[graphic omitted]
COLONIAL
FLORIDA TAX-EXEMPT FUND
[graphic omitted]
SEMIANNUAL REPORT
JULY 31, 1997
----------------------------
NOT FDIC- MAY LOSE VALUE
INSURED NO BANK GUARANTEE
----------------------------
<PAGE>
COLONIAL FLORIDA TAX-EXEMPT FUND HIGHLIGHTS
FEBRUARY 1, 1997- JULY 31, 1997
INVESTMENT OBJECTIVE: Colonial Florida 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 income tax and Florida intangibles tax and
opportunities for long-term appreciation from a portfolio primarily invested in
investment grade municipal bonds.
THE FUND IS DESIGNED TO OFFER:
|X| High monthly double tax-free income
|X| Long-term appreciation
|X| Diversification and emphasis on quality
PORTFOLIO MANAGER COMMENTARY: "As the investment environment for bonds improved
over the period, the Fund's strategic shift towards more interest rate sensitive
bonds yielded positive results. The Fund focused on purchasing higher quality
revenue bonds in an environment where bond yields were unusually tight."
- Peter Andersen
COLONIAL FLORIDA TAX-EXEMPT FUND PERFORMANCE
CLASS A CLASS B
Inception date 2/1/93 2/1/93
- -------------------------------------------------------------------------------
Distributions declared per share(1) $0.198 $0.170
- -------------------------------------------------------------------------------
SEC yields on 7/31/97(2) 4.42% 3.89%
- -------------------------------------------------------------------------------
Taxable-equivalent SEC yields(3) 7.32% 6.44%
- -------------------------------------------------------------------------------
Six-month total returns, assuming reinvestment 6.55% 6.15%
of all distributions and no sales charge or
contingent deferred sales charge (CDSC)
- -------------------------------------------------------------------------------
Net asset value per share on 7/31/97 $7.71 $7.71
(1) A portion of the Fund's income may be subject to the alternative minimum
tax.
(2) The 30-day SEC yields on 7/31/97 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 Advisor had not waived or borne
certain Fund expenses, SEC yields would have been 4.02% for Class A shares and
3.47% for Class B shares.
(3) Taxable-equivalent SEC yields are based on the combined maximum effective
39.6% federal income tax rate.
The Fund may at times purchase tax-exempt securities at a discount, and some or
all of this discount may be included in the Fund's ordinary income which will be
taxable when distributed.
Quality Breakdown Top Five Sectors
(as of 7/31/97) (as of 7/31/97)
- ------------------------------------ -----------------------------------
AAA .......................... 68.1% Water & Sewer ............... 21.8%
AA ........................... 14.3% General Obligations ......... 10.9%
A ............................ 8.6% Hospitals ................... 10.5%
BBB .......................... 5.1% Municipal Electric .......... 10.0%
Non-rated .................... 2.4% Housing ..................... 9.2%
Cash & Equivalents ........... 1.5%
Because the Fund is actively managed, quality and sector weightings will change.
Quality breakdown and sector classifications are based on total net assets.
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
[Photo of Harold W. Cogger]
I am pleased to present the semiannual report for Colonial Florida Tax-Exempt
Fund. This report reflects on the investment environment for the six months
ended July 31, 1997.
The national economy continued to grow during the past six months. A firm job
market buoyed consumer confidence, resulting in strong retail, auto and housing
sales during the first quarter of 1997. The Federal Reserve Board raised
short-term interest rates in March for the first time in two years in response
to growing concern about future wage and price inflation. As interest rates
rose, bond prices declined.
Bond prices recovered during the second half of the period as consumer spending
declined, dampening investors' fears of potential inflation. At the same time,
industrial production, corporate capital spending and consumer income levels
continued to expand while inflation remained very low. This indicates that while
economic growth has slowed down, the economy is still on track to post gains for
1997 and carry the current economic expansion into its eighth year.
Municipal bonds prices continued to outperform Treasury prices. A low supply of
new municipal issues combined with strong demand helped support these tax-exempt
bond prices. Municipal bond prices also received a boost as the final balanced
budget agreement emerged from Congress. However, the investment environment for
municipal bonds was not without challenge. The yield advantage for investing in
lower quality municipal bonds continued to be historically low. This, combined
with tight supply, created higher prices and lower yields for many new
investments.
The long-term benefits of investing in any municipal bond fund include
tax-free income and the opportunity to diversify your fixed-income portfolio.
Colonial Florida Tax-Exempt Fund continues to offer you competitive tax-free
income and long-term total return, as well as an opportunity to participate in
Florida's economic expansion.
As always, we thank you for the opportunity to help meet your investment goals.
Respectfully,
/s/ Harold W. Cogger
Harold W. Cogger
President
September 11, 1997
Because market conditions change frequently, there can be no assurance that the
trends described in this report will continue, come to pass or affect Fund
performance.
<PAGE>
PORTFOLIO MANAGEMENT REPORT
As of August 27, 1997, PETER ANDERSEN resigned from Colonial Management
Associates, Inc. MAUREEN G. NEWMAN, vice president of the Advisor, now manages
the Fund. Ms. Newman has managed various other municipal bond funds for Colonial
since May 1996.
INVESTMENT ENVIRONMENT REFLECTS CHANGING ECONOMIC CONDITIONS
A series of economic reports near the beginning of the period suggested a
stronger pace of economic growth than had been expected. The economy's healthy
rate of growth during the first quarter of 1997 sparked fears of potential
inflation -- a negative for bonds -- and bond prices declined. The Federal
Reserve Board raised short-term interest rates in March and bond prices declined
further. By April, bond prices began to recover as decreased consumer spending
on autos, homes and retail goods restrained the pace of economic growth.
Bond prices were increased at the end of July as the final budget accord
emerged. This agreement by Congress to balance the budget indicates that the
nation's budget deficit should decline and the Government would need to borrow
less money. This should have a positive impact on long-term interest rates and,
therefore, on bond prices.
FUND INCREASES ITS SENSITIVITY TO INTEREST RATES
The Fund's investment strategy reflected the changes in the economic
environment. The portfolio was structured defensively at the beginning of the
period with a relatively low sensitivity to changes in interest rates.
Significant holdings of bonds with shorter maturities and bonds with higher
coupons helped to reduce price declines when interest rates rose during the
first half of the period, helping to stabilize the Fund's asset value.
During April and May, economic reports suggested moderating economic growth with
continued low inflation, creating a positive environment for fixed-income
investments. We increased the Fund's average maturity by selling shorter
maturity and higher coupon bonds and purchasing noncallable and longer maturity
bonds. These bonds are more sensitive to interest rate changes and generated
larger price gains as rates fell during the last three months of the period.
These strategies had a positive impact on performance. The Fund's Class A shares
posted a total return of 6.55% for the period, based on the net asset value,
outperforming the Lehman Brothers Municipal Bond Index. The Index posted a total
return of 5.86% for the period. In addition, the Fund's performance placed it in
the top quartile of Florida tax-exempt funds for the period as measured by
Lipper Analytical Services, Inc.*
POSITIVE EXPECTATIONS FOR FLORIDA'S ECONOMY CONTINUED
The State's economy continued to grow strongly. Employment gains are among the
strongest in the nation, reflecting rapid expansion in the trade, service and
tourism industries. For example, increases in the banking, insurance and export
trade sectors have resulted in more balanced demographics while Florida's
significant tourism industry has benefited from the ongoing national economic
expansion. Increased infrastructure needs, generated by the accompanying
population growth, may increase Florida's debt level as State and local
governments borrow to finance municipal projects, particularly schools. However,
we anticipate that improved demographics and continued population growth will be
adequate to support additional borrowing.
INCREASING YOUR TOTAL RETURN
With a balanced economy producing low inflation and low unemployment, interest
rates have been going down over the last few months. If this trend continues,
its effect could be reflected in smaller dividend checks. With inflation under
control, current dividends continue to outpace the inflation rate, and remain a
reliable source of tax-exempt income. The goal of the Fund is to increase
shareholders' total return, so while interest rates have gone down, and
dividends are likely to follow, the net asset value per share of the Fund has
been increasing. We will continue to invest primarily in investment grade
municipal bonds that provide the most potential for long-term appreciation.
*Source: Lipper Analytical Services, Inc. Lipper rankings are based on the
Lipper Florida Tax-Exempt Municipal Fund universe. The Fund's ranking for the
six-month period is in the top quartile (rated 5 out of 78 funds), year-to-date
as of July 31, 1997, in the top quartile (rated 11 out of 78 funds), in the
second quartile for 1 year (rated 27 out of 77 funds) and in the second quartile
for 3 years (rated 22 out of 57 funds). Rankings do not include any sales
charges. Performance for different share classes will vary with fees associated
with each class. Past performance cannot guarantee future results.
<PAGE>
COLONIAL FLORIDA TAX-EXEMPT FUND'S INVESTMENT PERFORMANCE
Change in Value of $10,000 from 2/1/93 to 7/31/97
Based on MOP for Class A Shares and applicable CDSC for Class B Shares
CLASS A SHARES
- --------------------------------------------------------------------------------
CFLTEF A 1/97 NAV A MOP A LEHMAN MUNI BOND
- --------------------------------------------------------------------------------
Feb 1, 93 10000 9525 10000
Feb 28, 93 10358.53 9866.502 10362
Mar 31, 93 10183.26 9699.56 10252
Apr 30, 93 10299.99 9810.74 10355
May 31, 93 10363.27 9871.012 10414
Jun 30, 93 10545.99 10045.06 10588
Jul 31, 93 10551.94 10050.72 10601
Aug 31, 93 10776.93 10265.02 10822
Sep 30, 93 10906.9 10388.83 10946
Oct 31, 93 10941.48 10421.76 10967
Nov 30, 93 10821.98 10307.94 10870
Dec 31, 93 11063.69 10538.17 11099
Jan 31, 94 11166.55 10636.14 11226
Feb 28, 94 10833.89 10319.28 10935
Mar 31, 94 10217.18 9731.864 10490
Apr 30, 94 10294.53 9805.543 10579
May 31, 94 10385.2 9891.9 10671
Jun 30, 94 10391.01 9897.437 10605
Jul 31, 94 10570.13 10068.05 10800
Aug 31, 94 10547.11 10046.12 10837
Sep 30, 94 10422.85 9927.767 10678
Oct 31, 94 10139.72 9658.081 10489
Nov 30, 94 9940.728 9468.543 10299
Dec 31, 94 10259.85 9772.511 10526
Jan 31, 95 10594.45 10091.22 10826
Feb 28, 95 10947.2 10427.21 11141
Mar 31, 95 11045.67 10521 11269
Apr 30, 95 11054.86 10529.75 11283
May 31, 95 11335.88 10797.42 11643
Jun 30, 95 11100.73 10573.45 11541
Jul 31, 95 11187.05 10655.66 11650
Aug 31, 95 11254.31 10719.73 11798
Sep 30, 95 11337.39 10798.86 11873
Oct 31, 95 11545 10996.61 12045
Nov 30, 95 11784.38 11224.62 12245
Dec 31, 95 11962.14 11393.94 12363
Jan 31, 96 12030.38 11458.94 12456
Feb 29, 96 11925.46 11359 12372
Mar 31, 96 11741.82 11184.08 12214
Apr 30, 96 11713.63 11157.24 12179
May 31, 96 11749.33 11191.24 12175
Jun 30, 96 11865.77 11302.14 12307
Jul 31, 96 11981.45 11412.33 12419
Aug 31, 96 12000.91 11430.86 12416
Sep 30, 96 12151.57 11574.37 12590
Oct 31, 96 12253.9 11671.84 12732
Nov 30, 96 12472.95 11880.48 12965
Dec 31, 96 12395.26 11806.48 12910
Jan 31, 97 12366.87 11779.44 12935
Feb 28, 97 12471.88 11879.46 13053
Mar 31, 97 12309.78 11725.07 12879
Apr 30, 97 12415.58 11825.84 12987
May 31, 97 12605.83 12007.05 13183
Jun 30, 97 12711.91 12108.09 13323
Jul 31, 97 13176.48 12550.6 13692
<PAGE>
CLASS B SHARES
- --------------------------------------------------------------------------------
CFLTEF B 1/97 NAV B MOP B LEHMAN MUNI BOND
- --------------------------------------------------------------------------------
Feb 1, 93 10000 10000 10000
Feb 28, 93 10352.28 10352.28 10362
Mar 31, 93 10170.79 10170.79 10252
Apr 30, 93 10281.08 10281.08 10355
May 31, 93 10337.9 10337.9 10414
Jun 30, 93 10513.8 10513.8 10588
Jul 31, 93 10513.34 10513.34 10601
Aug 31, 93 10731.16 10731.16 10822
Sep 30, 93 10854.15 10854.15 10946
Oct 31, 93 10881.98 10881.98 10967
Nov 30, 93 10756.7 10756.7 10870
Dec 31, 93 10990.29 10990.29 11099
Jan 31, 94 11085.59 11085.59 11226
Feb 28, 94 10748.36 10748.36 10935
Mar 31, 94 10129.8 10129.8 10490
Apr 30, 94 10200.09 10200.09 10579
May 31, 94 10283.67 10283.67 10671
Jun 30, 94 10283.04 10283.04 10605
Jul 31, 94 10453.85 10453.85 10800
Aug 31, 94 10424.64 10424.64 10837
Sep 30, 94 10295.26 10295.26 10678
Oct 31, 94 10008.85 10008.85 10489
Nov 30, 94 9806.266 9806.266 10299
Dec 31, 94 10114.95 10114.95 10526
Jan 31, 95 10438.64 10438.64 10826
Feb 28, 95 10779.66 10779.66 11141
Mar 31, 95 10869.89 10869.89 11269
Apr 30, 95 10872.09 10872.09 11283
May 31, 95 11141.7 11141.7 11643
Jun 30, 95 10903.81 10903.81 11541
Jul 31, 95 10981.59 10981.59 11650
Aug 31, 95 11040.88 11040.88 11798
Sep 30, 95 11115.6 11115.6 11873
Oct 31, 95 11312.34 11312.34 12045
Nov 30, 95 11539.95 11539.95 12245
Dec 31, 95 11706.8 11706.8 12363
Jan 31, 96 11766.37 11766.37 12456
Feb 29, 96 11656.49 11656.49 12372
Mar 31, 96 11469.55 11469.55 12214
Apr 30, 96 11434.79 11434.79 12179
May 31, 96 11462.38 11462.38 12175
Jun 30, 96 11568.66 11568.66 12307
Jul 31, 96 11674.29 11674.29 12419
Aug 31, 96 11685.98 11685.98 12416
Sep 30, 96 11825.43 11825.43 12590
Oct 31, 96 11917.72 11917.72 12732
Nov 30, 96 12123.33 12123.33 12965
Dec 31, 96 12040.3 12040.3 12910
Jan 31, 97 12005.19 12005.19 12935
Feb 28, 97 12099.68 12099.68 13053
Mar 31, 97 11934.79 11934.79 12879
Apr 30, 97 12029.87 12029.87 12987
May 31, 97 12206.74 12206.74 13183
Jun 30, 97 12302 12302 13323
Jul 31, 97 12743.86 12543.86 13692
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, do not incur fees or expenses, and it is not
possible to invest in an index.
AVERAGE ANNUAL TOTAL RETURNS
As of June 30, 1997 (most recent quarter end)
- --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES
INCEPTION 2/1/93 2/1/93
NAV MOP NAV W/CDSC
- --------------------------------------------------------------------------------
1 YEAR 7.14% 2.05% 6.34% 1.34%
- --------------------------------------------------------------------------------
SINCE INCEPTION 5.59 4.43 4.81 4.42
- --------------------------------------------------------------------------------
Past performance cannot predict future results. Returns and value of an
investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. Net asset value (NAV) returns do not
include sales charge or contingent deferred sales charge (CDSC). Maximum
offering price (MOP) returns include the maximum sales charge of 4.75%. The CDSC
returns reflect the maximum charge of 5% for one year and 2% since inception. If
the Advisor 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.
As of August 1, 1997, the Fund began offering Class C shares.
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO
JULY 31, 1997 (UNAUDITED, IN THOUSANDS)
MUNICIPAL BONDS - 97.1% PAR VALUE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 1.7%
EDUCATION
Dade County Educational Facilities
Authority,
University of Miami, Series 1996-A,
6.000% 04/01/08 $ 1,000 $ 1,120
--------
- -----------------------------------------------------------------------------------------------------------
HEALTHCARE - 11.6%
HOSPITAL - 10.5%
Orange County Health Facilities Authority,
Orlando Regional Healthcare System,
Series 1996-A,
6.250% 10/01/16 6,000 6,968
--------
NURSING HOME - 1.1%
BROWARD COUNTY,
Beverly Enterprises-Florida, Inc.,
9.800% 11/01/10 120 133
Collier County Industrial
Development Authority, Beverly
Enterprises-Florida, Inc., Series 1991,
10.750% 03/01/03 165 189
Escambia County, Beverly
Enterprises-Florida, Inc., Series 1985
9.800% 06/01/11 115 127
Leon County, Beverly Enterprises-Florida,
Inc., Series 1985,
9.800% 06/01/11 90 101
Palm Beach County,
Beverly Enterprises-Florida, Inc.,
Series 1984,
10.000% 06/01/11 95 105
Volusia County Industrial Development
Authority, Beverly Enterprises-Florida, Inc.,
Series 1987,
9.800% 12/01/07 55 56
--------
711
--------
- -----------------------------------------------------------------------------------------------------------
HOUSING - 6.7%
ASSISTED LIVING/SENIOR- 0.9%
Clearwater Housing Authority,
Hampton Apartments, Series 1994
8.250% 05/01/24 575 610
--------
MULTI-FAMILY - 0.4%
Hialeah Housing Authority,
Series 1991,
9.500% 11/01/21 200 190
State Housing Finance Agency,
Windsong Apartments, Series 1993-C
9.250% 01/01/19 95 97
--------
287
--------
SINGLE-FAMILY - 5.4%
Broward County Housing Finance
Authority, Series 1995
6.700% 02/01/28(a) 1,220 1,301
Manatee County Housing Finance
Authority Mortgage:
7.200% 05/01/28 500 562
7.450% 05/01/27 1,550 1,753
--------
3,616
--------
- -----------------------------------------------------------------------------------------------------------
OTHER - 1.8%
REFUNDED/ESCROW/SPECIAL OBLIGATIONS (B)
Port Everglades Authority,
Series 1986,
7.125% 11/01/16 1,000 1,220
--------
- -----------------------------------------------------------------------------------------------------------
TAX-BACKED - 23.4%
SALES & EXCISE TAX - 7.5%
Jacksonville, Series 1993
(c) 10/01/09 525 290
Lakeland Capital Improvement,
5.000% 10/1/2017(d) 1,000 978
State Division Department of
Natural Resources,
6.750% 07/01/13 1,000 1,101
Jacksonville Transportation,
5.000% 07/01/13 1,000 1,010
Tampa Sports Authority, Tampa Bay
Arena Project, Series 1995,
5.750% 10/01/25 1,500 1,648
--------
5,027
--------
STATE GENERAL OBLIGATIONS - 10.9%
State Board of Education:
Series 1992 A, 6.400% 06/01/19 2,500 2,706
Series 1989 A, 7.250% 06/01/23 1,000 1,096
PR Commonwealth of Puerto Rico,
Series 1996,
6.500% 07/01/14 3,000 3,476
--------
7,278
--------
STATE APPROPRIATED - 5.0%
State Department of Corrections,
Okeechobee Correctional Installation,
Series 1995,
6.250% 03/01/15 625 688
PR Commonwealth of Puerto Rico, Urban
Renewal & Housing Corp.,
7.875% 10/01/04 1,500 1,628
PR Commonwealth of Puerto Rico,
Public Building Authority, Series B,
5.000% 07/01/15 1,000 990
--------
3,306
--------
- -----------------------------------------------------------------------------------------------------------
TRANSPORTATION - 14.2%
AIRPORT - 7.4%
Dade County, Miami International
Airport, Series 1992-B
6.600% 10/01/22(a) 2,000 2,188
Hillsborough County Aviation Authority,
Tampa International Airport, Series-A,
6.900% 10/01/11 1,500 1,611
Palm Beach County,
County Airport System,
7.750% 10/01/10 1,000 1,145
--------
4,944
--------
TRANSPORTATION - 6.8%
Dade County Seaport:
Series 1995, 6.200% 10/01/09 1,000 1,143
Series 1996, 5.125% 10/01/16 1,750 1,728
Series 1996, 5.400% 10/01/21 1,615 1,639
--------
4,510
--------
- -----------------------------------------------------------------------------------------------------------
UTILITY - 37.7%
INDIVIDUAL POWER PRODUCER - 2.6%
Martin County Industrial Development
Authority, Indiantown Co-generation
Project, Series 1994-A,
7.875% 12/15/25 1,500 1,740
--------
INVESTOR OWNED - 3.3%
Citrus County, Florida Power Corp.
Crystal River Power Plant,
Series 1992-A
6.625% 01/01/27 2,000 2,178
--------
MUNICIPAL ELECTRIC - 10.0%
Lakeland, Series 1996-B
6.000% 10/01/11 1,870 2,106
Orlando Utilities Commission,
Series 1989-D,
6.750% 10/01/17 3,750 4,566
--------
6,672
--------
WATER & SEWER - 21.8%
Coral Springs Water & Sewer,
6.000% 06/01/10 1,000 1,114
Dade County Water & Sewer System:
Series 1993, 5.000% 10/01/13 2,235 2,213
Series 1997, 5.250% 10/01/26 1,500 1,483
Hillsborough County,
Series 1991 A,
7.000% 08/01/14 2,155 2,397
Indian Trace Community Development
Distribution Water Management,
5.000% 05/01/17 1,650 1,617
PR Commonwealth of Puerto Rico
Aqueduct & Sewer Authority,
5.000% 07/01/19 2,000 1,975
Seacoast Utility Authority, Series 1989-A
5.500% 03/01/15 1,900 2,016
Seminole County, Series 1992,
6.000% 10/01/19 1,500 1,695
--------
14,510
--------
TOTAL MUNICIPAL BONDS (cost of $61,153) 64,697
--------
OPTIONS - 0.2% CONTRACTS
- -----------------------------------------------------------------------------------------------------------
September 1997 Treasury Bond Call,
Strike price 116, Expiration 08/23/97
(cost of $31) 75 105
--------
TOTAL INVESTMENTS (cost of $61,184)(e) 64,802
--------
SHORT-TERM OBLIGATIONS - 1.5% PAR VALUE
- -----------------------------------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (f)
State Health Facilities
Financing Authority,
Series 1992,
3.650% 12/01/02 $ 1,000 $ 1,000
--------
OTHER ASSETS & LIABILITIES, NET - 1.2% 844
- -----------------------------------------------------------------------------------------------------------
NET ASSETS - 100% $ 66,646
--------
NOTES TO INVESTMENT PORTFOLIO:
- -----------------------------------------------------------------------------------------------------------
(a) These securities, or a portion thereof, with a total market value of $2,559, are being used to
collateralize the delayed delivery purchase in note (d) below and open futures contracts.
(b) The Fund has been informed that the issuer has placed direct obligations of the U.S. Government in an
irrevocable trust, solely for the payment of the interest and principal.
(c) Zero coupon bond.
(d) This security, has been purchased on a delayed delivery basis for settlement at a future date beyond
the customary settlement time.
(e) Cost for federal income tax purposes is the same.
(f) Variable rate demand notes are considered short-term obligations. Interest rates change periodically on
specified dates. These securities are payable on demand and are secured by either letters of credit or
other credit support agreements from banks. The rates listed are as of July 31, 1997.
Short futures contracts open at July 31, 1997:
<CAPTION>
Par value Unrealized
covered by Expiration depreciation
contracts month at 07/31/97
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Municipal Bond $ 170 December $ 7
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JULY 31, 1997 (UNAUDITED)
(in thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $61,184) $64,802
Short-term obligations 1,000
-------
65,802
Cash $ 23
Receivable for:
Interest 1,021
Investments sold 986
Fund shares sold 76
Deferred organization expenses 5
Other 1 2,112
------- -------
Total Assets 67,914
LIABILITIES
Payable for:
Investments purchased 977
Distributions 265
Fund shares repurchased 18
Variation margin on futures 2
Payable to Adviser 2
Accrued:
Deferred Trustees fees 1
Other 3
-------
Total Liabilities 1,268
-------
NET ASSETS $66,646
=======
Net asset value & redemption price per share -
Class A ($32,782/4,254) $ 7.71
=======
Maximum offering price per share - Class A
($7.71/0.9525) $ 8.09(a)
=======
Net asset value & offering price per share -
Class B ($33,864/4,395) $ 7.71(b)
=======
COMPOSITION OF NET ASSETS
Capital paid in $65,659
Undistributed net investment income 93
Accumulated net realized loss (2,717)
Net unrealized appreciation (depreciation) on:
Investments 3,618
Open futures contracts (7)
-------
$66,646
=======
(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.
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 1997
(UNAUDITED)
(in thousands)
INVESTMENT INCOME
Interest $ 1,871
EXPENSES
Management fee $ 161
Service fee 56
Distribution fee - Class B 124
Transfer agent 49
Bookkeeping fee 16
Trustees fee 7
Custodian fee 1
Audit fee 12
Legal fee 3
Registration fee 5
Reports to shareholders 3
Amortization of deferred
organization expenses 4
Other 5
-------
446
Custodian credits earned (1)
-------
445
-------
Fees waived by the Adviser (137) 308
------- -------
Net Investment Income 1,563
-------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 231
Closed futures contracts (195)
-------
Net Realized Gain 36
Net unrealized appreciation during
the period on:
Investments 2,376
Open futures contracts 10
-------
Net Unrealized Appreciation 2,386
-------
Net Gain 2,422
-------
Net Increase in Net Assets from Operations $ 3,985
=======
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
Six months
ended Year ended
(in thousands) July 31 January 31
-------- -------
INCREASE (DECREASE) IN NET ASSETS 1997 1997
Operations:
Net investment income $ 1,563 $ 3,208
Net realized gain 36 552
Net unrealized appreciation (depreciation) 2,386 (2,305)
------- -------
Net Increase from Operations 3,985 1,455
Distributions:
From net investment income - Class A (810) (1,656)
From net investment income - Class B (780) (1,538)
------- -------
2,395 (1,739)
------- -------
Fund Share Transactions:
Receipts for shares sold - Class A 2,194 4,869
Value of distributions reinvested - Class A 376 675
Cost of shares repurchased - Class A (2,249) (6,036)
------- -------
321 (492)
------- -------
Receipts for shares sold - Class B 1,959 5,202
Value of distributions reinvested - Class B 231 479
Cost of shares repurchased - Class B (2,876) (7,174)
------- -------
(686) (1,493)
------- -------
Net Decrease from Fund Share
Transactions (365) (1,985)
------- -------
Total Increase (Decrease) 2,030 (3,724)
NET ASSETS
Beginning of period 64,616 68,340
------- -------
End of period (including undistributed
net investment income of $93 and $97,
respectively) $66,646 $64,616
======= =======
NUMBER OF FUND SHARES
Sold - Class A 295 655
Issued for distributions reinvested - Class A 50 91
Repurchased - Class A (301) (816)
------- -------
44 (70)
------- -------
Sold - Class B 264 699
Issued for distributions reinvested - Class B 31 64
Repurchased - Class B (388) (968)
------- -------
(93) (205)
------- -------
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1997 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
In the opinion of management of Colonial Florida 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, 1997, 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, by pursuing current income exempt from federal income tax and Florida
intangibles tax and opportunities for long-term appreciation from a portfolio
primarily invested in investment grade municipal bonds. 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.
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), 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 per share data and ratios are calculated by adjusting the expense and
net investment income per share data and ratios for the Fund for the entire
period by the distribution fee applicable to Class B shares only.
FEDERAL INCOME TAXES: Consistent with 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.
DEFERRED ORGANIZATION EXPENSE: The Fund incurred expenses of $47,925 in
connection with its organization, initial registration with the Securities and
Exchange Commission and with various states, and the initial public offering of
its shares. These expenses were deferred and are being amortized on a
straight-line basis over five years.
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:
Average Net Assets Annual Fee Rate
------------------ ---------------
First $2 billion 0.50%
Over $2 billion 0.45%
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 FEE: Colonial Investors Service Center, Inc., (the Transfer
Agent), an affiliate of the Adviser, provides shareholder services for a monthly
fee equal to 0.14% annually of the Funds average net assets and receives
reimbursement for certain out of pocket expenses.
Effective January 1, 1997 and continuing through calendar year 1997, the
Transfer Agent fee will be reduced by 0.01% in cumulative monthly increments,
resulting in a decrease in the fee from 0.14% to 0.13% annually.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Colonial Investment
Services, Inc. (the Distributor), an affiliate of the Adviser, is the Funds
principal underwriter. During the six months ended July 31,1997, the Fund has
been advised that the Distributor retained net underwriting discounts of $5,330
on sales of the Funds Class A shares and received contingent deferred sales
charges (CDSC) of $47,208 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:
Valuation of shares Annual
outstanding on the 20th of Fee
each month which were issued Rate
---------------------------- -------
Prior to November 30, 1994 0.10%
On or after December 1, 1994 0.25%
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, taxes, and
extraordinary expenses, if any) exceed 0.40% 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 Funds Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Funds assets.
NOTE 4. PORTFOLIO INFORMATION
- -------------------------------------------------------------------------------
INVESTMENT ACTIVITY: During the six months ended July 31, 1997, purchases and
sales of investments, other than short-term obligations were $11,569,604 and
$11,114,735, respectively.
Unrealized appreciation (depreciation) at July 31, 1997, based on cost of
investments for both financial statement and federal income tax purposes was :
Gross unrealized appreciation $3,638,540
Gross unrealized depreciation (20,470)
----------
Net unrealized appreciation $3,618,070
==========
CAPITAL LOSS CARRYFORWARDS: At January 31, 1997, capital loss
carryforwards available (to the extent provided in regulations) to
offset future realized gains were approximately as follows:
Year of Capital loss
expiration carryforward
---------- -----------
2002 $ 22,000
2003 573,000
2004 1,485,000
2005 41,000
---------
$2,121,000
==========
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 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 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 Adviser 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 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, 1997.
<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
---------------------------- ---------------------------
1997 1997
Class A Class B Class A Class B
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 7.430 $ 7.430 $ 7.620 $ 7.620
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.198 0.170 0.395 0.340
Net realized and
unrealized gain (loss) 0.280 0.280 (0.194) (0.194)
-------- -------- -------- --------
Total from Investment
Operations 0.478 0.450 0.201 0.146
-------- -------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment
income (0.198) (0.170) (0.391) (0.336)
-------- -------- -------- --------
Net asset value -
End of period $ 7.710 $ 7.710 $ 7.430 $ 7.430
======= ======= ======= =======
Total return (b)(c) 6.55%(d) 6.15%(d) 2.80% 2.03%
======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses 0.57%(e)(f) 1.32%(e)(f) 0.56%(e) 1.31%(e)
Interest expense - - (g) (g)
Net investment income 5.23%(e)(f) 4.48%(e)(f) 5.31%(e) 4.56%(e)
Fees and expenses
waived or borne
by the Adviser 0.43%(e)(f) 0.43%(e)(f) 0.44%(e) 0.44%(e)
Portfolio turnover 18%(d) 18%(d) 69% 69%
Net assets at end
of period (000) $ 32,782 $ 33,864 $ 31,275 $ 33,341
(a) Net of fees and expenses waived or borne by the Adviser which amounted to:
$ 0.016 $ 0.016 $ 0.032 $ 0.032
(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) The benefits derived from custody credits and directed brokerage arrangements had no impact. Prior years'
ratios are net of benefits received, if any.
(f) Annualized.
(g) Rounds to less than 0.01%.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
<TABLE>
<CAPTION>
Year ended January 31
---------------------------------------------------------------------------
1996 1995
Class A Class B Class A Class B
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
$ 7.100 $ 7.100 $ 7.930 $ 7.930
------- ------- ------- -------
0.404 0.351 0.423 0.369
0.535 0.533 (0.839) (0.839)
------- ------- ------- -------
0.939 0.884 (0.416) (0.470)
------- ------- ------- -------
(0.419) (0.364) (0.414) (0.360)
------- ------- ------- -------
$ 7.620 $ 7.620 $ 7.100 $ 7.100
======= ======= ======= =======
13.55% 12.72% (5.11)% (5.83)%
======= ======= ======= =======
0.45%(e) 1.18%(e) 0.22% 0.97%
- - - -
5.45%(e) 4.72%(e) 5.92% 5.17%
0.55%(e) 0.55%(e) 0.73% 0.73%
83% 83% 45% 45%
$ 32,599 $ 35,741 $ 27,498 $ 31,116
$ 0.040 $ 0.040 $ 0.052 $ 0.052
</TABLE>
<PAGE>
Year ended January 31
----------------------------------
1994(b)
Class A Class B
---------------- --------------
Net asset value -
Beginning of period $ 7.500 $ 7.500
-------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.434 0.378
Net realized and
unrealized gain (loss) 0.420 0.420
-------- --------------
Total from Investment
Operations 0.854 0.798
-------- --------------
LESS DISTRIBUTIONS DECLARED TO
SHAREHOLDERS:
From net investment
income (0.424) (0.368)
-------- --------------
Net asset value -
End of period $ 7.930 $ 7.930
======== ==============
Total return (b)(c) 11.66% 10.85%
======== ==============
RATIOS TO AVERAGE NET ASSETS
Expenses 0.05% 0.80%
Interest expense 5.40% 4.65%
Net investment income
Fees and expenses
waived or borne 0.88% 0.88%
by the Adviser 19% 19%
Portfolio turnover
Net assets at end 23,802 $ 31,513
of period (000)
(a) Net of fees and expenses waived or borne by the Adviser which amounted to:
$ 0.071 $ 0.071
(b) The Fund commenced investment operations on February 1, 1993.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Adviser not waived or reimbursed a portion of expenses, total
return would have been reduced.
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Florida Tax-Exempt Fund is:
Colonial Investors Service Center, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial Florida Tax-Exempt Fund mails one shareholder report to each
shareholder address. If you would like more than one report, please call
Colonial at 1-800-426-3750 and additional reports will be sent to you.
This report has been prepared for shareholders of Colonial Florida 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.
<PAGE>
[GRAPHIC OMITTED] COLONIAL
MUTUAL FUNDS
Mutual Funds for
Planned Portfolios
- --------------------------------------------------------------------------------
TRUSTEES
ROBERT J. BIRNBAUM
Retired (formerly Special Counsel, Dechert, Price & Rhoads; President and Chief
Operating Officer, New York Stock Exchange, Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis, Nessen, Kamin & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
WILLIAM D. IRELAND, JR.
Retired (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
Partner, Development Capital, L.L.C. (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 and 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
Retired Partner, Peat Marwick Main & Co. (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) 1997
A Liberty Financial Company (NYSE: L)
One Financial Center, Boston, Massachusetts 02111-2621, 617-426-3750
FL-03/982D-0797 M (9/97)
