transactions (6,117) (5,421)
--------- ---------
Total Increase (Decrease) (10,975) 4,873
NET ASSETS
Beginning of period 130,543 125,670
--------- ---------
End of period (including undistributed
and net of overdistributed net
investment income of $1 and $52,
respectively) $ 119,568 $ 130,543
--------- ---------
NUMBER OF FUND SHARES
Sold - Class A 180 500
Issued for distributions reinvested - Class A 143 319
Repurchased - Class A (816) (1,318)
--------- ---------
(493) (499)
--------- ---------
Sold - Class B 279 765
Issued for distributions reinvested - Class B 97 216
Repurchased - Class B (726) (1,228)
--------- ---------
(350) (247)
--------- ---------
</TABLE>
See notes to financial statements.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial Ohio Tax-Exempt Fund (the Fund), a
series of Colonial Trust V, the accompanying financial statements contain all
normal and recurring adjustments necessary for the fair presentation of the
financial position of the Fund at July 31, 1996, and the results of its
operations, the changes in its net assets and the financial highlights for the
six months then ended.
NOTE 2. ACCOUNTING POLICIES
ORGANIZATION: The Fund is a non-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 as high a level of after-tax total return, as is consistent with prudent
risk. The Fund may issue an unlimited number of shares. The Fund offers Class A
shares sold with a front-end sales charge and Class B shares which are subject
to an annual distribution fee and a contingent deferred sales charge. Class B
shares will convert to Class A shares when they have been outstanding
approximately eight years.
The 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.
Options are valued at the last reported sale price, or in the absence of a sale,
the mean between the last quoted bid and asking price.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions which cannot be valued as set forth above are valued at fair
value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
18
<PAGE>
Notes to Financial Statements/July 31, 1996
- --------------------------------------------------------------------------------
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 distribution fee), realized and unrealized
gains (losses), are allocated to each class proportionately on a daily basis for
purposes of determining the net asset value of each class.
Class B per share data and ratios are calculated by adjusting the expense and
net investment income per share data and ratios for the Fund for the entire
period by the annualized distribution fee applicable to Class B shares only.
FEDERAL INCOME TAXES: Consistent with the Fund's policy to qualify as a
regulated investment company and to distribute all of its taxable 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 3. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE: Colonial Management Associates, Inc. (the Adviser) is the
investment Adviser of the Fund and furnishes accounting and other services and
office facilities for a monthly fee based on each Fund's pro rata portion of the
combined average net assets of Trust V as follows:
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
------------------ ---------------
<S> <C>
First $1 billion 0.55%
Next $1 billion 0.50%
Over $2 billion 0.45%
</TABLE>
19
<PAGE>
Notes to Financial Statements/July 31, 1996
- --------------------------------------------------------------------------------
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES - CONT.
Effective January, 1, 1996 the management fee applicable to the Trust is being
reduced based on the following schedule for the first $1 billion in combined
average net assets:.
<TABLE>
<CAPTION>
Cumulative Annualized
Effective Date Reduction
-------------- ---------------------
<S> <C>
January 1, 1996 0.0125%
April 1, 1996 0.0250%
July 1, 1996 0.0375%
October 1, 1996 0.0500%
</TABLE>
BOOKKEEPING FEE: The Adviser provides bookkeeping and pricing services for
$27,000 per year plus 0.035% of the Fund's average net assets over $50 million.
TRANSFER AGENT: Colonial Investors Service Center, Inc. (the Transfer
Agent), an affiliate of the Adviser, provides shareholder services for a
monthly fee equal to 0.14% annually of the Fund's average net assets and
receives a reimbursement for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Colonial Investment
Services, Inc. (the Distributor), an affiliate of the Adviser, is the Fund's
principal underwriter. During the six months ended July 31, 1996, the Fund has
been advised that the Distributor retained net underwriting discounts of $4,308
on sales of the Fund's Class A shares and received contingent deferred sales
charges (CDSC) of $100,656 on Class B share redemptions.
The Fund has adopted a 12b-1 plan which requires the payment of a distribution
fee to the Distributor equal to 0.75% annually of the Fund's average net assets
attributable to Class B shares. The plan also requires the payment of a service
fee to the Distributor as follows:
<TABLE>
<CAPTION>
Valuation of shares Annual
outstanding on the 20th of Fee
each month which where issued Rate
----------------------------- ------
<S> <C>
Prior to November 30, 1994 0.10%
On or after December 1, 1994 0.25%
</TABLE>
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
EXPENSE LIMITS: The Adviser has agreed, until further notice, to waive fees and
bear certain Fund expenses to the extent that total expenses (exclusive of
service and distribution fees, brokerage commissions, interest,
20
<PAGE>
Notes to Financial Statements/July 31, 1996
- --------------------------------------------------------------------------------
taxes, and extraordinary expenses, if any) exceed 0.75% annually of the Fund's
average net assets.
OTHER: The Fund pays no compensation to its officers, all of whom are employees
of the Adviser.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY: During the six months ended July 31, 1996, purchases and
sales of investments, other than short-term obligations, were $20,886,673 and
$26,908,074, respectively.
Unrealized appreciation (depreciation) at July 31, 1996, based on cost of
investments for both financial statement and federal income tax purposes was
approximately:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 4,874,000
Gross unrealized depreciation (1,599,000)
------------
Net unrealized appreciation $ 2,775,000
------------
</TABLE>
CAPITAL LOSS CARRYFORWARDS: At January 31, 1996, capital loss carryforwards
available (to the extent provided in regulations) to offset future realized
gains were approximately as follows:
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
---------- ------------
<S> <C>
1996 $ 218,000
1998 78,000
1999 8,000
2001 21,000
2002 112,000
2004 1,035,000
----------
$1,467,000
----------
</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.
21
<PAGE>
Notes to Financial Statements/July 31, 1996
- --------------------------------------------------------------------------------
NOTE 4. PORTFOLIO INFORMATION - CONT.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
The Fund may purchase or sell 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 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 positions 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 Adviser of the future direction of interest rates. Any of these risks may
involve amounts exceeding the amount recognized in the Fund's Statement of
Assets and Liabilities at any given time.
NOTE 5. LINE OF CREDIT
The Fund may borrow up to 10% 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 six months ended July 31, 1996.
22
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
(Unaudited)
Six months ended
July 31 Year ended January 31
----------------------------------- -------------------------------
1996 1996
Class A Class B Class A Class B
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 7.510 $ 7.510 $ 6.930 $ 6.930
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.185 0.158 0.375 0.321
Net realized and
unrealized gain (loss) (0.283) (0.283) 0.585 0.585
----------- ----------- ----------- -----------
Total from Investment
Operations (0.098) (0.125) 0.960 0.906
----------- ----------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.182) (0.155) (0.380) (0.326)
----------- ----------- ----------- -----------
Net asset value -
End of period $ 7.230 $ 7.230 $ 7.510 $ 7.510
----------- ----------- ----------- -----------
Total return (b)(c) (1.24)%(d) (1.62)%(d) 14.18% 13.34%
----------- ----------- ----------- -----------
RATIOS TO AVERAGE NET ASSETS
Expenses 0.88%(e)(f) 1.63%(e)(f) 0.85%(f) 1.60%(f)
Net investment income 5.11%(e)(f) 4.36%(e)(f) 5.19%(f) 4.44%(f)
Fees and expenses
waived or borne
by the Adviser 0.10%(e) 0.10%(e) 0.11% 0.11%
Portfolio turnover 17%(d) 17%(d) 31% 31%
Net assets at end
of period (000) $ 68,039 $ 51,529 $ 74,383 $ 56,160
(a) Net of fees and expenses waived or borne by the Adviser which amounted to:
$ 0.004 $ 0.004 $ 0.008 $ 0.008
</TABLE>
(b) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(c) Had the Adviser not waived or reimbursed a portion of expenses, total
return would have been reduced.
(d) Not annualized.
(e) Annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
23
<PAGE>
FINANCIAL HIGHLIGHTS - continued
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended January 31
--------------------------------------------------------------
1995 1994
Class A Class B Class A Class B
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 7.670 $ 7.670 $ 7.290 $ 7.290
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.401 0.348 0.406 0.351
Net realized and
unrealized gain (loss) (0.745) (0.745) 0.389 0.389
----------- ----------- ----------- -----------
Total from Investment
Operations (0.344) (0.397) 0.795 0.740
----------- ----------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.396) (0.343) (0.411) (0.356)
From capital paid in -- -- (0.004) (0.004)
----------- ----------- ----------- -----------
Total Distributions
Declared to Shareholders (0.396) (0.343) (0.415) (0.360)
----------- ----------- ----------- -----------
Net asset value -
End of period $ 6.930 $ 6.930 $ 7.670 $ 7.670
----------- ----------- ----------- -----------
Total return (c)(d) (4.38)% (5.10)% 11.17% 10.36%
----------- ----------- ----------- -----------
RATIOS TO AVERAGE NET ASSETS
Expenses 0.72% 1.47% 0.82% 1.57%
Net investment income 5.71% 4.96% 5.34% 4.59%
Fees and expenses waived
or borne by the Adviser 0.16% 0.16% 0.09% 0.09%
Portfolio turnover 33% 33% 3% 3%
Net assets at end of period (000) $ 72,123 $ 53,547 $ 79,394 $ 51,212
(a) Net of fees and expenses waived or borne by the Adviser which amounted to:
$ 0.011 $ 0.011 $ 0.007 $ 0.007
</TABLE>
(b) Class B shares were initially offered on August 4, 1992. Per share
amounts reflect activity from that date.
(c) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses, total
return would have been reduced.
(e) Not annualized.
(f) Annualized.
24
<PAGE>
FINANCIAL HIGHLIGHTS - continued
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended January 31
---------------------------------------------
1993 1992
Class A Class B(b) Class A
----------- ----------- -----------
<S> <C> <C>
$ 7.090 $ 7.330 $ 6.880
----------- ----------- -----------
0.444 0.185 0.457
0.204 (0.033) 0.208
----------- ----------- -----------
0.648 0.152 0.665
----------- ----------- -----------
(0.448) (0.192) (0.455)
-- -- --
----------- ----------- -----------
(0.448) (0.192) (0.455)
----------- ----------- -----------
$ 7.290 $ 7.290 $ 7.090
----------- ----------- -----------
9.41% 0.85%(e) 10.00%
----------- ----------- -----------
1.00% 1.75%(f) 1.00%
6.18% 5.43%(f) 6.57%
0.03% 0.03%(f) 0.09%
13% 13% 13%
$ 62,439 $ 7,293 $ 50,281
$ 0.002 -- $ 0.006
</TABLE>
25
<PAGE>
HOW TO REACH COLONIAL
BY PHONE OR BY MAIL
BY TELEPHONE
COLONIAL CUSTOMER CONNECTION - 1-800-345-6611
For 24-hour account information, call from your touch-tone phone. (Rotary
callers will be automatically connected to a representative during business
hours.) A recorded message will guide you through the menu:
For fund prices, dividends, and capital gains information ......... press 1
For account information ........................................... press 2
To speak to a Colonial representative ............................. press 3
For yield and total return information ............................ press 4
For duplicate statements or new supply of checks .................. press 5
To order duplicate tax forms and year-end statements .............. press 6
(February through May)
To review your options at any time during your call ............... press *
To speak with a shareholder services representative about your account, call
Monday to Friday, 8:00 am to 8:00 pm ET, and Saturdays from February through
mid-April, 10:00 am to 2:00 pm ET.
COLONIAL TELEPHONE TRANSACTION DEPARTMENT - 1-800-422-3737
To purchase, exchange, or sell shares by telephone, call Monday to Friday, 9:00
am to 8:00 pm ET. Transactions received after the close of the New York Stock
Exchange will receive the next business day's closing price.
COLONIAL LITERATURE DEPARTMENT - 1-800-248-2828
To request literature on any Colonial fund, call Monday to Friday, 8:30 am to
6:30 pm ET.
BY MAIL
COLONIAL INVESTORS SERVICE CENTER, INC.
P.O. BOX 1722
BOSTON, MA 02105-1722
26
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Ohio Tax-Exempt Fund is:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial Ohio Tax-Exempt Fund mails one shareholder report to each shareholder
address. If you would like more than one report, please call our Literature
Department at 1-800-248-2828 and additional reports will be sent to you.
This report has been prepared for shareholders of Colonial Ohio Tax-Exempt Fund.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives, and operating policies of the Fund.
27
<PAGE>
[COLONIAL MUTUAL FUNDS LOGO]
Mutual Funds for
Planned Portfolios
TRUSTEES
ROBERT J. BIRNBAUM
Trustee (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Trustee (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
LORA S. COLLINS
Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Trustee (formerly Chairman of the Board, Bank of New England-Worcester)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
WILLIAM E. MAYER
Dean, College of Business and Management, University of Maryland (formerly Dean,
Simon Graduate School of Business, University of Rochester; Chairman and Chief
Executive Officer, CS First Boston Merchant Bank; and President and Chief
Executive Officer, The First Boston Corporation)
JAMES L. MOODY, JR.
Chairman of the Board, Hannaford Bros. Co. (formerly Chief Executive Officer,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
GEORGE L. SHINN
Financial Consultant (formerly Chairman, Chief Executive Officer and Consultant,
The First Boston Corporation)
ROBERT L. SULLIVAN
Management Consultant (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
SINCLAIR WEEKS, JR.
Chairman of the Board, Reed & Barton Corporation
COLONIAL INVESTMENT SERVICES, INC., Distributor (C) 1996
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
OH-03/515C-0796 M (9/96)
