<PAGE>
[CAPITAL BUILDING GRAPHIC]
COLONIAL FLORIDA TAX-EXEMPT FUND SEMIANNUAL REPORT
July 31, 1998
Not FDIC May Lose Value
Insured No Bank Guarantee
<PAGE>
COLONIAL FLORIDA TAX-EXEMPT FUND HIGHLIGHTS
February 1, 1998 - July 31, 1998
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 providing the opportunity for
long-term appreciation from a portfolio primarily invested in investment-grade
municipal bonds. Fund shares are also intended to be exempt from the Florida
intangibles tax.
PORTFOLIO MANAGER COMMENTARY: "The Fund was positioned for a declining interest
rate environment. Interest rates varied considerably, but were essentially
unchanged between the beginning and the end of the period. During this period,
we focused on finding high-quality bonds that would provide shareholders with
higher levels of income while reducing the effects of volatility." - Maureen
Newman
COLONIAL FLORIDA TAX-EXEMPT FUND PERFORMANCE
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Inception date 2/1/93 2/1/93 8/1/97
Distributions declared per share(1) $0.200 $0.170 $0.182
SEC yields on 7/31/98(2) 3.96% 3.39% 3.68%
Taxable-equivalent SEC yields(3) 6.56% 5.61% 6.09%
Six-month total returns, assuming reinvestment 1.31% 0.91% 1.07%
of all distributions and no sales charge or
contingent deferred sales charge (CDSC)(4)
Net asset value per share on 7/31/98 $ 7.69 $ 7.69 $ 7.69
</TABLE>
(1) A portion of the Fund's income may be subject to the alternative
minimum tax.
(2) The 30-day SEC yields on July 31, 1998, reflect the portfolio's earning
power, net of expenses, and is expressed as an annualized percentage of
the public offering price at the end of the period. If the Advisor or
Distributor had not waived or borne certain Fund expenses, SEC yields
would have been 3.76% for Class A shares, 3.18% for Class B shares and
3.16% for Class C shares.
(3) Taxable-equivalent SEC yields are based on the maximum effective 39.6%
federal income tax rate.
(4) Performance results reflect any voluntary waivers or reimbursements of
Fund expenses by the Advisor or Distributor. Absent these waivers or
reimbursement arrangements, performance results would have been lower.
The Fund may at times purchase tax-exempt securities at a discount. Some or all
of this discount may be included in the Fund's ordinary income and will be
taxable when distributed.
<TABLE>
<CAPTION>
QUALITY BREAKDOWN
(as of 7/31/98)
<S> <C>
AAA .................................................. 62.4%
AA ................................................... 17.7%
A .................................................... 11.0%
BBB .................................................. 6.1%
Non-rated ............................................ 1.8%
Short-term obligations ............................... 1.0%
TOP FIVE SECTORS
(as of 7/31/98)
General Obligations .................................. 16.2%
Hospitals ............................................ 14.6%
Municipal Electric ................................... 13.4%
Water & Sewer ........................................ 11.8%
Airport .............................................. 7.1%
</TABLE>
Quality and sector breakdowns are calculated as a percentage of total
investments, including short-term obligations. Because the Fund is actively
managed, there can be no guarantee the Fund will continue to maintain these
quality and sector breakdowns in the future.
2
<PAGE>
PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
In June 1998, Harold Cogger retired as president
of Colonial Florida Tax-Exempt Fund. I would like
to take this opportunity to thank him for his
guidance over the past few years and wish him [PHOTO OF
well. As the new president, I am pleased to STEPHEN E. GIBSON]
present the semiannual report for Colonial Florida Tax-Exempt Fund for the
six-month period ended July 31, 1998.
Conditions for fixed-income investments varied during the period. Early on,
interest rates were volatile, based on uncertainty over the effects of the Asian
economic crisis on the U.S. economy.
However, reports of stronger-than-expected economic growth during the spring had
investors fearing the Federal Reserve Board might raise rates. In response, bond
prices fell. This environment prevailed until the final months of the period,
when weaker economic numbers hinting at slower growth encouraged fixed-income
investors.
The tax-exempt bond market experienced price volatility similar to that of the
broader U.S. government bond market. Declines in long-term interest rates that
occurred in the fourth quarter of 1997 helped stimulate the supply of municipal
bonds early in the period. Many issuers rushed to take advantage of low rates to
refinance existing higher-coupon debt as well as to finance new projects. The
market found it difficult to absorb the unusually large increase in supply and
prices declined early in 1998. During this period, municipal bond yields became
very attractive in comparison to Treasury bonds. The increased investor demand
that followed helped push municipal bond prices higher toward the end of July.
For investors seeking competitive levels of tax-free income and the potential
for long-term price appreciation, Colonial Florida Tax-Exempt Fund remains a
suitable option for their investment portfolios.
Respectfully,
/s/ STEPHEN E. GIBSON
Stephen E. Gibson
President
September 11, 1998
Because market conditions change frequently, there can be no assurance that the
trends described above or on the following pages will continue.
3
<PAGE>
PORTFOLIO MANAGEMENT REPORT
MAUREEN NEWMAN is portfolio manager of Colonial Florida Tax-Exempt Fund. Ms.
Newman is vice president of Colonial Management Associates, Inc. and is the
manager of tax-exempt credit research.
VARIABLE ECONOMIC AND MARKET CONDITIONS PREVAILED
Conditions for fixed-income investments varied during the period as investors
weighed the fundamental strength of the U.S. economy against the potential for
an economic slowdown caused by the crisis in Southeast Asia. Market sentiment
regarding the likelihood of an interest rate increase by the Federal Reserve
Board changed several times during the period. Uncertainty about the domestic
economy's ability to produce continued growth without inflation caused bond
prices to alternately rise and fall for much of the period. Bond prices rallied
modestly near the end of July as the Federal Reserve Board signaled that no
change in interest rates was imminent.
Like the broader bond market, the tax-exempt market also experienced fluctuating
prices. Supply and demand factors contributed to this volatility. Declining
interest rates during the fourth quarter of 1997 led to an increased supply of
municipal bonds that the market initially found difficult to absorb. However, as
prices declined, investor demand increased again, pushing prices back up during
the second half of the period.
REPOSITIONING THE FUND'S PORTFOLIO
Based on our long-term outlook for low inflation and modest economic growth, we
structured the portfolio to take advantage of a potential decline in interest
rates. During the last half of 1997, the portfolio benefited from its holdings
in discount and non-callable bonds, that tend to perform well in a
declining-rate environment. However, the vacillating bond market had a somewhat
dampening effect on the performance of the Fund's discount and non-callable
holdings during the most recent six-month period.
During this period, we sought to increase the Fund's yield and take advantage of
relative value opportunities. To accomplish this, we purchased a small number of
higher-yielding bonds issued in states other than Florida. These bonds will be
replaced by year-end so that shareholders will not be subject to Florida's
intangibles tax. In all cases, these bonds have experienced larger price
increases in comparison to insured municipal bonds, a standard yardstick for
measuring tax-exempt bond performance. We also purchased a non-rated,
multi-family housing bond whose debt repayment was guaranteed by the Florida
Housing Finance Corp., a new issuing authority. Shortly after purchase, the
guarantor received an "A" rating from Standard & Poor's. For the six months
ended July 31, 1998, the total return for Class A shares was 1.31%, based on net
asset value.
4
<PAGE>
FLORIDA'S ECONOMY CONTINUED TO OUTPERFORM
The Florida economy has not shown any signs of slowing down. The State's
economic base continues to diversify and to experience strong growth relative to
both the southern region and the nation. Florida remains an appealing tourist
destination and is increasingly selected as a corporate relocation site. The
State government is financially healthy, with reserve levels for fiscal years
1997 and 1998 at the highest levels in more than a decade. Strong fiscal
management should provide the State with adequate resources to manage its
growth. Accordingly, we do not expect that increased debt levels associated with
new financing for schools, roads and other infrastructure projects will present
an undue financial burden. We will continue to research the steady supply of new
bond issues for opportunities to increase the Fund's income and potential for
long-term appreciation.
OUTLOOK FOR A POSITIVE ECONOMIC AND MARKET ENVIRONMENT
Our long-term outlook remains positive. We expect that low inflation and modest
economic growth will continue. Sustained high levels of productivity and global
competition are likely to keep inflation pressure low. The economic slowdown in
Asia should keep the U.S. economy from growing too fast. The current federal
budget surplus may limit the government's need to borrow money, and thus, the
need to issue Treasury securities. This could help create higher demand for
alternative fixed-income investments, including tax-exempt bonds.
Considering these factors, the Fund will remain positioned for a declining
interest rate environment. However, we do anticipate some variability in
interest rates in the months to come. Therefore, we will continue to actively
manage all aspects of the Fund to decrease the potential negative effects of
rate volatility.
5
<PAGE>
COLONIAL FLORIDA TAX-EXEMPT FUND'S INVESTMENT PERFORMANCE VS.
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
Growth of $10,000 from 2/1/93 - 7/31/98
Class A Shares
Based on NAV and POP
[LINE GRAPH]
<TABLE>
<CAPTION>
Label A B C
Label AS OF DATE CFLTEF Preload Postload Lehman
<S> <C> <C> <C> <C>
1 Jan 31, 93 10000 9525 10000
2 Feb 28, 93 10352 9867 10361.57
3 Mar 31, 93 10171 9700 10252.08
4 Apr 30, 93 10281 9811 10355.39
5 May 31, 93 10338 9871 10413.54
6 Jun 30, 93 10514 10045 10587.68
7 Jul 31, 93 10513 10051 10601.29
8 Aug 31, 93 10731 10265 10822.13
9 Sep 30, 93 10854 10389 10945.54
10 Oct 31, 93 10882 10422 10966.57
11 Nov 30, 93 10757 10308 10869.76
12 Dec 31, 93 10990 10538 11099.26
13 Jan 31, 94 11086 10636 11226.07
14 Feb 28, 94 10748 10319 10935.33
15 Mar 31, 94 10130 9732 10489.94
16 Apr 30, 94 10200 9806 10579.02
17 May 31, 94 10284 9892 10670.57
18 Jun 30, 94 10283 9897 10605.31
19 Jul 31, 94 10454 10068 10799.86
20 Aug 31, 94 10425 10046 10837.29
21 Sep 30, 94 10295 9928 10678.31
22 Oct 31, 94 10009 9658 10488.71
23 Nov 30, 94 9806 9469 10298.8
24 Dec 31, 94 10115 9773 10525.52
25 Jan 31, 95 10439 10091 10826.47
26 Feb 28, 95 10780 10427 11141.34
27 Mar 31, 95 10870 10521 11269.39
28 Apr 30, 95 10872 10530 11282.69
29 May 31, 95 11142 10797 11642.72
30 Jun 30, 95 10904 10573 11540.96
31 Jul 31, 95 10982 10656 11650.14
32 Aug 31, 95 11041 10720 11797.99
33 Sep 30, 95 11116 10799 11872.53
34 Oct 31, 95 11312 10997 12045.12
35 Nov 30, 95 11540 11225 12245.24
36 Dec 31, 95 11707 11394 12362.77
37 Jan 31, 96 11766 11459 12456.18
38 Feb 29, 96 11656 11359 12372.05
39 Mar 31, 96 11470 11184 12214
40 Apr 30, 96 11435 11157 12179.36
41 May 31, 96 11462 11191 12174.72
42 Jun 30, 96 11569 11302 12307.41
43 Jul 31, 96 11674 11412 12418.76
44 Aug 31, 96 11686 11431 12415.98
45 Sep 30, 96 11825 11574 12589.5
46 Oct 31, 96 11918 11672 12731.78
47 Nov 30, 96 12123 11880 12964.99
48 Dec 31, 96 12040 11806 12910.24
49 Jan 31, 97 12005 11779 12934.67
50 Feb 28, 97 12100 11879 13053.44
51 Mar 31, 97 11935 11725 12879.3
52 Apr 30, 97 12030 11826 12987.25
53 May 31, 97 12207 12007 13182.73
54 Jun 30, 97 12302 12108 13323.15
55 Jul 31, 97 12744 12551 13692.15
56 Aug 31, 97 12513 12328 13563.79
57 Sep 30, 97 12661 12478 13724.63
58 Oct 31, 97 12759 12579 13813.09
59 Nov 30, 97 12840 12664 13894.44
60 Dec 31, 97 13056 12882 14097.03
61 Jan 31, 98 13171 13001 14242.4
62 Feb 28, 98 13136 12970 14246.73
63 Mar 31, 98 13133 12973 14259.41
64 Apr 30, 98 13045 12891 14195.08
65 May 31, 98 13283 13130 14419.63
66 Jun 30, 98 13297 13150 14476.54
67 Jul 31, 98 13312 13171 14512.73
</TABLE>
GROWTH OF A $10,000 INVESTMENT MADE ON 2/1/93
As of 7/31/98
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Class A Class B Class C
NAV POP NAV w/CDSC NAV w/CDSC
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------
$13,828 $13,171 $13,272 $13,172 $13,312 $13,312
- -------------------------------------------------------------------------
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
As of 7/31/98
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
INCEPTION 2/1/93 2/1/93 8/1/97
NAV POP NAV w/CDSC NAV w/CDSC
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 year 4.94% (0.04)% 4.14% (0.85)% 4.46% 3.46%
- ------------------------------------------------------------------------------------------------
5 years 5.56 4.53 4.77 4.44 4.83 4.83
- ------------------------------------------------------------------------------------------------
Life .. 6.07 5.14 5.28 5.14 5.34 5.34
- ------------------------------------------------------------------------------------------------
</TABLE>
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 charges or contingent deferred sales charges (CDSC). Public
offering price (POP) returns include the maximum sales charge of 4.75% for Class
A shares. The CDSC returns reflect the maximum charges of 5% for one year and 2%
for five years for Class B shares, and 1% for one year for Class C shares.
Performance results reflect any voluntary waivers or reimbursement of Fund
expenses by the Advisor or Distributor. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
Performance for different share classes will vary based on differences in sales
charges and fees associated with each class.
Class C share performance information includes returns of the Fund's Class B
shares (the oldest existing fund class) for periods prior to its inception date.
These Class B share returns are not restated to reflect any expense differential
(e.g., Rule 12b-1 fees) between Class B and C shares.
The Lehman Brothers Municipal Bond Index is a broad-based, unmanaged index that
tracks the performance of the municipal bond market. Unlike mutual funds,
indexes are not investments and do not incur fees or expenses. It is not
possible to invest directly in an index.
6
<PAGE>
INVESTMENT PORTFOLIO
JULY 31, 1998 (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 96.1% PAR VALUE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 1.6%
EDUCATION
Pinellas County Educational Facilities
Authority, Barry University Project,
Series 1998,
5.375% 10/01/23 $1,000 $ 991
------
- --------------------------------------------------------------------------------------------
HEALTHCARE - 14.8%
HOSPITALS - 14.2%
Cape Canaveral Hospital District,
Series 1998,
5.250% 01/01/18 1,000 975
Orange County Health Facilities Authority,
Orlando Regional Healthcare System,
Series 1996-A,
6.250% 10/01/16(a) 6,000 6,890
Tampa Catholic Health East,
5.250% 11/15/12 1,000 1,028
------
8,893
------
NURSING HOMES - 0.6%
Collier County Industrial
Development Authority,
Beverly Enterprises, Inc., Series 1991,
10.750% 03/01/03 150 171
Escambia County,
Beverly Enterprises-Florida, Inc.,
Series 1985,
9.800% 06/01/11 110 120
Palm Beach County,
Beverly Enterprises-Florida, Inc.,
Series 1984,
10.000% 06/01/11 90 99
------
390
------
- --------------------------------------------------------------------------------------------
HOUSING - 8.3%
MULTI-FAMILY - 1.7%
Florida Housing Finance Agency,
Windsong Apartments,
Series 1993-C,
9.250% 01/01/19 35 28
</TABLE>
7
<PAGE>
Investment Portfolio/July 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING - CONT.
MULTI-FAMILY - CONT.
Palm Beach County Housing Finance Authority,
Windsor Park Apartments Project,
Series 1998-A,
5.800% 12/01/28 $1,000 $1,021
------
1,049
------
SINGLE FAMILY - 6.6%
Broward County Housing Finance Authority,
Series 1995,
6.700% 02/01/28(a) 1,220 1,312
Lee County Housing
Finance Authority,
Series 1998-A,
6.300% 03/01/29 1,000 1,103
Manatee County Housing
Finance Authority,
Series 1996-1,
7.450% 05/01/27 1,550 1,755
------
4,170
------
- -----------------------------------------------------------------------------------------------
OTHER - 3.1%
REFUNDED/ESCROWED(b)
Clearwater Housing Authority,
Hampton Apartments,
Series 1994,
8.250% 05/01/24 575 704
Port Everglades Authority,
Series 1986,
7.125% 11/01/16 1,000 1,218
------
1,922
------
- -----------------------------------------------------------------------------------------------
TAX-BACKED - 26.2%
LOCAL APPROPRIATED - 3.4%
Hillsborough County School Board,
Series 1998-A,
5.500% 07/01/16 1,060 1,126
Miami-Dade County School Board,
Series 1998-A,
5.250% 08/01/13 1,000 1,026
------
2,152
------
LOCAL GENERAL OBLIGATIONS - 1.0%
IL Lake & McHenry Counties United
School District, Series 1998,
(c) 02/01/09 1,000 605
------
</TABLE>
8
<PAGE>
Investment Portfolio/July 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
SPECIAL NON-PROPERTY TAX - 6.0%
Commonwealth of Puerto Rico,
Infrastructure Finance Authority, Series A,
5.000% 07/01/28 $ 500 $ 489
Jacksonville Excise Tax,
Series 1993,
(c) 10/01/09 525 310
Jacksonville Transportation System,
5.000% 07/01/13 1,000 1,003
Tampa Sports Authority,
Tampa Bay Arena Project,
Series 1995,
5.750% 10/01/25 1,500 1,652
LA Jefferson Parish School Board,
Series 1998,
(c) 03/01/10 500 284
------
3,738
------
STATE APPROPRIATED - 1.1%
Florida Department of Corrections,
Okeechobee Correctional Institution,
Series 1995,
6.250% 03/01/15 625 689
------
STATE GENERAL OBLIGATIONS - 14.7% Commonwealth of Puerto Rico:
Aqueduct & Sewer Authority,
5.000% 07/01/19 2,000 1,959
Series 1996,
6.500% 07/01/14 3,000 3,504
Florida Board of Education:
Series 1989-A,
7.250% 06/01/23 1,000 1,071
Series 1992-A,
6.400% 06/01/19 2,500 2,699
------
9,233
------
- ------------------------------------------------------------------------------------------------
TRANSPORTATION - 11.4%
AIRPORTS - 6.9%
Broward County,
Airport System Revenue, Series 1998-E,
5.375% 10/01/13(d) 1,000 1,032
Dade County,
Miami International Airport,
Series 1992-B,
6.600% 10/01/22 2,000 2,187
</TABLE>
9
<PAGE>
Investment Portfolio/July 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSPORTATION - CONT.
AIRPORTS - CONT.
Palm Beach County,
County Airport System,
7.750% 10/01/10 $1,000 $1,121
------
4,340
------
PORTS - 4.5% Dade County Seaport:
Series 1995,
6.200% 10/01/09 1,000 1,139
Series 1996,
5.400% 10/01/21 1,615 1,648
------
2,787
------
- ----------------------------------------------------------------------------------------------------
UTILITY - 30.7%
INDEPENDENT POWER PRODUCER - 2.8%
Martin County Industrial
Development Authority,
Indiantown Co-generation Project, Series 1994-A,
7.875% 12/15/25 1,500 1,754
------
INVESTOR OWNED - 3.4%
Citrus County,
Florida Power Corp.,
Crystal River Power Plant, Series 1992-A,
6.625% 01/01/27 2,000 2,170
------
MUNICIPAL ELECTRIC - 13.0%
Gainesville,
Utilities System Revenue,
Series 1996-A,
5.200% 10/01/22 1,470 1,462
Lakeland Electric and Water System,
Series 1996-B,
6.000% 10/01/11 1,870 2,110
Orlando Utilities Commission,
Series 1989-D,
6.750% 10/01/17 3,750 4,553
------
8,125
------
WATER & SEWER - 11.5%
Coral Springs Improvement District,
6.000% 06/01/10(a) 1,000 1,101
Hillsborough County Utility System,
Series 1991-A,
7.000% 08/01/14 2,155 2,358
</TABLE>
10
<PAGE>
Investment Portfolio/July 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Seacoast Utility Authority,
Series 1989-A,
5.500% 03/01/15 $1,900 $ 2,031
Seminole County Water and Sewer,
Series 1992,
6.000% 10/01/19 1,500 1,692
-------
7,182
-------
TOTAL INVESTMENTS (cost of $57,169)(e) 60,190
-------
SHORT-TERM OBLIGATIONS - 1.0%
- ----------------------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (f)
Pinellas County Health Facilities Authority,
Series 1985,
3.700% 12/01/15 600 600
-------
OTHER ASSETS & LIABILITIES, NET - 2.9% 1,814
- ----------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $62,604
-------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- --------------------------------------------------------------------------------
(a) These securities, or a portion thereof, with a total market value of
$3,167, are being used to collateralize the delayed delivery purchase
indicated in note (d) below and open futures contracts.
(b) 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.
(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,
1998.
(g) Rounds to less than one.
Long futures contracts open at July 31, 1998:
<TABLE>
<CAPTION>
Par value Unrealized
covered by Expiration appreciation
Type contracts month at 7/31/98
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Treasury bond $ 1,100 September (g)
</TABLE>
See notes to financial statements.
11
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JULY 31, 1998 (UNAUDITED)
(in thousands except for per share amounts and footnotes)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $57,169) $ 60,190
Short-term obligations 600
--------
60,790
Receivable for:
Investments sold $ 2,015
Interest 895
Fund shares sold 64
Receivable due from Adviser 2
Other 72 3,048
-------- --------
Total Assets 63,838
LIABILITIES
Payable for:
Investments purchased 1,029
Fund shares repurchased 118
Distributions 84
Accrued deferred trustees fees 3
--------
Total Liabilities 1,234
--------
NET ASSETS $ 62,604
--------
Net asset value & redemption price per share -
Class A ($30,734/3,995) $ 7.69(a)
--------
Maximum offering price per share - Class A
($7.69/0.9525) $ 8.07(b)
--------
Net asset value & offering price per share -
Class B ($31,708/4,122) $ 7.69(a)
--------
Net asset value & offering price per share -
Class C ($162/21) $ 7.69(a)
--------
COMPOSITION OF NET ASSETS
Capital paid in $ 61,715
Overdistributed net investment income (68)
Accumulated net realized loss (2,064)
Net unrealized appreciation on:
Investments 3,021
Open futures contracts (c)
--------
$ 62,604
========
</TABLE>
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced. (c) Rounds to
less than one.
See notes to financial statements.
12
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
INVESTMENT INCOME
Interest $ 1,732
EXPENSES
Management fee $ 159
Service fee 56
Distribution fee - Class B 121
Distribution fee - Class C (a)
Transfer agent 45
Bookkeeping fee 16
Trustees fee 6
Custodian fee 1
Audit fee 9
Legal fee 2
Registration fee 9
Reports to shareholders 4
Other 3
-------
431
Fees waived by the Adviser (63)
Fees waived by the Distributor - Class C (a) 368
------- -------
Net Investment Income 1,364
-------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 301
Closed futures contracts (38)
-------
Net Realized Gain 263
Net unrealized appreciation (depreciation) during
the period on:
Investments (895)
Open futures contracts 21
-------
Net Unrealized Depreciation (874)
-------
Net Loss (611)
-------
Increase in Net Assets from Operations $ 753
=======
</TABLE>
(a) Rounds to less than one.
See notes to financial statements.
13
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Unaudited)
Six months Year ended
(in thousands) ended July 31 January 31
------------- ----------
INCREASE (DECREASE) IN NET ASSETS 1998 1998 (a)
<S> <C> <C>
Operations:
Net investment income $ 1,364 $ 3,057
Net realized gain 263 432
Net unrealized appreciation (depreciation) (874) 2,670
-------- --------
Net Increase from Operations 753 6,159
Distributions:
From net investment income - Class A (770) (1,611)
In excess of net investment income - Class A (38) --
From net investment income - Class B (676) (1,489)
In excess of net investment income - Class B (34) --
From net investment income - Class C (3) (2)
In excess of net investment income - Class C (b) --
-------- --------
(768) 3,057
-------- --------
Fund Share Transactions:
Receipts for shares sold - Class A 1,991 3,939
Value of distributions reinvested - Class A 376 723
Cost of shares repurchased - Class A (3,404) (5,290)
-------- --------
(1,037) (628)
-------- --------
Receipts for shares sold - Class B 1,979 4,014
Value of distributions reinvested - Class B 243 446
Cost of shares repurchased - Class B (3,791) (5,689)
-------- --------
(1,569) (1,229)
-------- --------
Receipts for shares sold - Class C 57 100
Value of distributions reinvested - Class C 3 2
-------- --------
60 102
-------- --------
Net Decrease from Fund
Share Transactions (2,546) (1,755)
-------- --------
Total Increase (Decrease) (3,314) 1,302
NET ASSETS
Beginning of period 65,918 64,616
-------- --------
End of period (net of overdistributed and
including undistributed net investment
income of $68 and $86, respectively) $ 62,604 $ 65,918
-------- --------
</TABLE>
(a) Class C shares were initially offered on August 1, 1997. (b) Rounds to less
than one.
See notes to financial statements.
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS - CONT.
<TABLE>
<CAPTION>
(Unaudited)
Six months Year ended
(in thousands) ended July 31 January 31
------------- ----------
NUMBER OF FUND SHARES 1998 1998 (a)
<S> <C> <C>
Sold - Class A 257 523
Issued for distributions reinvested - Class A 49 96
Repurchased - Class A (440) (700)
------ ------
(134) (81)
------ ------
Sold - Class B 257 532
Issued for distributions reinvested - Class B 32 59
Repurchased - Class B (490) (756)
------ ------
(201) (165)
------ ------
Sold - Class C 8 13
Issued for distributions reinvested - Class C (b) (b)
------ ------
8 13
------ ------
</TABLE>
(a) Class C shares were initially offered on August 1, 1997. (b) Rounds to less
than one.
See notes to financial statements.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1998 (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, 1998, 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 providing the
opportunity 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 three classes of shares: Class A, Class B, and Class C.
Class A shares are sold with a front-end sales charge and a 1.00% contingent
deferred sales charge on redemptions made within eighteen months on an original
purchase of $1 million to $5 million. Class B shares are subject to an annual
distribution fee and a contingent deferred sales charge. Class B shares will
convert to Class A shares when they have been outstanding approximately eight
years. Class C shares are subject to a contingent deferred sales charge on
redemptions made within one year after purchase and an annual distribution fee.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies that are consistently followed by the Fund in
the preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS: Debt securities generally are valued by a
pricing service based upon market transactions for normal, institutional-size
trading units of similar securities. When management deems it appropriate, an
over-the-counter or exchange bid quotation is used.
Futures contracts are valued based on the difference between the last sale price
and the opening price of the contract.
16
<PAGE>
Notes to Financial Statements/July 31, 1998
- --------------------------------------------------------------------------------
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 for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains (losses) are based upon the specific identification
method for both financial statement and federal income tax purposes.
The Fund may trade securities on other than normal settlement terms. This may
increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS: All income,
expenses (other than the Class B and Class C distribution fees), and realized
and unrealized gains (losses), are allocated to each class proportionately on a
daily basis for purposes of determining the net asset value of each class.
Class B and Class C per share data and ratios are calculated by adjusting the
expense and net investment income per share data and ratios for the Fund for the
entire period by the distribution fee applicable to Class B and Class C shares
only.
FEDERAL INCOME TAXES: Consistent with the Fund's policy to qualify as a
regulated investment company and to distribute all of its taxable and tax-exempt
income, no federal income tax has been accrued.
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM: Interest income is recorded on the
accrual basis. Original issue discount is accreted to interest income over the
life of a security with a corresponding increase in the cost basis; market
discount is not accreted. Premium is amortized against interest income with a
corresponding decrease in the cost basis.
DISTRIBUTIONS TO SHAREHOLDERS: The Fund declares and records distributions daily
and pays monthly.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforwards) under income tax regulations.
17
<PAGE>
Notes to Financial Statements/July 31, 1998
- --------------------------------------------------------------------------------
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 the Fund's pro-rata portion of the
combined average net assets of the funds constituting Trust V as follows:
<TABLE>
<CAPTION>
Average Net Assets Annual Fee Rate
------------------ ---------------
<S> <C> <C>
First $2 billion 0.50%
Over $2 billion 0.45%
</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 0.13% annually of the Fund's average net assets and receives reimbursement
for certain out-of-pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Liberty Funds
Distributor, Inc., formerly Liberty Financial Investments, Inc. (the
Distributor), a subsidiary of the Adviser, is the Fund's principal underwriter.
For the six months ended July 31, 1998, the Fund has been advised that the
Distributor retained net underwriting discounts of $3,116 on sales of the Fund's
Class A shares and received contingent deferred sales charges (CDSC) of none,
$75,614, and none on Class A, Class B, and Class C share redemptions,
respectively.
The Fund has adopted a 12b-1 plan which requires the payment of a distribution
fee to the Distributor equal to 0.75% annually of the Fund's average net assets
attributable to Class B and Class C shares. The Distributor has voluntarily
agreed, until further notice, to waive a portion of the Class C share
distribution fee so that it does not exceed 0.45% annually. 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 were 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.
18
<PAGE>
Notes to Financial Statements/July 31, 1998
- --------------------------------------------------------------------------------
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 0.60% 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: For the six months ended July 31, 1998, purchases and sales
of investments, other than short-term obligations, were $16,448,855 and
$19,645,349 respectively.
Unrealized appreciation (depreciation) at July 31, 1998, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $3,077,950
Gross unrealized depreciation (57,042)
----------
Net unrealized appreciation $3,020,908
==========
</TABLE>
CAPITAL LOSS CARRYFORWARDS: At January 31, 1998, 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>
2003 234,000
2004 1,485,000
2005 41,000
----------
$1,760,000
==========
</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.
19
<PAGE>
Notes to Financial Statements/July 31, 1998
- --------------------------------------------------------------------------------
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 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 amount recorded in the Fund's Statement of Assets
and Liabilities at any given time.
NOTE 5. LINE OF CREDIT
- --------------------------------------------------------------------------------
The Fund may borrow up to 33 1/3% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit during
the six months ended July 31, 1998.
20
<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
---------------------------------------------
1998
---------------------------------------------
Class A Class B Class C
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 7.790 $ 7.790 $ 7.790
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.182 0.152 0.164(b)
Net realized and
unrealized loss (0.082) (0.082) (0.082)
----------- ----------- -----------
Total from Investment
Operations 0.100 0.070 0.082
----------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.191) (0.162) (0.174)
In excess of net
investment income (0.009) (0.008) (0.008)
----------- ----------- -----------
Total Distributions Declared
to Shareholders (0.200) (0.170) (0.182)
Net asset value -
End of period $ 7.690 $ 7.690 $ 7.690
=========== =========== ===========
Total return (c)(d)(e) 1.31% 0.91% 1.07%
=========== =========== ===========
RATIOS TO AVERAGE NET ASSETS
Expenses (f)(g) 0.78% 1.53% 1.23(b)
Net investment income (f)(g) 4.67% 3.92% 4.22(b)
Fees waived by
the Adviser (f)(g) 0.20% 0.20% 0.20%
Portfolio turnover (e) 27% 27% 27%
Net assets at end
of period (000) $ 30,734 $ 31,708 $ 162
(a) Net of fees and expenses waived by the Adviser which amounted to:
$ 0.008 $ 0.008 $ 0.008
(b) Net of fees waived by the Distributor which amounted to $0.012 per
share and 0.30%.
(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 and Distributor not waived or reimbursed a portion of
expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(g) Annualized.
</TABLE>
21
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each
period are as follows:
<TABLE>
<CAPTION>
Year ended January 31
-------------------------------------------------
1998
--------------------------------------------------
Class A Class B Class C (b)
----------- ----------- ------------------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 7.430 $ 7.430 $ 7.710
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.388 0.332 0.172(c)
Net realized and
unrealized gain (loss) 0.361 0.361 0.082
----------- ----------- -----------
Total from Investment
Operations 0.749 0.693 0.254
----------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.389) (0.333) (0.174)
----------- ----------- -----------
Net asset value -
End of period $ 7.790 $ 7.790 $ 7.790
=========== =========== ===========
Total return (d)(e) 10.37% 9.55% 3.35%(f)
=========== =========== ===========
RATIOS TO AVERAGE NET ASSETS
Expenses 0.59%(g) 1.34%(g) 1.04%(c)(g)(h)
Interest expense -- -- --
Net investment income 5.08%(g) 4.33%(g) 4.63%(c)(g)(h)
Fees waived or borne
by the Adviser 0.41%(g) 0.41%(g) 0.40%(g)(h)
Portfolio turnover 32% 32% 32%
Net assets at end
of period (000) $ 32,150 $ 33,665 $ 103
(a) Net of fees and expenses waived or borne by the Adviser which amounted
to:
$ 0.031 $ 0.031 $ 0.031
(b) Class C shares were initially offered on August 1, 1997. Per share
amounts reflect activity from that date.
(c) Net of fees waived by the Distributor which amounted to $0.012 per
share and 0.30%.
(d) Total return at net asset value assuming all distributions reinvested
and no initial sales charge or contingent deferred sales charge.
(e) Had the Adviser and Distributor not waived or reimbursed a portion of
expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements had an impact of 0.01% and $0.001 per share.
(h) Annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior year ratios are net of benefits
received, if any.
(j) Rounds to less than 0.01%.
</TABLE>
22
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
<TABLE>
<CAPTION>
Year ended January 31
- ----------------------------------------------------------------
1997 1996
Class A Class B Class A Class B
- ----------- ----------- ----------- ---------
<S> <C> <C> <C>
$ 7.620 $ 7.620 $ 7.100 7.100
- ----------- ----------- ----------- ---------
0.395 0.340 0.404 0.351
(0.194) (0.194) 0.535 0.533
- ----------- ----------- ----------- ---------
0.201 0.146 0.939 0.884
- ----------- ----------- ----------- ---------
(0.391) (0.336) (0.419) (0.364)
- ----------- ----------- ----------- ---------
$ 7.430 $ 7.430 $ 7.620 $ 7.620
=========== =========== =========== =========
2.80% 2.03% 13.55% 12.72%
=========== =========== =========== =========
0.56% (i) 1.31% (i) 0.45% (i) 1.18%(i)
(j) (j) -- --
5.31% (i) 4.56% (i) 5.45% (i) 4.72%(i)
0.44% (i) 0.44% (i) 0.55% (i) 0.55%(i)
69% 69% 83% 0.83%
$ 31,275 $ 33,341 $ 32,599 $ 35,741
$ 0.032 $ 0.032 $ 0.040 $ 0.040
</TABLE>
23
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected data for a share of each class outstanding throughout each
period are as follows:
<TABLE>
<CAPTION>
Year ended January 31
---------------------------------------------------------------
1995 1994(b)
Class A Class B Class A Class B
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 7.930 $ 7.930 $ 7.500 $ 7.500
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.423 0.369 0.434 0.378
Net realized and
unrealized gain (loss) (0.839) (0.839) 0.420 0.420
----------- ----------- ----------- -----------
Total from Investment
Operations (0.416) (0.470) 0.854 0.798
----------- ----------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.414) (0.360) (0.424) (0.368)
----------- ----------- ----------- -----------
Net asset value -
End of period $ 7.100 $ 7.100 $ 7.930 $ 7.930
=========== =========== =========== ===========
Total return (c)(d) (5.11)% (5.83)% 11.66% 10.85%
=========== =========== =========== ===========
RATIOS TO AVERAGE NET ASSETS
Expenses 0.22% 0.97% 0.05% 0.80%
Net investment
income 5.92% 5.17% 5.40% 4.65%
Fees waived or borne
by the Adviser 0.73% 0.73% 0.88% 0.88%
Portfolio turnover 45% 45% 19% 19%
Net assets at end
of period (000) $ 27,498 $ 31,116 $ 23,802 $ 31,513
(a) Net of fees and expenses waived or borne by the Adviser which amounted
to:
$ 0.052 $ 0.052 $ 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.
</TABLE>
24
<PAGE>
SHAREHOLDER SERVICES
TO MAKE INVESTING EASIER
Your Fund has one of the most extensive selections of shareholder services
available. Your financial advisor can help you arrange for any of these
services, or you can call us directly at 1-800-345-6611.
AFFORDABLE ADDITIONAL INVESTMENTS: Add to your account with as little as $50 on
most funds; $25 for an IRA account.
FREE EXCHANGES(1): Exchange all or part of your account into the same share
class of another fund distributed by Liberty Funds Distributor, Inc. by phone or
mail.
EASY ACCESS TO YOUR MONEY(1): Make withdrawals from your account by phone, by
mail or, for certain funds, by check.
ONE-YEAR REINSTATEMENT PRIVILEGE: If you need access to your money, but then
choose to return it within one year, you can reinvest in any fund distributed by
Liberty Funds Distributor of the same share class without any penalty or sales
charge.
FUNDAMATIC: Make periodic investments as low as $50 from your checking
account to your Fund account.
SYSTEMATIC WITHDRAWAL PLAN (SWP): Receive monthly, quarterly or semiannual
payments via check or bank transmission. There is a $5,000 account value
required, but no minimum for the payment amount. The maximum annual withdrawal
is 12% of account balance at time SWP is established. SWPs by check are
processed on the 10th calendar day of each month unless the 10th falls on a
non-business day or the first business day of the week. If this occurs, the
processing date will be the previous business day. Dividends and capital gains
must be reinvested.
AUTOMATED DOLLAR COST AVERAGING: Transfer money on a monthly basis from any fund
with a balance of $5,000 into the same share class of up to four other funds
distributed by Liberty Funds Distributor. Minimum for each transfer is $100.
RETIREMENT PLANS: Choose from a broad range of retirement plans, including IRAs.
(1) Redemptions and exchanges are made at the next determined net asset
value after the request is received by the Transfer Agent. Proceeds may
be more or less than your original cost. The exchange privilege may be
terminated at any time. Exchanges are not available on all funds.
Investors who purchase Class B or C shares, or $1 million or more of
Class A shares, may be subject to a contingent deferred sales charge.
25
<PAGE>
HOW TO REACH US
BY PHONE OR BY MAIL
BY TELEPHONE
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 service 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 a.m. to 8:00 p.m. ET, and Saturdays from February
through mid-April, 10:00 a.m. to 2:00 p.m. ET.
TELEPHONE TRANSACTION DEPARTMENT - 1-800-422-3737
To purchase, exchange or sell shares by telephone, call Monday to Friday,
9:00 a.m. to 7:00 p.m. ET. Transactions received after the close of the New
York Stock Exchange will receive the next business day's closing price.
LITERATURE - 1-800-426-3750
To request literature on any fund distributed by Liberty Funds Distributor,
Inc., call Monday to Friday, 8:30 a.m. to 6:30 p.m. ET.
BY MAIL
LIBERTY FUNDS SERVICES, INC.
P.O. BOX 1722
BOSTON, MA 02105-1722
26
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Florida Tax-Exempt Fund is:
Liberty Funds Services, 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
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 and the most recent
copy of Liberty Funds Distributor's Performance Update.
*Effective October 1, 1998, Colonial Investors Service Center, Inc. -- the
Transfer Agent for Colonial, Stein Roe Advisor and Newport Funds -- will
change its name to Liberty Funds Services, Inc.
27
<PAGE>
TRUSTEES
ROBERT J. BIRNBAUM
Consultant (formerly Special Counsel, Dechert, Price & Rhoads; President and
Chief Operating Officer, New York Stock Exchange, Inc.; President, American
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, & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
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, Chief Executive Officer and
Director, Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
ROBERT L. SULLIVAN
Retired Partner, KPMG Peat Marwick LLP (formerly Management Consultant,
Saatchi and Saatchi Consulting Ltd. and Principal and International Practice
Director, Management Consulting, Peat Marwick Main & Co.)
Liberty LOGO
[Liberty Colonial Funds - Stein Roe Advisor Funds - Newport Funds]
Liberty Funds Distributor, Inc. (C) 1998
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
Visit us at www.libertyfunds.com FL-03/765F-0798 (9/98) 98/924
