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COLONIAL NORTH CAROLINA TAX-EXEMPT FUND Annual report
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January 31, 1999
[GRAPHIC OMITTED]
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Not FDIC May Lose Value
Insured No Bank Guarantee
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COLONIAL NORTH CAROLINA TAX-EXEMPT FUND HIGHLIGHTS
FEBRUARY 1, 1998 - JANUARY 31, 1999
Portfolio Manager Commentary: "Interest rate volatility, low nominal interest
rates and a near-record level of supply created challenging conditions for
tax-exempt investors. Despite these hurdles, the Fund was well positioned. We
took advantage of declining interest rates and continued economic growth in
North Carolina, generating attractive performance relative to the Fund's Lipper
peer group."(1)
-- Brian Hartford
Colonial North Carolina Tax-Exempt Fund Performance
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Class A Class B Class C
Inception dates 9/1/93 9/1/93 8/1/97
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12-month distributions declared per share(2) $0.356 $0.299 $0.321
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SEC yields on 1/31/99(3) 3.77% 3.20% 3.48%
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Taxable-equivalent SEC yields(4) 6.77% 5.74% 6.25%
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12-month total returns, assuming reinvestment 6.98% 6.17% 6.49%
of all distributions and no sales charge or
contingent deferred sales charge (CDSC)(5)
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Net asset value per share on 1/31/99 $7.60 $7.60 $7.60
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Quality Breakdown(6) (as of 1/31/99)
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AAA...............................42.1%
AA................................33.7%
A ................................18.6%
BBB................................0.7%
Nonrated...........................1.7%
Short-Term Obligations.............3.2%
Top Five Sectors(6) (as of 1/31/99)
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Local Appropriated................20.0%
Refunded/Escrowed.................14.6%
Hospitals.........................10.6%
Education..........................9.5%
Multi-Family Housing...............7.5%
(1) See complete Lipper rankings on page 3.
(2) A portion of the Fund's income may be subject to the alternative minimum
tax. The Fund may at times purchase tax-exempt securities at a discount.
Some or all of this discount may be included in the Fund's ordinary income
and will be taxable when distributed.
(3) The 30-day SEC yields on January 31, 1999, reflect the portfolio's earning
power, net of expenses, and are expressed as an annualized percentage of
the public offering price at the end of the period. If the Advisor or its
affiliates had not waived certain Fund expenses, the SEC yield would have
been 3.24% for Class C shares.
(4) Taxable-equivalent SEC yields are based on the combined maximum effective
44.3% federal and North Carolina state income tax rate. This tax rate does
not reflect the phase out of exemptions or the reduction of otherwise
allowable deductions which occurs when Adjusted Gross Income exceeds
certain levels.
(5) Performance results reflect any voluntary waiver of Fund expenses by the
Advisor or its affiliates. Absent this waiver, performance results would
have been lower.
(6) 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.
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2
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PRESIDENT'S MESSAGE
TO FUND SHAREHOLDERS
I am pleased to present the annual report for Colonial North Carolina Tax-Exempt
Fund for the 12 months ended January 31, 1999.
The past 12 months were generally positive for bonds, although conditions varied
considerably as domestic and international events affected all sectors of the
bond market. Despite some economic uncertainty early in the year, the economy
continued to grow and inflation remained low, creating a positive climate for
bonds.
[PHOTO]
International events played a role in the strong U.S. bond market.
The economic turmoil in Asia that began in 1997 gradually spread to other
less-developed markets, most notably Russia and Latin America. During pockets of
increased volatility, investors around the world sought the relative quality and
stability of U.S. Treasury bonds. Although demand for safety made Treasurys the
bond market's biggest winner, municipal bonds also benefited.
Colonial's disciplined bond fund management style and long-term investment
orientation served shareholders well during this volatile period, helping the
Fund outperform the majority of its peers over the past 12 months.(1) For
investors seeking competitive levels of tax-free income and the potential for
long-term price appreciation, Colonial North Carolina Tax-Exempt Fund may
provide an attractive option.
The Portfolio Manager Report on the following pages will provide you with more
specific information on your Fund's performance and the market in which your
Fund invests. Thank you for choosing Colonial North Carolina Tax-Exempt Fund and
for giving us the opportunity to serve your investment needs.
Respectfully,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
March 11, 1999
(1) Source: Lipper, Inc. Lipper rankings are based on the Lipper North Carolina
Tax-Exempt Municipal Fund universe. The Fund (Class A shares) ranked in the
first quartile for one year (1 out of 40 funds), in the first quartile for three
years (4 out of 36 funds) and in the first quartile for five years (3 out of 25
funds). Rankings do not include any sales charges. Performance for different
share classes will vary with fees associated with each class. Past performance
does not guarantee future results.
Because economic and market conditions change frequently, there can be no
assurance that the trends discussed above or on the following pages will
continue.
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3
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PORTFOLIO MANAGER REPORT
Brian Hartford is portfolio manager of Colonial North Carolina Tax-Exempt Fund.
Mr. Hartford is a senior vice president of Colonial Management Associates, Inc.
and is the quantitative risk manager for Colonial's tax-exempt investments.
Tax-exempt market generated modest gains
The period began on a positive note, with the U.S. economy strong and no clear
signs of inflation. Throughout the year a series of international crises were
manifested domestically, affecting both stock and bond prices. Instability in
Asia, Russia and Latin America contributed to an increase in the U.S. trade
deficit and concerns about corporate profitability. This fall, the Federal
Reserve Board lowered short-term interest rates three times in an effort to
renew investor confidence. Sentiment about how these events might impact the
U.S. economy in the long run shifted throughout the period, taking fixed-income
investors on a roller coaster ride through much of the year. Overall, bond
prices rose during the period.
Like the broader bond market, municipal bond prices were affected by global
events and interest rate volatility. In addition, the tax-exempt market
experienced a near-record level of issuance in 1998, as issuers took advantage
of lower interest rates to refinance existing debt and to finance new projects.
At times, the market found it difficult to absorb this supply. Despite this
challenging environment, municipal bond prices rose 1.57% during the year as
measured by the Bond Buyer 40 Index, a widely used measure of municipal market
performance.
Fund's performance reflects investment strategy
For the 12-month period, the Fund generated a total return of 6.98% for
Class A shares, based on net asset value. This compares favorably with the
performance of the Fund's Lipper competitive peer group, which averaged 5.67%
for the same time period. We attribute this performance to the Fund's investment
strategy.
Our forecast for modest economic growth and low inflation led us to believe that
interest rates would decline. Since bond prices tend to rise when interest rates
fall, we emphasized bonds with a higher sensitivity to interest rate changes for
most of the year. These included noncallable bonds, which cannot be refinanced
at a lower rate of interest prior to maturity. The longer life span of these
bonds increases their sensitivity to changes in interest rates, often producing
attractive price gains when interest rates decline.
In the final months of the year our analysis suggested that the market was
overvalued. In response, we reduced the Fund's sensitivity to interest rate
changes by shortening its duration. We will continue to actively manage the
Fund's positioning in an effort to add value for our investors.
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4
<PAGE>
North Carolina's economy rolled on
North Carolina was a prime beneficiary of strong national and regional economies
during 1998. The state generated the seventh straight year of healthy economic
gains as employment, income and gross state product all increased. Financial
reserves increased as well, cushioning the state from potential economic
setbacks. The state continued to profit from population inflows and corporate
relocations as individuals and businesses are attracted by the temperate climate
and relatively low cost of living and doing business. North Carolina has
graduated from a regional business center to one with national presence,
particularly in the banking industry. However, North Carolina's ability to
maintain such rapid growth in the future may be restrained by tight labor
markets, consolidation in the banking industry and weak global economies.
Therefore, many of the portfolio's holdings represent revenue-backed,
essential-service bonds, such as utilities. Even during economic slowdowns,
demand for water and electricity tend to generate sufficient revenues to meet
issuers' debt repayment schedules. For example, we have invested in Asheville
Water & Sewer and in North Carolina State Municipal Power Agency No. 1 (1.57%
and 4.02% of total net assets, respectively). Both of these utility providers
are financially strong and operate in attractive service areas with a good blend
of residential and commercial customers.
Positive outlook for municipal market conditions
Looking ahead, inflation should remain low, as we expect productivity gains and
a worldwide surplus in manufacturing capacity to limit the potential for
substantial price increases. In the municipal market, we expect positive supply
and demand dynamics. We doubt total issuance will match 1998's near-record
supply of $280 billion, partially because refinancing volume should slow down as
many issuers have already refinanced. Overall, lower supply combined with
generally positive expectations for the economic environment should have a
positive impact on municipal bond prices. However, as we end the eighth
consecutive year of economic expansion in the U.S., we will watch for events and
trends that could change our expectations and possibly lead us to alter our
investment strategy.
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5
<PAGE>
Colonial North Carolina Tax-Exempt Fund's Investment Performance vs.
the Lehman Brothers Municipal Bond Index
Growth of $10,000 from 9/1/93 - 1/31/99
Class A Shares
Based on NAV and POP
[The following information was represented by a mountain graph in the printed
materials.]
AS OF DATE NAV POP Lehman
- ---------- --- --- ------
Sep 30, 93 10070 9592 10114
Oct 31, 93 10061 9583 10133
Nov 30, 93 9957 9484 10044
Dec 31, 93 10164 9681 10256
Jan 31, 94 10222 9736 10373
Feb 28, 94 9900 9430 10105
Mar 31, 94 9315 8872 9693
Apr 30, 94 9415 8968 9775
May 31, 94 9529 9076 9860
Jun 30, 94 9477 9027 9800
Jul 31, 94 9621 9164 9979
Aug 31, 94 9667 9208 10014
Sep 30, 94 9502 9051 9867
Oct 31, 94 9253 8814 9692
Nov 30, 94 9029 8600 9516
Dec 31, 94 9305 8863 9726
Jan 31, 95 9654 9195 10004
Feb 28, 95 9991 9516 10295
Mar 31, 95 10111 9631 10413
Apr 30, 95 10130 9649 10426
May 31, 95 10397 9903 10758
Jun 30, 95 10208 9723 10664
Jul 31, 95 10287 9798 10765
Aug 31, 95 10377 9884 10902
Sep 30, 95 10468 9971 10971
Oct 31, 95 10665 10158 11130
Nov 30, 95 10892 10375 11315
Dec 31, 95 11030 10506 11424
Jan 31, 96 11093 10566 11510
Feb 29, 96 10973 10451 11432
Mar 31, 96 10822 10308 11286
Apr 30, 96 10794 10281 11254
May 31, 96 10827 10313 11250
Jun 30, 96 10924 10405 11372
Jul 31, 96 11019 10496 11475
Aug 31, 96 11037 10513 11473
Sep 30, 96 11197 10665 11633
Oct 31, 96 11309 10772 11765
Nov 30, 96 11518 10971 11980
Dec 31, 96 11440 10896 11929
Jan 31, 97 11457 10913 11952
Feb 28, 97 11571 11022 12062
Mar 31, 97 11428 10885 11901
Apr 30, 97 11510 10964 12001
May 31, 97 11675 11120 12181
Jun 30, 97 11791 11231 12311
Jul 31, 97 12121 11546 12652
Aug 31, 97 12024 11453 12533
Sep 30, 97 12158 11581 12682
Oct 31, 97 12226 11646 12764
Nov 30, 97 12328 11743 12839
Dec 31, 97 12532 11936 13026
Jan 31, 98 12614 12015 13160
Feb 28, 98 12596 11998 13164
Mar 31, 98 12611 12012 13176
Apr 30, 98 12541 11945 13117
May 31, 98 12762 12156 13324
Jun 30, 98 12812 12203 13377
Jul 31, 98 12845 12235 13410
Aug 31, 98 12947 12332 13617
Sep 30, 98 13171 12545 13787
Oct 31, 98 13292 12660 13787
Nov 30, 98 13273 12642 13835
Dec 31, 98 13375 12740 13870
Jan 31, 99 13495 12854 14035
Growth of a $10,000 investment made on 9/1/93
As of 1/31/99
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Class A Class B Class C
NAV POP NAV w/CDSC NAV w/CDSC
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$13,495 $12,854 $12,958 $12,858 $12,999 $12,999
Average Annual Total Returns
As of 1/31/99
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Class A Class B Class C
Inception 9/1/93 9/1/93 8/1/97
NAV POP NAV w/CDSC NAV w/CDSC
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1 year 6.98% 1.90% 6.17% 1.17% 6.49% 5.49%
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5 years 5.71 4.69 4.92 4.59 4.99 4.99
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Life 5.68 4.74 4.89 4.75 4.96 4.96
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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. CDSC returns reflect the maximum charges of 5% for one year, 2% for
five years and 1% for life 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 its affiliates. 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 shares and Class 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.
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6
<PAGE>
INVESTMENT PORTFOLIO
JANUARY 31, 1999 (IN THOUSANDS)
MUNICIPAL BONDS - 95.4% PAR VALUE
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EDUCATION - 12.4%
Education - 9.3%
East Carolina University,
Series 1994,
6.200% 11/01/15 $ 475 $ 525
State Educational Facilities Authority,
Wake Forest University,
Series 1998,
5.000% 11/01/17 250 254
State Educational Facilities Finance
Agency,
Duke University, Series C,
6.750% 10/01/21 1,235 1,350
NC University Board Government,
5.250% 10/01/13 1,000 1,069
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3,198
----------
Student Loan - 3.1%
State Education Assistance Authority,
Series 1996 C,
6.350% 07/01/16 1,000 1,076
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................................................................................
HEALTHCARE - 10.5%
Hospitals
Charlotte-Mecklenburg Hospital,
Carolinas Healthcare Systems:
Series A:
5.000% 01/15/17 750 756
6.250% 01/01/20 640 689
Series 1996 A,
5.750% 01/15/21 250 269
Gaston Health Care,
5.000% 02/15/19 1,000 979
State Medical Care Commission:
Annie Penn Memorial Hospital,
Series 1998,
5.375% 01/01/22 250 246
Wilson Memorial Hospital,
Series 1997,
(a) 11/01/22 1,380 661
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3,600
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7
<PAGE>
Investment Portfolio/January 31, 1999
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MUNICIPAL BONDS - CONT. PAR VALUE
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HOUSING - 12.1%
Multi-Family - 7.4%
Eastern Carolina Regional Housing
Authority, New River Apartments
Jacksonville, Series 1998,
8.250% 09/01/14 $ 245 $ 265
North Wilkesboro Housing
Development Corp.,
Series 1995 A,
6.350% 10/01/22 745 802
State Housing Finance Agency,
Series F,
6.600% 07/01/17 1,340 1,458
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2,525
----------
Single Family - 4.7%
State Housing Finance Agency:
Series W,
6.450% 09/01/14 485 521
Series KK,
5.500% 03/01/09 305 324
Series 1998,
5.250% 03/01/17 750 757
----------
1,602
----------
................................................................................
OTHER - 14.4%
Refunded/Escrowed (b)
Cumberland County,
Civic Center Project,
Series 1995 A,
6.400% 12/01/24(c) 1,000 1,159
Eastern Municipal Power Agency,
Series 1991 A,
6.500% 01/01/18 1,500 1,823
Lincoln County,
Lincoln County Hospital,
9.000% 05/01/07 255 310
State Municipal Power Agency,
Catawba No. 1,
Series 1990,
5.500% 01/01/13 1,000 1,108
Wake County,
Series 1993,
5.125% 10/01/13 500 535
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4,935
----------
8
<PAGE>
Investment Portfolio/January 31, 1999
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TAX-BACKED - 31.7%
Local Appropriated - 19.7%
Chapel Hill,
Parking Facilities,
Series 1994,
6.450% 12/01/23 $ 500 $ 554
Charlotte:
Charlotte-Mecklenburg Law Project,
Series 1993 B,
5.375% 06/01/13 700 738
Cityfair Parking Facility,
Series 1994 A,
6.125% 06/01/10 430 478
Cumberland County,
Civic Center Project,
Series 1998,
5.000% 12/01/18 1,000 1,012
Durham County:
Hospital & Office Facilities:
Series 1994,
6.000% 05/01/14 1,000 1,129
Series 1997,
5.000% 05/01/14 500 518
Harnett County,
Harnett County Projects,
Series 1994,
6.400% 12/01/14 250 283
Randolph County,
Randolph County Project,
Series 1995,
5.300% 06/01/15 500 523
Rowan County,
Justice Center Project,
Series 1992,
6.250% 12/01/07 500 563
Sampson Area,
4.750% 06/01/19(d) 1,000 977
----------
6,775
----------
Local General Obligations - 2.9%
Mecklenburg County,
Series 1998 B,
4.500% 02/01/16 1,000 984
----------
Special Non-Property Tax - 1.5%
State Centennial Authority,
Arena Project,
5.000% 09/01/10 500 531
----------
9
<PAGE>
Investment Portfolio/January 31, 1999
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MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
TAX-BACKED - CONT.
State Appropriated - 0.6%
PR Commonwealth of Puerto Rico,
Public Buildings Authority,
Series 1993 M,
5.700% 07/01/16 $ 200 $ 212
----------
State General Obligations - 7.0%
PR Commonwealth of Puerto Rico,
Aqueduct & Sewer Authority:
Series 1995,
6.250% 07/01/12 1,000 1,185
Series 1996,
6.500% 07/01/14 1,000 1,211
----------
2,396
----------
................................................................................
UTILITY - 14.3%
Investor Owned - 3.1%
Wake County Industrial Facilities &
Pollution Control Financing Authority,
Carolina Power & Light Co., Series 1983,
6.900% 04/01/09 1,010 1,067
----------
Joint Power Authority - 6.6%
Eastern Municipal Power Agency:
5.700% 01/01/16 300 325
Series 1996 A,
6.000% 01/01/22 500 574
State Municipal Power Agency,
Catawba Electric No. 1,
Series 1998 A,
5.500% 01/01/15 1,250 1,379
----------
2,278
----------
Municipal Electric - 3.0%
University of North Carolina at
Chapel Hill,
(a) 08/01/13(c) 2,000 1,027
----------
Water & Sewer - 1.6%
Asheville,
Series 1996,
5.625% 08/01/16(c) 500 540
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TOTAL MUNICIPAL BONDS (cost of $30,581)(e) 32,745
----------
10
<PAGE>
Investment Portfolio/January 31, 1999
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SHORT-TERM OBLIGATIONS - 3.2%
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VARIABLE RATE DEMAND NOTES (f)
CA Irvine Improvement Bond Act of 1915,
Series 1997,
3.000% 09/02/22 $ 188 $ 188
CA Irvine Ranch Water District,
3.000% 01/01/21 100 100
CA State Health Facilities Financing
Authority, Sutter Health, Series A,
3.000% 03/01/20 100 100
LA State Offshore Terminal Authority,
Loop, Inc.,
3.150% 09/01/06 100 100
MS Perry County,
Leaf River Forest Project,
3.150% 03/01/02 300 300
NY New York City:
3.300% 10/01/20 200 200
General Obligation, Series B,
3.300% 10/01/22 100 100
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TOTAL SHORT-TERM OBLIGATIONS 1,088
----------
OTHER ASSETS & LIABILITIES, NET - 1.4% 485
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NET ASSETS - 100% $ 34,318
==========
NOTES TO INVESTMENT PORTFOLIO:
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(a) Zero coupon bond.
(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) These securities, or a portion thereof, with a total market value
of $2,476, are being used to collateralize the delayed delivery
purchase indicated in note (d) below and open futures contracts.
(d) This security has been purchased on a delayed delivery basis for
settlement at a future date beyond the customary settlement date.
(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. This
security is payable on demand and is secured by either letters of
credit or other credit support agreements from banks. The rate
listed is as of January 31, 1999.
Futures contracts open at January 31, 1999: Unrealized
Par value appreciation
covered by Expiration (depreciation)
Type contracts month at 01/31/99
----------------------------------------------------------------------------
Treasury Bond $ 300 March $ (2)
Municipal Bond 600 March 18
----------
$ 16
==========
See notes to financial statements.
11
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JANUARY 31, 1999
(in thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $30,581) $ 32,745
Short-term obligations 1,088
------------
33,833
Receivable for:
Investments sold $ 1,086
Interest 354
Fund shares sold 10
Other 71 1,521
----------- ------------
Total Assets 35,354
LIABILITIES
Payable for:
Investments purchased 978
Distributions 40
Payable to Advisor 10
Accrued :
Deferred Trustees fees 3
Other 5
-----------
Total Liabilities 1,036
------------
NET ASSETS $ 34,318
------------
Net asset value & redemption price per share -
Class A ($16,426/2,160) $ 7.60(a)
------------
Maximum offering price per share - Class A
($7.60/0.9525) $ 7.98(b)
------------
Net asset value & offering price per share -
Class B ($17,387/2,286) $ 7.60(a)
------------
Net asset value & offering price per share -
Class C ($505/66) $ 7.60(a)
------------
COMPOSITION OF NET ASSETS
Capital paid in $ 32,914
Overdistributed net investment income (29)
Accumulated net realized loss (747)
Net unrealized appreciation on:
Investments 2,164
Open futures contracts 16
------------
$ 34,318
============
(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.
See notes to financial statements.
12
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JANUARY 31, 1999
(in thousands)
INVESTMENT INCOME
Interest $ 1,787
EXPENSES
Management fee $ 167
Service fee 56
Distribution fee - Class B 127
Distribution fee - Class C 2
Transfer agent 51
Bookkeeping fee 27
Trustees fee 9
Custodian fee 3
Audit fee 18
Legal fee 6
Registration fee 15
Reports to shareholders 8
Amortization of deferred
organization expenses 3
Other 7
-----------
499
Fees waived by the Advisor (97)
Fees waived by the Distributor - Class C (1)
Custodian Credits Earned (3) 398
----------- ------------
Net Investment Income 1,389
------------
NET REALIZED & UNREALIZED GAIN ON PORTFOLIO POSITIONS
Net realized gain on:
Investments 429
Closed futures contracts 140
-----------
Net Realized Gain 569
Net change in unrealized appreciation
during the period on:
Investments 176
Open futures contracts 9
-----------
Net Change in Unrealized Appreciation 185
------------
Net Gain 754
------------
Increase in Net Assets from Operations $ 2,143
============
See notes to financial statements.
13
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands) Year ended January 31
----------------------------
INCREASE (DECREASE) IN NET ASSETS 1999 1998 (a)
Operations:
Net investment income $ 1,389 $ 1,584
Net realized gain 569 122
Net unrealized appreciation 185 1,359
----------- ------------
Net Increase from Operations 2,143 3,065
Distributions:
From net investment income - Class A (753) (839)
In excess of net investment income - Class A (18) -
From net investment income - Class B (661) (744)
In excess of net investment income - Class B (16) -
From net investment income - Class C (10) (2)
In excess of net investment income - Class C (b) -
----------- ------------
685 1,480
----------- ------------
Fund Share Transactions:
Receipts for shares sold - Class A 1,709 1,398
Value of distributions reinvested - Class A 459 487
Cost of shares repurchased - Class A (2,497) (2,710)
----------- ------------
(329) (825)
----------- ------------
Receipts for shares sold - Class B 1,309 1,432
Value of distributions reinvested - Class B 352 368
Cost of shares repurchased - Class B (1,968) (2,630)
----------- ------------
(307) (830)
----------- ------------
Receipts for shares sold - Class C 369 171
Value of distributions reinvested - Class C 9 2
Cost of shares repurchased - Class C (56) -
----------- ------------
322 173
----------- ------------
Net Decrease from Fund
Share Transactions (314) (1,482)
----------- ------------
Total Increase (Decrease) 371 (2)
NET ASSETS
Beginning of period 33,947 33,949
----------- ------------
End of period (net of overdistributed
and including undistributed net investment
income of $29 and $35, respectively) $ 34,318 $ 33,947
=========== ============
(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.
Year ended January 31
----------------------------
(in thousands) 1999 1998 (a)
NUMBER OF FUND SHARES
Sold - Class A 228 193
Issued for distributions reinvested - Class A 61 67
Repurchased - Class A (334) (374)
----------- ------------
(45) (114)
----------- ------------
Sold - Class B 175 198
Issued for distributions reinvested - Class B 47 50
Repurchased - Class B (265) (366)
----------- ------------
(43) (118)
----------- ------------
Sold - Class C 49 23
Issued for distributions reinvested - Class C 1 (b)
Repurchased - Class C (7) -
----------- ------------
43 23
----------- ------------
(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 NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999
NOTE 1. ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
Organization: Colonial North Carolina Tax-Exempt Fund (the Fund), a series of
Colonial Trust V, 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 and North Carolina state
personal income 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 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.
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.
16
<PAGE>
Notes to Financial Statements/January 31, 1999
- --------------------------------------------------------------------------------
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.
Deferred organization expenses: The Fund incurred $31,806 of expenses in
connection with its organization, initial registration with the Securities and
Exchange Commission and various states, and the initial public offering of its
shares. These expenses were deferred and were 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.
17
<PAGE>
Notes to Financial Statements/January 31, 1999
- --------------------------------------------------------------------------------
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
- --------------------------------------------------------------------------------
Management fee: Colonial Management Associates, Inc. (the Advisor) is the
investment Advisor of the Fund and furnishes accounting and other services and
office facilities for a monthly fee based on each Fund's pro-rata portion of the
combined average net assets of the funds constituting Trust V as follows:
Average Net Assets Annual Fee Rate
------------------ ---------------
First $2 billion 0.50% 0.55%
Over $2 billion 0.45% 0.45%
Bookkeeping fee: The Advisor 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: Liberty Funds Services, Inc., formerly Colonial Investors
Service Center, Inc. (the Transfer Agent), an affiliate of the Advisor, provides
shareholder services for a monthly fee equal to 0.13% annually of the Fund's
average net assets and receives reimbursement for certain out-of-pocket
expenses.
Underwriting discounts, service and distribution fees: Liberty Funds
Distributor, Inc., formerly Liberty Financial Investments, Inc., (the
Distributor) a subsidiary of the Advisor, is the Fund's principal underwriter.
For the year ended January 31, 1999, the Fund has been advised that the
Distributor retained net underwriting discounts of $6,752 on sales of the Fund's
Class A shares and received contingent deferred sales charges (CDSC) of none,
$31,416, 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:
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.
18
<PAGE>
Notes to Financial Statements/January 31, 1999
- --------------------------------------------------------------------------------
Expense limits: The Advisor 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 0.75% annually of the Fund's average net
assets. Through October 31, 1998 the expense limit was 0.60% of the Fund's
average net assets
Other: The Fund pays no compensation to its officers, all of whom are employees
of the Advisor.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
The Fund has an agreement with its custodian bank under which $2,559 of
custodian fees have been reduced by balance credits applied during the year
ended January 31, 1999. The Fund could have invested a portion of the assets
utilized in connection with the expense offset arrangement in an income
producing asset if it had not entered into such arrangements.
NOTE 3. PORTFOLIO INFORMATION
- --------------------------------------------------------------------------------
Investment activity: During the year ended January 31, 1999, purchases and sales
of investments, other than short-term obligations, were $8,492,928 and
$8,763,194, respectively.
Unrealized appreciation (depreciation) at January 31,1999, based on cost of
investments for both financial statement and federal income tax purposes was:
Gross unrealized appreciation $ 2,177,272
Gross unrealized depreciation (12,979)
-------------
Net unrealized appreciation $ 2,164,293
=============
Capital loss carryforwards: At January 31, 1999, 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
------------ -------------
2004 $ 356,000
2005 124,000
-------------
$ 480,000
=============
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.
19
<PAGE>
Notes to Financial Statements/January 31,1999
- --------------------------------------------------------------------------------
NOTE 3. PORTFOLIO INFORMATION - CONT.
- --------------------------------------------------------------------------------
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 positions due to
different trading hours or the temporary absence of a liquid market for either
the instrument or the underlying securities or (3) an inaccurate prediction by
the Advisor of the future direction of interest rates. Any of these risks may
involve amounts exceeding the amount recognized in the Fund's Statement of
Assets and Liabilities at any given time.
NOTE 4. LINE OF CREDIT
- --------------------------------------------------------------------------------
The Fund may borrow up to 33 1/3% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit during
the year ended January 31, 1999.
NOTE 5. RESULTS OF SPECIAL SHAREHOLDER MEETING (UNAUDITED)
- --------------------------------------------------------------------------------
On October 30, 1998, a Special Meeting of Shareholders of the Fund was held to
approve the following items, all as described in the Proxy Statement for the
Meeting. On August 21, 1998, the record date for the Meeting, the Fund had
outstanding 4,418,150 shares of beneficial interest. The votes cast at the
Meeting were as follows:
20
<PAGE>
Notes to Financial Statements/January 31,1999
- --------------------------------------------------------------------------------
Authority
For Withheld
--- --------
To Elect a Board of Trustees:
Robert J. Birnbaum 2,730,155 80,060
Tom Bleasdale 2,736,899 73,316
John Carberry 2,737,795 72,420
Lora S. Collins 2,739,203 71,012
James E. Grinnell 2,729,962 80,253
Richard W. Lowry 2,737,850 72,365
Salvatore Macera 2,740,027 70,188
William E. Mayer 2,739,240 70,975
James L. Moody, Jr. 2,737,795 72,420
John J. Neuhauser 2,742,362 67,853
Thomas E. Stitzel 2,737,795 72,420
Robert L. Sullivan 2,737,721 72,494
Anne-Lee Verville 2,737,839 72,376
To amend fundamental investment policies regarding borrowing and lending:
For Against Abstain
--- ------- -------
2,047,733 36,951 136,172
To approve policies for a master fund/feeder fund structure:
For Against Abstain
--- ------- -------
2,055,961 35,109 129,784
21
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding throughout each period are
as follows:
<TABLE>
<CAPTION>
Year ended January 31
-------------------------------------------
1999
Class A Class B Class C
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 7.450 $ 7.450 $ 7.450
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.342 0.285 0.307(b)
Net realized and
unrealized gain 0.164 0.164 0.164
----------- ----------- -----------
Total from Investment
Operations 0.506 0.449 0.471
----------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.348) (0.292) (0.314)
In excess of net
investment income (0.008) (0.007) (0.007)
----------- ----------- -----------
Total Distributions
Declared to Shareholders (0.356) (0.299) (0.321)
----------- ----------- -----------
Net asset value -
End of period $ 7.600 $ 7.600 $ 7.600
=========== =========== ===========
Total return (e)(f) 6.98% 6.17% 6.49%
=========== =========== ===========
RATIOS TO AVERAGE NET ASSETS
Expenses (h) 0.81% 1.56% 1.26%(b)
Net investment income (h) 4.55% 3.80% 4.10%(b)
Fees and expenses waived
or borne by the Advisor (h) 0.29% 0.29% 0.29%
Portfolio turnover 26% 26% 26%
Net assets at end
of period (000) $ 16,426 $ 17,387 $ 505
(a) Net of fees and expenses waived or borne by the Advisor which amounted to:
$ 0.022 $ 0.022 $ 0.022
</TABLE>
(b) Net of fees waived by the Distributor which amounted to $0.022 per share
and 0.30%.
(c) Class C shares were initially offered on August 1, 1997. Per share amounts
reflect activity from that date.
(d) Net of fees waived by the Distributor which amounted to $0.011 per share
and 0.30%.
(e) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(f) Had the Advisor and Distributor not waived or reimbursed a portion of
expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
agreements had an impact of 0.01% and $0.001 per share for the year ended
January 31, 1999. The benefits derived for the years ended January 31,
1998 and 1997 had no impact.
(i) Annualized.
22
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Year ended January 31
- --------------------------------------------------------------------------------
1998 1997
Class A Class B Class C (c) Class A Class B
------------ ------------ ------------ ----------- ------------
$ 7.120 $ 7.120 $ 7.350 $ 7.270 $ 7.270
------------ ------------ ------------ ----------- ------------
0.373 0.319 0.168(d) 0.376 0.322
0.327 0.327 0.100 (0.150) (0.150)
------------ ------------ ------------ ----------- ------------
0.700 0.646 0.268 0.226 0.172
------------ ------------ ------------ ----------- ------------
(0.370) (0.316) (0.168) (0.376) (0.322)
- - - - -
------------ ------------ ------------ ----------- ------------
(0.370) (0.316) (0.168) (0.376) (0.322)
------------ ------------ ------------ ----------- ------------
$ 7.450 $ 7.450 $ 7.450 $ 7.120 $ 7.120
============ ============ ============ =========== ============
10.10% 9.28% 3.69%(g) 3.29% 2.51%
============ ============ ============ =========== ============
0.49% 1.24% 0.96%(d)(i) 0.45% 1.20%
5.11% 4.36% 4.55%(d)(i) 5.29% 4.54%
0.64% 0.64% 0.63%(i) 0.66% 0.66%
23% 23% 23% 38% 38%
$16,425 $17,348 $ 174 $16,522 $17,427
$ 0.047 $ 0.047 $ 0.047 $ 0.047 $ 0.047
- --------------------------------------------------------------------------------
1999 Federal Income Tax Information (unaudited)
All of the income distributions will be treated as exempt income for federal
income tax purposes.
- --------------------------------------------------------------------------------
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
------------------------------------------------------------
1996 1995
Class A Class B Class A Class B
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value -
Beginning of period $ 6.680 $ 6.680 $ 7.500 $ 7.500
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment
income (a) 0.386 0.334 0.396 0.345
Net realized and
unrealized gain (loss) 0.588 0.588 (0.822) (0.822)
----------- ----------- ----------- -----------
Total from Investment
Operations 0.974 0.922 (0.426) (0.477)
----------- ----------- ----------- -----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net
investment income (0.384) (0.332) (0.394) (0.343)
----------- ----------- ----------- -----------
Net asset value -
End of period $ 7.270 $ 7.270 $ 6.680 $ 6.680
=========== =========== =========== ===========
Total return (b)(c) 14.91% 14.07% (5.55)% (6.27)%
=========== =========== =========== ===========
RATIOS TO AVERAGE NET ASSETS
Expenses 0.33%(d) 1.08%(d) 0.12% 0.87%
Net investment
income 5.47%(d) 4.72%(d) 5.83% 5.08%
Fees and expenses waived
or borne by the
Advisor 0.76%(d) 0.76%(d) 0.93% 0.93%
Portfolio turnover 34% 34% 37% 37%
Net assets at end
of period (000) $ 15,813 $ 18,593 $ 14,189 $ 17,169
(a) Net of fees and expenses waived or borne by the Advisor which amounted to:
$ 0.053 $ 0.053 $ 0.063 $ 0.063
</TABLE>
(b) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(c) Had the Advisor not waived or reimbursed a portion of expenses, total
return would have been reduced.
(d) The benefits derived from custody credits and directed brokerage
agreements had no impact. Prior year's ratios are net of benefits
received, if any.
24
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES OF COLONIAL TRUST V AND THE SHAREHOLDERS OF
COLONIAL NORTH CAROLINA TAX-EXEMPT FUND
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Colonial North Carolina Tax- Exempt
Fund (the "Fund") (a series of Colonial Trust V) at January 31, 1999, the
results of its operations, the changes in its net assets and the financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and the financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of portfolio positions at January 31, 1999 by correspondence with
the custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 11, 1999
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.
Liberty 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 North Carolina Tax-Exempt Fund is:
Liberty Funds Services, Inc.*
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
Colonial North Carolina 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 North Carolina
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, Crabbe Huson, Newport and Stein Roe Advisor
Funds -- changed 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)
JOHN CARBERRY
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Development Capital, LLC (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ROBERT L. SULLIVAN
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
[LOGO] L I B E R T Y
COLONIAL o CRABBE HUSON o NEWPORT o STEIN ROE ADVISOR
Liberty Funds Distributor, Inc. (C)1999
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
Visit us at www.libertyfunds.com NC-02/681G-0199 (3/99) 99/293
- --------------------------------------------------------------------------------
