-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PTOqNTjA9IIgHphGwVsnPMEyb6Q9KUaMuQXDxBWwA0nIHNZjNm/21bNpeVj/pqqa O8soHqxk60GVSsN9Q1RiFA== 0000891804-04-000595.txt : 20040305 0000891804-04-000595.hdr.sgml : 20040305 20040304174022 ACCESSION NUMBER: 0000891804-04-000595 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040305 EFFECTIVENESS DATE: 20040305 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA ACORN TRUST CENTRAL INDEX KEY: 0000002110 IRS NUMBER: 362692100 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-01829 FILM NUMBER: 04649836 BUSINESS ADDRESS: STREET 1: 227 W MONROE STE 3000 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3126349200 MAIL ADDRESS: STREET 1: 227 W MONROE STE 3000 CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTY ACORN TRUST DATE OF NAME CHANGE: 20010424 FORMER COMPANY: FORMER CONFORMED NAME: ACORN INVESTMENT TRUST DATE OF NAME CHANGE: 19940204 FORMER COMPANY: FORMER CONFORMED NAME: ACORN FUND INC DATE OF NAME CHANGE: 19920703 N-CSR 1 file001.txt COLUMBIA ACORN TRUST UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-01829 --------------------- Columbia Acorn Trust ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) 227 West Monroe, Suite 3000, Chicago, Illinois 60606 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Vincent Pietropaolo, Esq. Columbia Management Group, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: 1-617-772-3698 ------------------- Date of fiscal year end: 12/31/2003 ------------------ Date of reporting period: 12/31/2003 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. [Photos of acorns] COLUMBIA ACORN FAMILY OF FUNDS CLASS Z SHARES 4 ANNUAL REPORT DECEMBER 31, 2003 MANAGED BY COLUMBIA WANGER ASSET MANAGEMENT, L.P. COLUMBIA ACORN FUND COLUMBIA ACORN INTERNATIONAL COLUMBIA ACORN USA COLUMBIA ACORN INTERNATIONAL SELECT COLUMBIA ACORN SELECT COLUMBIA THERMOSTAT FUND Columbia Acorn Family of Funds Annual Report 2003 Table of Contents Columbia Acorn Family of Funds Performance At A Glance 1 Squirrel Chatter: Don't Bet The Farm 2 COLUMBIA ACORN FUND In a Nutshell 4 At a Glance 5 Major Portfolio Changes 16 Statement of Investments 18 COLUMBIA ACORN INTERNATIONAL In a Nutshell 6 At a Glance 7 Major Portfolio Changes 30 Statement of Investments 32 Portfolio Diversification 36 COLUMBIA ACORN USA In a Nutshell 8 At a Glance 9 Major Portfolio Changes 37 Statement of Investments 38 COLUMBIA ACORN INTERNATIONAL SELECT In a Nutshell 10 At a Glance 11 Major Portfolio Changes 43 Statement of Investments 44 Portfolio Diversification 46 COLUMBIA ACORN SELECT In a Nutshell 12 At a Glance 13 Major Portfolio Changes 47 Statement of Investments 48 COLUMBIA THERMOSTAT FUND In a Nutshell 14 At a Glance 15 Statement of Investments 67 Statements of Assets and Liabilities 68 Statements of Operations 69 Statement of Changes in Net Assets 70 Financial Highlights 72 Notes to Financial Statements 73 COLUMBIA ACORN FAMILY OF FUNDS Statements of Assets and Liabilities 50 Statements of Operations 51 Statements of Changes in Net Assets 52 Financial Highlights 56 Notes to Financial Statements 60 Report of Independent Auditors 78 Columbia Acorn Family of Funds Information 79 Board of Trustees and Management of Acorn 80 > 2003 YEAR-END DISTRIBUTIONS The following table details the funds' year-end distributions. The record and ex-dividend date for COLUMBIA ACORN FUND and COLUMBIA ACORN SELECT was December 5, 2003 and the payable date was December 8, 2003. For COLUMBIA THERMOSTAT FUND, the record and ex-dividend date was December 26, 2003 and the payable date was December 29, 2003. LONG-TERM SHORT-TERM CAPITAL CAPITAL ORDINARY REINVESTMENT GAINS GAINS INCOME PRICE --------- ---------- ---------- ------------- Columbia Acorn Fund $ 0.0201 None None $ 21.87 Columbia Acorn Select $ 0.0890 $ 0.0452 None $ 17.71 Columbia Thermostat Fund None None $ 0.1508 $ 12.23 THE DISCUSSION IN THIS REPORT OF PORTFOLIO COMPANIES IS FOR ILLUSTRATION ONLY AND IS NOT A RECOMMENDATION OF INDIVIDUAL STOCKS. THE INFORMATION IS BELIEVED TO BE ACCURATE, BUT THE INFORMATION AND THE VIEWS OF THE PORTFOLIO MANAGERS MAY CHANGE AT ANY TIME WITHOUT NOTICE. Columbia Acorn Family of Funds >Performance At A Glance Class Z Average Annual Total Returns through 12/31/03
4TH * 1 3 5 10 LIFE QUARTER YEAR YEARS YEARS YEARS OF FUND - --------------------------------------------------------------------------------------- COLUMBIA ACORN FUND (6/10/70) 14.45% 45.68% 10.26% 14.49% 13.58% 16.30% - --------------------------------------------------------------------------------------- S&P 500 12.18% 28.69% -4.05% -0.57% 11.07% 12.12% - --------------------------------------------------------------------------------------- Russell 2500 14.43% 45.51% 6.58% 9.40% 11.74% NA - --------------------------------------------------------------------------------------- Russell 2000 14.52% 47.25% 6.27% 7.13% 9.47% NA - --------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 14.85% 40.90% 6.83% 9.39% 11.11% NA - --------------------------------------------------------------------------------------- Lipper Mid-Cap Core Funds Index 13.06% 36.58% 2.38% 7.89% 10.95% NA - --------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL (9/23/92) 17.35% 47.80% -0.73% 6.99% 7.44% 11.07% - --------------------------------------------------------------------------------------- Citigroup EMI 15.97% 55.02% 7.19% 6.18% 4.74% 6.28% Global ex-US - --------------------------------------------------------------------------------------- MSCI EAFE 17.08% 38.59% -2.91% -0.05% 4.47% 6.16% - --------------------------------------------------------------------------------------- Lipper Int'l Small- 14.77% 55.10% 5.45% 10.31% NA NA Cap Funds Index - --------------------------------------------------------------------------------------- COLUMBIA ACORN USA (9/4/96) 13.57% 47.13% 12.67% 9.87% -- 14.00% - --------------------------------------------------------------------------------------- Russell 2000 14.52% 47.25% 6.27% 7.13% -- 8.63% - --------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 14.85% 40.90% 6.83% 9.39% -- 9.90% - --------------------------------------------------------------------------------------- S&P 500 12.18% 28.69% -4.05% -0.57% -- 9.12% - --------------------------------------------------------------------------------------- COLUMBIA ACORN INT'L SELECT + (11/23/98) 16.92% 41.79% -5.04% 6.14% -- 8.01% - --------------------------------------------------------------------------------------- Citigroup World ex-US Cap Range $2-10B 15.81% 49.65% 4.73% 5.92% -- 6.48% - --------------------------------------------------------------------------------------- MSCI EAFE 17.08% 38.59% -2.91% -0.05% -- 0.75% - --------------------------------------------------------------------------------------- Lipper International Funds Index 15.45% 36.00% -1.85% 2.13% -- 2.51% - --------------------------------------------------------------------------------------- COLUMBIA ACORN SELECT+ (11/23/98) 4.97% 30.61% 9.15% 13.43% -- 14.66% - --------------------------------------------------------------------------------------- S&P MidCap 400 13.19% 35.62% 4.84% 9.21% -- 11.28% - --------------------------------------------------------------------------------------- Lipper Mid-Cap Growth Index 10.98% 35.42% -8.56% 2.18% -- 4.78% - --------------------------------------------------------------------------------------- S&P 500 12.18% 28.69% -4.05% -0.57% -- 0.55% - --------------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND (9/25/02) 7.34% 19.79% -- -- -- 19.01% - --------------------------------------------------------------------------------------- S&P 500 12.18% 28.69% -- -- -- 29.59% - --------------------------------------------------------------------------------------- Lehman U.S. Credit Intermediate Bond Index 0.40% 6.91% -- -- -- 7.95% - --------------------------------------------------------------------------------------- Lehman U.S Govt. Intermediate Bond Index -0.20% 2.29% -- -- -- 2.89% - --------------------------------------------------------------------------------------- Lipper Flexible Portfolio Funds Index 9.26% 23.03% -- -- -- 23.09% - ---------------------------------------------------------------------------------------
* Not annualized. + Liberty Acorn Foreign Forty was renamed Columbia Acorn International Select. Liberty Acorn Twenty was renamed Columbia Acorn Select. Both changes went into effect on October 13, 2003. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Current performance may be lower or higher than the performance data collected. Visit columbiafunds.com for daily performance updates. For complete information about Columbia Acorn Funds, including objectives, risks, charges and expenses, refer to a copy of the prospectus. Be sure to read it carefully before you invest. DESCRIPTION OF INDEXES: S&P 500 is a broad, market-weighted average of U.S. blue-chip company stock performance. S&P MIDCAP 400 is a broad market-weighted index of 400 stocks that are in the next size/tier down from the S&P 500. RUSSELL 2000 is a market-weighted index of 2000 U.S. companies, formed by taking the largest 3,000 companies and eliminating the largest 1,000. RUSSELL 2500 is the smallest 2,500 U.S. companies from this same group. CITIGROUP EMI GLOBAL EX-US is the bottom 20% of institutionally investable capital of developed and emerging countries, selected by index sponsor, outside the U.S. MSCI EAFE is Morgan Stanley's Europe, Australasia and Far East Index, a widely recognized international benchmark that comprises 20 major markets in proportion to world stock market capitalization. CITIGROUP WORLD EX-US CAP RANGE $2-10B is a subset of the Broad Market Index, representing a mid-cap developed market index excluding the U.S. LIPPER INDEXES include the largest funds tracked by Lipper, Inc. in the named category. LIPPER MID-CAP GROWTH INDEX, 30 mid-cap growth funds; LIPPER MID-CAP CORE FUNDS INDEX, 30 mid-cap core funds; LIPPER INTERNATIONAL FUNDS INDEX, 30 largest non-U.S. funds, not including non-U.S. small cap funds; Lipper International SMALL-CAP FUNDS INDEX, 10 largest non-U.S. funds investing in small cap companies, including Columbia Acorn International; LIPPER SMALL-CAP CORE FUNDS INDEX, 30 largest small cap core funds, including Columbia Acorn Fund. LIPPER FLEXIBLE PORTFOLIO FUNDS INDEX is an equal dollar weighted index of the 30 largest mutual funds within the Flexible Portfolio fund classification, as defined by Lipper. LEHMAN U.S. GOVERNMENT INTERMEDIATE BOND INDEX is made up of 1 to 10 year treasury and agency bonds, excluding targeted investor notes and state and local government series bonds. The LEHMAN U.S. CREDIT INTERMEDIATE BOND INDEX is the intermediate component of the U.S. Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements. All indexes are unmanaged and returns include reinvested distributions. A more complete description of each index is included in the Fund's statement of additional information. It is not possible to invest directly in an index. 1 >Squirrel Chatter: DON'T BET THE FARM Photo of Ralph Wanger How do you run a mutual fund to get good results? Are the investing rules the same for managing small-cap/mid-cap funds and large-cap funds? Here are some of my personal opinions on these questions. We believe some basic principles apply to any stock portfolio. (1) Diversification reduces risk, so own mid-cap stocks (Columbia Acorn Select) and a small-cap fund (Columbia Acorn USA). (2) International stocks add additional beneficial diversification (Columbia Acorn International) 1. (3) The market often over-values growth stocks, so pay close attention to valuation. (4) Big winners take years to develop, so think long term. So what are the differences in managing small-, mid-and large-cap funds? Many large-company portfolios are run according to the rules expressed in Charles Ellis's book, WINNING THE LOSER'S GAME. 2 He tells us to play it safe. Start with a portfolio that mirrors the market and try to avoid big losers (fraud such as Enron and WorldCom, overpriced growth such as Cisco at $80 3). One could say he starts with the S&P 500 and reduces it to the Ellis 495 by getting rid of some potential big losers. The WINNING THE LOSER'S GAME strategy may work for a big-company portfolio, but it is not the way I like to run a small-cap fund. Small-cap is a winner's game. You want to be a Barry Bonds or a Sammy Sosa and hit 50 home runs. If you get the homers, you are a hero; you can strike out a lot of times but no one will care very much. As an example, International Game Technology (IGT) has been a great long-term winner for the funds. In the 2003 season, IGT hit a grand slam - an additional unrealized gain of $175 million! 4 Even if you strike out more often than you would like, one big winner more than offsets a half-dozen $10 million losers. Some of our big winners are duly celebrated in the Scarlet A section. The funds had fine results in 2003 due to the success we had in these stocks and many others. Writing about success, however, is less colorful than writing about failure; there are more plays about Nero than about Marcus Aurelius. When it comes to investing, there are only a few ways to fail. You can buy a company that runs into unexpected problems. Sometimes you buy into a speculative company you know is high risk and the company just doesn't make it. The unfortunate speculators who bought Cisco at $80 lost mere hundreds of billions of dollars compared to the more unfortunate speculators gulled by the Enron and WorldCom frauds. Of course bubbles and speculation have a long history. The first overpricing bubble on record was the tulip-mania boom in Holland in 1636. Tulips were a new "high-tech" flower in Europe but the price of strangely colored varieties went way too high, creating a nasty collapse. Tulip-bulb farming today is still important to the Dutch but it is no longer high tech. Farmers can fool you. About 25 years ago, I put some personal money into Maine Sugar. The promoter was a potato processor in Aroostook County, Maine. He believed that the climate and soil there was favorable for growing sugar beets. He floated stock to build a sugar refinery and invited a planeload of New York analysts to come see the sugar beet fields under cultivation. The analysts got on a bus and were driven to a field where the CEO dug up a giant sugar beet. The analysts had never seen such a large sugar beet (most of them had never seen a farm, for that matter). They got back on the bus, and after another ten minutes arrived at another field. The CEO dug up a sugar beet bigger than the first one. The bus continued to another farm field where again an impressive beet was unearthed. When the analysts arrived back in New York, they wrote buy reports based on the great number of farms growing sugar beets. Maine Sugar dissolved a few months later, and the city-boy analysts realized that they had been shown the same field three times in a row. (Columbia Acorn Funds didn't own Maine Sugar). The latest foolish farm fraud is Parmalat, an Italian company in the milk business. (Parma latte, get it?) The Columbia Acorn Funds lost a few million dollars in Parmalat (see Pages 6 and 10). Big banks that did business with Parmalat could lose hundreds of millions of dollars in bad loans. One of the centerpieces of the fraud was a made-up bank deposit of 3.95 billion euros (about $5 billion). The Parmalat officials allegedly handed the auditors a hastily forged document purporting to be the bank's acknowledgement of the deposit. The auditors appear to have accepted the false affidavit without making their own inquiry ("Hey, we are facing a deadline and it's only five billion.") and allowed the company to continue its fraud for a few more months, roping us in. How could we have avoided getting caught? Talking to company management more often probably would have not helped at all; after all, the bank lenders, the bond rating agencies, and auditor were fooled, and they had much freer access to the company's internal records then any outside financial analyst could ever get. One answer would have been to talk to Parmalat's suppliers, in this case the dairy farmers. After the collapse, someone did ("Parma Farmers Had One Rule: Don't Deal With Parmalat," BLOOMBERG NEWS, January 19, 2004). Achille Coelli, director of the Union of Parma Farmers said, "Farmers here won't work with Parmalat. Tanzi [the CEO] never had a good reputation. The company was a slow payer, so only one 1-800-922-6769 2 percent of the milk produced in Parma province was sold to Parmalat." Obvious red flag? Sure. Did any analyst do this check before the collapse? Don't think so. What conclusions do we want to draw from this crying over spilt milk, besides the vaguely comforting notion that not all fraud occurs in the USA? First, a smart crook can fool some of the people all of the time. Second, really star-quality analytic work could help discover frauds sooner, but much of the time that doesn't happen. Third, complete skepticism would have you avoid fraud, but you would avoid the good investments too. An investor must balance skepticism and credulity just as one balances risk/return or growth/value. Fourth, diversification dilutes the negative effect of one bad stock. Since fraud tends to hit you one at a time, it's a strike out, but it doesn't cost you the season. The benefits you get from big winners far outweigh a few losers. 2003 SCARLET A WINNERS HEAP HIGH THE GOLDEN CORN! 5 -- JOHN GREENLEAF WHITTIER Our analysts and portfolio managers deserve a lot of credit for picking exceptional stocks but we do not rely solely on our internal investment prowess. Often we get sage advice from investment pros outside our Chicago office. We honor and thank these individuals by presenting them with the coveted Scarlet A certificate. In 2003, domestic stocks had to increase more than 150% and make more than $40 million to be considered for a Scarlet A. The international stock criteria was a return of at least 100% and a dollar gain of $20 million or more. Our thanks to Greg Jackson of Blum Capital Partners for his help on software company NOVELL. The stock was up 214% in 2003 and brought in a firm-wide gain of over $101 million. Rural cellular service provider WESTERN WIRELESS was up 250% in 2003 and provided a dollar gain of nearly $69 million. Hats off to Thomas Lee of JPMorgan for his help with this 2003 winner. Thomas confirmed our internal analysis that Western Wireless was generating free cash flow and that fears that the company could go bust were unfounded. Natural gas producer ULTRA PETROLEUM, up nearly 150%, brought in a dollar gain of over $50 million. Credit for this idea goes to Barry Sahgal of Brean Murray & Co. While this is Barry's first Scarlet A win, this is not his first contribution to the Columbia Acorn Funds. Barry also brought EVERGREEN RESOURCES to our attention in 1998, a stock that has increased over 270% during the five years we've held it in our funds. A repeat winner tops our international Scarlet A list. Ireland's ANGLO IRISH BANK was up 142% in 2003 and provided a firm-wide dollar gain of nearly $60 million. To David Smith of Davy Stockbrokers in Dublin: Thanks again! Stefan Stalmann of Dresdner Kleinwort Wasserstein in Frankfurt, Germany, earns the Scarlet A for his help with DEPFA BANK. The stock, up 139% with a $22 million gain, provides international public-sector financing. While we had built a position in Depfa Bank before speaking with Stefan, his understanding of the company reinforced our conviction and we remained invested in the stock longer than we might have on his advice, benefiting shareholders. It is noteworthy that Robert Hurkmans, a Dresdner contact in New York, encouraged us to contact Stefan. The best attributes of a good broker are credibility and being selective about providing information and analyst contacts within their own organization. So, to Robert Hurkmans, we offer kudos for darned good brokering. COLUMBIA WAM NEWS John Park has been named director of domestic research for Columbia Wanger Asset Management, L.P. John joined the firm in 1993 and has managed Columbia Acorn Select since its 1998 inception. He also became a co-manager on Columbia Acorn Fund in 2003. /s/ Ralph Wanger Ralph Wanger FOUNDER, ADVISOR AND TRUSTEE COLUMBIA WANGER ASSET MANAGEMENT, L.P. ________________________________________________________________________________ 1 For more information about Columbia Acorn Select, Columbia Acorn USA or Columbia Acorn International, including management fees and expenses, please call us at (800) 922-6769 or visit www.columbiafunds.com. Please read the prospectus carefully before you invest or send money. 2 Ellis, Charles D., WINNING THE LOSER'S GAME: TIMELESS STRATEGIES FOR SUCCESSFUL INVESTING, McGraw-Hill Trade, 4th Edition, March 14, 2002. 3 No fund advised by Columbia Wanger Asset Management, L.P., owns or has owned Enron, WorldCom or Cisco. 4 The dollar gain for the one-year period ended December 31, 2003 reflects the total gain in the stock across all funds/accounts advised by Columbia Wanger Asset Management, L.P., that held IGT. 5 Whitter, John Greenleaf, THE CORN SONG, prior to 1872. As of 12/31/03, fund positions, as a percent of net assets, in the holdings mentioned were: Parmalat: Columbia Acorn International, 0.0%; Columbia Acorn International Select, 0.0%. International Game Technology: Columbia Acorn Fund, 2.8%; Columbia Acorn Select, 2.3%. Novell: Columbia Acorn Fund, 0.9%; Columbia Acorn USA, 2.0%. Western Wireless: Columbia Acorn Fund, 0.5%; Columbia Acorn USA, 2.5%. Ultra Petroleum: Columbia Acorn Fund, 0.6%; Columbia Acorn USA, 0.8%. Evergreen Resources: Columbia Acorn Fund, 0.4%. Anglo Irish Bank: Columbia Acorn Fund, 0.5%; Columbia Acorn International, 2.2%; Columbia Acorn International Select, 5.8%. Depfa Bank: Columbia Acorn Fund, 0.2%; Columbia Acorn International, 0.9%; Columbia Acorn International Select, 2.5%. 3 Columbia Acorn Fund* >In a Nutshell Photo of Charles P. McQuaid Photo of Robert A. Mohn Photo of John H. Park Columbia Acorn Fund surged 45.68% in 2003, our fourth best year ever. As shown on Page 1, the Fund matched the Russell 2500, slightly underper-formed the Russell 2000, handily beat many peers and substantially outperformed the large cap S&P 500. During the fourth quarter, Columbia Acorn Fund's 14.45% gain matched small-cap performance measures and moderately beat mid- and large-cap benchmarks. We've previously discussed buying good tech stocks at distressed prices, and also purchasing select telecom and biotech stocks when we believed we were being paid to take risk. Most of these stocks were up a lot, but given improved tech demand, repaired telecom balance sheets, and biotech fundamental progress, we believe additional gains seem plausible for many of the holdings. We constantly review the Fund's portfolio, looking to swap into stocks that we consider more attractive. Aspect Communications, discussed separately on this page, was Columbia Acorn Fund's biggest percentage winner, up 454% during the year. Barcode and wireless ID systems maker Unova jumped 354% on improved earnings, while software provider Novell, technology e-learning company Skillsoft Publishing, and technology staff company Igate Capital each at least doubled. The Fund's biggest loser was First Health Group, down over 20%, as competitors put pricing pressure on the firm. Columbia Acorn Fund's foreign stocks delivered an average 57.81% return for the year. The leading percentage gainer was Korean auto parts maker Hyundai Mobis, which cranked out a 171% gain on better than expected earnings. Anglo Irish Bank, discussed on Page 6, appreciated 125% and was the Fund's largest foreign winner in dollars. We continue to believe that foreign stocks on average are better values than domestic securities, so we have increased the Fund's foreign weighting to 12.7%. We currently don't expect it to exceed 15%. Small caps have outperformed large caps for nearly five years and by most measures small-cap valuations are now close to long-term average valuations relative to large caps. While we continue to find companies that we believe are attractive, the combination of fewer compelling new ideas and more existing stocks approaching sell targets has caused the Board of Trustees to take proactive steps to reduce cash inflows. Existing shareholders can continue to buy shares in Columbia Acorn Fund. The minimum for NEW eligible accounts, however, has been raised to $50,000 and several marketing channels have been closed. Please see our recent prospectus supplement for additional details. We'd like to take this opportunity to officially welcome John Emerson to Columbia Wanger Asset Management's domestic analyst team. John joined us mid-year to cover media stocks. /s/ Charles P. McQuaid /s/ Robert A. Mohn Charles P. McQuaid Robert A. Mohn LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER /s/ John H. Park John H. Park CO-PORTFOLIO MANAGER The Right Call - -------------------------------------------------------------------------------- Columbia Wanger Asset Management's technology services and software analyst Ben Andrews always believed that technology was driving a revolution in the telecommunications industry. Though telecom-related stocks collapsed from early 2000 to early 2003, consumers worldwide still wanted hand-held devices and broadband connections, while corporations wanted increased productivity and cost savings. Call center software provider Aspect Communications suffered from management, product, and financing transitions, but had a stable customer base that generated plenty of revenue. As the economy improved, Aspect's next generation products started to grow, and the company's financing and management problems were worked out. Aspect became profitable and the stock rose over 450% in 2003. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. * LIBERTY ACORN FUND WAS RENAMED COLUMBIA ACORN FUND ON OCTOBER 13, 2003. ON SEPTEMBER 30, 2003, RALPH WANGER RELINQUISHED HIS DAILY FIRM AND PORTFOLIO MANAGEMENT RESPONSIBILITIES. AT THAT TIME, CHUCK MCQUAID BECAME THE LEAD PORTFOLIO MANAGER OF COLUMBIA ACORN FUND. MR. WANGER CONTINUES TO SERVE AS A TRUSTEE OF COLUMBIA ACORN TRUST AND AS A MEMBER OF THE COLUMBIA THERMOSTAT SUPERVISORY COMMITTEE, AND WILL REMAIN AFFILIATED WITH COLUMBIA WANGER ASSET MANAGEMENT, LP, ACTING IN AN ADVISORY CAPACITY. AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS MENTIONED WERE: ASPECT COMMUNICATIONS, 0.6%; UNOVA, 0.3%; SKILLSOFT PUBLISHING, 0.8%; IGATE CAPITAL, 0.3%; FIRST HEALTH GROUP, 1.0%; HYUNDAI MOBIS, 0.2%; ANGLO IRISH BANK, 0.5%; NOVELL, 0.9%. 1-800-922-6769 4 Columbia Acorn Fund >At a Glance Ticker Symbol: ACRNX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through December 31, 2003 1 YEAR 5 YEARS 10 YEARS - ----------------------------------------------------------- Returns before taxes 45.68% 14.49% 13.58% - ----------------------------------------------------------- Returns after taxes 45.66 12.74 11.50 on distributions - ----------------------------------------------------------- Returns after taxes 29.72 11.88 10.93 on distributions and sale of fund shares - ----------------------------------------------------------- S&P 500 (pretax) 28.69 -0.57 11.07 - ----------------------------------------------------------- Russell 2500 (pretax) 45.51 9.40 11.74 - ----------------------------------------------------------- Russell 2000 (pretax) 47.25 7.13 9.47 - ----------------------------------------------------------- Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value will fluctuate, resulting in a gain or loss on sale. COLUMBIA ACORN FUND PORTFOLIO DIVERSIFICATION >as a % of net assets, as of December 31, 2003 PIE CHART Consumer 20.0% Goods/Services Industrial 12.2% Goods/Services Finance 11.6% Other* 8.8% Health Care 8.6% Energy/Minerals 7.0% Real Estate 4.3% Information 27.5% Software/Services 13.8% Computer Related Hardware 8.9% Media 2.3% Telecommunications 2.5% * Other includes cash and other assets less liabilities of 7.8%. Foreign equities within the portfolio were 12.7% diversified by region as follows: 8.0% Europe; 1.7% Asia without Japan; 1.7% Canada; 0.6% Japan; 0.3% Australia; 0.2% Latin America; 0.2% New Zealand. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN FUND (CLASS Z) >June 10, 1970 through December 31, 2003 This graph compares the results of $10,000 invested in Columbia Acorn Fund at inception on June 10, 1970 to the S&P 500 Stock Index, a broad, market-weighted average of U.S. blue-chip company stock performance. The index is unmanaged and returns for both the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM FOR DAILY PERFORMANCE UPDATES. FOR COMPLETE INFORMATION ABOUT COLUMBIA ACORN FUNDS, INCLUDING OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO A COPY OF THE PROSPECTUS. BE SURE TO READ IT CAREFULLY BEFORE YOU INVEST. COLUMBIA ACORN FUND NAV ON 12/31/03: $22.56 TOTAL NET ASSETS: $11,168.8 MILLION AVERAGE ANNUAL TOTAL RETURN --------------------------- 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND 45.68% 14.49% 13.58% 16.30% MOUNTAIN CHART COLUMBIA ACORN FUND S&P 500 ---------- ------- 6/30/70 9694.96 9819.82 7/31/70 10517.20 10575.00 8/31/70 11223.10 11081.10 9/30/70 12022.80 11481.20 10/31/70 11916.20 11385.80 11/30/70 12169.40 11962.10 12/31/70 13586.70 12676.20 1/31/71 14953.40 13224.70 2/28/71 15837.70 13378.40 3/31/71 17020.50 13905.70 4/30/71 18230.50 14446.20 5/31/71 17275.90 13881.80 6/30/71 17397.30 13928.20 7/31/71 17289.40 13389.00 8/31/71 17640.10 13908.30 9/30/71 17571.50 13846.10 10/31/71 16516.40 13304.20 11/30/71 15677.70 13306.80 12/31/71 17828.50 14489.90 1/31/72 18652.50 14788.00 2/29/72 19648.80 15197.40 3/31/72 20119.20 15323.30 4/30/72 20672.70 15426.60 5/31/72 20824.90 15731.30 6/30/72 20562.00 15425.30 7/31/72 19521.50 15498.10 8/31/72 19129.90 16070.50 9/30/72 18962.10 16029.40 10/31/72 18920.10 16218.90 11/30/72 19745.20 17000.50 12/31/72 19367.60 17241.70 1/31/73 18270.10 16984.60 2/28/73 16883.50 16385.80 3/31/73 16563.50 16399.00 4/30/73 15055.00 15373.60 5/31/73 13637.80 15515.40 6/30/73 13637.80 15453.10 7/31/73 15214.60 16081.10 8/31/73 14555.10 15532.60 9/30/73 16825.00 16196.30 10/31/73 17469.20 16222.80 11/30/73 14877.20 14423.70 12/31/73 14769.80 14708.50 1/31/74 15110.60 14603.90 2/28/74 15188.10 14593.30 3/31/74 15017.60 14293.90 4/30/74 13824.30 13781.10 5/31/74 12925.40 13365.10 6/30/74 12506.90 13212.80 7/31/74 11718.20 12366.20 8/31/74 10621.60 11176.50 9/30/74 9697.29 9888.71 10/31/74 12015.90 11551.40 11/30/74 11436.20 10987.00 12/31/74 10684.30 10816.10 1/31/75 12371.50 12191.30 2/28/75 12895.60 12969.00 3/31/75 13022.60 13298.90 4/30/75 13642.00 13975.90 5/31/75 14928.40 14642.30 6/30/75 15944.80 15341.80 7/31/75 15106.10 14353.50 8/31/75 14224.10 14100.40 9/30/75 13646.80 13660.60 10/31/75 14160.00 14553.50 11/30/75 14224.10 14964.20 12/31/75 13951.50 14842.30 1/31/76 16285.70 16649.40 2/29/76 17970.90 16509.00 3/31/76 18959.40 17065.40 4/30/76 18943.20 16933.00 5/31/76 19461.80 16744.80 6/30/76 20498.90 17486.80 7/31/76 19796.30 17403.30 8/31/76 19861.60 17371.50 9/30/76 20727.30 17819.30 10/31/76 19926.90 17488.10 11/30/76 21217.30 17416.50 12/31/76 23046.60 18394.30 1/31/77 24091.10 17523.80 2/28/77 23235.40 17204.60 3/31/77 23910.10 17024.40 4/30/77 24486.10 17094.60 5/31/77 24979.70 16759.40 6/30/77 26608.90 17587.40 7/31/77 26441.50 17368.80 8/31/77 25778.00 17070.70 9/30/77 25628.70 17097.20 10/31/77 24666.60 16430.80 11/30/77 26740.10 16950.20 12/31/77 27171.40 17077.40 1/31/78 25528.80 16097.00 2/28/78 25780.50 15771.10 3/31/78 26754.00 16234.80 4/30/78 28919.20 17698.70 5/31/78 30094.10 17861.70 6/30/78 30094.10 17616.60 7/31/78 32149.90 18643.30 8/31/78 35492.20 19203.80 9/30/78 34745.70 19142.80 10/31/78 28519.30 17473.50 11/30/78 30826.60 17848.40 12/31/78 31776.70 18199.50 1/31/79 33357.00 19006.40 2/28/79 32583.80 18395.60 3/31/79 36376.10 19492.60 4/30/79 36504.90 19617.10 5/31/79 37057.20 19189.20 6/30/79 40131.50 20023.80 7/31/79 41505.20 20292.80 8/31/79 44852.30 21464.00 9/30/79 45298.60 21555.40 10/31/79 42063.00 20174.90 11/30/79 45614.80 21134.10 12/31/79 47790.40 21585.90 1/31/80 50478.20 22927.90 2/29/80 50602.40 22926.60 3/31/80 42258.40 20696.90 4/30/80 44556.60 21654.70 5/31/80 47393.20 22768.90 6/30/80 49111.70 23489.70 7/31/80 52126.70 25123.20 8/31/80 54232.80 25377.60 9/30/80 56697.00 26124.80 10/31/80 57876.40 26653.40 11/30/80 61793.80 29492.60 12/31/80 62594.10 28602.30 1/31/81 61405.10 27405.90 2/28/81 61124.80 27881.60 3/31/81 65118.90 28997.10 4/30/81 65445.90 28436.70 5/31/81 66637.10 28509.50 6/30/81 64184.60 28330.70 7/31/81 61688.10 28389.00 8/31/81 57933.60 26750.10 9/30/81 54131.50 25431.90 10/31/81 57600.90 26804.50 11/30/81 58955.30 27910.70 12/31/81 58004.80 27195.30 1/31/82 55855.50 26840.20 2/28/82 54397.10 25339.20 3/31/82 53546.40 25206.70 4/30/82 55247.80 26346.10 5/31/82 54299.90 25447.80 6/30/82 53692.20 25066.20 7/31/82 52745.60 24619.80 8/31/82 55713.30 27608.60 9/30/82 56586.10 27953.10 10/31/82 62596.40 31169.80 11/30/82 67559.20 32429.80 12/31/82 68207.60 33053.80 1/31/83 71999.10 34283.30 2/28/83 75490.60 35068.90 3/31/83 77580.20 36364.60 4/30/83 80463.40 39228.90 5/31/83 85065.80 38888.40 6/30/83 87777.20 40401.40 7/31/83 85603.50 39209.10 8/31/83 83886.10 39798.60 9/30/83 85388.90 40347.10 10/31/83 82356.50 39880.80 11/30/83 85254.70 40722.00 12/31/83 85388.90 40510.10 1/31/84 82835.90 40283.50 2/29/84 79613.70 38865.90 3/31/84 80298.10 39539.00 4/30/84 80212.50 39913.90 5/31/84 77304.00 37705.40 6/30/84 79416.90 38524.10 7/31/84 78263.90 38045.80 8/31/84 87574.80 42248.30 9/30/84 87718.90 42257.60 10/31/84 87978.40 42420.50 11/30/84 87401.90 41946.20 12/31/84 89045.00 43051.10 1/31/85 98794.40 46405.70 2/28/85 100452.00 46974.00 3/31/85 99746.10 47004.50 4/30/85 99838.20 46960.80 5/31/85 105733.00 49674.10 6/30/85 107107.00 50451.80 7/31/85 108625.00 50378.90 8/31/85 107665.00 49948.30 9/30/85 103142.00 48386.30 10/31/85 107696.00 50621.40 11/30/85 114788.00 54092.50 12/31/85 117142.00 56710.40 1/31/86 119848.00 57027.00 2/28/86 126521.00 61289.10 3/31/86 132668.00 64708.50 4/30/86 134936.00 63979.90 5/31/86 139176.00 67383.40 6/30/86 141429.00 68522.80 7/31/86 134782.00 64690.00 8/31/86 138982.00 69487.30 9/30/86 132005.00 63742.70 10/31/86 134914.00 67417.90 11/30/86 136502.00 69096.40 12/31/86 136843.00 67294.60 1/31/87 147564.00 76356.70 2/28/87 157864.00 79373.30 3/31/87 160298.00 81664.00 4/30/87 155055.00 80938.00 5/31/87 158913.00 81640.20 6/30/87 164942.00 85763.10 7/31/87 170980.00 90107.30 8/31/87 179878.00 93469.80 9/30/87 180519.00 91420.20 10/31/87 135087.00 71731.60 11/30/87 133089.00 65826.70 12/31/87 142923.00 70828.00 1/31/88 147022.00 73807.60 2/29/88 158881.00 77248.30 3/31/88 159366.00 74860.90 4/30/88 163642.00 75688.90 5/31/88 161394.00 76343.40 6/30/88 169946.00 79847.60 7/31/88 171144.00 79544.30 8/31/88 167856.00 76844.20 9/30/88 173543.00 80117.90 10/31/88 174832.00 82349.00 11/30/88 172344.00 81175.10 12/31/88 178370.00 82591.40 1/31/89 185925.00 88639.40 2/28/89 189702.00 86430.80 3/31/89 192253.00 88447.30 4/30/89 200936.00 93039.20 5/31/89 208099.00 96803.10 6/30/89 204223.00 96254.60 7/31/89 215945.00 104944.00 8/31/89 221422.00 106997.00 9/30/89 226493.00 106562.00 10/31/89 213358.00 104089.00 11/30/89 217568.00 106211.00 12/31/89 222681.00 108761.00 1/31/90 208258.00 101460.00 2/28/90 210852.00 102766.00 3/31/90 217234.00 105490.00 4/30/90 210956.00 102858.00 5/31/90 226002.00 112887.00 6/30/90 229686.00 112125.00 7/31/90 226379.00 111766.00 8/31/90 195903.00 101664.00 9/30/90 175081.00 96715.70 10/31/90 170959.00 96303.70 11/30/90 177743.00 102529.00 12/31/90 183674.00 105386.00 1/31/91 194615.00 109975.00 2/28/91 210518.00 117839.00 3/31/91 219033.00 120693.00 4/30/91 226082.00 120979.00 5/31/91 236741.00 126198.00 6/30/91 226533.00 120416.00 7/31/91 237001.00 126029.00 8/31/91 245977.00 129014.00 9/30/91 246204.00 126856.00 10/31/91 253986.00 128561.00 11/30/91 246772.00 123381.00 12/31/91 270641.00 137492.00 1/31/92 285157.00 134930.00 2/29/92 295551.00 136684.00 3/31/92 293460.00 134018.00 4/30/92 284576.00 137954.00 5/31/92 285796.00 138630.00 6/30/92 278828.00 136567.00 7/31/92 289313.00 142146.00 8/31/92 284681.00 139238.00 9/30/92 289723.00 140877.00 10/31/92 305027.00 141361.00 11/30/92 322837.00 146174.00 12/31/92 336210.00 147928.00 1/31/93 350678.00 149205.00 2/28/93 349705.00 151239.00 3/31/93 368610.00 154429.00 4/30/93 359370.00 150697.00 5/31/93 388973.00 154728.00 6/30/93 393411.00 155182.00 7/31/93 391413.00 154556.00 8/31/93 417246.00 160421.00 9/30/93 429428.00 159193.00 10/31/93 445772.00 162484.00 11/30/93 428938.00 160935.00 12/31/93 444889.00 162882.00 1/31/94 447121.00 168418.00 2/28/94 441700.00 163847.00 3/31/94 420332.00 156704.00 4/30/94 423840.00 158714.00 5/31/94 419057.00 161318.00 6/30/94 404705.00 157364.00 7/31/94 417781.00 162532.00 8/31/94 437059.00 169194.00 9/30/94 431588.00 165057.00 10/31/94 429979.00 168765.00 11/30/94 413243.00 162619.00 12/31/94 411750.00 165032.00 1/31/95 404013.00 169311.00 2/28/95 417133.00 175910.00 3/31/95 423188.00 181101.00 4/30/95 427897.00 186433.00 5/31/95 441017.00 193884.00 6/30/95 458846.00 198388.00 7/31/95 481143.00 204967.00 8/31/95 486243.00 205482.00 9/30/95 496104.00 214155.00 10/31/95 475362.00 213389.00 11/30/95 488963.00 222756.00 12/31/95 497407.00 227047.00 1/31/96 505453.00 234775.00 2/29/96 525203.00 236952.00 3/31/96 535444.00 239232.00 4/30/96 563972.00 242760.00 5/31/96 584087.00 249020.00 6/30/96 572749.00 249970.00 7/31/96 543209.00 238927.00 8/31/96 563988.00 243967.00 9/30/96 584766.00 257697.00 10/31/96 581798.00 264805.00 11/30/96 598124.00 284821.00 12/31/96 609569.00 279177.00 1/31/97 631050.00 296619.00 2/28/97 622944.00 297752.00 3/31/97 594573.00 286661.00 4/30/97 597816.00 303775.00 5/31/97 645235.00 322269.00 6/30/97 674822.00 336708.00 7/31/97 709392.00 363498.00 8/31/97 712680.00 343135.00 9/30/97 767344.00 361926.00 10/31/97 744739.00 349840.00 11/30/97 744739.00 366035.00 12/31/97 761852.00 372320.00 1/31/98 748400.00 376439.00 2/28/98 803106.00 403589.00 3/31/98 853328.00 424257.00 4/30/98 865884.00 428524.00 5/31/98 833150.00 421159.00 6/30/98 850978.00 438266.00 7/31/98 802766.00 433600.00 8/31/98 656313.00 370910.00 9/30/98 684967.00 394671.00 10/31/98 719533.00 426775.00 11/30/98 749097.00 452640.00 12/31/98 807685.00 478724.00 1/31/99 807206.00 498743.00 2/28/99 770776.00 483242.00 3/31/99 778925.00 502576.00 4/30/99 842677.00 522039.00 5/31/99 856098.00 509711.00 6/30/99 901844.00 537999.00 7/31/99 914942.00 521200.00 8/31/99 888260.00 518622.00 9/30/99 883409.00 504404.00 10/31/99 910091.00 536324.00 11/30/99 974612.00 547226.00 12/31/99 1077260.00 579455.00 1/31/00 1051090.00 550342.00 2/29/00 1129000.00 539924.00 3/31/00 1081910.00 592744.00 4/30/00 1044700.00 574911.00 5/31/00 1022610.00 563116.00 6/30/00 1062100.00 576998.00 7/31/00 1066420.00 567977.00 8/31/00 1144140.00 603257.00 9/30/00 1163260.00 571409.00 10/31/00 1133650.00 568993.00 11/30/00 1074010.00 524134.00 12/31/00 1185610.00 526699.00 1/31/01 1207650.00 545386.00 2/28/01 1177340.00 495657.00 3/31/01 1124300.00 464257.00 4/30/01 1223500.00 500334.00 5/31/01 1275170.00 503686.00 6/30/01 1293240.00 491427.00 7/31/01 1268730.00 486590.00 8/31/01 1218320.00 456128.00 9/30/01 1053070.00 419295.00 10/31/01 1097880.00 427290.00 11/30/01 1182610.00 460066.00 12/31/01 1258360.00 464097.00 1/31/02 1246390.00 457324.00 2/28/02 1230910.00 448504.00 3/31/02 1320990.00 465372.00 4/30/02 1318180.00 437158.00 5/31/02 1278770.00 433937.00 6/30/02 1214020.00 403024.00 7/31/02 1070450.00 371610.00 8/31/02 1079600.00 374050.00 9/30/02 1015550.00 333398.00 10/31/02 1058480.00 362743.00 11/30/02 1126750.00 384093.00 12/31/02 1090860.00 361529.00 1/31/03 1065520.00 352058.00 2/28/03 1048630.00 346776.00 3/31/03 1062000.00 350143.00 4/30/03 1154200.00 378984.00 5/31/03 1236540.00 398952.00 6/30/03 1274540.00 404041.00 7/31/03 1334360.00 411165.00 8/31/03 1404740.00 419183.00 9/30/03 1388550.00 414732.00 10/31/03 1501860.00 438193.00 11/30/03 1550420.00 442049.00 12/31/03 1589180.00 465234.00 COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. International Game Technology 2.8% SLOT MACHINES & PROGRESSIVE JACKPOTS 2. XTO Energy 1.6% NATURAL GAS PRODUCER 3. Expeditors International of Washington 1.0% INTERNATIONAL FREIGHT FORWARDER 4. First Health Group 1.0% PPO NETWORK 5. Coach 1.0% DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 6. Novell 0.9% SECURITY & IDENTITY MANAGEMENT SOFTWARE 7. ITT Educational Services 0.9% POSTSECONDARY DEGREE PROGRAMS 8. AmeriCredit 0.8% AUTO LENDING 9. Chico's FAS 0.8% WOMEN'S SPECIALTY RETAILER 10. TCF Financial 0.8% GREAT LAKES BANK The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 5 Columbia Acorn International* >In a Nutshell Photo of P. Zachary Egan Photo of Louis J. Mendes III Columbia Acorn International finished 2003 on a strong note. The Fund was up 17.35% for the quarter, outperforming both the 15.97% gain of the Citigroup EMI Global ex-US Index and the 17.08% return of the MSCI EAFE Index. For the year, the Fund's return of 47.80% fell short of the Citigroup EMI Global ex-US return of 55.02% but beat the MSCI EAFE return of 38.59%. Stocks outside the Fund's core strategy, mainly stocks in the basic materials sector, soared during the year, dampening the Fund's return. Even though the Fund didn't beat the benchmark Citigroup EMI Global ex-US Index, the absolute return for the year is the third best in Columbia Acorn International's history. The best stocks in the quarter and year came from a variety of industries. ASE Test, a semiconductor packaging and testing company in Taiwan, rose 72% on a recovery in demand for semiconductors. For the year, the stock was up 271%. Improved sales drove home a 69% fourth quarter gain for South Korean auto parts maker Hyundai Mobis and an annual gain of 197%. Other winners included Global BioChem Technology Group, a maker of corn starch and corn gluten headquartered in Hong Kong, up 64% in the quarter and 137% for the year; United Services Group, a temporary staffing service in the Netherlands, up 57% in the quarter and 114% for 2003; and Anglo Irish Bank, a niche middle-market bank in Ireland and the Fund's largest holding, up 48% in the fourth quarter and 125% for the year. A problem stock for the quarter was Zapf Creation, a toy manufacturer in Germany, down on weakness in its U.S. doll business. The company has made changes to its U.S. sales organization and plans to introduce new products in 2004. We believe these changes should help Zapf regain traction in the important U.S. market. The Fund's small position in Italian dairy producer Parmalat fell 55% in the quarter when it was revealed that a huge cash reserve on its books was falsified. The Fund minimized losses in the stock by halving the position when concerns first surfaced. Laggards for the year included Ireland's Waterford Wedgewood, down 51%. Its highly leveraged position hurt the stock in a year when luxury good purchases, particularly in the household goods sector, were subdued. The stock was also hurt by the weakened U.S. dollar. Singapore's Star Cruises also sank in the annual period, down 40%. The company's heavy reliance on Asian gambling cruises to support its large debt worried investors following the SARS outbreak and the expansion of gambling operations within Asia. We sold the Fund's position in the stock. We are pleased to introduce a new member to Columbia Wanger Asset Management's international analyst team. Kenneth Wooden joined the firm in early December to cover Japanese equities. Ken spent 17 years investing in Japan and is a welcome addition to the team. /s/ P. Zachary Egan /s/ Louis J. Mendes III P. Zachary Egan Louis J. Mendes III CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER Anglo Irish Bank - -------------------------------------------------------------------------------- Fills A Niche Anglo Irish Bank is one of the only true niche banking franchises in Europe. Specializing in middle-market banking, Anglo Irish Bank provides corporate lending, commercial mortgages and structured finance arrangements to corporations, partnerships and high net worth clients in Ireland and the UK. A robust lending environment and strong asset quality helped boost the return 125% in 2003 for Columbia Acorn International. Trading at just 11.8-times 2004's earnings with a consistent 30% return on equity and above average earnings growth, we believe the stock price still has room to grow. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. * LIBERTY ACORN INTERNATIONAL WAS RENAMED COLUMBIA ACORN INTERNATIONAL ON OCTOBER 13, 2003. ON SEPTEMBER 30, 2003, LEAH ZELL RELINQUISHED HER DAILY FIRM AND PORTFOLIO MANAGEMENT RESPONSIBILITIES. AT THAT TIME, CHUCK MCQUAID BECAME CHIEF INVESTMENT OFFICER OVERSEEING BOTH THE INTERNATIONAL AND DOMESTIC TEAMS. MS. ZELL REMAINS AFFILIATED WITH COLUMBIA WANGER ASSET MANAGEMENT, LP, ACTING IN AN ADVISORY CAPACITY. AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS MENTIONED WERE: ASE TEST, 1.0%; HYUNDAI MOBIS, 1.1%; GLOBAL BIO-CHEM TECHNOLOGY GROUP, 1.3%; UNITED SERVICES GROUP, 0.9%; ANGLO IRISH BANK, 2.2%; ZAPF CREATION, 0.4%; PARMALAT, 0.0%; WATERFORD WEDGEWOOD, 0.0%; STAR CRUISES, 0.0%. 1-800-922-6769 6 Columbia Acorn International >At a Glance Ticker Symbol: ACINX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through December 31, 2003 1 YEAR 5 YEARS 10 YEARS - --------------------------------------------------------------- Returns before taxes 47.80% 6.99% 7.44% - --------------------------------------------------------------- Returns after taxes 47.81 5.82 6.54 on distributions - --------------------------------------------------------------- Returns after taxes 31.27 5.71 6.21 on distributions and sale of fund shares - --------------------------------------------------------------- Citigroup EMI Global 55.02 6.18 4.74 ex-US (pretax) - --------------------------------------------------------------- Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. The return after taxes on distributions may be higher than the return before taxes due to qualified foreign tax credits. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value will fluctuate, resulting in a gain or loss on sale. COLUMBIA ACORN INTERNATIONAL PORTFOLIO DIVERSIFICATION >as a % of net assets, as of December 31, 2003 PIE CHART Consumer 23.3% Goods/Services Finance 10.8% Health Care 8.0% Energy/Minerals 5.8% Information 13.3% Technology Real Estate 1.7% Transportation 3.5% Other* 5.9% Industrials 27.7% * Other includes cash and other assets less liabilities of 4.5%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL (CLASS Z) >September 23, 1992 through December 31, 2003 This graph compares the results of $10,000 invested in Columbia Acorn International at inception on September 23, 1992 to the Citigroup EMI Global ex-US, Citigroup's index of the bottom 20% of institutionally investable capital of developed and emerging countries, as selected by Citigroup, excluding the U.S. The index is unmanaged and returns for both the index and Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM FOR DAILY PERFORMANCE UPDATES. FOR COMPLETE INFORMATION ABOUT COLUMBIA ACORN FUNDS, INCLUDING OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO A COPY OF THE PROSPECTUS. BE SURE TO READ IT CAREFULLY BEFORE YOU INVEST. COLUMBIA ACORN INTERNATIONAL NAV AS OF 12/31/03: $22.66 TOTAL NET ASSETS: $1,678.3 MILLION AVERAGE ANNUAL TOTAL RETURN ---------------------------- 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND 47.80% 6.99% 7.44% 11.07% MOUNTAIN CHART COLUMBIA CITIGROUP ACORN EMI GLOBAL INTERNATIONAL EX-US ------------- ---------- 9/30/92 10010.00 10000.00 10/31/92 10380.00 9383.91 11/30/92 10570.00 9403.64 12/31/92 10690.00 9537.99 1/31/93 10780.00 9623.14 2/28/93 11460.00 9965.42 3/31/93 12000.00 10968.70 4/30/93 12450.00 11975.90 5/31/93 12910.00 12611.20 6/30/93 12920.00 12126.90 7/31/93 12920.00 12500.40 8/31/93 13760.00 13145.40 9/30/93 13910.00 12871.10 10/31/93 14560.00 12825.70 11/30/93 14620.00 11753.50 12/31/93 15940.00 12508.70 1/31/94 16630.00 13759.70 2/28/94 16570.00 13855.90 3/31/94 15850.00 13629.20 4/30/94 15960.00 14036.90 5/31/94 15870.00 13834.00 6/30/94 15550.00 14122.60 7/31/94 15980.00 14289.40 8/31/94 16481.40 14451.90 9/30/94 16491.50 14040.50 10/31/94 16521.70 14277.80 11/30/94 15606.00 13454.40 12/31/94 15334.40 13537.60 1/31/95 14640.10 12974.20 2/28/95 14549.50 12760.30 3/31/95 14811.10 13250.60 4/30/95 15263.90 13662.70 5/31/95 15505.40 13487.70 6/30/95 15726.80 13338.70 7/31/95 16582.20 14086.10 8/31/95 16411.00 13752.70 9/30/95 16823.80 13845.30 10/31/95 16300.30 13431.40 11/30/95 16068.70 13547.00 12/31/95 16703.00 14056.20 1/31/96 17357.40 14388.00 2/29/96 17881.00 14556.00 3/31/96 18203.20 14862.80 4/30/96 18787.10 15629.20 5/31/96 19340.90 15506.80 6/30/96 19592.60 15499.60 7/31/96 18967.90 14897.90 8/31/96 19240.40 15045.70 9/30/96 19361.60 15129.60 10/31/96 19553.30 15033.30 11/30/96 20088.40 15292.80 12/31/96 20152.90 14905.90 1/31/97 20636.00 14691.40 2/28/97 20892.90 14986.40 3/31/97 20584.60 14800.10 4/30/97 20286.50 14599.20 5/31/97 21170.40 15460.10 6/30/97 21807.50 15852.60 7/31/97 21951.10 15699.60 8/31/97 20788.10 15012.50 9/30/97 21660.30 15252.50 10/31/97 20487.00 14513.10 11/30/97 20268.90 13840.70 12/31/97 20190.30 13552.80 1/31/98 20475.70 13978.20 2/28/98 22122.60 15035.10 3/31/98 23857.20 15762.10 4/30/98 24351.30 15889.60 5/31/98 24768.50 16024.60 6/30/98 24334.70 15459.90 7/31/98 24491.40 15362.20 8/31/98 21368.40 13343.30 9/30/98 20428.20 13047.60 10/31/98 21111.00 13946.60 11/30/98 22308.70 14427.10 12/31/98 23304.90 14732.80 1/31/99 23842.20 14630.10 2/28/99 23125.80 14356.00 3/31/99 23573.50 14978.00 4/30/99 24983.90 15891.60 5/31/99 25140.60 15500.90 6/30/99 27222.30 16103.90 7/31/99 28190.90 16623.50 8/31/99 29001.80 16916.00 9/30/99 29486.10 16839.10 10/31/99 30758.80 16685.50 11/30/99 35365.30 17285.70 12/31/99 41761.10 18462.30 1/31/00 41607.50 18110.40 2/29/00 48297.80 18807.10 3/31/00 46808.40 18890.60 4/30/00 41359.30 17650.20 5/31/00 38286.00 17281.10 6/30/00 40170.90 18330.80 7/31/00 39669.10 17723.40 8/31/00 40562.60 18230.90 9/30/00 38494.10 17294.80 10/31/00 35630.00 16248.40 11/30/00 32730.10 15532.40 12/31/00 33402.30 16139.40 1/31/01 34914.90 16439.90 2/28/01 32408.00 15801.20 3/31/01 29284.80 14577.40 4/30/01 30419.20 15531.50 5/31/01 30223.20 15500.30 6/30/01 28746.50 14974.40 7/31/01 27590.90 14535.30 8/31/01 27034.60 14495.40 9/30/01 23353.90 12608.10 10/31/01 24466.60 13120.40 11/30/01 25850.50 13659.80 12/31/01 26349.80 13772.30 1/31/02 25707.80 13522.90 2/28/02 25636.50 13749.30 3/31/02 26977.50 14645.10 4/30/02 27862.00 14950.10 5/31/02 27747.90 15428.50 6/30/02 26646.10 14826.70 7/31/02 23854.00 13559.50 8/31/02 23496.10 13478.20 9/30/02 21405.60 12234.10 10/31/02 21491.50 12510.60 11/30/02 22150.20 12978.10 12/31/02 22107.40 12823.60 1/31/03 21561.90 12608.10 2/28/03 20987.70 12383.20 3/31/03 20686.20 12262.50 4/30/03 22566.80 13418.60 5/31/03 24433.00 14562.40 6/30/03 25133.50 15105.90 7/31/03 25681.50 15644.00 8/31/03 26835.00 16392.10 9/30/03 27844.40 17141.50 10/31/03 29978.50 18388.40 11/30/03 30800.50 18723.10 12/31/03 32675.00 19879.20 COLUMBIA ACORN INTERNATIONAL TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Anglo Irish Bank (Ireland) 2.2% SMALL BUSINESS & MIDDLE MARKET BANKING 2. Rhoen-Klinikum (Germany) 2.0% HOSPITAL MANAGEMENT 3. Kerry Group (Ireland) 1.5% FOOD INGREDIENTS 4. Housing Development 1.4% Finance (INDIA) MORTGAGE LOAN PROVIDER 5. Venture (Singapore) 1.3% ELECTRONIC CONTRACT MANUFACTURER 6. Global BioChem Technology Group (Hong Kong) 1.3% CORN-BASED BIOCHEMICAL PRODUCTS 7. Grafton Group (Ireland) 1.3% BUILDERS, WHOLESALERS & DIY RETAILING 8. Corus Entertainment (Canada) 1.3% TV PROGRAMMING & RADIO STATIONS 9. Talisman Energy (Canada) 1.2% OIL & GAS PRODUCER 10. Hunter Douglas (Netherlands) 1.2% DECORATIVE WINDOW COVERINGS The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 7 Columbia Acorn USA* >In a Nutshell Photo of Robert A. Mohn Columbia Acorn USA finished 2003 up 47.13%, performing in line with the Russell 2000's 47.25% gain. During the fourth quarter, the Fund gained 13.57% vs. a 14.52% gain for the benchmark. Small caps dominated large caps in 2003. The S&P 500, up 28.69%, had a good year but did not come close to reaching small-cap returns. Technology stocks continued to lead the rally. In Columbia Acorn USA, Novell and Micros Systems were among the top five moneymakers in the Fund for the year and the quarter. Novell, up 97% for the quarter and 215% for the year, is highlighted in the box below. Micros had a 93% annual gain and 27% rise in the quarter. After years of waiting, hotels are finally starting to upgrade their computer systems. Micros has been benefiting from this initiative with revenue growth in its hotel and restaurant integration software up nearly 20%. In the financial sector, AmeriCredit and World Acceptance posted top gains. Auto lender AmeriCredit was up 104% for the year and 55% in the fourth quarter. Credit loss reports showed that for the first time in 27 months AmeriCredit had a year-over-year drop in losses in November. Personal lender World Acceptance increased 162% in the year and 47% in the quarter largely due to the strengthening economy. Freight forwarder Hub Group also bounced back with the economy, up an impressive 349% for the year and 98% for the quarter. Aspect Communications was another big percentage winner, up 310% for the year and 89% in the quarter. See Page 4 for more on this stock. The notable poor performer was First Health Group, down 20% in the year and 26% in the quarter. First Health's competition aggressively lowered prices during the year. Home health care service provider Lincare Holdings also fell as the government moved to cut oxygen reimbursement rates, a major source of revenue for Lincare Holdings. Disappointing sales marked down stock prices for retailers Gadzooks and Abercrombie & Fitch in the quarter and for the year. What a difference a year makes. Last year, all areas of the market - small, mid, large - ended the year down in double digits. This year, small-cap gains neared 50%, mid caps cleared 35% and large caps came in at about 30% (See Page 1 for index returns). So, what's next? Small caps did so well in 2003 that there is some concern that they are getting overpriced. We still believe that small caps are in for a very long period of outperformance. As for valuations, we have a list of stocks that we believe are attractive to buy at current levels. Today that list is smaller than it was six months ago but we believe there continue to be small-cap stocks to buy at good prices. /s/ Robert A. Mohn Robert A. Mohn LEAD PORTFOLIO MANAGER Novell Competes - -------------------------------------------------------------------------------- Novell, the leading provider of network printer, directory, and file services, is up against a formidable competitor, Microsoft. But Novell isn't backing down. The company has invested capital and leveraged existing knowledge to go after new markets. Security Identity Management and Linux are two fast-growing markets in which Novell has been building a name for itself. Columbia Wanger Asset Management's technology analyst Ben Andrews purchased Novell under the assumption that at least one of these markets would drive Novell's revenue and earnings over the next one to two years. Wall Street has become aware of Novell's push into Linux and has doubled the price of its shares. Novell's bottom line pay out has yet to come, but we believe it is on the right track. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. * LIBERTY ACORN USA WAS RENAMED COLUMBIA ACORN USA ON OCTOBER 13, 2003. AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS MENTIONED WERE: NOVELL, 2.0%; MICROS SYSTEMS, 3.3%; AMERICREDIT, 2.5%; WORLD ACCEPTANCE, 1.5%; HUB GROUP, 1.1%; ASPECT COMMUNICATIONS, 0.2%; FIRST HEALTH GROUP, 2.1%; LINCARE HOLDINGS, 1.1%; GADZOOKS, 0.1%; ABERCROMBIE & FITCH, 0.5%. 1-800-922-6769 8 Columbia Acorn USA >At a Glance Ticker Symbol: AUSAX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through December 31, 2003 1 YEAR 5 YEARS LIFE OF FUND - ---------------------------------------------------------- Returns before taxes 47.13% 9.87% 14.00% - ---------------------------------------------------------- Returns after taxes 47.13 9.32 13.20 on distributions - ---------------------------------------------------------- Returns after taxes 30.63 8.34 12.03 on distributions and sale of fund shares - ---------------------------------------------------------- Russell 2000 (pretax) 47.25 7.13 8.63 - ---------------------------------------------------------- Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value will fluctuate, resulting in a gain or loss on sale. COLUMBIA ACORN USA PORTFOLIO DIVERSIFICATION >as a % of net assets, as of December 31, 2003 PIE CHART Health Care 14.6% Consumer 14.2% Goods/Services Other* 7.5% Finance 10.5% Energy/Minerals 7.7% Industrial 6.8% Goods/Services Information 38.7% Software/Services 20.7% Telecommunications 8.0% Media 3.4% Computer Related Hardware 6.6% * Other includes cash and other assets less liabilities of 6.6%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN USA (CLASS Z) >September 4, 1996 through December 31, 2003 This graph compares the results of $10,000 invested in Columbia Acorn USA at inception on September 4, 1996 to the Russell 2000 Index, a market-weighted index of 2,000 smaller U.S. companies formed by taking the largest 3,000 U.S. companies and eliminating the largest 1,000. The index is unmanaged and returns for both the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM FOR DAILY PERFORMANCE UPDATES. FOR COMPLETE INFORMATION ABOUT COLUMBIA ACORN FUNDS, INCLUDING OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO A COPY OF THE PROSPECTUS. BE SURE TO READ IT CAREFULLY BEFORE YOU INVEST. COLUMBIA ACORN USA NAV AS OF 12/31/03: $21.01 TOTAL NET ASSETS: $693.3 MILLION AVERAGE ANNUAL TOTAL RETURN --------------------------- 1 YEAR 5 YEARS LIFE OF FUND 47.13% 9.87% 14.00% MOUNTAIN CHART COLUMBIA ACORN USA RUSSELL 2000 ---------- ------------ 9/4/96 10000.00 10000.00 9/30/96 10720.00 10359.90 10/31/96 10810.00 10200.20 11/30/96 11260.00 10620.50 12/31/96 11650.00 10898.90 1/31/97 12210.00 11116.70 2/28/97 11920.00 10847.10 3/31/97 11480.00 10335.30 4/30/97 11420.00 10364.10 5/31/97 12510.00 11517.10 6/30/97 13320.00 12010.70 7/31/97 14000.00 12569.60 8/31/97 14350.00 12857.20 9/30/97 15340.00 13798.30 10/31/97 15140.00 13192.10 11/30/97 15170.00 13106.80 12/31/97 15413.10 13336.20 1/31/98 15076.70 13125.70 2/28/98 16320.40 14096.30 3/31/98 17400.90 14677.70 4/30/98 17992.10 14758.80 5/31/98 17227.60 13964.00 6/30/98 17525.00 13993.40 7/31/98 16591.90 12860.50 8/31/98 13936.00 10363.30 9/30/98 14151.30 11174.30 10/31/98 14653.80 11630.10 11/30/98 15402.40 12239.40 12/31/98 16305.10 12996.70 1/31/99 15776.20 13169.40 2/28/99 14894.90 12102.80 3/31/99 15016.10 12291.70 4/30/99 16095.70 13393.20 5/31/99 16734.70 13588.80 6/30/99 17650.20 14203.30 7/31/99 18047.90 13813.60 8/31/99 16821.80 13302.30 9/30/99 16866.00 13305.20 10/31/99 17860.10 13359.10 11/30/99 18810.00 14156.80 12/31/99 20059.00 15759.40 1/31/00 19053.10 15506.30 2/29/00 19867.40 18066.90 3/31/00 19819.50 16875.80 4/30/00 17568.10 15860.30 5/31/00 16526.20 14935.90 6/30/00 16834.00 16237.90 7/31/00 16748.30 15715.40 8/31/00 17765.20 16914.50 9/30/00 17642.60 16417.40 10/31/00 17654.90 15684.50 11/30/00 16625.70 14074.50 12/31/00 18255.20 15283.30 1/31/01 19406.90 16079.00 2/28/01 19370.10 15023.90 3/31/01 18904.60 14289.00 4/30/01 21195.70 15406.90 5/31/01 22384.10 15785.60 6/30/01 23008.90 16330.60 7/31/01 23254.00 15446.70 8/31/01 22616.90 14947.80 9/30/01 19345.60 12935.60 10/31/01 19394.60 13692.60 11/30/01 20546.30 14752.60 12/31/01 21770.20 15663.20 1/31/02 22031.20 15500.30 2/28/02 21285.60 15075.50 3/31/02 23099.80 16287.10 4/30/02 23447.70 16435.60 5/31/02 22130.60 15706.10 6/30/02 20801.00 14926.80 7/31/02 17967.90 12672.40 8/31/02 17706.90 12640.10 9/30/02 16389.80 11732.40 10/31/02 17172.60 12108.60 11/30/02 18663.70 13189.20 12/31/02 17744.20 12454.80 1/31/03 17483.30 12110.10 2/28/03 17247.20 11744.20 3/31/03 17284.50 11895.40 4/30/03 18974.40 13023.30 5/31/03 20962.50 14420.90 6/30/03 21298.00 14681.90 7/31/03 22304.50 15600.50 8/31/03 23534.70 16315.80 9/30/03 22988.00 16014.60 10/31/03 25348.90 17359.50 11/30/03 25908.10 17975.50 12/31/03 26106.90 18340.20 COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Micros Systems 3.3% INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 2. ITT Educational Services 2.6% POSTSECONDARY DEGREE PROGRAMS 3. AmeriCredit 2.5% AUTO LENDING 4. Edwards Lifesciences 2.5% HEART VALVES 5. Western Wireless 2.5% RURAL CELLULAR PHONE FRANCHISES 6. JDA Software 2.3% APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 7. First Health Group 2.1% PPO NETWORK 8. Novell 2.0% SECURITY & IDENTITY MANAGEMENT SOFTWARE 9. Commonwealth Telephone 2.0% RURAL PHONE FRANCHISES & CLEC 10. HCC Insurance Holdings 2.0% AVIATION INSURANCE The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 9 Columbia Acorn International Select* >In a Nutshell Photo of Todd M. Narter Photo of Christopher J. Olson After three years of posting dreary results, the international markets rose sharply in 2003. Columbia Acorn International Select finished the year up 41.79% vs. a 49.65% gain for the benchmark Citigroup World ex-US Cap Range $2-10B Index and a 38.59% return for the large-cap MSCI EAFE Index. In the fourth quarter, the Fund gained 16.92%, outperforming the benchmark return of 15.81% and nearing the MSCI EAFE gain of 17.08%. Market interest in Japan and in more speculative stocks in general cooled in the fourth quarter, benefiting the Fund's relative return. But the Fund's more conservative stance toward Japan and higher-risk stocks dampened annual performance. Still, an annual return of nearly 42%,achieved without speculative maneuvering, should delight most shareholders. For the quarter, three of the four biggest winners in the Fund were banks offering niche services. Anglo Irish Bank, the Fund's largest holding, finished up 48% in the quarter. The corporate lending environment in the United Kingdom remains robust and Anglo Irish Bank continued to benefit. For the year, shares were up over 125%. Another winner in Columbia Acorn International Select was Den Norske Bank, a full-service commercial bank in Norway. Shares finished up 39% in the quarter and up 52% for the year. Ireland's Depfa Bank, a provider of public-sector financing, finished the quarter up 31%. For the year, shares were up 156%. The Fund's worst stocks for the quarter included Parmalat, the big dairy producer in Italy. Shares fell 55% when it was revealed that a huge cash reserve on its books was falsified. We limited the Fund's downside risk early on by halving its position in the stock when concerns first surfaced, selling those shares for a slight gain. We sold out of the Fund's remaining position shortly before the company went bankrupt. Another stock dragging down performance this quarter was Terumo, a maker of pharmaceuticals and medical supplies in Japan. Continued cuts in drug reimbursements and a steady decline in the number of new drugs coming to market slowed growth in pharmaceutical sales. The share price fell 3% during the quarter and we sold the Fund's position in the stock. /s/ Todd M. Narter /s/ Christopher J. Olson Todd M. Narter Christopher J. Olson CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER More Than The Name - -------------------------------------------------------------------------------- You Know The Swatch brand name conjures up an image of a colorful, plastic watch that was a must-have for trendy teens in the '80s. While the Swatch watch continues to attract buyers, the earnings growth for this Swiss watchmaker is coming from its higher-end brands Omega and Brequet. Demand for the pricier lines is increasing in China and in the rest of the Asia Pacific region. We added the stock to Columbia Acorn International Select because we believe Swatch has a solid brand and is a low cost producer. Valuations are also good. After appreciating 27% in the quarter, the shares still sell at a discount to its peers. MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. * LIBERTY ACORN FOREIGN FORTY WAS RENAMED COLUMBIA ACORN INTERNATIONAL SELECT ON OCTOBER 13, 2003. AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS MENTIONED WERE: ANGLO IRISH BANK, 5.8%; DEN NORSKE BANK, 3.2%; DEPFA BANK, 2.5%; PARMALAT, 0.0%; TERUMO, 0.0%; SWATCH GROUP, 2.5%. 1-800-922-6769 10 Columbia Acorn International Select >At a Glance Ticker Symbol: ACFFX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through December 31, 2003 1 YEAR 5 YEARS LIFE OF FUND - ----------------------------------------------------------- Returns before taxes 41.79% 6.14% 8.01% - ----------------------------------------------------------- Returns after taxes 41.94 6.06 7.92 on distributions - ----------------------------------------------------------- Returns after taxes 27.34 5.28 6.92 on distributions and sale of fund shares - ----------------------------------------------------------- Citigroup World ex-US 49.65 5.92 6.48 $2-10B (pretax) - ----------------------------------------------------------- Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. The return after taxes on distributions may be higher than the return before taxes due to qualified foreign tax credits. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value will fluctuate, resulting in a gain or loss on sale. COLUMBIA ACORN INTERNATIONAL SELECT PORTFOLIO DIVERSIFICATION >as a % of net assets, as of December 31, 2003 PIE CHART Consumer 21.6% Goods/Services Industrial 19.1% Goods/Services Other* 8.4% Health Care 11.4% Finance 17.0% Energy/Minerals 6.7% Information Technology 15.8% * Other includes cash and other assets less liabilities of 4.8%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT (CLASS Z) >November 23, 1998 through December 31, 2003 This graph compares the results of $10,000 invested in Columbia Acorn International Select at inception on November 23, 1998 to the Citigroup World ex-US $2-10B Index, a subset of Citigroup's Broad Market Index, representing a mid-cap developed market index excluding the U.S. The index and Fund returns include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM FOR DAILY PERFORMANCE UPDATES. FOR COMPLETE INFORMATION ABOUT COLUMBIA ACORN FUNDS, INCLUDING OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO A COPY OF THE PROSPECTUS. BE SURE TO READ IT CAREFULLY BEFORE YOU INVEST. COLUMBIA ACORN INTERNATIONAL SELECT NAV ON 12/31/03: $14.58 TOTAL NET ASSETS: $43.4 MILLION AVERAGE ANNUAL TOTAL RETURN --------------------------- 1 YEAR 5 YEARS LIFE OF FUND 41.79% 6.14% 8.01% MOUNTAIN CHART CITIGROUP COLUMBIA ACORN WORLD EX-US CAP INTERNATIONAL RANGE SELECT $2-$10B -------------- --------------- 11/23/98 10000.00 10000.00 11/30/98 10140.00 10045.10 12/31/98 11000.00 10338.80 1/31/99 11790.00 10309.80 2/28/99 11590.00 10051.80 3/31/99 11980.00 10449.20 4/30/99 12240.00 11032.40 5/31/99 12170.00 10566.60 6/30/99 13109.80 10952.70 7/31/99 13510.80 11362.00 8/31/99 13771.30 11489.60 9/30/99 13621.00 11529.70 10/31/99 14132.20 11535.10 11/30/99 16998.70 11864.40 12/31/99 19975.50 12771.70 1/31/00 19664.80 12154.30 2/29/00 24245.20 12310.70 3/31/00 23092.60 12679.70 4/30/00 21258.40 12171.70 5/31/00 18923.10 11975.80 6/30/00 19852.50 12610.80 7/31/00 19469.00 12203.10 8/31/00 20266.30 12586.30 9/30/00 19236.90 12168.00 10/31/00 18479.90 11791.00 11/30/00 16128.30 11439.80 12/31/00 17309.10 11998.20 1/31/01 17874.30 11938.60 2/28/01 15825.50 11505.00 3/31/01 13706.00 10607.50 4/30/01 14412.50 11390.60 5/31/01 14382.20 11293.20 6/30/01 13763.20 10999.40 7/31/01 13062.40 10723.40 8/31/01 12778.00 10626.20 9/30/01 10624.60 9391.94 10/31/01 11305.10 9769.16 11/30/01 11924.70 10118.30 12/31/01 12280.20 10140.20 1/31/02 11650.50 9840.78 2/28/02 11508.30 9990.63 3/31/02 11914.60 10562.20 4/30/02 12290.40 10755.60 5/31/02 12432.60 11097.30 6/30/02 12046.60 10712.10 7/31/02 10746.50 9752.72 8/31/02 10949.60 9729.61 9/30/02 10147.20 8859.06 10/31/02 10126.90 9017.25 11/30/02 10380.80 9476.41 12/31/02 10451.90 9209.34 1/31/03 9944.05 8978.22 2/28/03 9527.60 8810.27 3/31/03 9629.18 8659.79 4/30/03 10533.20 9425.05 5/31/03 11447.30 10100.90 6/30/03 11526.70 10389.10 7/31/03 11709.60 10806.10 8/31/03 12217.90 11429.10 9/30/03 12675.30 11900.10 10/31/03 13620.60 12818.90 11/30/03 13905.20 12926.80 12/31/03 14820.00 13781.40 COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Anglo Irish Bank (Ireland) 5.8% SMALL BUSINESS & MIDDLE MARKET BANKING 2. Kerry Group (Ireland) 3.9% FOOD INGREDIENTS 3. Rhoen-Klinikum (Germany) 3.9% HOSPITAL MANAGEMENT 4. BG Group (United Kingdom) 3.5% OIL & GAS PRODUCER 5. Den Norske Bank (Norway) 3.2% LARGEST NORWEGIAN BANK 6. Talisman Energy (Canada) 3.1% OIL & GAS PRODUCER 7. Neopost (France) 2.9% POSTAGE METERS 8. Compass Group (United Kingdom) 2.9% INTERNATIONAL CONCESSION & CONTRACT CATERING 9. Lion Nathan (Australia) 2.7% AUSTRALIAN BEER BREWER/DISTRIBUTOR 10. Grafton Group (Ireland) 2.7% BUILDERS, WHOLESALERS & DIY RETAILING The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 11 Columbia Acorn Select* >In a Nutshell Photo of John H. Park Columbia Acorn Select returned 4.97% during the fourth quarter, behind the benchmark S&P MidCap 400's 13.19% return and the S&P 500's 12.18% gain. For 2003, the Fund was up 30.61%, trailing the S&P MidCap 400's 35.62% return but beating the S&P 500's 28.69% gain. While we are pleased with the Fund's absolute result, we are disappointed that Columbia Acorn Select underper-formed since it was leading its primary benchmark through the first three quarters of the year. Electronic Arts gained 97% in 2003, as sales and earnings consistently beat expectations. Guidant, the Fund's largest position, returned 92% as investors came to appreciate the company's fast growing defibrillator business as well as its potential growth making drug-eluting stents. (A stent is a little wire-mesh tube that keeps an artery open after an angioplasty procedure.) On the downside, First Health Group, one of the Fund's biggest positions, fell 20% for the year as the company lowered its sales and earnings for 2004 due to increased competition in the managed-care industry. While obviously disappointed, we believe the long-term outlook remains sound and we have added to the Fund's position. Most other losses for the year were relatively small in position size or percentages. In fact, all losses combined contributed to just a 3.16% drop for the Fund in 2003. Perhaps our biggest detractor was the conservative nature of Columbia Acorn Select; only five of the Fund's stocks were up 70% or more. While the market has rewarded the Fund's more conservative stance in the past, highly speculative stocks had the most impressive gains in 2003 and Columbia Acorn Select did not keep pace. Furthermore, as the market has bounced back, we have seen few opportunities to buy such stocks at prices that fairly compensate us for the risks incurred. I am justifiably proud of the terrific efforts put forth by our investment team in 2003. My thanks to Ralph Wanger, Chuck McQuaid, Rob Mohn, Ben Andrews, Susie Hultquist, Harold Lichtenstein, Grant McKay, Rob Chalupnik, Todd Griesbach, David Frank, and John Emerson for their invaluable contributions. I am also grateful to Shelley Maish and Mike Olah for providing Herculean efforts in trading throughout the year. Finally, thank you for your continued support as a Columbia Acorn Select shareholder. /s/ John H. Park John H. Park LEAD PORTFOLIO MANAGER Weight Watchers -- - -------------------------------------------------------------------------------- A Winning Loser The first question you ask a successful dieter is, "How did you lose the weight?" This marketing has contributed to Weight Watchers' unique business model by which its customers actually perpetuate the success of the business. With over 40 years in the business, the Weight Watchers' brand has become synonymous with healthy weight loss. Demand is more robust than ever with obesity rates at an all time high both domestically and in international markets. The company generates significant free cash flow due to fat profit margins and slim capital expenditure requirements, which it has been using to acquire franchises, pay down debt and repurchase stock -- all accretive to earnings. The stock has been under pressure recently as attendance growth has moderated due to the current popularity of the Atkins/high protein diet. History has shown us though that diet fads come and go, similar to excess weight, and we believe the sensibility of the Weight Watchers' program is one that dieters will return to, as will investors to the stock. COLUMBIA ACORN SELECT IS A NON-DIVERSIFIED FUND. THE PERFORMANCE OF EACH OF ITS HOLDINGS WILL HAVE A GREATER IMPACT ON THE FUND'S TOTAL RETURN, AND MAY MAKE THE FUND'S RETURNS MORE VOLATILE THAN A MORE DIVERSIFIED FUND. MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. * LIBERTY ACORN TWENTY WAS RENAMED COLUMBIA ACORN SELECT ON OCTOBER 13, 2003. AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS MENTIONED WERE: ELECTRONIC ARTS, 3.9%; GUIDANT, 8.9%; FIRST HEALTH GROUP, 7.1%; WEIGHT WATCHERS, 3.1%. 1-800-922-6769 12 Columbia Acorn Select >At a Glance Ticker Symbol: ACTWX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through December 31, 2003 1 YEAR 5 YEARS LIFE OF FUND - ----------------------------------------------------------- Returns before taxes 30.61% 13.43% 14.66% - ----------------------------------------------------------- Returns after taxes 30.43 12.86 14.09 on distributions - ----------------------------------------------------------- Returns after taxes 20.05 11.47 12.59 on distributions and sale of fund shares - ----------------------------------------------------------- S&P MidCap 35.62 9.21 11.28 400 (pretax) - ----------------------------------------------------------- Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value will fluctuate, resulting in a gain or loss on sale. COLUMBIA ACORN SELECT PORTFOLIO DIVERSIFICATION >as a % of net assets, as of December 31, 2003 PIE CHART Information 27.3% Health Care 20.2% Finance 13.5% Industrial Goods/Services 3.7% Other* 6.9% Consumer 28.4% Goods/Services * Cash and other assets less liabilities. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN SELECT (CLASS Z) >November 23, 1998 through December 31, 2003 This graph compares the results of $10,000 invested in Columbia Acorn Select at inception on November 23, 1998 to the S&P MidCap 400, a broad, market-weighted index of 400 stocks that are in the next size/tier down from the S&P 500. The Index is unmanaged and returns for both the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM FOR DAILY PERFORMANCE UPDATES. FOR COMPLETE INFORMATION ABOUT COLUMBIA ACORN FUNDS, INCLUDING OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO A COPY OF THE PROSPECTUS. BE SURE TO READ IT CAREFULLY BEFORE YOU INVEST. COLUMBIA ACORN SELECT NAV ON 12/31/03: $18.20 TOTAL NET ASSETS: $740.6 MILLION AVERAGE ANNUAL TOTAL RETURN --------------------------- 1 YEAR 5 YEARS LIFE OF FUND 30.61% 13.43% 14.66% MOUNTAIN CHART COLUMBIA ACORN S&P MID SELECT CAP 400 -------- --------- 11/23/98 10000.00 10000.00 11/30/98 10030.00 9911.29 12/31/98 10710.00 11108.90 1/31/99 11000.00 10676.20 2/28/99 10710.00 10117.20 3/31/99 11480.00 10399.90 4/30/99 12710.00 11220.20 5/31/99 12730.00 11268.80 6/30/99 13040.00 11872.20 7/31/99 13190.00 11619.90 8/31/99 12060.00 11221.70 9/30/99 12110.00 10875.10 10/31/99 12970.00 11429.30 11/30/99 13250.00 12029.20 12/31/99 13848.00 12744.10 1/31/00 13474.00 12385.20 2/29/00 13554.90 13252.00 3/31/00 14171.50 14361.10 4/30/00 13463.90 13859.60 5/31/00 13100.00 13686.70 6/30/00 14319.80 13887.70 7/31/00 13931.30 14107.10 8/31/00 15431.30 15682.20 9/30/00 15798.20 15574.80 10/31/00 15927.70 15046.70 11/30/00 14381.60 13910.90 12/31/00 15465.20 14975.10 1/31/01 15913.90 15308.60 2/28/01 14983.60 14435.00 3/31/01 14403.50 13361.80 4/30/01 15454.20 14835.80 5/31/01 16297.00 15181.30 6/30/01 16023.40 15120.00 7/31/01 15870.20 14894.80 8/31/01 15125.90 14407.60 9/30/01 14206.50 12615.50 10/31/01 14513.00 13173.50 11/30/01 16023.40 14153.50 12/31/01 16702.50 14884.70 1/31/02 16373.50 14807.30 2/28/02 16022.60 14825.60 3/31/02 16581.90 15885.40 4/30/02 15682.60 15811.10 5/31/02 16143.20 15544.40 6/30/02 15869.00 14406.70 7/31/02 14860.10 13011.20 8/31/02 15222.00 13076.60 9/30/02 14520.10 12023.10 10/31/02 15320.70 12544.10 11/30/02 16088.40 13269.80 12/31/02 15397.50 12724.50 1/31/03 15331.70 12352.70 2/28/03 15375.50 12058.50 3/31/03 15682.60 12160.10 4/30/03 16581.90 13043.00 5/31/03 17481.20 14123.90 6/30/03 17941.80 14303.90 7/31/03 18808.10 14811.50 8/31/03 19586.80 15483.30 9/30/03 19159.10 15246.30 10/31/03 19861.00 16399.10 11/30/03 19718.40 16970.50 12/31/03 20110.90 17256.80 COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Guidant 8.9% STENTS, DEFIBRILLATORS & OTHER CARDIAC MEDICAL DEVICES 2. First Health Group 7.1% PPO NETWORK 3. Interpublic Group 5.3% ADVERTISING 4. Synopsys 5.1% SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS 5. PeopleSoft 4.5% HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 6. TCF Financial 4.5% GREAT LAKES BANK 7. Harley-Davidson 4.0% MOTORCYCLES & RELATED MERCHANDISE 8. Electronic Arts 3.9% ENTERTAINMENT SOFTWARE 9. Moody's 3.8% RATING SERVICE FOR CREDIT OBLIGATIONS 10. Herman Miller 3.8% OFFICE FURNITURE The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 13 Columbia Thermostat Fund >In a Nutshell Photo of Ralph Wanger Photo of Charles P. McQuaid Photo of Harvery Hirschhorn The Columbia Thermostat Fund completed its first full year of operations in 2003. The Fund rebal- ances between five stock funds and three bond funds according to a simple mechanical rule, quite like the way your home thermostat keeps the room temperature steady. The logical construction of the Fund appealed to many people, so assets at year-end were nearly $128 million, what we believe to be a very good number for a start-up fund. Investment performance for the Fund was satisfactory, up 7.34% in the fourth quarter and 19.79% for the year (see Page 1 for index comparisons). Equities FOURTH QUARTER 1-YEAR WEIGHTING TOTAL RETURN TOTAL RETURN FUND IN SECTOR 2003 2003 - ------------------------------------------------------------------ Columbia 20% 14.45% 45.68% Acorn Fund - ------------------------------------------------------------------ Columbia 15% 4.97% 30.61% Acorn Select - ------------------------------------------------------------------ Columbia Growth 25% 9.42% 26.47% Stock Fund - ------------------------------------------------------------------ Columbia Growth 25% 11.77% 19.51% & Income Fund - ------------------------------------------------------------------ Columbia Mid Cap 15% 13.90% 27.82% Value Fund - ------------------------------------------------------------------ WEIGHTED AVERAGE 100% 11.02% 29.40% - ------------------------------------------------------------------ Fixed Income FOURTH QUARTER 1-YEAR WEIGHTING TOTAL RETURN TOTAL RETURN FUND IN SECTOR 2003 2003 - ------------------------------------------------------------------ Columbia Federal 30% 0.11% 2.26% Securities Fund - ------------------------------------------------------------------ Columbia Intermediate 50% 1.46% 9.50% Bond Fund - ------------------------------------------------------------------ Columbia High Yield Fund 20% 2.89% 11.49% - ------------------------------------------------------------------ WEIGHTED AVERAGE 100% 1.34% 7.73% - ------------------------------------------------------------------ Columbia Thermostat Fund Rebalancing in 2003 - ------------------------------------------------------------------ Stock/Fixed Income allocation 01/01/03: 70% stock, 30% fixed income Stock/Fixed Income allocation 12/31/03: 50% stock, 50% fixed income FOURTH QUARTER 1-YEAR 2003 2003 - ------------------------------------------------------------------ Times stocks increased 0 3 - ------------------------------------------------------------------ Times stocks decreased 3 9 - ------------------------------------------------------------------ TOTAL 3 12 By construction, the Fund should be expected to have a return somewhere between the stock market and the bond market, and it did. The Fund's equity portfolio had a 29.40% return for the year, and the fixed income piece was up 7.73%. Thermostat's equity funds were 50% in small-cap, mid-cap and value funds, which was an overweighting in these categories vs. the entire market; this was a good idea in 2003, as these funds outperformed the large-company index as measured by the S&P 500 Index. The Fund's rebalancing system added some moderate value, but as the year unfolded, a high equity weighting throughout the year would have worked out better. The Thermostat system is likely to produce its best results in a market with lots of up-and-down moves. In 2003, the last 10 months of the year featured a steady uptrend for stocks, so shareholders would have done better by having all their money in an equity fund such as Columbia Acorn Fund. Of course, one cannot know that at the beginning of the year, which is why Columbia Thermostat makes sense for conservative investors. /s/ Ralph Wanger /s/ Charles P. McQuaid Ralph Wanger Charles P. McQuaid CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER /s/ Harvery Hirschhorn Harvery Hirschhorn CO-PORTFOLIO MANAGER THE VALUE OF AN INVESTMENT IN THE FUND IS BASED PRIMARILY ON THE PERFORMANCE OF THE UNDERLYING PORTFOLIO FUNDS AND THE ALLOCATION OF THE FUND'S ASSETS AMONG THEM. AN INVESTMENT IN THE UNDERLYING FUNDS MAY PRESENT CERTAIN RISKS, INCLUDING STOCK MARKET FLUCTUATIONS THAT OCCUR IN RESPONSE TO ECONOMIC AND BUSINESS DEVELOPMENTS; AND A GREATER DEGREE OF SOCIAL, POLITICAL AND ECONOMIC VOLATILITY ASSOCIATED WITH INTERNATIONAL INVESTING. INVESTING IN SMALL-AND MID-CAP STOCKS MAY PRESENT SPECIAL RISKS INCLUDING POSSIBLE ILLIQUIDITY AND GREATER PRICE VOLATILITY THAN STOCKS OF LARGER, MORE ESTABLISHED COMPANIES. CHANGES IN INTEREST RATES AND CHANGES IN THE FINANCIAL STRENGTH OF ISSUERS OF LOWER-RATED BONDS MAY ALSO AFFECT UNDERLYING FUND PERFORMANCE. THE FUND IS ALSO SUBJECT TO THE RISK THAT THE INVESTMENT ADVISER'S DECISIONS REGARDING ASSET CLASSES AND PORTFOLIO FUNDS WILL NOT ANTICIPATE MARKET TRENDS SUCCESSFULLY, RESULTING IN A FAILURE TO PRESERVE CAPITAL OR LOWER TOTAL RETURN. IN ADDITION, THE FUND MAY BUY AND SELL SHARES OF THE PORTFOLIO FUNDS FREQUENTLY. THIS MAY RESULT IN HIGHER TRANSACTION COSTS AND ADDITIONAL TAX LIABILITY. THIS IS NOT AN OFFER OF THE SHARES OF ANY OTHER MUTUAL FUND MENTIONED HEREIN. 1-800-922-6769 14 Columbia Thermostat Fund >At a Glance Ticker Symbol: COTZX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through December 31, 2003 1 YEAR LIFE OF FUND - ------------------------------------------------------------ Returns before taxes 19.79% 19.01% - ------------------------------------------------------------ Returns after taxes on distributions 19.26 18.59 - ------------------------------------------------------------ Returns after taxes on distribu- tions and sale of fund shares 12.87 15.97 - ------------------------------------------------------------ S&P 500 (pretax) 28.69 29.59 - ------------------------------------------------------------ Lehman U.S. Credit Intermediate Bond Index (pretax) 6.91 7.95 - ------------------------------------------------------------ Lehman U.S. Govt. Intermediate Bond Index (pretax) 2.29 2.89 - ------------------------------------------------------------ Lipper Flexible Portfolio Funds Index (pretax) 23.03 23.09 - ------------------------------------------------------------ Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value will fluctuate, resulting in a gain or loss on sale. COLUMBIA THERMOSTAT FUND PORTFOLIO WEIGHTINGS >as a % of assets in each investment category, as of December 31, 2003 STOCK MUTUAL FUNDS PIE CHART Columbia 20% Acorn Fund Columbia 15% Acorn Select Columbia 25% Growth Stock Fund Columbia 25% Growth & Income Fund Columbia 15% Mid Cap Value Fund BOND MUTUAL FUNDS PIE CHART Columbia 30% Federal Securities Fund Columbia 50% Intermediate Bond Fund Columbia 20% High Yield Fund THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA THERMOSTAT FUND (CLASS Z) >September 25, 2002 through December 31, 2003 This graph compares the results of $10,000 invested in Columbia Thermostat Fund at inception on September 25, 2002 to three indexes. The S&P 500 is a broad, market-weighted average of U.S. blue-chip company stock performance. The Lehman U.S. Govt. Bond Index is comprised of 1 to 10 year treasury and agency bonds, excluding targeted investor notes and state and local government series bonds. The Lehman U.S. Credit Intermediate Bond Index is the intermediate component of the U.S. Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements. The Indexes are unmanaged and returns for the indexes and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE DATA COLLECTED. VISIT COLUMBIAFUNDS.COM FOR DAILY PERFORMANCE UPDATES. FOR MORE INFORMATION ABOUT COLUMBIA ACORN FUNDS, INCLUDING OBJECTIVES, RISKS, CHARGES AND EXPENSES, REFER TO COPY OF THE PROSPECTUS. BE SURE TO READ IT CAREFULLY BEFORE YOU INVEST. COLUMBIA THERMOSTAT FUND NAV ON 12/31/03: $12.31 TOTAL NET ASSETS: $127.9 MILLION AVERAGE ANNUAL TOTAL RETURN - --------------------------- 1 YEAR LIFE OF FUND 19.79% 19.01% MOUNTAIN CHART LEHMAN COLUMBIA LEHMAN U.S. GOVT. THERMOSTAT U.S. CREDIT INTERMEDIATE FUND S&P 500 INTERMEDIATE BOND BOND ---------- ------- ----------------- ------------ 9/25/02 10000.00 10000.00 10000.00 10000.00 9/30/02 9850.00 9955.60 10042.80 10038.80 10/31/02 10220.00 10831.90 9962.13 10032.00 11/30/02 10700.00 11469.40 10044.60 9952.60 12/31/02 10410.00 10795.60 10306.80 10136.50 1/31/03 10260.00 10512.80 10335.10 10114.10 2/28/03 10100.00 10355.10 10517.50 10228.30 3/31/03 10190.00 10455.60 10539.30 10230.50 4/30/03 10710.00 11316.80 10683.90 10259.20 5/31/03 11200.00 11913.10 10956.80 10420.30 6/30/03 11348.00 12065.10 10962.70 10403.20 7/31/03 11418.00 12277.80 10626.40 10150.40 8/31/03 11648.20 12517.20 10658.60 10168.70 9/30/03 11618.20 12384.30 10976.00 10389.10 10/31/03 12018.40 13084.90 10878.30 10287.30 11/30/03 12148.50 13200.00 10911.20 10288.10 12/31/03 12470.60 13892.30 11019.40 10368.30 COLUMBIA THERMOSTAT FUND ASSET ALLOCATION >as a % of net assets, as of December 31, 2003 PIE CHART Stock Mutual Funds 49.5% Bond Mutual Funds 49.6% Cash and Other Assets 0.9% Less Liabilities 15 Columbia Acorn Fund >Major Portfolio Changes in the Fourth Quarter (Unaudited) NUMBER OF SHARES -------------------------- 09/30/03 12/31/03 Additions - ---------------------------------------------------------------------------- INFORMATION 3Com 0 2,000,000 Actuate 4,534,000 6,000,000 Alliance Atlantis Communications (Canada) 500,000 750,000 Andrew 1,000,000 1,600,000 Crown Castle International 3,000,000 3,500,000 DoubleClick 0 2,000,000 Igate 4,500,000 4,550,000 Integrated Circuit Systems 1,005,000 1,120,000 Intralot (Greece) 0 345,000 InVision Technologies 0 255,000 IXYS 1,000,000 1,250,000 Kronos 1,180,000 1,770,000 Northeast Utilities 0 850,000 Peoplesoft 3,300,000 3,400,000 Pericom Semiconductor 318,000 404,000 Perot Systems 0 900,000 Pinnacle Systems 0 1,250,000 Regent Communications 0 241,000 SES Global (Luxembourg) 332,000 560,000 Spanish Broadcasting System 700,000 1,006,000 Sybase 1,221,000 1,521,000 Symmetricom 0 1,051,000 Tellabs 1,000,000 5,000,000 THQ 1,000,000 1,200,000 Venture (Singapore) 1,840,000 2,710,000 Watts Water Technologies 0 475,000 - ---------------------------------------------------------------------------- HEALTH CARE Applied Molecular Evolution 0 252,000 CTI Molecular Imaging 674,000 1,900,000 Diagnostic Products 920,000 989,000 Enzon 1,115,000 1,665,000 Essilor International (France) 265,000 365,000 First Health Group 5,046,000 5,586,000 Gambro (Sweden) 2,100,000 2,500,000 OPG Groep (Netherlands) 365,000 420,000 Patheon 0 433,600 Smith & Nephew 2,000,000 2,600,000 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Abercrombie & Fitch 495,000 895,000 Aeropostale 1,085,000 1,510,000 AFC Enterprises 1,500,000 2,000,000 American Woodmark 375,000 422,000 Autogrill (Italy) 1,217,000 1,447,000 BearingPoint 0 3,100,000 NUMBER OF SHARES -------------------------- 09/30/03 12/31/03 - ---------------------------------------------------------------------------- Billabong International (Australia) 2,950,000 3,000,000 Chico's FAS 2,095,000 2,495,000 Christopher & Banks 3,328,000 3,743,000 Genesco 565,000 700,000 Leapfrog Enterprises 0 1,250,000 Lion Nathan 3,000,000 4,000,000 Nobia (Sweden) 810,000 1,160,000 Orkla (Norway) 810,000 950,000 Oxford Industries 282,000 564,000 Pegasus Solutions 0 300,000 Petco Animal Supplies 815000 1,015,000 R.H. Donnelley 46,000 150,000 Sky City Entertainment (New Zealand) 1,500,000 5,000,000 Urban Outfitters 688,000 788,000 Weight Watchers 320,000 695,000 Winn-Dixie Stores 1,750,000 4,500,000 - ---------------------------------------------------------------------------- FINANCE AmeriCredit 5,531,000 5,831,000 Anglo Irish Bank (Ireland) 2,910,000 3,200,000 BOK Financial 445,000 825,000 CityBank Lynnwood 128,000 159,000 Concord EFS 0 1,485,000 Corpbanca 0 186,000 Depfa Bank (Ireland) 125,000 185,000 DNB NOR ASA (Norway) 0 2,800,000 First Mutual Bancshares 0 46,000 Gables Residential Trust 287,000 400,000 Great Southern Bancorp 0 73,000 Intermediate Capital (United Kingdom) 350,000 500,000 Investment Technology Group 300,000 1,215,000 Irish Life & Permanent 700,000 1,000,000 Jardine Lloyd Thompson 0 1,000,000 Republic Bancorp 1,634,000 1,798,000 Southwest Bancorp 0 303,000 TCF Financial 1,551,000 1,751,000 United National Group 0 595,000 West Coast Bancorp 472,000 700,000 - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Aalberts Industries 310,000 510,000 AM (Netherlands) 0 133,000 Amer Group (Finland) 250,000 370,000 Bilfinger Berger (Germany) 375,000 525,000 Central Parking 0 900,000 Esco 950,000 1,050,000 Esprit Holdings 0 1,500,000 Gibraltar Steel 1,300,000 1,900,000 1-800-922-6769 16 NUMBER OF SHARES -------------------------- 09/30/03 12/31/03 Additions, continued - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES (CONTINUED) Grafton Group (Ireland) 3,400,000 3,800,000 Grupo Aeroportuario del Sureste 0 500,000 Imerys (France) 0 50,000 Intermagnetics General 363,000 500,000 Masonite International (Canada) 263,700 440,000 Novozymes (Denmark) 316,600 450,000 Pentair 118,000 420,000 Schindler (Switzerland) 40,000 60,000 Shimano 0 579,000 Ushio (Japan) 500,000 825,000 Waste Connections 377,000 533,000 Wienerberger (Austria) 0 700,000 - ---------------------------------------------------------------------------- ENERGY/MINERALS Airgas 650,000 975,000 Enerflex Systems 850,000 1,050,000 FMC Technologies 1,700,000 1,900,000 Nexen 0 400,000 Oneok 500,000 1,250,000 Quicksilver 544,000 600,000 Talisman Energy (Canada) 365,000 565,000 Tullow Oil 3,000,000 9,165,000 Westport Resources 342,000 517,000 - ---------------------------------------------------------------------------- OTHER INDUSTRIES General Growth Properties 615,000 1,845,000 Highland Hospitality 0 380,000 Kobenhavns Lufthavne (Denmark) 100,000 140,000 LNR Property 0 291,000 NUMBER OF SHARES -------------------------- 09/30/03 12/31/03 Sales - ---------------------------------------------------------------------------- INFORMATION Deutsche Boerse (Germany) 275,000 175,000 Information Holdings 800,000 600,000 RealNetworks 1,200,000 -- Torex (United Kingdom) 600,000 -- - ---------------------------------------------------------------------------- HEALTH CARE Omega Pharma (Belgium) 426,000 296,000 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Hyundai Mobis (South Korea) 575,000 465,000 ITT Educational Services 2,200,000 2,111,000 Parmalat Finanziaria (Italy) 3,500,000 -- Steiner Leisure 1,260,000 894,000 - ---------------------------------------------------------------------------- FINANCE Neuberger Berman 900,000 -- Texas Regional Bancshares 990,000 700,000 - ---------------------------------------------------------------------------- ENERGY/MINERALS Newpark Resources 4,500,000 4,750,000 Saipem (Italy) 3,200,000 2,200,000 - ---------------------------------------------------------------------------- OTHER INDUSTRIES Unisource Energy 1,200,000 1,100,000 17 Columbia Acorn Fund >Statement of Investments, December 31, 2003 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- SECURITIES: 92.2% - ---------------------------------------------------------------------------- INFORMATION: 27.5% MEDIA >TV/SATELLITE BROADCASTING: 0.4% 1,400,000 Gray Television $ 21,168 MID MARKET AFFILIATED TV STATIONS 3,300,000 TVB (Hong Kong) 16,662 TELEVISION PROGRAMMING & BROADCASTING 560,000 SES Global (Luxembourg) 5,645 SATELLITE BROADCASTING SERVICES 200,000 Young Broadcasting (b) 4,008 TELEVISION STATIONS - ---------------------------------------------------------------------------- 47,483 >RADIO BROADCASTING: 0.7% 1,200,000 Cumulus Media, Cl. A (b) 26,400 RADIO STATIONS IN SMALL CITIES 850,000 Salem Communications (b) 23,052 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 935,000 Saga Communications (b)(c) 17,326 RADIO STATIONS IN SMALL & MID-SIZED CITIES 1,006,000 Spanish Broadcasting (b) 10,563 SPANISH LANGUAGE RADIO STATIONS 241,000 Regent Communications (b) 1,530 RADIO STATIONS IN SMALL & MID-SIZED CITIES - ---------------------------------------------------------------------------- 78,871 >TELEVISION PROGRAMMING/CATV: 1.2% 2,605,000 Liberty Media (b) 30,973 CATV PROGRAMMING & MEDIA COMPANY HOLDINGS 2,500,000 Mediacom Communications (b) 21,675 CABLE TELEVISION FRANCHISES 1,000,000 Corus Entertainment (Canada) 21,279 TELEVISION PROGRAMMING & RADIO STATIONS 1,700,000 Insight Communications (b) 17,527 CATV FRANCHISES IN MIDWEST 2,750,000 Hit Entertainment (United Kingdom) 14,457 TELEVISION SHOWS FOR CHILDREN 1,500,000 United Global Com (b) 12,720 VIDEO, VOICE & DATA SERVICES OUTSIDE THE USA 750,000 Alliance Atlantis Communication (b) (Canada) 11,502 TV/MOVIE PRODUCTION/DISTRIBUTION & CATV CHANNELS - ---------------------------------------------------------------------------- 130,133 TELECOMMUNICATIONS >TELECOMMUNICATIONS/WIRELINE COMMUNICATIONS: 0.3% 900,000 Commonwealth Telephone (b) 33,975 RURAL PHONE FRANCHISES & CLEC - ---------------------------------------------------------------------------- >TELECOMMUNICATIONS EQUIPMENT: 0.9% 5,000,000 Tellabs (b) 42,150 TELECOMMUNICATIONS & CABLE EQUIPMENT 830,000 Plantronics (b) 27,100 COMMUNICATION HEADSETS 1,600,000 Andrew (b) 18,416 WIRELESS INFRASTRUCTURE EQUIPMENT NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 1,051,000 Symmetricom (b) $ 7,651 NETWORK TIMING & SYNCHRONIZATION DEVICES - ---------------------------------------------------------------------------- 95,317 >MOBILE COMMUNICATIONS: 1.3% 2,800,000 Western Wireless (b) 51,408 RURAL CELLULAR PHONE SERVICES 3,500,000 Crown Castle International (b) 38,605 COMMUNICATION TOWERS IN USA & UK 520,000 Telephone & Data Systems 32,526 CELLULAR & TELEPHONE SERVICES 1,500,000 American Tower (b) 16,230 COMMUNICATION TOWERS IN USA & MEXICO 533,000 COMARCO (b)(c) 5,863 WIRELESS NETWORK TESTING - ---------------------------------------------------------------------------- 144,632 COMPUTER RELATED HARDWARE >COMPUTER HARDWARE/RELATED SYSTEMS: 2.5% 2,500,000 Seachange International (b)(c) 38,500 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 980,000 Avocent (b) 35,790 COMPUTER CONTROL SWITCHES 494,000 Zebra Technologies (b) 32,787 BAR CODE PRINTERS 1,400,000 Unova (b) 32,130 BARCODE & WIRELESS LAN SYSTEMS 431,900 Neopost (France) 21,767 POSTAGE METERS 625,000 Excel Technologies (b)(c) 20,538 LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS 445,000 Rogers (b) 19,633 PCB LAMINATES & HIGH PERFORMANCE FOAMS 2,000,000 3Com (b) 16,340 NETWORKING EQUIPMENT 1,575,000 Cable Design Technologies (b) 14,159 NETWORKING & SPECIALTY CABLES 535,000 II VI (b) 13,803 LASER COMPONENTS 1,055,000 CTS 12,132 ELECTRONIC COMPONENTS, SENSORS & EMS 2,325,000 Concurrent Computer (b) 10,160 VIDEO ON DEMAND SYSTEMS & SERVICES 230,000 Applied Films (b) 7,595 THIN-FILM GLASS COATING EQUIPMENT - ---------------------------------------------------------------------------- 275,334 >GAMING EQUIPMENT: 3.0% 8,768,000 International Game Technology 313,018 SLOT MACHINES & PROGRESSIVE JACKPOTS 827,000 Shuffle Master (b) 28,631 CARD SHUFFLERS, CASINO GAMES & SLOT MACHINES - ---------------------------------------------------------------------------- 341,649 >CONTRACT MANUFACTURING: 0.8% 1,170,000 Jabil Circuit (b) 33,111 ELECTRONIC MANUFACTURING SERVICES 2,710,000 Venture (Singapore) 31,914 ELECTRONIC MANUFACTURING SERVICES 1-800-922-6769 18 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >CONTRACT MANUFACTURING--CONTINUED 1,300,000 Plexus (b) $ 22,321 ELECTRONIC MANUFACTURING SERVICES - ---------------------------------------------------------------------------- 87,346 >INSTRUMENTATION: 1.4% 836,000 Dionex (b) 38,473 ION & LIQUID CHROMATOGRAPHY 810,000 Mettler Toledo (b) 34,190 LABORATORY EQUIPMENT 900,000 Trimble Navigation (b) 33,516 GPS-BASED INSTRUMENTS 668,000 Varian (b) 27,876 ANALYTICAL INSTRUMENTS 2,300,000 Spectris (United Kingdom) 17,480 ELECTRONIC INSTRUMENTATION & CONTROLS 255,000 Invision Technologies (b) 8,560 MANUFACTURER OF EXPLOSIVE DETECTION SYSTEMS - ---------------------------------------------------------------------------- 160,095 >SEMICONDUCTORS/RELATED EQUIPMENT: 1.2% 1,120,000 Integrated Circuit Systems (b) 31,909 SILICON TIMING DEVICES 685,000 Littelfuse (b) 19,742 LITTLE FUSES 800,000 Semtech (b) 18,184 ANALOG SEMICONDUCTORS 519,000 Microsemi (b) 12,757 ANALOG/MIXED SIGNAL SEMICONDUCTORS 1,250,000 IXYS (b) 11,688 POWER SEMICONDUCTORS 664,000 Asyst Technologies (b) 11,520 SEMICONDUCTOR FAB AUTOMATION EQUIPMENT 565,000 Supertex (b) 10,792 MIXED-SIGNAL SEMICONDUCTORS 361,000 Actel (b) 8,700 FIELD PROGRAMMABLE GATE ARRAYS 404,000 Pericom Semiconductor (b) 4,307 SEMICONDUCTORS: INTERFACE INTEGRATED CIRCUITS - ---------------------------------------------------------------------------- 129,599 SOFTWARE/SERVICES >BUSINESS SOFTWARE: 7.0% 9,900,000 Novell (b) 104,148 SECURITY & IDENTITY MANAGEMENT SOFTWARE 3,400,000 PeopleSoft (b) 77,520 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 1,600,000 Avid Technology (b)(c) 76,800 DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS 1,770,000 Kronos (b)(c) 70,110 LABOR MANAGEMENT SOLUTIONS 4,000,000 Aspect Communications (b)(c) 63,040 CALL CENTER SOFTWARE 3,050,000 Systems & Computer Technology (b)(c) 49,868 ENTERPRISE SOFTWARE & SERVICES 1,050,000 Micros Systems (b)(c) 45,528 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 5,700,000 E.Piphany (b)(c) 41,097 CRM SOFTWARE NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 2,200,000 JDA Software Group (b)(c) $ 36,322 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 1,521,000 Sybase (b) 31,302 DATABASE SOFTWARE 2,200,000 MAPICS (b)(c) 28,798 MID MARKET ERP SOFTWARE 2,035,000 MRO Software (b)(c) 27,391 ENTERPRISE MAINTENANCE SOFTWARE 3,000,000 Lawson Software (b) 24,690 ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE 6,000,000 Actuate (b)(c) 18,660 INFORMATION DELIVERY SOFTWARE & SOLUTIONS 550,000 Hyperion Solutions (b) 16,577 BUSINESS ANALYSIS SOFTWARE 1,760,000 Witness Systems (b)(c) 16,421 CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE 5,000,000 Indus International (b)(c) 15,000 ENTERPRISE ASSET MANAGEMENT SOFTWARE 1,125,000 Radiant Systems (b) 9,461 POINT OF SALE SYSTEMS FOR CONVENIENCE STORES 500,000 SPSS (b) 8,940 STATISTICAL/BUSINESS ANALYSIS SOFTWARE 1,200,000 ScanSoft (b) 6,384 SOFTWARE TO INCORPORATE SPEECH & IMAGES TO TEXT 1,400,000 ClickSoftware Technologies (b)(c) 5,712 SERVICE CHAIN OPTIMIZATION SOFTWARE 3,300,000 BSQUARE (b)(c) 4,719 SOFTWARE TO HELP DESIGN MOBILE DEVICES 70,000 Group 1 Software (b) 1,233 ADDRESS VERIFICATION SOFTWARE - ---------------------------------------------------------------------------- 779,721 >CONSUMER SOFTWARE: 0.4% 1,200,000 THQ (b) 20,292 ENTERTAINMENT SOFTWARE 750,000 Activision (b) 13,650 ENTERTAINMENT SOFTWARE 1,250,000 Pinnacle Systems (b) 10,663 VIDEO EDITING SOFTWARE & HARDWARE - ---------------------------------------------------------------------------- 44,605 >COMPUTER SERVICES: 1.5% 4,550,000 Igate Capital (b)(c) 35,718 TECHNOLOGY STAFFING SERVICES 3,100,000 Bearing Point (b) 31,279 BUSINESS CONSULTING & TECHNOLOGY STRATEGY 3,469,000 Ciber (b)(c) 30,042 SOFTWARE SERVICES & STAFFING 4,600,000 AnswerThink Consulting (b)(c) 25,530 IT INTEGRATOR FOR FORTUNE 2000 900,000 Perot Systems (b) 12,132 BUSINESS CONSULTING & TECHNOLOGY STRATEGY 560,000 American Management Systems (b) 8,439 SOFTWARE DEVELOPMENT SERVICES 2,300,000 Analysts International (b)(c) 7,751 TECHNOLOGY STAFFING SERVICES 500,000 Pomeroy Computer Resources (b) 7,370 NETWORK INTEGRATION SERVICES 1,025,000 New Horizons Worldwide (b)(c) 5,831 COMPUTER TRAINING SERVICES - ---------------------------------------------------------------------------- 164,092 19 Columbia Acorn Fund >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >BUSINESS INFORMATION/MARKETING SERVICES/PUBLISHING: 1.5% 1,200,000 Getty Images (b) $ 60,156 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA 1,336,000 Navigant Consulting (b) 25,197 CONSULTING FIRM 2,685,000 InfoUSA (b)(c) 19,923 BUSINESS DATA FOR SALES LEADS 1,000,000 Moore: Wallace (Canada) (b) 18,733 COMMERCIAL PRINTING 950,000 Administaff (b) 16,511 PROFESSIONAL EMPLOYER ORGANIZATION 600,000 Information Holdings (b) 13,260 PATENT & OTHER BUSINESS INFORMATION 300,000 Proquest (b) 8,835 INFORMATION SERVICES FOR EDUCATION & AUTOMOTIVE MARKETS 150,000 RH Donnelley (b) 5,976 YELLOW PAGES PUBLISHER 1,700,000 PRIMEDIA (b) 4,811 SPECIALTY MAGAZINES & OTHER PUBLICATIONS - ---------------------------------------------------------------------------- 173,402 >INTERNET: 1.3% 9,900,000 Skillsoft Publishing (b)(c) 85,635 PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING) 2,500,000 RSA Security (b) 35,500 ENTERPRISE SECURITY SOFTWARE 2,000,000 DoubleClick (b) 20,440 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA 1,051,030 Vital Stream, Cl. C (b) 694 828,778 Vital Stream, Cl. B (b)(e) 520 STREAMING SERVICES FOR THE INTERNET 250,000 NeoPlanet, Series A (b)(e) 29 53,376 NeoPlanet, Series B (b)(e) 11 WEB BROWSER - ---------------------------------------------------------------------------- 142,829 >ELECTRONICS DISTRIBUTION: 0.7% 1,695,000 Avnet (b) 36,714 ELECTRONIC COMPONENTS DISTRIBUTION 780,000 Tech Data (b) 30,958 I/T DISTRIBUTOR 1,410,000 Agilysys 15,721 I/T DISTRIBUTOR - ---------------------------------------------------------------------------- 83,393 >TRANSACTION PROCESSORS: 1.4% 1,487,000 Global Payments 70,067 CREDIT CARD PROCESSOR 1,485,000 Concord EFS (b) 22,037 CREDIT CARD PROCESSOR 725,000 Euronext (France) 18,333 TRADING SERVICES FOR FINANCIAL MARKETS 600,000 Cubic 13,800 REVENUE COLLECTION & DEFENSE SYSTEMS NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 5,000,000 Hong Kong Exchanges & Clearing (Hong Kong) $ 10,820 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 175,000 Deutsche Boerse (Germany) 9,558 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 406,000 Euronet Worldwide (b) 7,308 ATM PROCESSOR 300,000 Pegasus Systems (b) 3,141 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY - ---------------------------------------------------------------------------- 155,064 ------------ INFORMATION: TOTAL 3,067,540 - ---------------------------------------------------------------------------- HEALTH CARE: 8.6% >BIOTECHNOLOGY/DRUG DELIVERY: 2.1% 519,000 Martek Biosciences (b) 33,719 FATTY ACIDS FOR BABY FORMULA & OTHER FOODS 2,055,000 Nektar Therapeutics (b) 27,969 PULMONARY DRUG DELIVERY 1,665,000 Enzon (b) 19,980 POLYMER DELIVERY TECHNOLOGY FOR IMPROVED DRUGS 1,708,000 Ciphergen Biosystems (b)(c) 19,198 PROTEIN CHIPS USED FOR DRUG TARGET DISCOVERY 426,000 NPS Pharmaceuticals (b) 13,095 SMALL MOLECULE DRUGS 900,000 Applera Celera Genomics (b) 12,519 DIAGNOSTICS & DRUG DEVELOPMENT 2,000,000 Medarex (b) 12,460 HUMANIZED ANTIBODIES 608,000 Protein Design Labs (b) 10,883 COMPUTER DESIGNED MONOCLONAL ANTIBODIES 2,800,000 Sequenom (b)(c) 8,904 HIGH SPEED DNA ANALYSIS INSTRUMENTS 1,600,000 Sangamo Biosciences (b)(c) 8,864 DRUG DISCOVERY 1,875,000 Locus Discovery, Series D Pfd. (b)(e) 7,500 HIGH THROUGHPUT RATIONAL DRUG DESIGN 1,982,000 Aclara Biosciences (b)(c) 7,234 MICROFLUIDIC SYSTEMS FOR DRUG DEVELOPMENT 635,000 Maxygen (b) 6,750 MOLECULAR BREEDING 638,000 Diversa (b) 5,901 MOLECULAR BREEDING 389,000 Atherogenic (b) 5,816 DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID ARTHRITIS, ASTHMA 865,000 Arena Pharmaceuticals (b) 5,363 NOVEL DRUG TARGETING TECHNOLOGY 304,000 Alexion Pharmaceuticals (b) 5,174 MONOCLONAL ANTIBODIES 252,000 Applied Molecular Evolution (b) 4,486 MONOCLONAL ANTIBODIES VIA MOLECULAR EVOLUTION 528,000 Pharmacyclics (b) 3,907 LIGHT ACTIVATED DRUGS FOR CANCER & VASCULAR DISEASES 461,000 SYRRX, Series C (b)(e) 2,397 X-RAY CRYSTALLOGRAPHY 1-800-922-6769 20 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED 320,000 Incyte Genomics (b) $ 2,189 BIOINFORMATICS & DRUG DEVELOPMENT 316,000 Guilford Pharmaceuticals (b) 2,142 DRUG DELIVERY & NEUROLOGY DRUGS 160,000 Myriad Genetics (b) 2,058 GENE DISCOVERY & DIAGNOSTIC PRODUCTS 1,249,999 Perlegen Sciences (b)(e) 1,950 LARGE SCALE GENE SEQUENCING 210,000 Gene Logic (b) 1,090 GENE EXPRESSION DATABASE 359,944 Microdose (b)(e) 180 DRUG INHALERS - ---------------------------------------------------------------------------- 231,728 >MEDICAL EQUIPMENT/LABORATORY SUPPLIES: 2.6% 1,629,000 Edwards Lifesciences (b) 49,000 HEART VALVES 989,000 Diagnostic Products 45,405 IMMUNODIAGNOSTIC KITS 1,900,000 CTI Molecular Imaging (b) 32,129 MEDICAL DIAGNOSTIC DEVICES 583,000 Orthofix International (b) 28,555 BONE FIXATION & STIMULATION DEVICES 2,600,000 Smith & Nephew (United Kingdom) 21,779 MEDICAL EQUIPMENT & SUPPLIES 20,000 Synthes-Stratec (Switzerland) 19,785 PRODUCTS FOR ORTHOPEDIC SURGERY 365,000 Essilor International (France) 18,855 EYEGLASS LENSES 875,000 Viasys Healthcare (b) 18,025 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 770,000 VISX (b) 17,826 LASER EYE SURGERY EQUIPMENT 520,000 ICU Medical (b) 17,826 INTRAVENOUS THERAPY PRODUCTS 600,000 Sola International (b) 11,280 SPECIALTY EYEGLASS LENSES 350,000 Haemonetics (b) 8,362 BLOOD & PLASMA COLLECTION EQUIPMENT 1,495,000 Novoste (b)(c) 7,161 RADIATION CATHETERS FOR IN-STENT RESTENOSIS - ---------------------------------------------------------------------------- 295,988 >PHARMACEUTICALS: 0.1% 138,000 Yuhan (South Korea) 7,853 ETHICAL DRUG PRODUCER 433,600 Patheon (Canada) (b) 3,905 PHARMACEUTICAL CONTRACT MANUFACTURER - ---------------------------------------------------------------------------- 11,758 >HOSPITAL MANAGEMENT: 0.2% 387,000 Rhoen-Klinikum (Germany) 19,992 HOSPITAL MANAGEMENT - ---------------------------------------------------------------------------- NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >MEDICAL SUPPLIES: 0.4% 686,000 Techne (b) $ 25,917 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES 650,000 Owens & Minor 14,242 DISTRIBUTION OF MEDICAL SUPPLIES - ---------------------------------------------------------------------------- 40,159 >SERVICES: 3.2% 5,586,000 First Health Group (b)(c) 108,704 PPO NETWORK 2,491,000 Lincare Holdings (b) 74,805 HOME HEALTH CARE SERVICES 2,592,000 NDCHealth Group (c) 66,407 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 640,000 Charles River Laboratories (b) 21,971 PHARMACEUTICAL RESEARCH 1,333,000 Dendrite International (b) 20,888 SOFTWARE FOR PHARMACEUTICAL SALES FORCE 2,500,000 Gambro (Sweden) 20,680 PRODUCTS/SERVICES FOR RENAL CARE 420,000 OPG Groep (Netherlands) 19,077 PHARMACEUTICAL WHOLESALER & RETAILER 550,000 Serologicals (b) 10,230 BLOOD COLLECTION & ANTIBODY PRODUCTION 296,000 Omega Pharma (Belgium) 9,398 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 440,000 Medquist (b) 7,066 MEDICAL TRANSCRIPTION SERVICES 700,000 Nestor Healthcare (United Kingdom) 2,574 HEALTHCARE STAFFING COMPANY - ---------------------------------------------------------------------------- 361,800 ------------ HEALTH CARE: TOTAL 961,425 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 19.9% GOODS >LEISURE VEHICLES: 1.3% 1,745,000 Harley-Davidson 82,940 MOTORCYCLES & RELATED MERCHANDISE 1,495,000 Monaco Coach (b)(c) 35,581 RECREATIONAL VEHICLES 275,000 Polaris Industries 24,360 MANUFACTURER OF LEISURE VEHICLES & RELATED PRODUCTS 2,850,000 Ducati Motor (Italy) (b) 4,930 MOTORCYCLES & RELATED MERCHANDISE - ---------------------------------------------------------------------------- 147,811 >FURNITURE/TEXTILES: 1.7% 1,275,000 Hon Industries 55,233 OFFICE FURNITURE & FIREPLACES 740,000 Mohawk Industries (b) 52,200 CARPET & FLOORING 1,900,000 Herman Miller 46,113 OFFICE FURNITURE 510,000 Furniture Brands International 14,958 FURNITURE 1,160,000 Nobia (Sweden) 12,095 KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION 21 Columbia Acorn Fund >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >FURNITURE/TEXTILES--CONTINUED 440,000 Masonite International (Canada) (b) $ 11,780 DOOR MANUFACTURER - ---------------------------------------------------------------------------- 192,379 >FOOD & BEVERAGES: 0.7% 1,600,000 Kerry Group (Ireland) 30,037 FOOD INGREDIENTS 950,000 Orkla (Norway) 21,235 DIVERSIFIED CONSUMER GOODS 4,000,000 Lion Nathan (Australia) 18,191 BEER BREWER/DISTRIBUTOR 180,000 Davide Campari (Italy) 8,731 SPIRITS & WINE - ---------------------------------------------------------------------------- 78,194 >NONDURABLES: 1.1% 2,300,000 Helen of Troy (b)(c) 53,245 HAIRDRYERS & CURLING IRONS 895,000 Scotts Company (b) 52,948 CONSUMER LAWN & GARDEN PRODUCTS 255,000 Uni-Charm (Japan) 12,544 INFANT HYGIENE & FEMININE CARE PRODUCTS 601,000 First Years (c) 8,979 INFANT & TODDLER PRODUCTS - ---------------------------------------------------------------------------- 127,716 >DURABLE GOODS: 1.3% 1,511,000 SCP Pool (b) 49,379 DISTRIBUTOR OF SWIMMING POOL SUPPLIES 605,000 Hunter Douglas (Netherlands) 28,288 WINDOW SHADES & VENETIAN BLINDS 465,000 Hyundai Mobis (South Korea) 25,016 AUTO PARTS 422,000 American Woodmark (c) 23,231 KITCHEN CABINETS 5,000,000 Techtronic Industries (Hong Kong) 13,846 POWER TOOL MANUFACTURER 579,000 Shimano (Japan) 11,998 BICYCLE COMPONENTS & FISHING TACKLE - ---------------------------------------------------------------------------- 151,758 >APPAREL: 2.0% 2,840,000 Coach (b) 107,210 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 1,370,000 Jones Apparel 48,265 WOMEN'S APPAREL 564,000 Oxford Industries 19,108 BRANDED & PRIVATE LABEL APPAREL 828,000 Steven Madden (b)(c) 16,891 WHOLESALER/RETAILER OF FASHION FOOTWEAR 3,000,000 Billabong International (Australia) 16,106 SURFWEAR APPAREL MANUFACTURER 200,000 Columbia Sportswear (b) 10,900 ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES - ---------------------------------------------------------------------------- 218,480 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------------- SERVICES >RETAIL: 5.4% 2,495,000 Chico's FAS (b) $ 92,190 WOMEN'S SPECIALTY RETAIL 3,743,000 Christopher & Banks (c) 73,101 WOMEN'S APPAREL RETAILER 1,600,000 Michaels Stores 70,720 CRAFT & HOBBY SPECIALTY RETAILER 4,500,000 Winn Dixie Stores 44,775 SUPERMARKETS IN THE SOUTHEAST US 1,510,000 Aeropostale (b) 41,404 MALL BASED TEEN RETAILER 500,000 Whole Foods Market 33,565 NATURAL FOOD SUPERMARKETS 1,070,000 Hot Topic (b) 31,522 MUSIC INSPIRED RETAILER OF APPAREL, ACCESSORIES & GIFTS 1,015,000 Petco Animal Supplies (b) 30,907 PET SUPPLIES & SERVICES 1,400,000 Borders Group 30,688 BOOKSTORES 788,000 Urban Outfitters (b) 29,195 ECLECTIC HOME & APPAREL RETAILER 536,000 Zale (b) 28,515 SPECIALTY RETAILER OF JEWELRY 895,000 Abercrombie & Fitch (b) 22,115 TEEN APPAREL RETAILER 450,000 Ann Taylor (b) 17,550 WOMEN'S APPAREL RETAILER 500,000 Pier 1 Imports 10,930 IMPORTED FURNITURE & TCHOTCHKES 700,000 Genesco (b) 10,591 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER 3,100,000 The Warehouse Group (New Zealand) 10,399 WAREHOUSE CLUB 1,015,000 Burberry Group (United Kingdom) 6,622 APPAREL RETAILER 850,000 Gaiam (b)(c) 5,058 HEALTHY LIVING CATALOG & E-COMMERCE 1,500,000 Esprit Holdings (Hong Kong) 4,985 GLOBAL APPAREL BRAND MANAGER $ 6,000,000 Gadzooks 5.00% Convertible (e) 4,485 TEEN APPAREL RETAILER - ---------------------------------------------------------------------------- 599,317 >TRAVEL: 0.8% 2,024,500 Intrawest (Canada) 37,440 OWNER/OPERATOR OF SKI RESORTS 3,380,000 LaQuinta (b) 21,666 OWNER/FRANCHISER OF MID-PRICED HOTELS 950,000 Vail Resorts (b) 16,150 OWNER/OPERATOR OF SKI RESORTS 725,000 Navigant International (b) 10,041 CORPORATE TRAVEL AGENCY 720,000 Jurys Doyle Hotel (Ireland) 8,799 HOTEL GROUP - ---------------------------------------------------------------------------- 94,096 1-800-922-6769 22 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >CONSUMER SERVICES: 1.9% 2,111,000 ITT Educational Services (b) $ 99,154 POSTSECONDARY DEGREE PROGRAMS 695,000 Weight Watchers (b) 26,667 WEIGHT LOSS PROGRAM 1,290,000 Coinstar (b)(c) 23,297 OWNER/OPERATOR OF COIN COUNTING MACHINES 260,000 USS (Japan) 18,395 USED CAR AUCTIONEER 1,750,000 Princeton Review (b)(c) 17,063 COLLEGE PREPARATION COURSES 2,350,000 Bally Total Fitness (b)(c) 16,450 NATIONAL CHAIN OF FITNESS CENTERS 900,000 Central Parking 13,437 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES - ---------------------------------------------------------------------------- 214,463 >ENTERTAINMENT/LEISURE PRODUCTS: 1.5% 805,000 International Speedway Motors 35,951 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 1,250,000 Leapfrog Enterprises (b) 33,163 EDUCATIONAL TOYS 1,276,000 Action Performance (c) 25,010 MOTORSPORT COLLECTIBLES & MERCHANDISING 2,765,000 Six Flags (b) 20,793 WORLDWIDE THEME PARK OPERATOR 370,000 Amer Group (Finland) 16,013 BRANDED SPORTING GOODS 363,000 Speedway Motors 10,498 MOTORSPORT RACETRACK OWNER & OPERATOR 1,750,000 Magna Entertainment, Cl. A (Canada) (b) 8,873 OWNER/OPERATOR OF THOROUGHBRED RACETRACKS 334,000 RC2 6,931 COLLECTIBLES & TOYS 345,000 Intralot (Greece) 6,729 LOTTERY & GAMING SYSTEMS & SERVICES - ---------------------------------------------------------------------------- 163,961 >CASINOS: 1.3% 2,010,000 Alliance Gaming (b) 49,546 DIVERSIFIED GAMING COMPANY 890,000 Station Casinos 27,261 CASINOS & RIVERBOATS 875,000 Argosy Gaming (b) 22,741 REGIONAL RIVERBOAT CASINOS 1,925,000 Pinnacle Entertainment (b)(c) 17,941 REGIONAL RIVERBOAT CASINOS 5,000,000 Sky City Entertainment (New Zealand) 15,102 CASINO/ENTERTAINMENT COMPLEX 635,000 Monarch Casino & Resort (b)(c) 7,004 CASINO/HOTEL IN RENO 113,000 Lakes Entertainment (b) 1,825 GAMING ENTREPRENEUR - ---------------------------------------------------------------------------- 141,420 >RESTAURANTS: 0.6% 2,000,000 AFC Enterprises (b)(c) 39,000 POPEYES, CHURCHES FRIED CHICKEN 1,447,000 Autogrill (Italy) (b) 20,675 TOLLWAY RESTAURANTS NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 243,000 Cheesecake Factory (b) $ 10,699 CASUAL DINING RESTAURANT 7,000 Kappa Create (Japan) 591 SUSHI CHAIN RESTAURANT OPERATOR - ---------------------------------------------------------------------------- 70,965 >CRUISE LINES: 0.3% 400,000 Carnival 15,892 LARGEST CRUISE LINE 894,000 Steiner Leisure (b)(c) 12,784 SPAS & HAIR/SKIN PRODUCTS ON CRUISE SHIPS - ---------------------------------------------------------------------------- 28,676 ------------ CONSUMER GOODS/SERVICES: TOTAL 2,229,236 - ---------------------------------------------------------------------------- FINANCE: 11.6% >BANKS: 4.2% 1,751,000 TCF Financial 89,914 GREAT LAKES BANK 1,608,000 Associated Banc-Corp 68,581 MIDWEST BANK 3,200,000 Anglo Irish Bank (Ireland) 50,438 SMALL BUSINESS & MIDDLE MARKET BANKING 1,122,000 Glacier Bancorp (c) 36,353 MOUNTAIN STATES BANK 825,000 BOK Financial (b) 31,944 OKLAHOMA BANK 700,000 Texas Regional Bancshares 25,900 SOUTH TEXAS BANK 1,798,000 Republic 24,255 MICHIGAN BANK 185,000 Depfa Bank (Ireland) 23,332 INTERNATIONAL PUBLIC SECTOR FINANCE 605,000 Chittenden 20,352 VERMONT & WESTERN MASSACHUSETTS BANK 2,800,000 Den Norske Bank (Norway) 18,650 LARGEST NORWEGIAN BANK 660,000 Hawthorne Financial (b)(c) 18,467 REAL ESTATE LENDER 356,000 Bank of Bermuda 16,002 OFFSHORE BANK 700,000 West Coast Bancorp 14,938 PORTLAND SMALL BUSINESS LENDER 303,000 Southwest Bancorp 5,418 OKLAHOMA SMALL BUSINESS BANK 159,000 CityBank Lynnwood 5,167 SEATTLE REAL ESTATE LENDER 186,000 CorpBanca (Chile) (b) 4,849 CHILE'S 3RD LARGEST LOCAL BANK 82,000 BankFirst 4,814 OKLAHOMA COMMUNITY BANK 170,000 Midwest Bank 3,783 CHICAGO BANK 82,000 First Financial BankShares 3,419 WEST TEXAS COMMUNITY BANK 73,000 Great Southern Bancorp 3,385 MISSOURI REAL ESTATE LENDER 46,000 First Mutual Bancshares 1,127 SEATTLE COMMUNITY BANK 23 Columbia Acorn Fund >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >BANKS--CONTINUED 29,000 Cascade Financial $ 562 SEATTLE COMMUNITY BANK - ---------------------------------------------------------------------------- 471,650 >SAVINGS & LOANS: 2.1% 2,184,000 Peoples Bank Bridgeport 71,198 CONNECTICUT SAVINGS & LOAN 947,000 Downey Financial 46,687 CALIFORNIA HOME LENDER 1,228,000 Anchor Bancorp Wisconsin (c) 30,577 WISCONSIN THRIFT 1,700,000 Housing Development Finance (India) 24,075 LEADING PROVIDER OF MORTGAGES IN INDIA 497,000 Quaker City Bancorp (c) 23,135 LA REAL ESTATE LENDER 1,000,000 Irish Life & Permanent (Ireland) 16,127 SAVINGS PRODUCTS 700,000 First Federal Capital 15,764 WISCONSIN THRIFT 190,000 Washington Federal 5,396 OLD FASHIONED MORTGAGE LENDER - ---------------------------------------------------------------------------- 232,959 >INSURANCE: 2.9% 870,000 Philadelphia Consolidated Holding (b) 42,482 SPECIALTY INSURANCE 1,320,000 HCC Insurance Holdings 41,976 AVIATION INSURANCE 826,000 Leucadia National 38,079 INSURANCE HOLDING COMPANY 1,000,000 RLI 37,460 SPECIALTY INSURANCE 138,000 Markel (b) 34,984 SPECIALTY INSURANCE 995,000 Protective Life 33,671 LIFE INSURANCE 700,000 Harleysville Group 13,923 COMMERCIAL & PERSONAL LINES INSURANCE 800,000 Ohio Casualty (b) 13,888 COMMERCIAL & PERSONAL LINES INSURANCE 650,000 Scottish Re Group (formerly known as Scottish Annuity & Life) 13,507 LIFE REINSURER 210,000 StanCorp Financial 13,205 GROUP LIFE, DISABILITY & 401K 400,000 Selective Insurance Group 12,944 COMMERCIAL & PERSONAL LINES INSURANCE 595,000 United National Group (b) 10,514 SPECIALTY INSURANCE 1,000,000 Jardine Lloyd Thompson (United Kingdom) 9,416 BUSINESS INSURANCE BROKER 355,000 Northbridge Financial (Canada) (b) 5,741 PROPERTY & CASUALTY INSURANCE 200,000 Kingsway Financial (Canada) (b) 2,259 AUTO & SPECIALTY INSURANCE - ---------------------------------------------------------------------------- 324,049 >MONEY MANAGEMENT: 1.0% 2,390,000 SEI Investments 72,823 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 855,000 Eaton Vance $ 31,327 SPECIALTY MUTUAL FUNDS 123,000 Affiliated Managers Group (b) 8,560 ASSET MANAGEMENT HOLDING COMPANY 200,000 The Investment Company of China (China) (b)(e) 246 CLOSED-END FUND - ---------------------------------------------------------------------------- 112,956 >BROKERAGE: 0.2% 1,215,000 Investment Technology Group (b) 19,622 ELECTRONIC TRADING - ---------------------------------------------------------------------------- >FINANCE COMPANIES: 1.2% 5,831,000 AmeriCredit (b) 92,888 AUTO LENDING 1,820,000 World Acceptance (b)(c) 36,236 PERSONAL LOANS 500,000 Intermediate Capital (United Kingdom) 9,425 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 900,000 DVI Health Services (b)(c) 36 LEASES BIG MEDICAL EQUIPMENT - ---------------------------------------------------------------------------- 138,585 ------------ FINANCE: TOTAL 1,299,821 - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 12.2% >STEEL: 0.8% 1,900,000 Gibraltar Steel (c) 47,785 STEEL PROCESSING 1,050,000 Worthington Industries 18,932 STEEL PROCESSING 550,000 Tenaris (Luxembourg) (b) 18,326 STEEL PIPE FOR OIL WELLS & PIPELINES - ---------------------------------------------------------------------------- 85,043 >INDUSTRIAL GOODS: 1.3% 1,400,000 Clarcor (c) 61,740 MOBILE & INDUSTRIAL FILTERS 750,000 Donaldson 44,370 INDUSTRIAL AIR FILTRATION 268,000 Mine Safety Appliances 21,309 SAFETY EQUIPMENT 500,000 Intermagnetics General (b) 11,080 SUPERCONDUCTING WIRE 100,000 Bacou Dalloz (France) 7,812 SAFETY EQUIPMENT - ---------------------------------------------------------------------------- 146,311 >INDUSTRIAL DISTRIBUTION: 1.1% 1,525,000 Watsco (c) 34,663 HVAC DISTRIBUTION 600,000 Hughes Supply 29,772 INDUSTRIAL DISTRIBUTION 3,800,000 Grafton Group (Ireland) 26,189 BUILDERS, WHOLESALERS & DIY RETAILING 975,000 Airgas 20,943 INDUSTRIAL GAS DISTRIBUTOR 900,000 Nuco2 (b)(c) 11,403 BULK CO2 GAS DISTRIBUTION TO RESTAURANTS - ---------------------------------------------------------------------------- 122,970 1-800-922-6769 24 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >CONSTRUCTION: 0.9% 488,000 Simpson $ 24,820 WALL JOINT MAKER 425,000 Florida Rock Industries 23,311 CONCRETE & AGGREGATES 700,000 Wienerberger (Austria) 18,680 BRICKS & CLAY ROOFING TILES 380,000 Daito Trust Construction (Japan) 11,279 APARTMENT BUILDER 3,000,000 Consorcio (Mexico) (b) 7,449 LOW/MEDIUM INCOME HOUSE BUILDER 750,000 McCarthy & Stone (United Kingdom) 6,922 BUILDER OF RETIREMENT APARTMENTS 216,000 Northwest Pipe Company (b) 2,877 WATER TRANSMISSION PIPE - ---------------------------------------------------------------------------- 95,338 >SPECIALTY CHEMICALS & INDUSTRIAL MATERIALS: 1.3% 1,850,000 Spartech (c) 45,584 PLASTICS DISTRIBUTION & COMPOUNDING 47,000 Geberit International (Switzerland) 23,095 PLUMBING SUPPLIES 1,000,000 Schulman 21,320 PLASTICS DISTRIBUTION & COMPOUNDING 37,000 Givaudan (Switzerland) 19,198 INDUSTRIAL FRAGRANCES & FLAVORS 450,000 Novozymes (Denmark) 16,408 INDUSTRIAL ENZYMES 50,000 Imerys (France) 10,514 INDUSTRIAL MINERALS PRODUCER 347,000 SYMYX (b) 7,131 MATERIALS & CHEMICALS - ---------------------------------------------------------------------------- 143,250 >MACHINERY: 1.2% 1,025,000 Ametek 49,466 AEROSPACE/INDUSTRIAL INSTRUMENTS 1,050,000 Esco Technologies (b)(c) 45,832 FILTRATION & TEST EQUIPMENT 420,000 Pentair 19,194 PUMPS, WATER TREATMENT & TOOLS 500,000 Cobham (United Kingdom) 10,416 AEROSPACE 285,000 Gardner Denver (b) 6,803 AIR COMPRESSORS, BLOWERS & PUMPS 150,000 Tennant 6,495 NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT - ---------------------------------------------------------------------------- 138,206 >OUTSOURCING SERVICES & TRAINING: 0.6% 1,900,000 Labor Ready (b) 24,890 TEMPORARY MANUAL LABOR 525,000 Bilfinger Berger (Germany) 17,860 CONSTRUCTION & RELATED SERVICES 9,500,000 Li & Fung (Hong Kong) 16,274 SOURCING OF CONSUMER GOODS 600,000 GP Strategies (b) 4,800 TRAINING PROGRAMS - ---------------------------------------------------------------------------- 63,824 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >CONGLOMERATES: 0.2% 5,550 Pargesa (Switzerland) $ 14,802 INDUSTRIAL & MEDIA HOLDINGS 510,000 Aalberts Industrie (Netherlands) 13,192 FLOW CONTROL & HEAT TREATMENT - ---------------------------------------------------------------------------- 27,994 >INDUSTRIAL SUPPLIERS: 0.2% 1,800,000 Xstrata (United Kingdom) 20,242 DIVERSIFIED MINING HOLDING COMPANY - ---------------------------------------------------------------------------- >LOGISTICS: 2.2% 2,900,000 Expeditors International of Washington 109,214 INTERNATIONAL FREIGHT FORWARDER 900,000 UTI Worldwide 34,137 INTERNATIONAL FREIGHT FORWARDER 1,000,000 Forward Air (b) 27,500 FREIGHT TRANSPORTATION BETWEEN AIRPORTS 1,800,000 Exel (United Kingdom) 23,729 GLOBAL LOGISTICS & FREIGHT FORWARDING 40,000,000 Sinotrans (China) 18,033 INTEGRATED LOGISTICS IN CHINA 759,000 Hub Group (b)(c) 16,349 TRUCK & RAIL FREIGHT FORWARDER 11,000,000 Sembcorp Logistics (Singapore) 12,954 LOGISTIC SERVICES FOR MARINE TRANSPORT - ---------------------------------------------------------------------------- 241,916 >WATER: 1.3% 2,400,000 Tetra Tech (b) 59,664 RESOURCE MANAGEMENT & INFRASTRUCTURE CONSULTING 856,000 Cuno (b)(c) 38,546 FILTRATION & FLUIDS CLARIFICATION 900,000 Pall 24,147 FILTRATION & FLUIDS CLARIFICATION 900,000 Insituform Technologies (b) 14,850 WATER/SEWER PIPE REPAIR 475,000 Watts Water Technologies 10,545 WATER, VALVES, REGULATORS & FILTRATION - ---------------------------------------------------------------------------- 147,752 >OTHER INDUSTRIAL SERVICES: 1.1% 1,500,000 Clark/Bardes Consulting (b)(c) 28,860 EXECUTIVE COMPENSATION & BENEFITS CONSULTING 725,000 G&K Services 26,644 UNIFORM RENTAL 825,000 Mobile Mini (b)(c) 16,269 LEASES PORTABLE STORAGE UNITS 590,000 Munters (Sweden) 14,273 MOISTURE & HUMIDITY CONTROL 60,000 Schindler (Switzerland) (b) 14,645 ELEVATOR MANUFACTURER & SERVICE PROVIDER 665,500 Zardoya Otis (Spain) 13,835 ELEVATOR MANUFACTURER & SERVICE PROVIDER 825,000 Ushio (Japan) 13,699 INDUSTRIAL LIGHT SOURCES - ---------------------------------------------------------------------------- 128,225 ------------ INDUSTRIAL GOODS/SERVICES: TOTAL 1,361,071 25 Columbia Acorn Fund >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- ENERGY/MINERALS: 7.0% >INDEPENDENT POWER: 0.2% 570,000 Gamesa (Spain) $ 18,737 SPANISH WIND TURBINES 720,000 Millennium Cell (b) 1,678 FUEL CELL TECHNOLOGY - ---------------------------------------------------------------------------- 20,415 >OIL/GAS PRODUCERS: 4.3% 6,300,000 XTO Energy 178,290 NATURAL GAS PRODUCER 2,550,000 Ultra Petroleum (b) 62,781 NATURAL GAS PRODUCER 1,200,000 Western Gas 56,700 OIL PRODUCER & COAL SEAM GAS PRODUCER 1,460,000 Evergreen Resources (b) 47,465 COAL SEAM GAS PRODUCER 565,000 Talisman Energy (Canada) 32,142 OIL & GAS PRODUCER 1,200,000 Southwestern Energy (b) 28,680 NATURAL GAS PRODUCER 600,000 Quicksilver (b) 19,380 NATURAL GAS & COAL SEAM GAS PRODUCER 517,000 Westport Resources (b) 15,438 OIL & GAS PRODUCER 400,000 Nexen (Canada) 14,522 OIL & GAS PRODUCER 9,165,000 Tullow Oil (United Kingdom) 14,029 OIL & GAS PRODUCER 500,000 McMoran Exploration (b) 9,375 NATURAL GAS PRODUCERS & LNG DEVELOPER 2,265,000 Tipperary (b)(c) 6,908 COAL SEAM GAS PRODUCER - ---------------------------------------------------------------------------- 485,710 >DISTRIBUTION/MARKETING/REFINING: 1.0% 1,260,000 Equitable Resources 54,079 NATURAL GAS UTILITY & PRODUCER 1,250,000 Oneok 27,600 NATURAL GAS UTILITY, MARKETING & PROCESSING 761,000 Atmos Energy 18,492 NATURAL GAS UTILITY 1,270,000 Aquila (b)(e) 8,941 ELECTRIC UTILITY HOLDING COMPANY - ---------------------------------------------------------------------------- 109,112 >OIL SERVICES: 1.5% 1,900,000 FMC Technologies (b) 44,270 OIL & GAS WELL HEAD MANUFACTURER 730,000 Carbo Ceramics 37,412 NATURAL GAS WELL STIMULANTS 4,750,000 Newpark Resources (b)(c) 22,753 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 1,750,000 Key Energy Services (b) 18,043 OIL & GAS WELL WORKOVER SERVICES 2,200,000 Saipem (Italy) 17,768 OFFSHORE CONSTRUCTION & DRILLING NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 1,050,000 Enerflex Systems (Canada) $ 16,412 NATURAL GAS COMPRESSOR 800,000 Hanover Compressor (b) 8,920 NATURAL GAS COMPRESSOR RENTAL - ---------------------------------------------------------------------------- 165,578 ------------ ENERGY/MINERALS: TOTAL 780,815 - ---------------------------------------------------------------------------- OTHER INDUSTRIES: 5.3% >REAL ESTATE: 4.3% 1,160,000 The Rouse Company 54,520 REGIONAL SHOPPING MALLS 1,845,000 General Growth Properties 51,199 REGIONAL SHOPPING MALLS 875,000 SL Green Realty 35,919 MANHATTAN OFFICE BUILDINGS 800,000 Macerich Company 35,600 REGIONAL SHOPPING MALLS 699,000 Forest City Enterprises, Cl. B 33,762 COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER 725,000 Mills 31,900 REGIONAL SHOPPING MALLS 690,000 Federal Realty Investment Trust 26,489 SHOPPING CENTERS 700,000 Manufactured Home Communities 26,355 MANUFACTURED HOME COMMUNITIES 1,375,000 Crescent Real Estate Equities 23,554 CLASS A OFFICE BUILDINGS 400,000 Chelsea Properties Group 21,924 OUTLET MALLS 975,000 Glimcher Realty Trust 21,821 REGIONAL SHOPPING MALLS 540,000 AMB Property 17,755 INDUSTRIAL PROPERTIES 700,000 Keystone Property Trust 15,463 INDUSTRIAL PROPERTIES 291,000 LNR Property 14,407 DISTRESSED PROPERTY FINANCE 400,000 Gables Residential Trust 13,896 APARTMENTS 200,000 Essex Property Trust 12,844 WEST COAST APARTMENTS 650,000 United Dominion Realty 12,480 APARTMENTS 574,000 LaSalle Hotel Properties 10,648 UPSCALE/FULL SERVICE HOTELS 190,000 Consolidated Tomoka 6,213 FLORIDA LAND OWNER 299,275 Security Capital European Realty (Luxembourg) (b)(e) 5,315 SELF STORAGE PROPERTIES 380,000 Highland Hospitality (b) 4,142 HOTEL REAL ESTATE INVESTMENT TRUST 133,000 Am NV (Netherlands) 1,032 PROPERTY DEVELOPER - ---------------------------------------------------------------------------- 477,238 1-800-922-6769 26 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >WASTE MANAGEMENT: 0.2% 533,000 Waste Connections (b) $ 20,131 SOLID WASTE MANAGEMENT - ---------------------------------------------------------------------------- >TRANSPORTATION: 0.3% 140,000 Kobenhavns Lufthavne (Denmark) 16,392 COPENHAGEN AIRPORT AUTHORITY 500,000 Grupo Aeroportaurio Del Sureste (Mexico) 8,800 CANCUN & COZUMEL AIRPORT OPERATOR 15,000,000 Comfort Group (Singapore) 7,198 TAXI SERVICE - ---------------------------------------------------------------------------- 32,390 >REGULATED UTILITIES: 0.5% 1,100,000 Unisource Energy 27,126 ELECTRIC UTILITY IN ARIZONA 850,000 Northeast Utilities 17,145 REGULATED ELECTRIC UTILITY 899,800 Red Electrica (Spain) 14,737 SPANISH POWER GRID - ---------------------------------------------------------------------------- 59,008 ------------ OTHER INDUSTRIES: TOTAL 588,767 Total Common Stocks and Other ------------ EQUITY-LIKE SECURITIES: 92.1% 10,288,675 (COST: $6,468,313) PRINCIPAL AMOUNT(000) VALUE (000) - ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 7.8% Yield 0.88% - 1.15% Due 1/02/04 - 2/14/04 $ 75,000 John Hancock Financial $ 74,936 75,000 Citicorp 74,911 74,000 Household Finance 73,966 74,000 General Electric Capital 73,917 70,000 American Express Credit 69,939 62,000 Virginia Electric & Power 61,979 59,000 Schering Plough 58,991 58,000 State Street Bank & Trust 57,955 52,000 Toyota Credit 51,955 50,193 Cambell Soup 50,183 50,000 Bayer 49,951 49,000 Marshall & IIsley 48,964 48,000 Cargill 47,983 37,000 AIG Funding 36,994 10,000 US Treasury Bill 9,998 32,863 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 1/15/06, Market Value $33,523 (repurchase proceeds: $32,865) 32,863 - ---------------------------------------------------------------------------- (AMORTIZED COST: $875,485) 875,485 ------------ TOTAL INVESTMENTS: 99.9% 11,164,160 (COST: $7,343,798) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 4,655 ------------ TOTAL NET ASSETS: 100% $ 11,168,815 ============================================================================ 27 Columbia Acorn Fund >Statement of Investments, continued ________________________________________________________________________________ >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investments was $7,338,384 and net unrealized appreciation was $3,825,776 consisting of gross unrealized appreciation of $4,118,963 and gross unrealized depreciation of $293,187. (b) Non-income producing security. (c) On December 31, 2003, the fund held the following percentages of the outstanding voting shares of the companies listed below: AnswerThink Consulting 10.34% Christopher & Banks 9.90% Gibraltar Steel 9.88% New Horizons Worldwide 9.87% World Acceptance 9.85% Hub Group 9.83% Skillsoft Publishing 9.80% Actuate 9.77% Indus International 9.63% Analysts International 9.50% Gaiam 9.24% Seachange International 9.19% Novoste 9.16% MAPICS 8.84% BSQUARE 8.81% Igate Capital 8.79% Systems & Computer Technology 8.78% Nuco2 8.46% MRO Software 8.22% Helen of Troy 8.18% Esco Technologies 8.17% Clark/Bardes Consulting 8.12% Witness Systems 7.96% Quaker City Bancorp 7.94% E.Piphany 7.66% JDA Software Group 7.58% COMARCO 7.39% NDCHealth Group 7.26% First Years 7.24% AFC Enterprises 7.15% Aspect Communications 7.13% Sequenom 7.00% Action Performance 6.98% Bally Total Fitness 6.91% Monarch Casino & Resort 6.80% Watsco 6.77% Sangamo Biosciences 6.45% Princeton Review 6.40% Steven Madden 6.32% Coinstar 6.07% Pinnacle Entertainment 6.03% DVI Health Services 5.93% First Health Group 5.92% Ciphergen Biosystems 5.92% Spartech 5.92% Newpark Resources 5.87% Glacier Bancorp 5.80% Micros Systems 5.79% Tipperary 5.77% Mobile Mini 5.75% Kronos 5.75% Hawthorne Financial 5.71% Aclara Biosciences 5.53% Clarcor 5.53% Ciber 5.44% Steiner Leisure 5.43% Anchor Bancorp Wisconsin 5.31% ClickSoftware Technologies 5.29% Excel Technologies 5.25% American Woodmark 5.23% Avid Technology 5.21% InfoUSA 5.14% Monaco Coach 5.14% Cuno 5.07% Saga Communications 5.05% The aggregate cost and value of these companies at December 31, 2003, was $1,322,612 and $1,914,723 respectively. Investments in affiliate companies represent 17.14% of total net assets at December 31, 2003. Investment activity and income amounts relating to affiliates during the year ended December 31, 2003 were as follows: Dividend Income $ 4,319 Net realized loss $ (225) Change in unrealized loss $ 708,696 Purchases $ 344,232 Proceeds from sales $ 89,746 In addition, additional purchases of existing portfolio holdings that were not considered affiliates in prior years, resulted in the fund owning more than 5% of the outstanding shares of certain issues at December 31, 2003. Therefore, the cost and market value affiliate disclosure amounts include both acquisitions of new investments in affiliates during the year, as well as prior year investment holdings that became affiliates during the current year. (d) On December 31, 2003, the market value of foreign securities (in thousands) represents 12.65% of total net assets. The Fund's foreign portfolio was diversified as follows: VALUE PERCENT ================================================== Canada $ 184,588 1.65% United Kingdom 157,091 1.41 Ireland 154,922 1.39 Switzerland 91,525 0.82 France 77,281 0.69 Japan 68,506 0.61 Hong Kong 62,587 0.56 Netherlands 61,589 0.55 Italy 52,104 0.47 Singapore 52,066 0.47 Germany 47,410 0.42 Spain 47,310 0.42 Sweden 47,048 0.42 Norway 39,885 0.36 VALUE PERCENT ================================================== Australia 34,297 0.31 South Korea 32,869 0.30 Denmark 32,800 0.29 Luxembourg 29,286 0.26 New Zealand 25,501 0.23 India 24,075 0.22 Austria 18,680 0.17 China 18,279 0.16 Mexico 16,249 0.15 Finland 16,013 0.14 Belgium 9,398 0.08 Greece 6,729 0.06 Chile 4,849 0.04 ---------- ------- Total Foreign Portfolio $1,412,937 12.65% ========== ======= 1-800-922-6769 28 (e) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. These securities are valued in good faith by the Board of Trustees. At December 31, 2003, these securities amounted to $31,574, which represents 0.3% of total net assets. Additional information on these securities is as follows:
ACQUISITION SECURITY DATES SHARES/PAR COST VALUE - ---------------------------------------------------------------------------------------- Locus Discovery, Series D Pfd. 09/05/01 1,875 $ 7,500 $ 7,500 Security Capital European Realty 08/20/98-11/12/99 299 5,985 5,315 Aquila 04/23/01-12/19/01 1,270 28,382 8,941 Perlegen Sciences 03/30/01 1,250 5,000 1,950 SYRRX, Series C 01/08/01 461 2,997 2,397 The Investment Company of China 10/22/92-03/15/00 200 1,690 246 Microdose 11/24/00 360 2,005 180 Gadzooks 5.00% Convertible 10/08/03 $ 6,000 6,000 4,485 NeoPlanet, Series A 02/12/99 250 2,000 29 NeoPlanet, Series B 02/17/00 53 641 11 Vital Stream, Cl. B 10/03/01-09/30/02 829 290 520 --------- ------- $ 62,490 $31,574 ========= =======
29 Columbia Acorn International >Major Portfolio Changes in the Fourth Quarter (Unaudited) NUMBER OF SHARES -------------------------- 09/30/03 12/31/03 Additions - ---------------------------------------------------------------------------- EUROPE >GERMANY/AUSTRIA Wienerberger AG (Austria) 0 300,000 Zapf Creation 240,000 300,000 >NORWAY Den Norske Bank 2,190,000 2,610,000 >SWEDEN Hexagon 250,000 293,000 >FRANCE Camaieu 0 34,000 Imerys 0 40,000 >UNITED KINGDOM/IRELAND Business Post 600,000 800,000 Expro International 2,500,000 2,700,000 Intermediate Capital 200,000 300,000 Irish Life & Permanent (Ireland) 1,000,000 1,100,000 Jardine Lloyd Thompson Group PLC 0 600,000 Kensington Group 0 1,000,000 Nestor Healthcare 1,360,000 1,520,000 Smith & Nephew 1,400,000 1,550,000 Tullow Oil 6,500,000 8,000,000 >NETHERLANDS AM NV 0 133,000 Sligro Food 7,768 362,000 Vopak 800,000 900,000 >ITALY Amplifon 0 90,000 >FINLAND Sponda Oyj 0 816,000 >GREECE Intralot 0 465,000 NUMBER OF SHARES -------------------------- 09/30/03 12/31/03 - ---------------------------------------------------------------------------- ASIA >HONG KONG Esprit Holdings 0 1,500,000 >JAPAN Nissin Healthcare Food Service 0 260,000 Park24 0 413,000 Shimano 0 543,000 >SINGAPORE Venture 1,480,000 1,920,000 >INDONESIA PT Perusahaan Gas Negara 0 30,000,000 - ---------------------------------------------------------------------------- LATIN AMERICA >CHILE Corpbanca 0 186,000 - ---------------------------------------------------------------------------- OTHER COUNTRIES >AUSTRALIA/NEW ZEALAND Sky City Entertainment (New Zealand) 2,000,000 4,000,000 Tabcorp 0 400,000 >CANADA Masonite International 240,000 420,000 Nexen 0 300,000 Patheon 600,000 1,261,000 >UNITED STATES Central European Distribution 19,700 134,600 1-800-922-6769 30 NUMBER OF SHARES -------------------------- 09/30/03 12/31/03 Sales - ---------------------------------------------------------------------------- EUROPE >GERMANY/AUSTRIA Deutsche Boerse 275,000 175,000 Software AG (Austria) 655,000 0 >SWEDEN Castellum 520,000 470,000 >FRANCE/BELGIUM Neopost 500,000 390,000 Omega Pharma (Belgium) 445,000 244,000 >UNITED KINGDOM/IRELAND Hit Entertainment 3,650,000 3,500,000 Marconi 1,075,000 0 Torex 700,000 0 Xstrata 800,000 0 >SPAIN Gamesa 530,000 435,000 Zardoya Otis 376,000 0 >NETHERLANDS Hunter Douglas 545,000 433,000 OPG Groep 377,000 349,000 >LUXEMBOURG Tenaris 424,000 400,000 >FINLAND Amer Group 384,000 185,000 >ITALY Parmalat Finanziaria 2,700,000 0 Saipem 1,500,000 0 NUMBER OF SHARES ------------------------- 09/30/03 12/31/03 - ---------------------------------------------------------------------------- ASIA >HONG KONG Television Broadcasts 3,000,000 2,000,000 >INDIA Housing Development Finance 2,000,000 1,700,000 >JAPAN ARRK 220,000 180,000 >SOUTH KOREA Cheil Communications 70,000 0 S1 Corporation 500,000 0 >SINGAPORE Comfort Group 27,000,000 1,500,000 >TAIWAN Chroma Ate 6,582,972 0 - ---------------------------------------------------------------------------- OTHER COUNTRIES >AUSTRALIA/NEW ZEALAND Computershare 5,000,000 0 Jupiters 2,500,000 0 The Warehouse Group (New Zealand) 3,500,000 2,000,000 >CANADA Altagas 728,100 0 Kingsway Financial 600,000 0 Moore - Wallace 450,000 0 31 Columbia Acorn International >Statement of Investments, December 31, 2003 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 95.5% - ---------------------------------------------------------------------------- EUROPE: 61.0% >GERMANY/AUSTRIA: 7.8% 335,000 Rhoen-Klinikum Pfd. $ 18,783 300,000 Rhoen-Klinikum 15,497 HOSPITAL MANAGEMENT 500,000 GFK 14,376 MARKET RESEARCH SERVICES 550,000 Hugo Boss Designs 11,053 FASHION APPAREL 300,000 Bilfinger Berger 10,206 CONSTRUCTION & RELATED SERVICES 175,000 Deutsche Boerse 9,558 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 200,000 Flughafen Wien (Austria) 9,374 VIENNA AIRPORT AUTHORITY 325,000 Kali & Salz 8,910 POTASH PRODUCTS, FERTILIZERS, SALT & WASTE MANAGEMENT 300,000 Wienerberger (Austria) 8,006 BRICKS & CLAY ROOFING TILES 1,000,000 Takkt 7,434 MAIL ORDER RETAILER OF OFFICE & WAREHOUSE DURABLES 300,000 Zapf Creation 7,231 TOY MANUFACTURER 75,000 Beru 4,886 AUTO PARTS & ELECTRONICS 35,300 Mayr-Melnhof (Austria) 4,239 CARTONBOARD & PACKAGING 200,000 Lion Bioscience (b) 816 BIOINFORMATICS - ---------------------------------------------------------------------------- 130,369 >DENMARK: 0.7% 100,000 Kobenhavns Lufthavne 11,709 COPENHAGEN AIRPORT AUTHORITY - ---------------------------------------------------------------------------- >NORWAY: 2.5% 2,610,000 Den Norske Bank 17,384 LARGEST NORWEGIAN BANK 566,000 Orkla 12,651 DIVERSIFIED CONSUMER GOODS 1,200,000 Tomra Systems 7,219 REVERSE VENDING MACHINES 220,000 Ekornes 4,059 NICHE FURNITURE MANUFACTURER - ---------------------------------------------------------------------------- 41,313 >FINLAND: 1.5% 385,000 Jaakko Poyry 10,575 ENGINEERING CONSULTANTS IN FORESTRY, ENERGY 185,000 Amer Group 8,007 BRANDED SPORTING GOODS 816,000 Sponda 6,796 OFFICE & WAREHOUSE PROPERTY COMPANY - ---------------------------------------------------------------------------- 25,378 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >SWEDEN: 3.2% 2,800,000 Intrum Justitia $ 14,793 RECEIVABLES MANAGEMENT & DEBT COLLECTION 470,000 Castellum 11,108 OFFICE, WAREHOUSE & RETAIL PROPERTY COMPANY 950,000 Nobia 9,906 KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION 400,000 Munters 9,676 MOISTURE & HUMIDITY CONTROL 293,000 Hexagon 7,984 DIVERSIFIED ENGINEERING - ---------------------------------------------------------------------------- 53,467 >FRANCE/BELGIUM: 6.5% 390,000 Neopost 19,655 POSTAGE METER MACHINES 575,000 Euronext 14,540 TRADING SERVICES FOR FINANCIAL MARKETS 270,000 Essilor International 13,948 EYEGLASS LENSES 500,000 Fininfo 11,774 DATA FEEDS FOR FRENCH BANKS & BROKERS 130,000 Bacou Dalloz 10,155 SAFETY EQUIPMENT 40,000 Imerys 8,411 INDUSTRIAL MINERALS PRODUCER 90,000 Bonduelle 8,216 PRODUCER OF CANNED, FROZEN & FRESH VEGETABLES 244,000 Omega Pharma (Belgium) 7,747 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 90,000 Vallourec 7,484 SEAMLESS TUBES 50,000 Groupe Bourbon 5,153 FOOD RETAILER 34,000 Camaieu 2,635 WOMEN'S APPAREL RETAILER - ---------------------------------------------------------------------------- 109,718 >GREECE: 0.5% 465,000 Intralot 9,069 LOTTERY & GAMING SYSTEMS & SERVICES - ---------------------------------------------------------------------------- >UNITED KINGDOM/IRELAND: 17.8% 2,310,000 Anglo Irish Bank (Ireland) 36,410 SMALL BUSINESS & MIDDLE MARKET BANKING 1,300,000 Kerry Group (Ireland) 24,405 FOOD INGREDIENTS 3,100,000 Grafton Group (Ireland) 21,365 BUILDERS, WHOLESALERS & DIY RETAILING 3,500,000 Hit Entertainment 18,399 TELEVISION SHOWS FOR CHILDREN 1,100,000 Irish Life & Permanent (Ireland) 17,740 SAVINGS PRODUCTS 1,300,000 Exel 17,137 GLOBAL LOGISTICS & FREIGHT FORWARDING 5,800,000 RPS Group 15,245 ENVIRONMENTAL CONSULTING 120,000 Depfa Bank (Ireland) 15,135 INTERNATIONAL PUBLIC SECTOR FINANCE 2,700,000 Expro International 13,013 OFFSHORE OIL FIELD SERVICES 1-800-922-6769 32 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >UNITED KINGDOM/IRELAND--CONTINUED 1,550,000 Smith & Nephew $ 12,983 MEDICAL EQUIPMENT & SUPPLIES 600,000 Cobham 12,499 AEROSPACE 8,000,000 Tullow Oil 12,246 OIL & GAS PRODUCER 1,600,000 Bunzl 12,188 DISTRIBUTION OF DISPOSABLE PRODUCTS TO FOOD INDUSTRY 1,420,000 Spectris 10,792 ELECTRONIC INSTRUMENTS & CONTROLS 1,400,000 Euro Money Institutional Investor 9,790 FINANCIAL PUBLICATIONS 740,000 Jurys Doyle Hotel (Ireland) 9,044 HOTEL GROUP 800,000 Business Post 7,369 PARCEL & EXPRESS MAIL SERVICE 1,010,000 Burberry 6,590 APPAREL RETAILER 1,000,000 Kensington 5,846 NON-CONFORMING MORTGAGE COMPANY 300,000 Intermediate Capital 5,655 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 600,000 Jardine Lloyd Thompson 5,650 BUSINESS INSURANCE BROKER 1,520,000 Nestor Healthcare 5,589 HEALTHCARE STAFFING COMPANY 450,000 McCarthy & Stone 4,153 BUILDER OF RETIREMENT APARTMENTS - ---------------------------------------------------------------------------- 299,243 >SWITZERLAND: 6.4% 40,000 Geberit International 19,656 PLUMBING SUPPLIES 80,000 Kaba Holdings 16,164 BUILDING SECURITY SYSTEMS 30,000 Givaudan 15,566 INDUSTRIAL FRAGRANCES & FLAVORS 33,500 BKW Energie 12,969 ELECTRIC UTILITY 13,000 Synthes-Stratec 12,860 PRODUCTS FOR ORTHOPEDIC SURGERY 40,000 Schindler (b) 9,763 ELEVATOR MANUFACTURER & SERVICE PROVIDER 3,000 Pargesa 8,001 INDUSTRIAL & MEDIA CONGLOMERATE 18,000 Sika 7,769 CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION 110,000 Bachem 5,641 PEPTIDES - ---------------------------------------------------------------------------- 108,389 >ITALY: 2.2% 1,200,000 Autogrill (b) 17,145 RESTAURANTS & CATERING FOR TRAVELERS 212,000 Davide Campari 10,284 BEVERAGES 1,700,000 De Longhi 7,111 CONSUMER APPLIANCES FOR HEATING, AIR CONDITIONING & COOKING NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 90,000 Amplifon $ 2,557 HEARING AID RETAILER - ---------------------------------------------------------------------------- 37,097 >SPAIN: 3.3% 2,000,000 Abengoa 14,540 ENGINEERING & CONSTRUCTION 435,000 Gamesa 14,299 WIND TURBINES 1,139,100 Cortefiel 10,477 APPAREL RETAILER 600,000 Red Electrica 9,828 SPANISH POWER GRID 400,000 Prosegur 6,501 SECURITY GUARDS - ---------------------------------------------------------------------------- 55,645 >NETHERLANDS: 7.0% 433,000 Hunter Douglas 20,246 DECORATIVE WINDOW COVERINGS 900,000 Vopak 16,896 OIL & CHEMICAL STORAGE 349,000 OPG Groep 15,852 PHARMACEUTICAL WHOLESALER & RETAILER 687,000 United Services Group 15,710 TEMPORARY STAFFING SERVICES 585,000 IM Tech 15,169 TECHNICAL ENGINEERING 362,000 Sligro Food Group 11,152 FOOD SERVICE & WHOLESALING 420,000 Aalberts Industrie 10,864 FLOW CONTROL & HEAT TREATMENT 200,000 Fugro 10,281 SURVEY & GPS SERVICES 133,000 Am NV 1,032 PROPERTY DEVELOPER - ---------------------------------------------------------------------------- 117,202 >LUXEMBOURG: 1.6% 400,000 Tenaris (b) 13,328 STEEL PIPE FOR OIL WELLS & PIPELINES 1,280,000 SES Global 12,902 SATELLITE BROADCASTING SERVICES - ---------------------------------------------------------------------------- 26,230 ------------ EUROPE: TOTAL 1,024,829 - ---------------------------------------------------------------------------- ASIA: 22.4% >HONG KONG/CHINA: 6.6% 35,000,000 Global Bio-Chem Technology Group 21,639 CORN-BASED BIO-CHEMICAL PRODUCTS 5,000,000 Techtronic Industries 13,846 POWER TOOL MANUFACTURER 2,000,000 TVB 10,098 TELEVISION PROGRAMMING & BROADCASTING 20,000,000 Sinotrans (China) 9,016 INTEGRATED LOGISTICS IN CHINA 4,000,000 Hong Kong Exchanges & Clearing 8,656 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 11,000,000 Zhejiang Expressway 7,722 TOLL ROAD BUILDER & OPERATOR 33 Columbia Acorn International >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >HONG KONG/CHINA-CONTINUED 12,000,000 Jiangsu Expressway $ 6,414 TOLL ROAD BUILDER & OPERATOR 15,000,000 Linmark 6,134 APPAREL/HARD GOODS SOURCING AGENT 14,500,000 Ngai Lik Industrial 5,977 CHINA BASED ELECTRONICS CONTRACT MANUFACTURER 8,000,000 Hainan Meilan Airport 5,564 CHINESE AIRPORT OPERATOR 5,000,000 Lianhua Supermarket (b) 5,281 CHINESE SUPERMARKET CHAIN 1,500,000 Esprit Holdings 4,985 GLOBAL APPAREL BRAND MANAGER 25,000,000 Lerado Group 4,830 BABY PARAPHERNALIA 803,000 Clear Media (b) 517 CHINA'S LARGEST OUTDOOR ADVERTISER - ---------------------------------------------------------------------------- 110,679 >JAPAN: 8.5% 190,000 USS 13,443 USED CAR AUCTIONEER 180,000 ARRK 11,643 PROTOTYPES & MOLDS FOR NEW PRODUCT DEVELOPMENT 1,031,000 Toyo Technica 11,404 VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION 679,900 Ushio 11,290 INDUSTRIAL LIGHT SOURCES 543,000 Shimano 11,252 BICYCLE COMPONENTS & FISHING TACKLE 346,300 Daito Trust Construction 10,279 APARTMENT BUILDER 413,000 Park 24 9,464 PARKING LOT OPERATOR 135,000 Sugi Pharmacy 9,337 DRUGSTORES 700,000 NIFCO 8,788 MOLDED PLASTIC COMPONENTS 172,000 Uni-Charm 8,461 INFANT HYGIENE & FEMININE CARE PRODUCTS 35,000 Bellsystem24 7,155 CALL CENTERS 150,000 Eneserve 6,020 POWER GENERATORS 260,000 Nissin Healthcare 5,291 MEAL PREPARATION 385,000 Daiseki 5,257 WASTE DISPOSAL & RECYCLING 325,000 Aderans 5,245 HAIR PIECES 1,150,000 OMC Card (b) 4,669 CREDIT CARD ISSUER 100,000 Taisei Lamick 2,184 PACKAGING MATERIALS & MACHINERY 7,000 Kappa Create 591 SUSHI CHAIN RESTAURANT OPERATOR - ---------------------------------------------------------------------------- 141,773 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >TAIWAN: 1.0% 1,130,000 ASE Test (b) $ 16,916 SEMICONDUCTOR PACKAGING & TEST SERVICES - ---------------------------------------------------------------------------- >SOUTH KOREA: 2.2% 355,000 Hyundai Mobis 19,098 AUTO PARTS 165,000 Yuhan 9,389 ETHICAL DRUG PRODUCER 100,000 Samsung Fire & Marine 5,749 NON-LIFE INSURANCE 315,000 Samyoung Heat Exchange 2,522 POWER PLANT RELATED MACHINERY - ---------------------------------------------------------------------------- 36,758 >INDONESIA: 0.3% 30,000,000 PT Perusahaan Gas Negara (b) 5,521 GAS PIPELINE OPERATOR - ---------------------------------------------------------------------------- >SINGAPORE: 2.4% 1,920,000 Venture 22,611 ELECTRONIC CONTRACT MANUFACTURER 9,000,000 Sembcorp Logistics 10,599 LOGISTIC SERVICES FOR MARINE TRANSPORT 15,000,000 Comfort Group 7,198 TAXI SERVICE - ---------------------------------------------------------------------------- 40,408 >INDIA: 1.4% 1,700,000 Housing Development Finance 24,075 MORTGAGE LOAN PROVIDER ------------ ASIA: TOTAL 376,130 - ---------------------------------------------------------------------------- LATIN AMERICA: 1.4% >MEXICO: 1.1% 600,000 Grupo Aeroportuario 10,560 MEXICAN AIRPORT AUTHORITY 3,000,000 Consorcio ARA (b) 7,449 LOW/MEDIUM INCOME HOUSE BUILDER - ---------------------------------------------------------------------------- 18,009 >CHILE: 0.3% 186,000 CorpBanca (b) 4,849 CHILE'S 3RD LARGEST LOCAL BANK ------------ LATIN AMERICA: TOTAL 22,858 - ---------------------------------------------------------------------------- OTHER COUNTRIES: 10.7% >AUSTRALIA/NEW ZEALAND: 3.6% 3,000,000 Billabong International 16,106 SURFWEAR APPAREL MANUFACTURER 4,000,000 Sky City Entertainment (New Zealand) 12,082 CASINO/ENTERTAINMENT COMPLEX 2,500,000 Lion Nathan 11,370 AUSTRALIAN BEER BREWER/DISTRIBUTOR 350,000 Perpetual Trustees 11,227 INVESTMENT MANAGEMENT 2,000,000 The Warehouse Group (New Zealand) 6,709 WAREHOUSE CLUB 400,000 Tabcorp Holdings 3,382 AUSTRALIA'S LARGEST GAMING COMPANY - ---------------------------------------------------------------------------- 60,876 1-800-922-6769 34 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >CANADA: 6.8% 1,000,000 Corus Entertainment $ 21,279 TV PROGRAMMING & RADIO STATIONS 365,000 Talisman Energy 20,764 OIL & GAS PRODUCER 300,000 Power Financial 11,498 LIFE INSURANCE & MUTUAL FUNDS 1,261,000 Patheon (b) 11,358 PHARMACEUTICAL CONTRACT MANUFACTURER 420,000 Masonite International (b) 11,245 DOOR MANUFACTURER 300,000 Nexen 10,892 OIL & GAS PRODUCER 5,000,000 Esprit Exploration (b) 10,756 NATURAL GAS PRODUCER 700,000 Shawcor 8,444 OIL & GAS PIPELINE PRODUCTS 450,000 Intrawest 8,322 OWNER/OPERATOR OF SKI RESORTS - ---------------------------------------------------------------------------- 114,558 >UNITED STATES: 0.3% 134,600 Central European Distribution (b) 4,253 SPIRITS & WINE DISTRIBUTION - ---------------------------------------------------------------------------- ------------ OTHER: TOTAL 179,687 TOTAL COMMON STOCKS AND OTHER ------------ EQUITY-LIKE SECURITIES: 95.5% 1,603,504 (COST: $1,163,943) PRINCIPAL AMOUNT(000) VALUE (000) - ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 3.8% $ 33,000 Toyota Motor Credit 1.02% Due 1/06/04 $ 32,995 30,563 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 1/15/06, Market Value $31,176 (repurchase proceeds: $30,564) 30,563 - ---------------------------------------------------------------------------- (AMORTIZED COST: $63,558) 63,558 ------------ TOTAL INVESTMENTS (d): 99.3% 1,667,062 (COST: $1,227,501) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.7% 11,270 ------------ TOTAL NET ASSETS: 100% $ 1,678,332 ============================================================================ ________________________________________________________________________________ >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investment was $1,230,952 and net unrealized appreciation was $436,110 consisting of gross unrealized appreciation of $488,906 and gross unrealized depreciation of $52,796. (b) Non-income producing security. (c) On December 31, 2003, the fund did not have any investments in affiliate companies. There were sales proceeds of $1,187, resulting in net realized losses of $2,588 in affiliate companies during the year ended December 31, 2003. There was no other investment activity. (d) On December 31, 2003, the Fund's total investments were denominated in currencies as follows: % OF CURRENCY VALUE NET ASSETS -------------------------------------------------------------------- Euro $ 621,599 37.0% British Pounds 175,144 10.4 Japanese Yen 141,773 8.5 Canadian Dollars 114,682 6.8 Hong Kong Dollars 110,680 6.6 Swiss Francs 108,389 6.5 Other currencies less than 5% of total net assets 394,795 23.5 ---------- ------ $1,667,062 99.3% ========== ====== 35 Columbia Acorn International >Portfolio Diversification At December 31, 2003, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE (000) PERCENT - ---------------------------------------------------------------------------- >INFORMATION TECHNOLOGY Business Information and Marketing Services $ 48,550 2.9% Television Programming 39,678 2.4 Financial Processors 32,754 1.9 Contract Manufacturing 28,588 1.7 Instrumentation 23,012 1.4 Semiconductors and Related Equipment 16,916 1.0 Satellite Broadcasting 12,902 0.8 Television Broadcasting 10,098 0.6 Publishing 9,790 0.6 Advertising 517 0.0 - ---------------------------------------------------------------------------- 222,805 13.3 >HEALTHCARE Medical Equipment 39,791 2.4 Services 34,479 2.1 Hospital Management 34,280 2.0 Pharmaceuticals 20,747 1.2 Biotechnology/ Drug Delivery 5,641 0.3 - ---------------------------------------------------------------------------- 134,938 8.0 >CONSUMER GOODS/SERVICES Food 83,216 5.0 Retail 48,571 2.9 Furniture and Textiles 45,456 2.7 Durables Goods 37,095 2.2 Apparels 33,293 2.0 Beverage 21,654 1.3 Other Consumer Services 19,539 1.2 Restaurants 17,736 1.1 Consumer Goods Distribution 17,696 1.0 Travel 17,366 1.0 Casinos 15,464 0.9 Nondurables 10,645 0.6 Gaming 9,069 0.5 Leisure Products 8,007 0.5 Other Entertainment 7,231 0.4 - ---------------------------------------------------------------------------- 392,038 23.3 >FINANCE Banks 73,778 4.4 Insurance 29,139 1.7 Other Finance Companies 26,294 1.6 Savings and Loans 24,075 1.4 Money Management 22,725 1.4 Credit Cards 4,669 0.3 - ---------------------------------------------------------------------------- 180,680 10.8 VALUE (000) PERCENT - ---------------------------------------------------------------------------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $ 113,640 6.8% Industrial Materials 76,536 4.6 Outsourcing and Training Services 64,220 3.8 Conglomerates 41,389 2.5 Electrical Components 38,088 2.3 Construction 35,772 2.1 Machinery 29,396 1.7 Speciality Chemicals 23,335 1.4 Industrial Distribution 21,365 1.3 Steel 20,812 1.2 - ---------------------------------------------------------------------------- 464,553 27.7 >ENERGY/MINERALS Oil/Gas Producers 54,658 3.2 Oil Services 31,738 1.9 Independent Power 6,020 0.4 Refining/Marketing/Distribution 5,521 0.3 - ---------------------------------------------------------------------------- 97,937 5.8 >OTHER INDUSTRIES Transportation 58,541 3.5 Real Estate 29,215 1.7 Regulated Utilities 22,797 1.4 - ---------------------------------------------------------------------------- 110,553 6.6 TOTAL COMMON STOCKS AND --------------------------- OTHER EQUITY-LIKE SECURITIES: 1,603,504 95.5 SHORT-TERM OBLIGATIONS: 63,558 3.8 --------------------------- TOTAL INVESTMENTS: 1,667,062 99.3 CASH AND OTHER ASSETS LESS LIABILITIES: 11,270 0.7 --------------------------- TOTAL NET ASSETS: $ 1,678,332 100.0% ============================================================================ 1-800-922-6769 36 Columbia Acorn USA >Major Portfolio Changes in the Fourth Quarter (Unaudited) NUMBER OF SHARES -------------------------- 09/30/03 12/31/03 Additions - ---------------------------------------------------------------------------- INFORMATION Andrew 100,000 480,000 AnswerThink Consulting 670,000 1,005,500 Commonwealth Telephone 293,800 363,800 Crown Castle International 955,000 1,005,000 DoubleClick 0 925,600 Igate Capital 0 200,000 Integrated Circuit Systems 175,300 365,300 Kronos 221,100 331,650 Symmetricon 0 270,500 Unova 115,000 180,000 - ---------------------------------------------------------------------------- HEALTH CARE CTI Molecular Imaging 178,900 245,000 Enzon 211,400 311,500 First Health Group 714,000 744,000 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Aeropostale 150,500 290,500 Coinstar 85,000 435,000 Leapfrog Enterprises 0 50,000 Petco Animal Supplies 25,000 95,000 Spanish Broadcasting System 150,000 603,200 Winn Dixie Stores 0 710,000 - ---------------------------------------------------------------------------- FINANCE HCC Insurance Holdings 350,000 430,000 TCF Financial 79,500 131,500 United National Group 0 71,400 - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Central Parking 0 181,700 Esco Technologies 59,000 282,000 Gibraltar Steel 0 50,000 Pentair 0 63,400 - ---------------------------------------------------------------------------- ENERGY/MINERALS FMC Technologies 166,700 401,700 Newpark Resources 651,000 905,600 Northeast Utilities 0 90,000 Quicksilver Resources 208,800 305,000 Western Gas 123,000 136,000 37 Columbia Acorn USA >Statement of Investments, December 31, 2003 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- COMMON STOCKS: 93.4% - ---------------------------------------------------------------------------- INFORMATION: 38.7% >BROADCASTING: 2.7% 333,100 Salem Communications (b) $ 9,034 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 603,200 Spanish Broadcasting (b) 6,334 SPANISH LANGUAGE RADIO STATIONS 138,500 Gray Television 2,094 MID MARKET AFFILIATED TV STATIONS 57,000 Saga Communications (b) 1,056 RADIO STATIONS IN SMALL & MID-SIZED CITIES - ---------------------------------------------------------------------------- 18,518 >TELEVISION PROGRAMMING: 0.7% 600,000 Mediacom Communications (b) 5,202 CABLE TELEVISION FRANCHISES - ---------------------------------------------------------------------------- >TELECOMMUNICATIONS/WIRELINE COMMUNICATIONS: 2.8% 363,800 Commonwealth Telephone (b) 13,733 RURAL PHONE FRANCHISES & CLEC 480,000 Andrew (b) 5,525 WIRELESS INFRASTRUCTURE EQUIPMENT - ---------------------------------------------------------------------------- 19,258 >TELECOMMUNICATION EQUIPMENT: 0.3% 270,500 Symmetricom (b) 1,969 NETWORK TIMING & SYNCHRONIZATION DEVICES - ---------------------------------------------------------------------------- >MOBILE COMMUNICATIONS: 4.9% 927,000 Western Wireless (b) 17,020 RURAL CELLULAR PHONE SERVICES 1,005,000 Crown Castle International (b) 11,085 COMMUNICATION TOWERS IN USA & UK 60,000 Telephone & Data Systems 3,753 CELLULAR & TELEPHONE SERVICES 182,700 COMARCO (b) 2,010 WIRELESS NETWORK TESTING - ---------------------------------------------------------------------------- 33,868 >COMPUTER SERVICES: 2.7% 786,000 RCM Technologies (b)(c) 5,793 TECHNOLOGY ENGINEERING SERVICES 1,005,500 AnswerThink Consulting (b) 5,581 IT INTEGRATOR FOR FORTUNE 2000 232,000 American Management Systems (b) 3,496 SOFTWARE DEVELOPMENT SERVICES 200,000 Igate Capital (b) 1,570 TECHNOLOGY STAFFING SERVICES 149,600 Ciber (b) 1,296 SOFTWARE SERVICES & STAFFING 256,600 Analysts International (b) 865 TECHNOLOGY STAFFING SERVICES - ---------------------------------------------------------------------------- 18,601 >BUSINESS/CONSUMER SOFTWARE: 13.6% 527,600 Micros Systems (b) 22,877 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 974,000 JDA Software (b) 16,081 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 1,330,000 Novell (b) 13,992 SECURITY & IDENTITY MANAGEMENT SOFTWARE NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 331,650 Kronos (b) $ 13,137 LABOR MANAGEMENT SOLUTIONS 304,991 PeopleSoft (b) 6,954 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 473,500 MRO Software (b) 6,373 ENTERPRISE MAINTENANCE SOFTWARE 653,200 E.Piphany (b) 4,710 CRM SOFTWARE 206,000 Group 1 Software (b) 3,630 ADDRESS VERIFICATION SOFTWARE 140,000 SPSS (b) 2,503 STATISTICAL ANALYSIS SOFTWARE 100,000 Aspect Communications (b) 1,576 CALL CENTER SOFTWARE 64,000 THQ (b) 1,082 ENTERTAINMENT SOFTWARE 65,000 MAPICS (b) 851 MID MARKET ERP SOFTWARE 34,000 Activision (b) 619 ENTERTAINMENT SOFTWARE - ---------------------------------------------------------------------------- 94,385 >INTERNET: 1.4% 925,600 DoubleClick (b) 9,460 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA - ---------------------------------------------------------------------------- >TRANSACTION PROCESSORS: 1.8% 211,640 Global Payments 9,972 CREDIT CARD PROCESSOR 140,000 Euronet Worldwide (b) 2,520 ATM PROCESSOR 21,000 Pegasus Systems (b) 220 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY - ---------------------------------------------------------------------------- 12,712 >BUSINESS INFORMATION/MARKETING SERVICES/PUBLISHING: 1.2% 102,800 Getty Images (b) 5,153 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA 110,000 Navigant Consulting (b) 2,075 CONSULTING FIRM 58,600 Information Holdings (b) 1,295 PATENT & OTHER BUSINESS INFORMATION - ---------------------------------------------------------------------------- 8,523 >CONTRACT MANUFACTURING: 0.3% 140,000 Plexus (b) 2,404 ELECTRONIC MANUFACTURING SERVICES - ---------------------------------------------------------------------------- >INSTRUMENTATION: 0.3% 60,000 Trimble Navigation (b) 2,234 GPS-BASED INSTRUMENTS - ---------------------------------------------------------------------------- >COMPUTER HARDWARE/SEMICONDUCTORS/ RELATED EQUIPMENT: 6.0% 186,000 Zebra Technologies (b) 12,345 BAR CODE PRINTERS 365,300 Integrated Circuit Systems (b) 10,407 SILICON TIMING DEVICES 424,100 Seachange International (b) 6,531 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 1-800-922-6769 38 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >COMPUTER HARDWARE/SEMICONDUCTORS/ RELATED EQUIPMENT-CONTINUED 180,000 Unova (b) $ 4,131 BARCODE & WIRELESS LAN SYSTEMS 70,000 Littelfuse (b) 2,017 LITTLE FUSES 50,000 Avocent (b) 1,826 COMPUTER CONTROL SWITCHES 200,000 Cable Design Technologies (b) 1,798 NETWORKING & SPECIALTY CABLES 40,000 Rogers (b) 1,765 PCB LAMINATES & HIGH PERFORMANCE FOAMS 70,000 IXYS (b) 654 POWER SEMICONDUCTORS - ---------------------------------------------------------------------------- 41,474 ------------ INFORMATION: TOTAL 268,608 - ---------------------------------------------------------------------------- HEALTH CARE: 14.6% >BIOTECHNOLOGY/DRUG DELIVERY: 2.9% 720,000 Nektar Therapeutics (b) 9,799 PULMONARY DRUG DELIVERY 311,500 Enzon (b) 3,738 POLYMER DELIVERY TECHNOLOGY FOR IMPROVED DRUGS 245,000 Applera Celera Genomics (b) 3,408 DIAGNOSTICS & DRUG DEVELOPMENT 375,000 Locus Discovery, Series D Pfd. (b)(d) 1,500 HIGH THROUGHPUT RATIONAL DRUG DESIGN 154,000 SYRRX, Series C (b)(d) 801 X-RAY CRYSTALLOGRAPHY 32,600 Applied Molecular Evolution (b) 580 MONOCLONAL ANTIBODIES VIA MOLECULAR EVOLUTION 363,636 Metabolex, Series F (b)(d) 53 DRUGS FOR DIABETES - ---------------------------------------------------------------------------- 19,879 >MEDICAL EQUIPMENT: 5.3% 573,000 Edwards Lifesciences (b) 17,236 HEART VALVES 220,000 Viasys Healthcare (b) 4,532 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 245,000 CTI Molecular Imaging (b) 4,143 MEDICAL DIAGNOSTIC DEVICES 98,500 ICU Medical (b) 3,377 INTRAVENOUS THERAPY PRODUCTS 135,600 VISX (b) 3,139 LASER EYE SURGERY 66,300 Diagnostic Products 3,044 IMMUNODIAGNOSTIC KITS 345,000 Novoste (b) 1,653 RADIATION CATHETERS FOR IN-STENT RESTENOSIS - ---------------------------------------------------------------------------- 37,124 >MEDICAL SUPPLIES: 1.2% 222,800 Techne (b) 8,417 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES - ---------------------------------------------------------------------------- >SERVICES: 5.2% 744,000 First Health Group (b) 14,478 PPO NETWORK NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 423,800 NDCHealth Group $ 10,858 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 246,800 Lincare Holdings (b) 7,411 HOME HEALTH CARE SERVICES 100,000 Dendrite International (b) 1,567 SOFTWARE FOR PHARMACEUTICAL SALES FORCE 40,000 Charles River Laboratories (b) 1,373 PHARMACEUTICAL RESEARCH 26,000 Medquist (b) 418 MEDICAL TRANSCRIPTION SERVICES - ---------------------------------------------------------------------------- 36,105 ------------ HEALTH CARE: TOTAL 101,525 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 14.2% >CONSUMER SERVICES: 4.2% 387,000 ITT Educational Services (b) 18,177 POSTSECONDARY DEGREE PROGRAMS 435,000 Coinstar (b) 7,856 OWNER/OPERATOR OF COIN COUNTING MACHINES 181,700 Central Parking 2,713 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES 48,900 Bally Total Fitness (b) 342 NATIONAL CHAIN OF FITNESS CENTERS - ---------------------------------------------------------------------------- 29,088 >APPAREL: 1.2% 197,600 Steven Madden (b) 4,031 WHOLESALER/RETAILER OF FASHION FOOTWEAR 64,000 Coach (b) 2,416 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 59,200 Oxford Industries 2,006 BRANDED & PRIVATE LABEL APPAREL - ---------------------------------------------------------------------------- 8,453 >ENTERTAINMENT/LEISURE PRODUCTS: 1.0% 91,300 International Speedway Motors 4,077 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 70,000 Action Performance 1,372 MOTORSPORT COLLECTIBLES & MERCHANDISING 50,000 Leapfrog Enterprises (b) 1,327 EDUCATIONAL TOYS - ---------------------------------------------------------------------------- 6,776 >DURABLE GOODS: 0.2% 30,000 American Woodmark 1,651 KITCHEN CABINETS - ---------------------------------------------------------------------------- >FURNITURE: 0.5% 85,000 Herman Miller 2,063 OFFICE FURNITURE 20,000 Mohawk Industries (b) 1,411 CARPET & FLOORING - ---------------------------------------------------------------------------- 3,474 >NONDURABLES: 1.4% 167,200 Scotts Company (b) 9,892 CONSUMER LAWN & GARDEN PRODUCTS - ---------------------------------------------------------------------------- 39 Columbia Acorn USA >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >RETAIL: 5.7% 290,500 Aeropostale (b) $ 7,966 MALL BASED TEEN RETAILER 710,000 Winn Dixie Stores 7,064 SUPERMARKETS IN THE SOUTHEAST US 343,750 Christopher & Banks 6,713 WOMEN'S APPAREL RETAILER 116,600 Urban Outfitters (b) 4,320 MULTI CHANNEL LIFESTYLE RETAILER 130,000 Abercrombie & Fitch (b) 3,212 TEEN APPAREL RETAILER 95,000 Petco Animal Supplies (b) 2,893 PET SUPPLIES & SERVICES 50,000 Michaels Stores 2,210 CRAFT & HOBBY SPECIALTY RETAILER 50,000 Ann Taylor (b) 1,950 WOMEN'S APPAREL RETAILER 95,000 Genesco (b) 1,437 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER 547,000 Gadzooks (b)(c) 848 TEEN APPAREL RETAILER 20,000 Chico's FAS (b) 739 WOMEN'S SPECIALTY RETAIL - ---------------------------------------------------------------------------- 39,352 ------------ CONSUMER GOODS/SERVICES: TOTAL 98,686 - ---------------------------------------------------------------------------- FINANCE: 10.5% >BANKS: 1.7% 131,500 TCF Financial 6,753 GREAT LAKES BANK 158,125 Chittenden 5,319 VERMONT & WEST MASSACHUSETTS BANK - ---------------------------------------------------------------------------- 12,072 >FINANCE COMPANIES: 4.0% 1,091,500 AmeriCredit (b) 17,388 AUTO LENDING 520,200 World Acceptance (b) 10,357 PERSONAL LOANS - ---------------------------------------------------------------------------- 27,745 >SAVINGS & LOAN: 1.3% 110,000 Downey Financial 5,423 CALIFORNIA HOME LENDER 116,400 Anchor Bancorp Wisconsin 2,898 WISCONSIN THRIFT 16,500 Peoples Bank Bridgeport 538 CONNECTICUT SAVINGS & LOAN - ---------------------------------------------------------------------------- 8,859 >MONEY MANAGEMENT: 0.2% 40,000 SEI Investments 1,219 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT - ---------------------------------------------------------------------------- >INSURANCE: 3.3% 430,000 HCC Insurance Holdings 13,674 AVIATION INSURANCE 17,000 Markel (b) 4,310 SPECIALTY INSURANCE NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 97,000 Harleysville Group $ 1,929 COMMERCIAL & PERSONAL LINES INSURANCE 35,000 Philadelphia Consolidated Holding (b) 1,709 SPECIALTY INSURANCE 71,400 United National Group (b) 1,262 SPECIALTY INSURANCE - ---------------------------------------------------------------------------- 22,884 ------------ FINANCE: TOTAL 72,779 - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 6.8% >SPECIALTY CHEMICALS/INDUSTRIAL MATERIALS: 0.6% 95,000 Spartech 2,341 PLASTICS DISTRIBUTION & COMPOUNDING 70,000 Schulman 1,492 PLASTICS DISTRIBUTION & COMPOUNDING - ---------------------------------------------------------------------------- 3,833 >STEEL: 0.2% 50,000 Gibraltar Steel 1,257 STEEL PROCESSING - ---------------------------------------------------------------------------- >INDUSTRIAL DISTRIBUTION: 0.3% 100,000 Nuco2 (b) 1,267 BULK CO2 GAS DISTRIBUTION TO RESTAURANTS 50,000 Airgas 1,074 INDUSTRIAL GAS DISTRIBUTOR - ---------------------------------------------------------------------------- 2,341 >CONSTRUCTION: 0.2% 30,000 Florida Rock Industries 1,645 CONCRETE & AGGREGATES - ---------------------------------------------------------------------------- >MACHINERY: 2.6% 282,000 Esco Technologies (b) 12,309 FILTRATION & TEST EQUIPMENT 63,400 Pentair 2,898 PUMPS, WATER TREATMENT & TOOLS 55,000 Ametek 2,654 AEROSPACE/INDUSTRIAL INSTRUMENTS - ---------------------------------------------------------------------------- 17,861 >WATER: 0.9% 134,000 Cuno (b) 6,034 FILTRATION & FLUIDS CLARIFICATION - ---------------------------------------------------------------------------- >INDUSTRIAL GOODS: 0.0% 10,300 Intermagnetics General (b) 228 SUPERCONDUCTING WIRE - ---------------------------------------------------------------------------- >LOGISTICS: 1.3% 346,000 Hub Group (b) 7,453 TRUCK & RAIL FREIGHT FORWARDER 59,600 Forward Air (b) 1,639 FREIGHT TRANSPORTATION BETWEEN AIRPORTS - ---------------------------------------------------------------------------- 9,092 1-800-922-6769 40 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >INDUSTRIAL SERVICES: 0.7% 206,900 Insurance Auto Auctions (b) $ 2,700 AUTO SALVAGE SERVICES 95,000 Clark/Bardes Consulting (b) 1,828 EXECUTIVE COMPENSATION & BENEFITS CONSULTING - ---------------------------------------------------------------------------- 4,528 ------------ INDUSTRIAL GOODS/SERVICES: TOTAL 46,819 - ---------------------------------------------------------------------------- ENERGY/MINERALS: 7.7% >OIL SERVICES: 2.6% 401,700 FMC Technologies (b) 9,360 OIL & GAS WELL HEAD MANUFACTURER 905,600 Newpark Resources (b) 4,338 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 61,000 Carbo Ceramics 3,126 NATURAL GAS WELL STIMULANTS 135,000 Key Energy Services (b) 1,392 OIL & GAS WELL WORKOVER SERVICES - ---------------------------------------------------------------------------- 18,216 >OIL & GAS PRODUCERS: 3.4% 305,000 Quicksilver (b) 9,851 NATURAL GAS & COAL SEAM GAS PRODUCER 136,000 Western Gas 6,426 OIL & COAL SEAM GAS PRODUCER 215,000 Ultra Petroleum (b) 5,293 NATURAL GAS PRODUCER 82,100 Southwestern Energy (b) 1,962 NATURAL GAS PRODUCER - ---------------------------------------------------------------------------- 23,532 >DISTRIBUTION/MARKETING/REFINING: 1.7% 193,000 Atmos Energy 4,690 NATURAL GAS UTILITY 99,600 Equitable Resources 4,275 NATURAL GAS UTILITY & PRODUCER 75,000 Oneok 1,656 NATURAL GAS UTILITY, MARKETING & PROCESSING 115,000 Aquila (b)(d) 810 ELECTRIC UTILITY HOLDING COMPANY - ---------------------------------------------------------------------------- 11,431 ------------ ENERGY/MINERALS: TOTAL 53,179 NUMBER OF SHARES PRINCIPAL AMOUNT(000) VALUE (000) - ---------------------------------------------------------------------------- OTHER INDUSTRIES: 0.9% >REAL ESTATE: 0.6% 47,000 The Rouse Company $ 2,209 REGIONAL SHOPPING MALLS 100,000 Crescent Real Estate Equities 1,713 CLASS A OFFICE BUILDINGS 35,000 Highland Hospitality (b) 381 HOTEL REAL ESTATE INVESTMENT TRUST - ---------------------------------------------------------------------------- 4,303 >REGULATED UTILITIES: 0.3% 90,000 Northeast Utilities 1,815 REGULATED ELECTRIC UTILITY - ---------------------------------------------------------------------------- ------------ OTHER INDUSTRIES: TOTAL 6,118 ------------ TOTAL COMMON STOCKS: 93.4% 647,714 (COST: $489,314) SHORT-TERM OBLIGATIONS: 6.4% $ 22,000 American General Finance Yield 1.04% Due 1/06/04 21,997 22,529 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 1/15/06, Market Value $22,981 (repurchase proceeds: $22,530) 22,529 - ---------------------------------------------------------------------------- (AMORTIZED COST: $44,526) 44,526 ------------ TOTAL INVESTMENTS: 99.8% 692,240 (COST: $533,840) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.2% 1,034 ------------ TOTAL NET ASSETS: 100% $ 693,274 ============================================================================ ________________________________________________________________________________ >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investment is $533,937 and net unrealized appreciation was $158,303 consisting of gross unrealized appreciation of $190,029 and gross unrealized depreciation of $31,726. (b) Non-income producing security. (c) On December 31, 2003, the fund held the following percentages of the outstanding voting shares of the companies listed below: RCM Technologies 7.38% Gadzooks 5.97% The aggregate cost and value of these companies at December 31, 2003, were $9,999 and $6,641, respectively. Investments in affiliate companies represent 0.96% of total net assets at December 31, 2003. The change in unrealized gain in these companies amounted to $795 during the year ended December 31, 2003. There were purchases of $1,032 in affiliated companies during the year. 41 Columbia Acorn USA >Statement of Investments, continued (d) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. These securities are valued in good faith by the Board of Trustees. At December 31, 2003, these securities amounted to $3,164, which represents 0.5% of total net assets. Additional information on these securities is as follows: ACQUISITION SECURITY DATES SHARES COST VALUE - ------------------------------------------------------------------------------ Locus Discovery, Series D Pfd. 09/05/01 375 $ 1,500 $ 1,500 SYRRX, Series C 01/04/01 154 1,001 801 Aquila 10/25/01-11/14/01 115 2,433 810 Metabolex, Series F 02/11/00 364 2,000 53 ------- ------- $ 6,934 $ 3,164 ======= ======= 1-800-922-6769 42 Columbia Acorn International Select >Major Portfolio Changes in the Fourth Quarter (Unaudited) NUMBER OF SHARES -------------------------- 09/30/03 12/31/03 Additions - ---------------------------------------------------------------------------- EUROPE >NORWAY Orkla 19,000 38,000 >UNITED KINGDOM/IRELAND BG Group 200,000 300,000 Irish Life & Permanent (Ireland) 45,000 70,000 Jardine Lloyd Thompson 0 45,000 Smith & Nephew 75,000 90,000 >NORWAY DNB NOR ASA 201,000 209,500 >SWEDEN Gambro 0 58,000 - ---------------------------------------------------------------------------- ASIA >HONG KONG Esprit Holdings 0 200,000 >JAPAN Shimano 0 33,800 Ushio 0 26,000 NUMBER OF SHARES -------------------------- 09/30/03 12/31/03 Sales - ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Hit Entertainment 190,000 90,000 Marconi 54,000 0 Reed Elsevier 90,000 0 >NETHERLANDS Wolters Kluwer 28,000 0 >ITALY Parmalat Finanziaria 230,000 0 - ---------------------------------------------------------------------------- ASIA >HONG KONG Television Broadcasts 210,000 40,000 >JAPAN Terumo 34,000 0 43 Columbia Acorn International Select >Statement of Investments, December 31, 2003 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- COMMON STOCKS: 95.2% - ---------------------------------------------------------------------------- EUROPE: 70.9% >GERMANY: 5.4% 30,000 Rhoen-Klinikum $ 1,682 HOSPITAL MANAGEMENT 12,000 Deutsche Boerse 655 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS - ---------------------------------------------------------------------------- 2,337 >NORWAY: 5.2% 209,500 Den Norske Bank 1,395 LARGEST NORWEGIAN BANK 38,000 Orkla 849 DIVERSIFIED CONSUMER GOODS - ---------------------------------------------------------------------------- 2,244 >SWEDEN: 1.1% 58,000 Gambro 480 PRODUCTS/SERVICES FOR RENAL CARE - ---------------------------------------------------------------------------- >FRANCE/BELGIUM: 8.5% 25,000 Neopost 1,260 POSTAGE METER MACHINES 22,000 Essilor International 1,136 EYEGLASS LENSES 35,000 Euronext 885 TRADING SERVICES FOR FINANCIAL MARKETS 2,000 Imerys 421 INDUSTRIAL MINERALS PRODUCER - ---------------------------------------------------------------------------- 3,702 >UNITED KINGDOM/IRELAND: 35.6% 160,000 Anglo Irish Bank (Ireland) 2,522 SMALL BUSINESS & MIDDLE MARKET BANKING 90,000 Kerry Group (Ireland) 1,690 FOOD INGREDIENTS 300,000 BG Group 1,536 OIL & GAS PRODUCER 185,000 Compass Group 1,255 INTERNATIONAL CONCESSION & CONTRACT CATERER 170,000 Grafton Group (Ireland) 1,172 BUILDERS, WHOLESALERS & DIY RETAILING 70,000 Irish Life & Permanent (Ireland) 1,129 SAVINGS PRODUCTS 8,700 Depfa Bank (Ireland) 1,097 INTERNATIONAL PUBLIC SECTOR FINANCE 120,000 Bunzl 914 DISTRIBUTION OF DISPOSABLE PRODUCTS TO FOOD INDUSTRY 40,000 Cobham 833 AEROSPACE 90,000 Smith & Nephew 754 MEDICAL EQUIPMENT & SUPPLIES 60,000 British Sky Broadcasting (b) 753 DIGITAL SATELLITE BROADCASTING 45,000 Exel 593 GLOBAL LOGISTICS & FREIGHT FORWARDING 90,000 Hit Entertainment 473 TELEVISION SHOWS FOR CHILDREN 45,000 Jardine Lloyd Thompson 424 BUSINESS INSURANCE BROKER NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 48,000 Burberry $ 313 APPAREL RETAILER - ---------------------------------------------------------------------------- 15,458 >SWITZERLAND: 8.8% 9,000 Swatch Group 1,080 WATCH & ELECTRONICS MANUFACTURER 4,000 Schindler (b) 976 ELEVATOR MANUFACTURER & SERVICE PROVIDER 900 Synthes-Stratec 890 PRODUCTS FOR ORTHOPEDIC SURGERY 1,700 Givaudan 882 INDUSTRIAL FRAGRANCES & FLAVORS - ---------------------------------------------------------------------------- 3,828 >ITALY: 2.1% 65,000 Autogrill (b) 929 RESTAURANTS & CATERING FOR TRAVELERS - ---------------------------------------------------------------------------- >SPAIN: 2.3% 60,000 Red Electrica 983 SPANISH POWER GRID - ---------------------------------------------------------------------------- >LUXEMBOURG: 1.9% 25,000 Tenaris 833 STEEL PIPE FOR OIL WELLS & PIPELINES ------------ EUROPE: TOTAL 30,794 - ---------------------------------------------------------------------------- ASIA: 14.1% >HONG KONG: 2.0% 200,000 Esprit Holdings 665 GLOBAL APPAREL BRAND MANAGER 40,000 TVB 202 TELEVISION PROGRAMMING & BROADCASTING - ---------------------------------------------------------------------------- 867 >JAPAN: 9.5% 10,000 Hoya 918 OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES 8,000 Nidec 764 ELECTRIC MOTORS 10,000 USS 708 USED CAR AUCTIONEER 33,800 Shimano 700 BICYCLE COMPONENTS & FISHING TACKLE 19,700 Daito Trust Construction 585 APARTMENT BUILDER 26,000 Ushio 432 INDUSTRIAL LIGHT SOURCES - ---------------------------------------------------------------------------- 4,107 >SINGAPORE: 2.6% 96,000 Venture 1,131 ELECTRONIC CONTRACT MANUFACTURER ------------ ASIA: TOTAL 6,105 1-800-922-6769 44 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- OTHER COUNTRIES: 10.2% >AUSTRALIA: 2.7% 260,000 Lion Nathan $ 1,182 AUSTRALIAN BEER BREWER/DISTRIBUTOR - ---------------------------------------------------------------------------- >CANADA: 7.5% 24,000 Talisman Energy 1,365 OIL & GAS PRODUCER 52,000 Corus Entertainment 1,106 TELEVISION PROGRAMMING & RADIO STATIONS 20,000 Power Financial 767 LIFE INSURANCE & MUTUAL FUNDS - ---------------------------------------------------------------------------- 3,238 ------------ OTHER: TOTAL 4,420 ------------ TOTAL COMMON STOCKS: 95.2% 41,319 (COST: $28,565) PRINCIPAL AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 4.4% $ 1,930 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 8/15/04, Market Value $1,970 (repurchase proceeds: $1,930) $ 1,930 - ---------------------------------------------------------------------------- (AMORTIZED COST: $1,930) 1,930 ------------ TOTAL INVESTMENTS (c): 99.6% 43,249 (COST: $30,495) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.4% 157 ------------ TOTAL NET ASSETS: 100% $ 43,406 ============================================================================ ________________________________________________________________________________ >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investments is $30,741 and net unrealized appreciation was $12,508, consisting of gross unrealized appreciation of $12,513 and gross unrealized depreciation of $5. (b) Non-income producing security. (c) On December 31, 2003, the Fund's total investments were denominated in currencies as follows: %OF CURRENCY VALUE NET ASSETS - ----------------------------------------------------------- Euro $ 15,560 35.8% British Pounds 7,848 18.1 Japanese Yen 4,107 9.5 Swiss Francs 3,829 8.8 Canadian Dollars 3,246 7.5 Norwegian Krone 2,245 5.2 Other currencies less than 5% of total net assets 6,414 14.7 -------- ------ $ 43,249 99.6% ======== ====== 45 Columbia Acorn International Select >Portfolio Diversification At December 31, 2003, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE (000) PERCENT - ---------------------------------------------------------------------------- >INFORMATION TECHNOLOGY Television Programming $ 1,579 3.6% Financial Processors 1,540 3.5 Contract Manufacturing 1,131 2.6 Television Broadcasting 955 2.2 Semiconductors and Related Equipment 918 2.1 Computer Hardware and Related Equipment 764 1.8 - ---------------------------------------------------------------------------- 6,887 15.8 >HEALTHCARE Medical Equipment 2,780 6.4 Hospital Management 1,682 3.9 Services 480 1.1 - ---------------------------------------------------------------------------- 4,942 11.4 >CONSUMER GOODS/SERVICES Food 2,539 5.9 Restaurants 2,184 5.0 Durable Goods 1,780 4.1 Beverage 1,182 2.7 Retail 978 2.3 Consumer Goods Distribution 708 1.6 - ---------------------------------------------------------------------------- 9,371 21.6 >FINANCE Banks 5,014 11.6 Insurance 1,553 3.6 Money Management 767 1.8 - ---------------------------------------------------------------------------- 7,334 17.0 VALUE (000) PERCENT - ---------------------------------------------------------------------------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $ 1,569 3.6% Electrical Components 1,265 2.9 Machinery 1,260 2.9 Industrial Distribution 1,172 2.7 Outsourcing and Training Services 914 2.1 Speciality Chemicals 882 2.0 Steel 833 1.9 Industrial Materials 421 1.0 - ---------------------------------------------------------------------------- 8,316 19.1 >ENERGY/MINERALS Oil/Gas Producers 2,901 6.7 - ---------------------------------------------------------------------------- 2,901 6.7 >OTHER INDUSTRIES Regulated Utilities 983 2.3 Real Estate 585 1.3 - ---------------------------------------------------------------------------- 1,568 3.6 --------------------------- TOTAL COMMON STOCKS: 41,319 95.2 --------------------------- SHORT-TERM OBLIGATIONS: 1,930 4.4 --------------------------- TOTAL INVESTMENTS: 43,249 99.6 CASH AND OTHER ASSETS LESS LIABILITIES: 157 0.4 --------------------------- NET ASSETS: $ 43,406 100.0% ============================================================================ 1-800-922-6769 46 Columbia Acorn Select >Major Portfolio Changes in the Fourth Quarter (Unaudited) NUMBER OF SHARES --------------------------- 09/30/03 12/31/03 Additions - ---------------------------------------------------------------------------- INFORMATION PeopleSoft 1,330,000 1,475,000 Synopsys 1,060,000 1,120,000 - ---------------------------------------------------------------------------- HEALTH CARE First Health Group 2,150,000 2,700,000 Guidant 1,070,000 1,090,000 Lincare Holdings 480,000 490,000 Techne 415,000 440,000 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Abercrombie & Fitch 640,000 660,000 Interpublic Group 2,500,000 2,520,000 Weight Watchers 0 600,000 - ---------------------------------------------------------------------------- FINANCE Markel 87,000 110,000 TCF Financial 480,000 650,000 - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Herman Miller 1,060,000 1,160,000 NUMBER OF SHARES -------------------------- 09/30/03 12/31/03 Sales - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Safeway 1,150,000 1,050,000 47 Columbia Acorn Select >Statement of Investments, December 31, 2003 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- COMMON STOCKS: 93.1% - ---------------------------------------------------------------------------- INFORMATION: 27.3% >INSTRUMENTATION: 2.4% 560,000 Tektronix $ 17,696 ANALYTICAL INSTRUMENTS - ---------------------------------------------------------------------------- >GAMING EQUIPMENT: 2.3% 470,000 International Game Technology 16,779 SLOT MACHINES & PROGRESSIVE JACKPOTS - ---------------------------------------------------------------------------- >CONSUMER SOFTWARE: 3.9% 600,000 Electronic Arts (b) 28,668 ENTERTAINMENT SOFTWARE - ---------------------------------------------------------------------------- >BUSINESS SOFTWARE: 9.6% 1,120,000 Synopsys (b) 37,811 SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS 1,475,000 PeopleSoft 33,630 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE - ---------------------------------------------------------------------------- 71,441 >ADVERTISING: 5.3% 2,520,000 Interpublic Group (b) 39,312 ADVERTISING - ---------------------------------------------------------------------------- >BUSINESS INFORMATION: 3.8% 470,000 Moody's 28,459 RATINGS SERVICE FOR CREDIT OBLIGATIONS ------------ INFORMATION: TOTAL 202,355 - ---------------------------------------------------------------------------- HEALTH CARE: 20.2% >MEDICAL EQUIPMENT: 8.9% 1,090,000 Guidant 65,618 STENTS, DEFIBRILLATORS & OTHER CARDIAC MEDICAL DEVICES - ---------------------------------------------------------------------------- >SERVICES: 9.1% 2,700,000 First Health Group (b) 52,542 PPO NETWORK 490,000 Lincare Holdings (b) 14,715 HOME HEALTH CARE SERVICES - ---------------------------------------------------------------------------- 67,257 >HOSPITAL/LABORATORY SUPPLIES: 2.2% 440,000 Techne (b) 16,623 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES ------------ HEALTH CARE: TOTAL 149,498 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 28.4% >LEISURE VEHICLES: 4.0% 620,000 Harley-Davidson 29,469 MOTORCYCLES & RELATED MERCHANDISE - ---------------------------------------------------------------------------- >CONSUMER SERVICES: 3.1% 600,000 Weight Watchers (b) 23,022 WEIGHT LOSS PROGRAM - ---------------------------------------------------------------------------- NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >RETAIL: 8.6% 660,000 Costco $ 24,539 WAREHOUSE SUPERSTORES 1,050,000 Safeway (b) 23,005 RETAIL FOOD & DRUG STORES 660,000 Abercrombie & Fitch (b) 16,309 TEEN APPAREL RETAILER - ---------------------------------------------------------------------------- 63,853 >ENTERTAINMENT: 2.6% 440,000 International Speedway Motors 19,650 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR - ---------------------------------------------------------------------------- >FURNITURE & MANUFACTURERS: 10.1% 1,160,000 Herman Miller 28,153 OFFICE FURNITURE 350,000 Mohawk Industries (b) 24,689 CARPET & FLOORING 580,000 Coach (b) 21,895 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES - ---------------------------------------------------------------------------- 74,737 ------------ >CONSUMER GOODS/SERVICES: TOTAL 210,731 - ---------------------------------------------------------------------------- FINANCE: 13.5% >BANKS: 7.4% 650,000 TCF Financial 33,377 GREAT LAKES BANK 500,000 Associated Banc-Corp 21,325 MIDWEST BANK - ---------------------------------------------------------------------------- 54,702 >INSURANCE: 3.8% 110,000 Markel (b) 27,886 SPECIALTY INSURANCE - ---------------------------------------------------------------------------- >MONEY MANAGEMENT: 2.3% 570,000 SEI Investments 17,368 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT ------------ FINANCE: TOTAL 99,956 - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 3.7% >LOGISTICS: 3.7% 720,000 Expeditors International of Washington 27,115 INTERNATIONAL FREIGHT FORWARDER ------------ INDUSTRIAL GOODS/SERVICES: TOTAL 27,115 ------------ TOTAL COMMON STOCKS: 93.1% 689,655 (COST: $579,443) 1-800-922-6769 48 PRINCIPAL AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 5.6% $ 18,000 American General Finance Yield 1.00% Due 1/05/04 $ 17,998 23,170 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 1/15/06, Market Value $23,635 (repurchase proceeds: $23,171) 23,170 - ---------------------------------------------------------------------------- (AMORTIZED COST: $41,168) 41,168 ------------ TOTAL INVESTMENTS: 98.7% 730,823 (COST: $620,611) CASH AND OTHER ASSETS LESS LIABILITIES: 1.3% 9,796 ------------ TOTAL NET ASSETS: 100% $ 740,619 ============================================================================ >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investments is $620,847 and net unrealized appreciation was $109,976, consisting of gross unrealized appreciation of $132,180 and gross unrealized depreciation of $22,204. (b) Non-income producing security. 49 Columbia Acorn Family of Funds >Statements of Assets and Liabilities
COLUMBIA COLUMBIA COLUMBIA ACORN ACORN ACORN DECEMBER 31, 2003 FUND INTERNATIONAL USA - ------------------------------------------------------------------------------------------------------------ (IN THOUSANDS) ASSETS Investments, at Cost $ 7,343,798 $ 1,227,501 $ 533,840 - ------------------------------------------------------------------------------------------------------------ Investment, at Value $ 11,164,160 $ 1,667,062 $ 692,240 Cash 4,064 -- 1 Foreign currency (cost: Columbia Acorn Fund $5,413; Columbia Acorn International $13,096; Columbia Acorn International Select $7) 5,405 13,251 -- Receivable for: Investments sold 812 -- 206 Fund shares sold 28,319 1,278 1,764 Dividends and interest 4,645 2,632 83 Expense reimbursement due from Advisor -- -- -- Deferred Trustees' Compensation Investments 924 396 64 Other assets -- -- 2 - ------------------------------------------------------------------------------------------------------------ Total Assets 11,208,329 1,684,619 694,360 LIABILITIES Payable for: Investments purchased 14,534 2,601 162 Fund shares redeemed 18,617 2,125 623 Foreign capital gains tax 1,515 813 -- Custodian 58 58 2 Management fee -- 4 -- 12b-1 Service & Distribution fees 2,524 65 111 Legal & audit fees 109 66 25 Reports to shareholders 252 53 23 Deferred Trustees' fees 924 396 64 Transfer agent fee 884 103 74 Other liabilities 97 3 2 - ------------------------------------------------------------------------------------------------------------ Total Liabilities 39,514 6,287 1,086 - ------------------------------------------------------------------------------------------------------------ NET ASSETS $ 11,168,815 $ 1,678,332 $ 693,274 ============================================================================================================ COMPOSITION OF NET ASSETS Paid in capital $ 7,331,293 $ 1,462,493 $ 548,134 Undistributed net investment income (Accumulated net investment loss) 6,955 16,493 92 Accumulated net realized gain (loss) 11,734 (238,525) (13,352) Net unrealized appreciation (depreciation) on: Investments (net of unrealized PFIC gains of $1,215 for Columbia Acorn International) 3,820,362 438,346 158,400 Foreign currency transactions (1,529) (475) -- - ------------------------------------------------------------------------------------------------------------ NET ASSETS $ 11,168,815 $ 1,678,332 $ 693,274 ============================================================================================================ Net asset value per share -- Class A (a) $ 22.20 $ 22.45 $ 20.74 (Net assets/shares) ($1,982,260/89,282) ($52,872/2,355) ($89,650/4,322) Maximum offering price per share -- Class A (b) $ 23.55 $ 23.82 $ 22.01 (Net asset value per share/ front-end sales charge) ($22.20/.9425) ($22.45/.9425) ($20.74/.9425) Net asset value and offering price per share -- Class B (a) $ 21.75 $ 22.07 $ 20.36 (Net assets/shares) ($1,221,931/56,168) ($39,800/1,803) ($66,175/3,250) Net asset value and offering price per share -- Class C (a) $ 21.75 $ 22.06 $ 20.36 (Net assets/shares) ($900,016/41,377) ($22,990/1,042) ($35,662/1,752) Net asset value, offering price and redemption price per share -- Class Z $ 22.56 $ 22.66 $ 21.01 (Net assets/shares) ($7,064,608/313,127) ($1,562,670/68,955) ($501,787/23,886) COLUMBIA ACORN COLUMBIA INTERNATIONAL ACORN DECEMBER 31, 2003 SELECT SELECT - ----------------------------------------------------------------------------------- (IN THOUSANDS) ASSETS Investments, at Cost $ 30,495 $ 620,611 - ----------------------------------------------------------------------------------- Investment, at Value $ 43,249 $ 730,823 Cash 1 -- Foreign currency (cost: Columbia Acorn Fund $5,413; Columbia Acorn International $13,096; Columbia Acorn International Select $7) 7 -- Receivable for: Investments sold -- -- Fund shares sold 122 10,986 Dividends and interest 123 43 Expense reimbursement due from Advisor 29 -- Deferred Trustees' Compensation Investments -- -- Other assets -- 7 - ----------------------------------------------------------------------------------- Total Assets 43,531 741,859 LIABILITIES Payable for: Investments purchased 27 -- Fund shares redeemed 45 879 Foreign capital gains tax -- -- Custodian 6 1 Management fee -- -- 12b-1 Service & Distribution fees 5 245 Legal & audit fees 17 -- Reports to shareholders 14 22 Deferred Trustees' fees -- 25 Transfer agent fee 8 65 Other liabilities 3 3 - ----------------------------------------------------------------------------------- Total Liabilities 125 1,240 - ----------------------------------------------------------------------------------- NET ASSETS $ 43,406 $ 740,619 =================================================================================== COMPOSITION OF NET ASSETS Paid in capital $ 68,842 $ 630,664 Undistributed net investment income (Accumulated net investment loss) 142 (21) Accumulated net realized gain (loss) (38,346) (236) Net unrealized appreciation (depreciation) on: Investments (net of unrealized PFIC gains of $1,215 for Columbia Acorn International) 12,754 110,212 Foreign currency transactions 14 -- - ----------------------------------------------------------------------------------- NET ASSETS $ 43,406 $ 740,619 =================================================================================== Net asset value per share -- Class A (a) $ 14.45 $ 18.01 (Net assets/shares) ($2,557/177) ($264,679/14,700) Maximum offering price per share -- Class A (b) $ 15.33 $ 19.11 (Net asset value per share/ front-end sales charge) ($14.45/.9425) ($18.01/.9425) Net asset value and offering price per share -- Class B (a) $ 14.12 $ 17.64 (Net assets/shares) ($3,162/224) ($118,064/6,694) Net asset value and offering price per share -- Class C (a) $ 14.14 $ 17.64 (Net assets/shares) ($3,691/261) ($64,212/3,641) Net asset value, offering price and redemption price per share -- Class Z $ 14.58 $ 18.20 (Net assets/shares) ($33,996/2,331) ($293,664/16,138)
(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 accompanying notes to financial statements 1-800-922-6769 50 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003
COLUMBIA COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA ACORN ACORN ACORN INTERNATIONAL ACORN (IN THOUSANDS) FUND INTERNATIONAL USA SELECT SELECT - ------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividend income $ 70,311 33,963 $ 1,380 $ 745 $ 1,767 Interest income 7,373 717 406 15 294 - ------------------------------------------------------------------------------------------------------------------- 77,684 34,680 1,786 760 2,061 Foreign taxes withheld (1,354) (3,216) -- (62) -- - ------------------------------------------------------------------------------------------------------------------- Total Investment Income 76,330 31,464 1,786 698 2,061 EXPENSES: Management fees 52,118 11,792 4,194 330 3,817 Administration fees 3,905 703 227 17 212 12b-1 Service & Distribution fees 18,497 588 884 59 1,375 Custody fees 794 950 11 45 18 Legal and audit fees 488 121 66 24 42 Transfer agent fees 8,051 923 496 60 690 Trustees' fees 369 70 21 4 14 Registration and blue sky fees 316 76 116 94 140 Reports to shareholders 1,419 267 161 68 148 Other expenses 288 40 18 8 24 - ------------------------------------------------------------------------------------------------------------------- Total expenses 86,245 15,530 6,194 709 6,480 Less custody fees paid indirectly (4) --* --* --* -- Less reimbursement of expenses by Advisor -- -- -- (147) -- - ------------------------------------------------------------------------------------------------------------------- Net Expenses 86,241 15,530 6,194 562 6,480 - ------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (9,911) 15,934 (4,408) 136 (4,419) NET REALIZED AND UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS: Net realized gain (loss) on: Investments 90,703 (7,250) 7,301 (445) 8,643 Foreign currency transactions (21) 106 -- 20 -- - ------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) 90,682 (7,144) 7,301 (425) 8,643 =================================================================================================================== Net change in net unrealized appreciation/ depreciation on: Investments 2,975,943 562,281 172,313 12,936 95,023 Foreign currency transactions (1,268) (291) -- -- -- - ------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation/ depreciation 2,974,675 561,990 172,313 12,936 95,023 =================================================================================================================== Net realized and unrealized gain 3,065,357 554,846 179,614 12,511 103,666 - ------------------------------------------------------------------------------------------------------------------- Net Increase in Net Assets resulting from Operations $ 3,055,446 $ 570,780 $ 175,206 $ 12,647 $ 99,247 ===================================================================================================================
* Rounds to less than $500. See accompanying notes to financial statements. 51 Columbia Acorn Family of Funds >Statements of Changes in Net Assets
COLUMBIA COLUMBIA ACORN ACORN FUND INTERNATIONAL YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, - ------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS (IN THOUSANDS) 2003 2002 2003 2002 OPERATIONS: Net investment income (loss) $ (9,911) $ (5,079) $ 15,934 $ 11,854 Net realized gain (loss) on investments, forward foreign currency contracts and foreign currency transactions 90,682 (57,609) (7,144) (88,618) Change in net unrealized appreciation (depreciation) of investments, forward foreign currency contracts and foreign currency transactions 2,974,675 (778,655) 561,990 (188,391) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) from Operations 3,055,446 (841,343) 570,780 (265,155) DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- (106) (24) Net realized gain -- Class A (1,752) -- -- -- Net investment income -- Class B -- -- -- -- Net realized gain -- Class B (1,116) -- -- -- Net investment income -- Class C -- -- -- -- Net realized gain -- Class C (813) -- -- -- Net investment income -- Class Z -- -- (5,829) (9,265) Net realized gain -- Class Z (6,236) -- -- -- - ------------------------------------------------------------------------------------------------------------------- Total Distribution to Shareholders (9,917) -- (5,935) (9,289) SHARE TRANSACTIONS: Subscriptions -- Class A 1,041,782 645,380 45,279 264,875 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- -- -- Distributions reinvested -- Class A 1,584 -- 80 17 Redemptions -- Class A (259,438) (134,555) (42,948) (251,764) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class A 783,928 510,825 2,411 13,128 Subscriptions -- Class B 364,144 490,366 11,463 15,847 Distributions reinvested -- Class B 1,018 -- -- -- Redemptions -- Class B (88,744) (67,763) (5,639) (6,194) - ------------------------------------------------------------------------------------------------------------------- Net Increase -- Class B 276,418 422,603 5,824 9,653 Subscriptions -- Class C 375,513 330,698 14,870 43,176 Distributions reinvested -- Class C 673 -- -- -- Redemptions -- Class C (73,548) (53,861) (13,396) (40,348) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease)-- Class C 302,638 276,837 1,474 2,828 Subscriptions -- Class Z 1,682,204 917,983 220,802 649,314 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- -- -- Distributions reinvested -- Class Z 5,443 -- 5,336 8,562 Redemptions -- Class Z (667,986) (509,628) (434,204) (768,033) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease)-- Class Z 1,019,661 408,355 (208,066) (110,157) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) from Share Transactions 2,382,645 1,618,620 (198,357) (84,548) - ------------------------------------------------------------------------------------------------------------------- Redemption Fees -- -- 400 -- - ------------------------------------------------------------------------------------------------------------------- Total Increase (Decrease) in Net Assets 5,428,174 777,277 366,888 (358,992) NET ASSETS: Beginning of period 5,740,641 4,963,364 1,311,444 1,670,436 - ------------------------------------------------------------------------------------------------------------------- End of period $ 11,168,815 $ 5,740,641 $ 1,678,332 $ 1,311,444 =================================================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS OR OVERDISTRIBUTED NET INVESTMENT INCOME) $ 6,955 $ 3,601 $ 16,493 $ 5,460 =================================================================================================================== COLUMBIA COLUMBIA ACORN ACORN USA INTERNATIONAL SELECT YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, - ------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS (IN THOUSANDS) 2003 2002 2003 2002 OPERATIONS: Net investment income (loss) $ (4,408) $ (2,949) $ 136 $ 39 Net realized gain (loss) on investments, forward foreign currency contracts and foreign currency transactions 7,301 (17,552) (425) (6,845) Change in net unrealized appreciation (depreciation) of investments, forward foreign currency contracts and foreign currency transactions 172,313 (56,039) 12,936 1,151 - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) from Operations 175,206 (76,540) 12,647 (5,655) DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- -- -- Net realized gain -- Class A -- -- -- -- Net investment income -- Class B -- -- -- -- Net realized gain -- Class B -- -- -- -- Net investment income -- Class C -- -- -- -- Net realized gain -- Class C -- -- -- -- Net investment income -- Class Z -- -- (19) -- Net realized gain -- Class Z -- -- -- -- - ------------------------------------------------------------------------------------------------------------------- Total Distribution to Shareholders -- -- (19) -- SHARE TRANSACTIONS: Subscriptions -- Class A 60,457 35,469 2,350 54,708 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- 22 -- -- Distributions reinvested -- Class A -- -- -- -- Redemptions -- Class A (23,188) (15,616) (3,212) (54,724) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class A 37,269 19,875 (862) (16) Subscriptions -- Class B 19,327 33,711 1,577 2,363 Distributions reinvested -- Class B -- -- -- -- Redemptions -- Class B (8,053) (13,914) (989) (2,245) - ------------------------------------------------------------------------------------------------------------------- Net Increase -- Class B 11,274 19,797 588 118 Subscriptions -- Class C 13,056 14,839 3,211 5,117 Distributions reinvested -- Class C -- -- -- -- Redemptions -- Class C (4,575) (5,070) (3,564) (5,510) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease)-- Class C 8,481 9,769 (353) (393) Subscriptions -- Class Z 221,496 125,400 23,389 72,837 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- 10,075 -- -- Distributions reinvested -- Class Z -- -- 18 -- Redemptions -- Class Z (83,975) (75,563) (25,393) (79,344) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease)-- Class Z 137,521 59,912 (1,986) (6,507) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) from Share Transactions 194,545 109,353 (2,613) (6,798) - ------------------------------------------------------------------------------------------------------------------- Redemption Fees -- -- 39 -- - ------------------------------------------------------------------------------------------------------------------- Total Increase (Decrease) in Net Assets 369,751 32,813 10,054 (12,453) NET ASSETS: Beginning of period 323,523 290,710 33,352 45,805 - ------------------------------------------------------------------------------------------------------------------- End of period $ 693,274 $ 323,523 $ 43,406 $ 33,352 =================================================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS OR OVERDISTRIBUTED NET INVESTMENT INCOME) $ 92 $ (50) $ 142 $ 5 =================================================================================================================== COLUMBIA ACORN SELECT YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, - ------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS (IN THOUSANDS) 2003 2002 OPERATIONS: Net investment income (loss) $ (4,419) $ (1,224) Net realized gain (loss) on investments, forward foreign currency contracts and foreign currency transactions 8,643 (508) Change in net unrealized appreciation (depreciation) of investments, forward foreign currency contracts and foreign currency transactions 95,023 (7,857) - ------------------------------------------------------------------------------------- Net Increase (Decrease) from Operations 99,247 (9,589) DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- Net realized gain -- Class A (1,172) -- Net investment income -- Class B -- -- Net realized gain -- Class B (563) -- Net investment income -- Class C -- -- Net realized gain -- Class C (301) -- Net investment income -- Class Z -- -- Net realized gain -- Class Z (2,145) -- - ------------------------------------------------------------------------------------- Total Distribution to Shareholders (4,181) -- SHARE TRANSACTIONS: Subscriptions -- Class A 237,520 31,504 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- Distributions reinvested -- Class A 1,096 -- Redemptions -- Class A (30,378) (10,199) - ------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class A 208,238 21,305 Subscriptions -- Class B 78,641 27,565 Distributions reinvested -- Class B 507 -- Redemptions -- Class B (9,321) (5,862) - ------------------------------------------------------------------------------------- Net Increase -- Class B 69,827 21,703 Subscriptions -- Class C 50,838 8,806 Distributions reinvested -- Class C 257 -- Redemptions -- Class C (4,391) (2,268) - ------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 46,704 6,538 Subscriptions -- Class Z 301,467 46,496 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- Distributions reinvested -- Class Z 1,920 -- Redemptions -- Class Z (150,913) (17,872) - ------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 152,474 28,624 - ------------------------------------------------------------------------------------- Net Increase (Decrease) from Share Transactions 477,243 78,170 - ------------------------------------------------------------------------------------- Redemption Fees -- -- - ------------------------------------------------------------------------------------- Total Increase (Decrease) in Net Assets 572,309 68,581 NET ASSETS: Beginning of period 168,310 99,729 - ------------------------------------------------------------------------------------- End of period $ 740,619 $ 168,310 ===================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS OR OVERDISTRIBUTED NET INVESTMENT INCOME) $ (21) $ (11) =====================================================================================
See accompanying notes to financial statements 1-800-922-6769 52-53 Spread Columbia Acorn Family of Funds >Statements of Changes in Net Assets, continued
COLUMBIA COLUMBIA ACORN ACORN FUND INTERNATIONAL YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, - ------------------------------------------------------------------------------------------------------------------- CHANGES IN SHARES OF BENEFICIAL INTEREST: (IN THOUSANDS) 2003 2002 2003 2002 NUMBER OF FUND SHARES OF BENEFICIAL INTEREST: Subscriptions -- Class A 56,202 38,478 2,734 15,488 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- -- -- Shares issued in reinvestment and capital gains -- Class A 73 -- 5 1 Less shares redeemed -- Class A (14,204) (8,482) (2,590) (14,677) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class A 42,071 29,996 149 812 Subscriptions -- Class B 20,371 29,099 653 923 Shares issued in reinvestment and capital gains -- Class B 48 -- -- -- Less shares redeemed-- Class B (5,154) (4,407) (343) (376) - ------------------------------------------------------------------------------------------------------------------- Net Increase -- Class B 15,265 24,692 310 547 Subscriptions -- Class C 20,690 19,804 911 2,573 Shares issued in reinvestment and capital gains -- Class C 32 -- -- -- Less shares redeemed -- Class C (4,207) (3,475) (833) (2,396) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 16,515 16,329 78 177 Subscriptions -- Class Z 89,984 54,769 13,104 38,166 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- -- -- Shares issued in reinvestment and capital gains -- Class Z 249 -- 313 484 Less shares redeemed -- Class Z (36,502) (31,314) (25,027) (45,408) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 53,731 23,455 (11,610) (6,758) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares of Beneficial Interest 127,582 94,472 (11,073) (5,222) - ------------------------------------------------------------------------------------------------------------------- COLUMBIA COLUMBIA ACORN ACORN USA INTERNATIONAL SELECT YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, - ------------------------------------------------------------------------------------------------------------------- CHANGES IN SHARES OF BENEFICIAL INTEREST: (IN THOUSANDS) 2003 2002 2003 2002 NUMBER OF FUND SHARES OF BENEFICIAL INTEREST: Subscriptions -- Class A 3,345 2,124 216 4,749 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- 2 -- -- Shares issued in reinvestment and capital gains -- Class A -- -- -- -- Less shares redeemed -- Class A (1,309) (1,009) (294) (4,731) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease)-- Class A 2,036 1,117 (78) 18 Subscriptions-- Class B 1,087 2,019 137 220 Shares issued in reinvestment and capital gains -- Class B -- -- -- -- Less shares redeemed-- Class B (512) (937) (95) (211) - ------------------------------------------------------------------------------------------------------------------- Net Increase -- Class B 575 1,082 42 9 Subscriptions -- Class C 724 892 311 459 Shares issued in reinvestment and capital gains -- Class C -- -- -- -- Less shares redeemed -- Class C (279) (335) (339) (495) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 445 557 (28) (36) Subscriptions -- Class Z 12,184 7,498 2,239 6,884 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- 724 -- -- Shares issued in reinvestment and capital gains -- Class Z -- -- 2 -- Less shares redeemed -- Class Z (4,772) (4,844) (2,435) (7,419) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 7,412 3,378 (194) (535) - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares of Beneficial Interest 10,468 6,134 (258) (544) - ------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN SELECT YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, - ------------------------------------------------------------------------------------- CHANGES IN SHARES OF BENEFICIAL INTEREST: (IN THOUSANDS) 2003 2002 NUMBER OF FUND SHARES OF BENEFICIAL INTEREST: Subscriptions -- Class A 14,227 2,229 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- Shares issued in reinvestment and capital gains -- Class A 63 -- Less shares redeemed-- Class A (1,869) (735) - ------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class A 12,421 1,494 Subscriptions -- Class B 4,854 1,955 Shares issued in reinvestment and capital gains -- Class B 30 -- Less shares redeemed -- Class B (601) (431) - ------------------------------------------------------------------------------------- Net Increase -- Class B 4,283 1,524 Subscriptions -- Class C 3,102 630 Shares issued in reinvestment and capital gains -- Class C 15 -- Less shares redeemed -- Class C (271) (164) - ------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 2,846 466 Subscriptions -- Class Z 18,117 3,286 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- Shares issued in reinvestment and capital gains -- Class Z 108 -- Less shares redeemed -- Class Z (8,676) (1,263) - ------------------------------------------------------------------------------------- Net Increase (Decrease)-- Class Z 9,549 2,023 - ------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares of Beneficial Interest 29,099 5,507 - -------------------------------------------------------------------------------------
See accompanying notes to financial statements 1-800-922-6769 54-55 Spread Columbia Acorn Family of Funds >Financial Highlights
COLUMBIA ACORN FUND CLASS Z YEAR ENDED DECEMBER 31, - -------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000 1999 NET ASSET VALUE, BEGINNING OF PERIOD $ 15.50 $ 17.88 $ 17.21 $ 18.53 $ 16.85 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.03 0.02 0.05 0.10 0.09 Net realized and unrealized gain (loss) 7.05 (2.40) 1.01 1.55 5.22 - -------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 7.08 (2.38) 1.06 1.65 5.31 - -------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- (0.04) (0.11) (0.09) From net realized gains (0.02) -- (0.35) (2.86) (3.54) - -------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.02) -- (0.39) (2.97) (3.63) ================================================================================================================================ NET ASSET VALUE, END OF PERIOD $ 22.56 $ 15.50 $ 17.88 $ 17.21 $ 18.53 ================================================================================================================================ Total Return (b) 45.68% (13.31)% 6.14% 10.06% 33.40% ================================================================================================================================ RATIOS TO AVERAGE NET ASSETS Expenses (c) 0.80% 0.82% 0.82% 0.83% 0.85% Net investment income (c) 0.17% 0.15% 0.28% 0.55% 0.49% Portfolio turnover rate 10% 13% 20% 29% 34% Net assets at end of period (IN MILLIONS) $ 7,065 $ 4,022 $ 4,220 $ 3,983 $ 3,921
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming all distributions reinvested. (c) The benefits derived from custody fees paid indirectly had no impact.
COLUMBIA ACORN INTERNATIONAL CLASS Z YEAR ENDED DECEMBER 31, - -------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000 1999 NET ASSET VALUE, BEGINNING OF PERIOD $ 15.40 $ 18.47 $ 23.85 $ 35.33 $ 20.82 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.21 0.14 0.12 0.01 0.83 Net realized and unrealized gain (loss) 7.13 (3.10) (5.11) (6.73) 15.45 - -------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 7.34 (2.96) (4.99) (6.72) 16.28 - -------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.08) (0.11) -- (0.66) (0.22) From net realized gains -- -- (0.39) (4.10) (1.55) - -------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.08) (0.11) (0.39) (4.76) (1.77) ================================================================================================================================ NET ASSET VALUE, END OF PERIOD $ 22.66 $ 15.40 $ 18.47 $ 23.85 $ 35.33 ================================================================================================================================ Total Return (b) 47.80% (16.10)% (21.11)% (20.02)% 79.20% ================================================================================================================================ RATIOS TO AVERAGE NET ASSETS Expenses (c) 1.05% 1.06% 1.06% 1.05% 1.11% Net investment income (c) 1.19% 0.80% 0.62% 0.02% 0.12% Portfolio turnover rate 40% 52% 45% 63% 46% Net assets at end of period (IN MILLIONS) $ 1,563 $ 1,241 $ 1,613 $ 2,459 $ 2,868
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming all distributions reinvested. (c) The benefits derived from custody fees paid indirectly had no impact.
COLUMBIA ACORN USA CLASS Z YEAR ENDED DECEMBER 31, - -------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000 1999 NET ASSET VALUE, BEGINNING OF PERIOD $ 14.28 $ 17.52 $ 14.90 $ 16.75 $ 14.80 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (a) (0.13) (0.10) (0.08) (0.05) 0.00(b) Net realized and unrealized gain (loss) 6.86 (3.14) 2.94 (1.48) 3.32 - -------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 6.73 (3.24) 2.86 (1.53) 3.32 - -------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- (0.00)(b) -- From net realized gains -- -- (0.24) (0.32) (1.37) - -------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders -- -- (0.24) (0.32) (1.37) ================================================================================================================================ NET ASSET VALUE, END OF PERIOD $ 21.01 $ 14.28 $ 17.52 $ 14.90 $ 16.75 ================================================================================================================================ Total Return (c) 47.13% (18.49)% 19.25% (8.99)% 23.00% ================================================================================================================================ RATIOS TO AVERAGE NET ASSETS Expenses (d) 1.11% 1.17% 1.17% 1.15% 1.15% Net investment income (loss) (d) (0.72)% (0.64)% (0.46)% (0.32)% 0.00%(e) Portfolio turnover rate 7% 31% 24% 45% 49% Net assets at end of period (IN MILLIONS) $ 502 $ 235 $ 229 $ 222 $ 371
(a) Per share data was calculated using average shares outstanding during the period. (b) Rounds to less than $0.01 per share. (c) Total return at net asset value assuming all distributions reinvested. (d) The benefits derived from custody fees paid indirectly had no impact. (e) Rounds to less than 0.01%. See accompanying notes to financial statements. 1-800-922-6769 56-57 Spread Columbia Acorn Family of Funds >Financial Highlights
COLUMBIA ACORN INTERNATIONAL SELECT CLASS Z YEAR ENDED DECEMBER 31, - -------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000 1999 NET ASSET VALUE, BEGINNING OF PERIOD $ 10.29 $ 12.09 $ 17.15 $ 19.93 $ 11.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (a) 0.06 0.03 (0.05) (0.11) (0.02) Net realized and unrealized gain (loss) 4.24 (1.83) (4.92) (2.53) 8.98 - -------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 4.30 (1.80) (4.97) (2.64) 8.96 - -------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.01) -- (0.01) (0.04) -- From net realized gains -- -- (0.08) (0.10) (0.03) - -------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.01) -- (0.09) (0.14) (0.03) =============================================================================================================================== NET ASSET VALUE, END OF PERIOD $ 14.58 $ 10.29 $ 12.09 $ 17.15 $ 19.93 =============================================================================================================================== Total Return (b) 41.79%(c) (14.89)%(c) (29.05)%(c) (13.35)% 81.60%(c) =============================================================================================================================== RATIOS TO AVERAGE NET ASSETS Expenses 1.45%(d) 1.45%(d) 1.45%(d) 1.33%(d) 1.48%(e) Net investment income (loss) 0.56%(d) 0.26%(d) (0.32)%(d) (0.42)%(d) (0.17)%(e) Reimbursement 0.42% 0.33% 0.01% -- 0.09% Portfolio turnover rate 69% 102% 82% 79% 60% Net assets at end of period (IN MILLIONS) $ 34 $ 26 $ 37 $ 130 $ 107
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming all distributions reinvested. (c) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (d) The benefits derived from custody fees paid indirectly had no impact. (e) In accordance with a requirement of the Securities and Exchange Commission, the ratios reflect total expenses prior to the reduction of custody fees for cash balances it maintains with the custodian ("custody fees paid indirectly"). The ratios of expenses to average daily net assets and net investment income to average daily net assets net of custody fees paid indirectly would have been 1.45% and (0.14)%, respectively for the year ended December 31, 1999.
COLUMBIA ACORN SELECT CLASS Z YEAR ENDED DECEMBER 31, - ------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000 1999 NET ASSET VALUE, BEGINNING OF PERIOD $ 14.04 $ 15.23 $ 14.13 $ 13.70 $ 10.71 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (a) (0.10) (0.10) (0.05) (0.07) (0.08) Net realized and unrealized gain (loss) 4.39 (1.09) 1.18 1.59 3.21 - ------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 4.29 (1.19) 1.13 1.52 3.13 - ------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- (0.01) -- From net realized gains (0.13) -- (0.03) (1.08) (0.14) - ------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.13) -- (0.03) (1.09) (0.14) =============================================================================================================================== NET ASSET VALUE, END OF PERIOD $ 18.20 $ 14.04 $ 15.23 $ 14.13 $ 13.70 =============================================================================================================================== Total Return (b) 30.61% (7.81)%(c) 8.00%(c) 11.68% 29.30%(c) =============================================================================================================================== RATIOS TO AVERAGE NET ASSETS Expenses 1.12%(d) 1.26%(d) 1.35% 1.34%(e) 1.37%(e) Net investment income (loss) (0.63)%(d) (0.67)%(d) (0.44)% (0.52)%(e) (0.62)%(e) Reimbursement -- 0.01% 0.03% -- 0.04% Portfolio turnover rate 16% 40% 82% 116% 101% Net assets at end of period (IN MILLIONS) $ 294 $ 93 $ 70 $ 67 $ 68
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming all distributions reinvested. (c) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (d) The benefits derived from custody fees paid indirectly had no impact. (e) In accordance with a requirement of the Securities and Exchange Commission, the ratios reflect total expenses prior to the reduction of custody fees for cash balances it maintains with the custodian ("custody fees paid indirectly"). The ratios of expenses to average daily net assets and net investment income to average daily net assets net of custody fees paid indirectly would have been 1.32% and (0.50)%, respectively for the year ended December 31, 2000, 1.35% and (0.60)%, respectively for the year ended December 31, 1999. See accompanying notes to financial statements. 1-800-922-6769 58-59 Spread Columbia Acorn Family of Funds >Notes to Financial Statements 1. Nature of Operations Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select (the "Funds") are series of Columbia Acorn Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust. The investment objective of each Fund is to seek long-term growth of capital. The Funds may issue an unlimited number of shares. The Funds offer four classes of shares: Class A, Class B, Class C and Class Z. Class A shares are sold with a front-end sales charge. A contingent deferred sales charge ("CDSC") is assessed to Class A shares purchased without an initial sales charge on redemptions made within eighteen months on an original purchase of $1 million to $25 million. Class B shares are subject to a contingent deferred sales charge. Class B shares will convert to Class A shares in three, four or eight years after purchase, depending on the program under which shares are purchased. Class C shares are subject to a contingent deferred sales charge on redemptions made within one year after purchase. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares. Generally, you may exchange your Class Z or Class A shares of the Fund for shares of another fund at no additional charge. However, if you exchange Class Z shares of Columbia Acorn International or Columbia Acorn International Select that you have owned 60 days or less for Class Z shares of a fund distributed by Columbia Funds Distributor, Inc., that does not have a redemption fee (including Columbia Acorn Fund, Columbia Acorn USA and Columbia Acorn Select), the Fund will charge you a redemption fee of 2% of the redemption proceeds. Exchanges between Columbia Acorn International and Columbia Acorn International Select (or a fund distributed by Columbia Funds Distributor, Inc. that has a redemption fee) will not be subject to the 2% redemption fee. In addition, if you redeem shares of Columbia Acorn International or Columbia Acorn International Select that you have owned 60 days or less, the Fund will charge you a redemption fee of 2% of redemption proceeds, with certain exceptions. See "Fund Policy on Trading of Fund Shares and Redemption Fees" as disclosed within the Funds' prospectus for more information. The financial highlights for Class A, Class B and Class C shares are presented in a separate annual report. The annual financial statements for the Columbia Thermostat Fund, another Fund of the Trust, begin on page 67 of this report. Effective October 13, 2003, the Funds changed their name from Liberty Acorn Fund to Columbia Acorn Fund, Liberty Acorn International to Columbia Acorn International, Liberty Acorn USA to Columbia Acorn USA, Liberty Acorn Foreign Forty to Columbia Acorn International Select and Liberty Acorn Twenty to Columbia Acorn Select. Also on that date, the Trust changed its name from Liberty Acorn Trust to Columbia Acorn Trust. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are borne pro rata on the basis of the relative net assets of all classes, except each class bears certain expenses unique to that class such as distribution services, transfer agent, and certain other class specific expenses. Differences in class expenses may result in payment of different dividend distributions for each class. All the share classes of the Trust have equal rights with respect to voting subject to class specific arrangements. On July 26, 2002, Columbia Acorn USA acquired all of the net assets of the Stein Roe Small Company Growth Fund ("Stein Roe Fund") pursuant to a plan of reorganization approved by the Stein Roe Fund shareholders on June 28, 2002. The acquisition was accomplished by a tax-free exchange of 1,139,488 shares of the Stein Roe Fund (valued at $10,096,640) for 726,123 shares of Columbia Acorn USA. The net assets of the Stein Roe Fund were combined with the net assets of Columbia Acorn USA on the acquisition date and included $3,125,202 of unrealized depreciation on investment. The aggregate net assets of Columbia Acorn USA immediately before and after acquisition were $306,945,066 and $317,041,706, respectively. 2. Significant Accounting Policies >Security valuation Investments are stated at fair value. Securities traded on securities exchanges or in over-the-counter markets in which transaction prices are reported are valued at the last sales price at the time of valuation. If a security is traded principally on the Nasdaq Stock Market Inc., the SEC-approved Nasdaq Official Closing Price will be applied. Securities for which there are no reported sales on the valuation date are valued at the latest bid quotation. Money market instruments having a maturity of 60 days or less from the valuation date are valued on an amortized cost basis, which approximates fair value. Securities for which 1-800-922-6769 60 quotations are not available are valued at a fair value as determined in good faith by the Board of Trustees. >Repurchase agreements The Funds may engage in repurchase agreement transactions. The Funds, through their custodians, receive delivery of underlying securities collateralizing repurchase agreements. The Funds' investment advisor determines that the value of the underlying securities is at all times at least equal to the resale price. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. >Foreign currency translations Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and dividend and interest income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such transactions. The gain or loss resulting from changes in foreign exchange rates is included with net realized and unrealized gain or loss from investments, as appropriate. >Security transactions and investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities are recorded as soon as the information is available to the Funds. Interest income is recorded on the accrual basis and includes amortization of discounts on money market instruments and long-term debt instruments when required for federal income tax purposes. Realized gains and losses from security transactions are reported on an identified cost basis. Awards from class action litigation may be recorded as a reduction of cost. If the Funds no longer own the applicable securities, the proceeds are recorded as realized gains. The Funds estimate components of distributions from Real Estate Investment Trusts (REITs). Distributions received in excess of income are recorded as a reduction of the cost of the related investments. Results of operations for the year reflect a change in estimate of these components using more current tax reporting received from REIT investments. The change in estimate had no impact on each of the Fund's net assets. >Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. >Financial instruments Each Fund may purchase or sell exchange-traded financial futures contracts, which are contracts that obligate that Fund to make or take delivery of a financial instrument or the cash value of a securities index at a specified future date at a specified price. The Funds enter into such contracts to hedge a portion of their portfolio. Gains and losses are reflected as "Net Realized Gain (Loss) on Futures" in the Statements of Operations. Additionally, each Fund, except for Columbia Acorn USA and Columbia Acorn Select, may engage in portfolio hedging with respect to changes in foreign currency exchange rates by entering into forward foreign currency contracts to purchase or sell foreign currencies. The Statements of Operations reflect gains and losses as realized for closed forward foreign currency contracts and unrealized for open contracts. The Funds bear the market risk that arises from changes in the value of financial instruments and securities indices (futures contracts) or from changes in foreign currency rates (forward foreign currency contracts) and the credit risk should a counterparty fail to perform under such contracts. None of the Funds entered into any futures contracts or forward foreign currency contracts during the year ended December 31, 2003. >Fund share valuation Fund shares are sold and redeemed on a continuing basis at net asset value. Net asset value per share is determined daily as of the close of trading on the New York Stock Exchange on each day the Exchange is open for trading. All income, expenses (other than the Class A, Class B and Class C 12b-1 and distribution fees, and Class A, Class B, Class C and Class Z shares Transfer Agent fees) and realized and unrealized gains (losses) of a fund are allocated to each class proportionately on a daily basis for purposes of determining the net asset value of each class. Redemption fees are allocated to paid-in-capital of each class proportionately for the purposes of determining net asset value of each class. >Custody fees Custody fees are reduced based on each Fund's cash balances maintained with the custodian. The amount is disclosed as a reduction of total expenses in the Statement of Operations. 1-800-922-6769 61 Columbia Acorn Family of Funds >Notes to Financial Statements continued >Federal income taxes The Funds have complied with the special provisions of the Internal Revenue Code available to regulated investment companies and, in the manner provided therein, distribute all their taxable income, as well as any net realized gain on sales of investments and foreign currency transactions reportable for federal income tax purposes. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required. >Distributions to Shareholders Distributions to shareholders are recorded on the ex-date. 3. Federal Tax Information Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for deferral of losses from wash sales, straddle deferrals, mark-to-market on futures contracts, current year distribution payable, foreign currency transactions, net operating losses, passive foreign investment companies, capital loss carryforwards, post-October losses and non-deductible expenses. Reclassifications are made to the Funds' capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. For the year ended December 31, 2003, permanent items identified and reclassified among the components of net assets are as follows: UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET ACCUMULATED NET INVESTMENT NET REALIZED PAID-IN UNREALIZED LOSS) GAIN (LOSS) CAPITAL APPRECIATION - ----------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 13,265 $ (13,067) $ (607) $ 409 Columbia Acorn International 1,034 (7,045) -- 6,011 Columbia Acorn USA 4,550 3,217 (7,767) -- Columbia Acorn International Select 20 (20) -- -- Columbia Acorn Select 4,409 (4,146) (263) -- Net investment income, net realized gains (losses) and net assets were not affected by this reclassification. The tax character of distributions paid during the years ended December 31, 2003 and December 31, 2002 were as follows: LONG-TERM ORDINARY CAPITAL DECEMBER 31, 2003 INCOME GAINS - ----------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ -- $ 9,917 Columbia Acorn International 5,935 -- Columbia Acorn USA -- -- Columbia Acorn International Select 19 -- Columbia Acorn Select 736 3,445 ORDINARY DECEMBER 31, 2002 INCOME - -------------------------------- (IN THOUSANDS) Columbia Acorn International $ 9,289 As of December 31, 2003, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY LONG-TERM UNREALIZED INCOME CAPITAL GAINS APPRECIATION* - -------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ -- $ 14,205 $ 3,824,239 Columbia Acorn International 16,894 -- 435,632 Columbia Acorn USA -- -- 158,303 Columbia Acorn International Select 154 -- 12,522 Columbia Acorn Select -- -- 109,976 *The difference between book-basis and tax-basis unrealized appreciation, if applicable, is attributable primarily to the tax deferral of losses on wash sales, REITs adjustments and foreign currency transactions. For the year ended December 31, 2003, the following capital loss carryforwards are available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code: 1-800-922-6769 62 YEAR OF COLUMBIA COLUMBIA ACORN COLUMBIA EXPIRATION ACORN FUND INTERNATIONAL ACORN USA - -------------------------------------------------------- (IN THOUSANDS) 2008 $ -- $ -- $ -- 2009 -- 111,479 3,035 2010 -- 76,335 10,064 2011 -- 48,476 -- - -------------------------------------------------------- TOTAL $ -- $236,290 $13,099 COLUMBIA ACORN COLUMBIA YEAR OF INTERNATIONAL ACORN EXPIRATION SELECT SELECT - -------------------------------------------------------- (IN THOUSANDS) 2008 $ -- $ -- 2009 23,084 -- 2010 12,528 -- 2011 2,488 -- - -------------------------------------------------------- TOTAL $38,100 $ -- Capital loss carryforwards utilized during the year ended December 31, 2003, were as follows: Columbia Acorn $38,258 Columbia Acorn USA 5,383 Columbia Acorn Select 530 Expired capital loss carryforwards, if any, are recorded as a reduction of paid-in capital. Columbia Acorn Fund and Columbia Acorn International have elected to mark-to-market their investments in Passive Foreign Investment Companies ("PFIC's") for federal income tax purposes. Gains and losses relating to PFIC's are treated as ordinary income for federal income tax purposes. A summary of transactions relating to PFIC's is as follows (in thousands): COLUMBIA ACORN FUND - -------------------------------------------------------- (IN THOUSANDS) Cumulative unrealized appreciation on PFIC's recognized in prior years at December 31, 2002 $ 409 Unrealized appreciation (depreciation) on PFIC's recognized for federal income tax purposes during 2003 -- Unrealized appreciation recognized in prior years on PFIC's sold during 2003 (409) --------- Cumulative unrealized appreciation on PFIC's carried forward at December 31, 2003 $ -- --------- COLUMBIA ACORN INTERNATIONAL - -------------------------------------------------------- (IN THOUSANDS) Cumulative unrealized appreciation on PFIC's recognized in prior years at December 31, 2002 $ 7,225 Unrealized appreciation (depreciation) on PFIC's recognized for federal income tax purposes during 2003 1,215 Unrealized appreciation recognized in prior years on PFIC's sold during 2003 (7,225) --------- Cumulative unrealized appreciation on PFIC's carried forward at December 31, 2003 $ 1,215 --------- 4. Transactions with Affiliates Effective October 13, 2003, the Fund's investment advisor changed its name from Liberty Wanger Asset Management, L.P. to Columbia Wanger Asset Management, L.P. ("Columbia WAM"). Columbia WAM, a wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a wholly-owned subsidiary of Fleet National Bank, which in turn is a wholly-owned subsidiary of FleetBoston Financial Corporation ("Fleet"), furnishes continuing investment supervision to each Fund and is responsible for the overall management of the Funds' business affairs. Under the Funds' investment management agreement, fees are accrued daily and paid monthly to Columbia WAM at the annual rates shown in the table below for each fund. COLUMBIA ACORN FUND - -------------------------------------------------------- Net asset value: On the first $700 million .75% Next $1.3 billion .70% Net assets in excess of $2 billion .65% COLUMBIA ACORN INTERNATIONAL - -------------------------------------------------------- Net asset value: On the first $100 million 1.20% Next $400 million .95% Net assets in excess of $500 million .75% COLUMBIA ACORN USA - -------------------------------------------------------- Net asset value: On the first $200 million .95% Net assets in excess of $200 million .90% COLUMBIA ACORN INTERNATIONAL SELECT - -------------------------------------------------------- On average daily net assets: .95% COLUMBIA ACORN SELECT - -------------------------------------------------------- On average daily net assets: .90% 1-800-922-6769 63 Columbia Acorn Family of Funds >Notes to Financial Statements continued >Expense Limit Columbia WAM has voluntarily agreed to reimburse the ordinary operating expenses (exclusive of distribution and service fees, interest, taxes and extraordinary expenses, if any) exceeding 1.45% of the average annual net assets for Columbia Acorn International Select Class Z shares and 1.35% of the average annual net assets for Columbia Acorn Select Class Z shares. Columbia WAM also provides administrative services to each Fund at an annual rate of .05% of average daily net assets. Effective October 13, 2003, Liberty Funds Distributor, Inc. changed its name to Columbia Funds Distributor, Inc. (the Distributor). The Distributor, an indirect subsidiary of Fleet, is each Fund's principal underwriter and receives no compensation on the sale of Class Z shares. Each Fund has adopted a 12b-1 plan which requires it to pay the Distributor a service and distribution fee on the net assets attributable to Class A, Class B and Class C shares. Effective October 13, 2003, Liberty Funds Services, Inc. changed its name to Columbia Funds Services, Inc. (the "Transfer Agent"). The Transfer Agent, an affiliate of the investment advisor, provides shareholder services to the Funds and receives reimbursement for out-of-pocket expenses. Certain officers and trustees of the Trust are also officers of Columbia WAM. The Trust makes no direct payments to its officers or trustees who are affiliated with Columbia WAM. Trustees' fees and expenses for the year ended December 31, 2003 are as follows: - -------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $369 Columbia Acorn International 70 Columbia Acorn USA 20 Columbia Acorn International Select 4 Columbia Acorn Select 14 - -------------------------------------------------------- The Trust provides a deferred compensation plan for its trustees. Under that plan, a trustee may elect to defer all or a portion of his or her compensation. Amounts deferred are retained by the Trust and represent an unfunded obligation of the Trust. The value of amounts deferred is determined by reference to the change in value of Class Z shares of one or more series of the Trust or a money market fund as specified by the trustee. Benefits under the deferred compensation plan are payable upon retirement. During the year ended December 31, 2003, the Funds engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. Those transactions complied with Rule 17a-7 under the Investment Company Act of 1940 and were as follows: FUNDS PURCHASES SALES - -------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $32,474 $ 5,329 Columbia Acorn International 7,022 33,552 Columbia Acorn USA 1,032 -- Columbia Acorn International Select -- 45 Columbia Acorn Select -- 1,204 - -------------------------------------------------------- 5. Borrowing Arrangements The Trust participates in a $150 million credit facility, which was entered into to facilitate portfolio liquidity. No amounts have been borrowed under this facility for the year ended December 31, 2003. 6. Investment Transactions The aggregate cost of purchases and proceeds from sales other than short-term obligations for the year ended December 31, 2003 were: COLUMBIA ACORN FUND - -------------------------------------------------------- (IN THOUSANDS) 2003 Investment securities Purchases $ 2,754,813 Proceeds from sales 692,955 - -------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL - -------------------------------------------------------- (IN THOUSANDS) 2003 Investment securities Purchases 533,515 Proceeds from sales 712,236 - -------------------------------------------------------- COLUMBIA ACORN USA - -------------------------------------------------------- (IN THOUSANDS) 2003 Investment securities Purchases 198,615 Proceeds from sales 29,091 - -------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL SELECT - -------------------------------------------------------- (IN THOUSANDS) 2003 Investment securities Purchases 22,844 Proceeds from sales 25,103 - -------------------------------------------------------- COLUMBIA ACORN SELECT - -------------------------------------------------------- (IN THOUSANDS) 2003 Investment securities Purchases 490,046 Proceeds from sales 62,409 - -------------------------------------------------------- 1-800-922-6769 64 7. Legal Proceedings The Securities and Exchange Commission (the "SEC"), the New York Attorney General and various other regulatory authorities are investigating late trading and market timing in mutual fund shares, and have sent information requests and subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG") (collectively, "Columbia"). These affiliates include the Distributor, Columbia Management Advisors, Inc. ("CMA"), and Columbia Wanger Asset Management, L.P. ("Columbia WAM"). CMA is the adviser to the Columbia Family of Funds, but is not the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered any instances where Columbia entities were knowingly involved in late trading of mutual fund shares. Columbia has identified a limited number of investors who had informal arrangements for trading shares of various funds managed by subsidiaries of CMG between 1998 and 2003. A majority of the transactions in connection with these arrangements occurred in one international fund and two domestic funds in the Columbia Family of Funds. A majority of the trading under these arrangements was made by three entities. A substantial majority of the trading had ended by October 2002. None of these arrangements exist today. Information relating to those trading arrangements has been supplied to various regulatory authorities. The SEC staff has issued notices to the effect that it has made a preliminary determination to recommend that the SEC bring civil enforcement actions, including injunctive proceedings, against the Distributor and CMA alleging that they have violated certain provisions of the federal securities laws. Columbia believes that those allegations are based principally on the trading arrangements referred to above. Columbia WAM has not been named in these notices. The Distributor and CMA are engaged in discussions with the SEC staff in an effort to reach a satisfactory resolution of these matters. However, there can be no assurance that such a resolution will be reached. Any potential resolution of these matters may include, but not be limited to, sanctions, financial penalties, damages or injunctions regarding the Distributor or CMA, and structural changes in the conduct of their business. Although Columbia does not believe that these regulatory developments or their resolution will have a material adverse effect on the Funds, or on the ability of the Distributor or Columbia WAM to provide services to the Funds, there can be no assurance that these matters or any publicity relating to these matters or other developments resulting from them will not adversely effect sales or redemptions of Fund shares or otherwise effect the Funds. Columbia Acorn Trust (the "Trust") and Columbia WAM are defendants in a lawsuit that seeks certification of a plaintiff class consisting of all persons in the United States who held shares in Columbia Acorn International Fund ("International Fund") for a period of more than 14 days during the five years prior to the filing of the lawsuit. The suit seeks compensatory and punitive damages, as well as interest, costs and attorney's fees. The lawsuit alleges, in summary, that the Trust and Columbia WAM exposed International Fund shareholders to trading by market timers by allegedly (a) failing to properly evaluate daily whether a significant event affecting the value of International Fund's securities had occurred after foreign markets had closed but before the calculation of the Fund's net asset value ("NAV"); (b) failing to implement International Fund's portfolio valuation and share pricing policies and procedures; (c) allowing portfolio valuation and share policies and procedures that benefited market timers at the expense of long-term shareholders; and (d) failing to know and implement applicable rules and regulations concerning the calculation of NAV. The Trust and Columbia WAM also are defendants in a lawsuit that seeks certification of a plaintiff class consisting of all persons in the United States who held shares in International Fund for a period of more than 14 days, without any stated limitation on the duration of the class period. The suit seeks compensatory and punitive damages, as well as interest, costs and attorney's fees. This suit contains allegations and counts similar to those described above, and also includes an additional count under Section 36(a) of the Investment Company Act of 1940. The Trust, on behalf of International Fund, and Columbia WAM intend to defend both suits vigorously. The Trust does not believe that the pending actions will have a material adverse affect on the financial statements of any Fund, and Columbia WAM does not believe that the pending actions will have a material adverse affect on its ability to perform under its contracts with the Funds. 1-800-922-6769 65 Columbia Acorn Family of Funds >Unaudited Information FEDERAL INCOME TAX INFORMATION: COLUMBIA ACORN FUND For the fiscal year ended December 31, 2003, the Fund designates long-term capital gains of $24,122. COLUMBIA ACORN INTERNATIONAL FUND Foreign taxes paid during the fiscal year ended December 31, 2003, amounted to $3,216 ($0.04 per share) are expected to be passed through to shareholders as 100% allowable foreign tax credits on Form 1099-DIV for the year ended December 31, 2003. Gross income derived from sources within foreign countries amounted to $33,962 ($0.46 per share) for the fiscal year ended December 31, 2003. COLUMBIA ACORN INTERNATIONAL SELECT FUND Foreign taxes paid during the fiscal year ended December 31, 2003, amounted to $62 ($0.02 per share) are expected to be passed through to shareholders as 100% allowable foreign tax credits on Form 1099-DIV for the year ended December 31, 2003. Gross income derived from sources within foreign countries amounted to $745 ($0.25 per share) for the fiscal year ended December 31, 2003. COLUMBIA ACORN SELECT FUND For the fiscal year ended December 31, 2003, the Fund designates long-term capital gains of $3,445. 100% of the ordinary income distributed by the Fund, in the year ended December 31, 2003, qualifies for the corporate dividends received deduction. For non-corporate shareholders 100%, or the maximum amount allowable under the Job and Growth Tax Relief Reconciliation Act of 2003, of income earned by the Fund for the period January 1, 2003 to December 31, 2003 may represent qualified dividend income. Final information will be provided in your 2003 1099-DIV form. 1-800-922-6769 66 Columbia Thermostat Fund >Statement of Investments, December 31, 2003 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- >STOCK FUNDS: 49.5% 981 Columbia Growth & Income Fund, Class Z $ 15,899 1,719 Columbia Growth Stock Fund, Class Z (b) 15,870 559 Columbia Acorn Fund, Class Z 12,613 393 Columbia Mid Cap Value Fund, Class Z 9,502 522 Columbia Acorn Select, Class Z (b) 9,501 - -------------------------------------------------------------------------------- TOTAL STOCK FUNDS (COST: $54,614) 63,385 >BOND FUNDS: 49.6% 3,469 Columbia Intermediate Bond Fund, Class Z 31,739 1,775 Columbia Federal Securities Fund, Class Z 19,061 1,453 Columbia High Yield Fund, Class Z 12,696 - -------------------------------------------------------------------------------- TOTAL BOND FUNDS (COST: $62,988) 63,496 >SHORT-TERM OBLIGATION: 0.8% $ 972 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 6/17/05, Market Value $996 (repurchase proceeds: $972) 972 - -------------------------------------------------------------------------------- (COST: $972) 972 ----------- TOTAL INVESTMENTS: 99.9% 127,853 (COST: $118,574) CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 76 ----------- TOTAL NET ASSETS: 100% $ 127,929 ================================================================================ >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investments was $118,600 and net unrealized appreciation was $9,253, consisting of gross unrealized appreciation of $9,349 and gross unrealized depreciation of $96. (b) Non-income producing. 67 Columbia Thermostat Fund >Statements of Assets and Liabilities
DECEMBER 31, 2003 - ----------------------------------------------------------------------------------------- (IN THOUSANDS) ASSETS Investments, at value (cost: $118,574) $ 127,853 Cash 8 Receivable for: Fund shares sold 1,655 Dividends 219 Expense reimbursement due from Advisor 167 - ----------------------------------------------------------------------------------------- Total Assets 129,902 LIABILITIES Payable for: Investments purchased 1,782 Fund shares redeemed 53 Transfer agent fees 29 Custody fees 2 Reports to shareholders 19 12b-1 Service & Distribution fees 74 Other liabilities 14 - ----------------------------------------------------------------------------------------- Total Liabilities 1,973 - ----------------------------------------------------------------------------------------- NET ASSETS $ 127,929 ========================================================================================= COMPOSITION OF NET ASSETS Paid in capital $ 118,444 Accumulated net realized gain 206 Net unrealized appreciation on investments 9,279 - ----------------------------------------------------------------------------------------- NET ASSETS $ 127,929 ========================================================================================= Net asset value per share -- Class A (a) $ 12.30 (Net assets/shares) ($42,271/3,437) Maximum offering price per share -- Class A (b) $ 13.05 (Net asset value per share/front-end sales charge) ($12.30/0.9425) Net asset value and offering price per share -- Class B (a) $ 12.32 (Net assets/shares) ($51,501/4,179) Net asset value and offering price per share -- Class C (a) $ 12.32 (Net assets/shares) ($20,087/1,631) Net asset value, offering price and redemption price per share -- Class Z $ 12.31 (Net assets/shares) ($14,070/1,143)
(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 accompanying notes to financial statements. 1-800-922-6769 68 COLUMBIA THERMOSTAT FUND >STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 (IN THOUSANDS) - ------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends from investment company shares $ 1,135 Interest income 27 - ------------------------------------------------------------------------------- Total Investment Income 1,162 EXPENSES: Management fees 49 Administration fees 25 12b-1 Services & Distribution fees 299 Transfer agent fees 134 Trustees fees --* Custody fees 28 Registration and blue sky fees 159 Reports to shareholders 85 Other expenses 37 - ------------------------------------------------------------------------------- Total expenses 816 Less custody fees paid indirectly --* Less reimbursement of expenses by Advisor (350) - ------------------------------------------------------------------------------- Net Expenses 466 - ------------------------------------------------------------------------------- Net Investment Income 696 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Realized gain distributions from investment company shares 272 Net unrealized appreciation on investments 9,219 - ------------------------------------------------------------------------------- Net realized and unrealized gain 9,491 - ------------------------------------------------------------------------------- Net Increase in Net Assets resulting from Operations $ 10,187 =============================================================================== * Rounds to less than $500. See accompanying notes to financial statements. 69 Columbia Thermostat Fund >Statement of Changes in Net Assets
YEAR ENDED PERIOD ENDED INCREASE IN NET ASSETS DECEMBER 31, DECEMBER 31, - ------------------------------------------------------------------------------------- (IN THOUSANDS) 2003 (a) 2002 (b) OPERATIONS: Net investment income $ 696 $ 9 Net realized gain on investments 272 10 Net unrealized appreciation 9,219 60 - ------------------------------------------------------------------------------------- Net Increase from Operations 10,187 79 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A (395) -- Net realized gain -- Class A (21) -- Net investment income -- Class B (108) -- Net realized gain -- Class B (30) -- Net investment income -- Class C (43) -- Net realized gain -- Class C (10) -- Net investment income -- Class Z (160) -- Net realized gain -- Class Z (14) -- - ------------------------------------------------------------------------------------- Total Distribution to Shareholders (781) -- SHARE TRANSACTIONS: Subscriptions -- Class A 40,815 -- Distributions reinvested -- Class A 373 -- Redemptions -- Class A (1,441) -- - ------------------------------------------------------------------------------------- Net Increase -- Class A 39,747 -- Subscriptions -- Class B 48,741 -- Distributions reinvested -- Class B 125 -- Redemptions -- Class B (1,176) -- - ------------------------------------------------------------------------------------- Net Increase -- Class B 47,690 -- Subscriptions -- Class C 19,668 -- Distributions reinvested -- Class C 44 -- Redemptions -- Class C (1,015) -- - ------------------------------------------------------------------------------------- Net Increase -- Class C 18,697 -- Subscriptions -- Class Z 9,094 4,089 Distributions reinvested -- Class Z 166 -- Redemptions -- Class Z (1,023) (16) - ------------------------------------------------------------------------------------- Net Increase -- Class Z 8,237 4,073 - ------------------------------------------------------------------------------------- Net Increase from Share Transactions 114,371 4,073 - ------------------------------------------------------------------------------------- Total Increase in Net Assets 123,777 4,152 - ------------------------------------------------------------------------------------- NET ASSETS: Beginning of period 4,152 -- - ------------------------------------------------------------------------------------- End of period $ 127,929 $ 4,152 ===================================================================================== OVERDISTRIBUTED (UNDISTRIBUTED) NET INVESTMENT INCOME $ -- $ 9 =====================================================================================
(a) Class A, Class B, and Class D commenced operations March 3, 2003. On October 13, 2003, Class D was redesignated Class C. (b) Class Z commenced operations September 25, 2002. See accompanying notes to financial statements. 1-800-922-6769 70 Columbia Thermostat Fund >Statement of Changes in Net Assets continued
YEAR ENDED PERIOD ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: DECEMBER 31, DECEMBER 31, - --------------------------------------------------------------------------------------------- (IN THOUSANDS) 2003 (a) 2002 (b) Subscriptions -- Class A 3,529 -- Shares issued in reinvestment and capital gains -- Class A 31 -- Less shares redeemed -- Class A (123) -- - --------------------------------------------------------------------------------------------- Net Increase -- Class A 3,437 -- Subscriptions -- Class B 4,268 -- Shares issued in reinvestment and capital gains -- Class B 10 -- Less shares redeemed -- Class B (99) -- - --------------------------------------------------------------------------------------------- Net Increase -- Class B 4,179 -- Subscriptions -- Class C 1,712 -- Shares issued in reinvestment and capital gains -- Class C 4 -- Less shares redeemed -- Class C (85) -- - --------------------------------------------------------------------------------------------- Net Increase -- Class C 1,631 -- Subscriptions -- Class Z 821 400 Shares issued in reinvestment and capital gains -- Class Z 14 -- Less shares redeemed -- Class Z (91) (1) - --------------------------------------------------------------------------------------------- Net Increase -- Class Z 744 399 - --------------------------------------------------------------------------------------------- Net Increase in Shares of Beneficial Interest 9,991 399 - ---------------------------------------------------------------------------------------------
(a) Class A, Class B, Class D commenced operations March 3, 2003. On October 13, 2003, Class D was redesignated Class C. (b) Class Z commenced operations September 25, 2002. See accompanying notes to financial statements. 71 Columbia Thermostat Fund >Financial Highlights
INCEPTION SEPTEMBER 25, YEAR ENDED 2002 THROUGH CLASS Z DECEMBER 31, DECEMBER 31, - ------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 NET ASSET VALUE, BEGINNING OF PERIOD $ 10.41 $ 10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.19 0.04 Net realized and unrealized gain 1.87 0.37 - ------------------------------------------------------------------------------------------------------- Total from Investment Operations 2.06 0.41 - ------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.16) -- From net realized gains 0.00(b) -- - ------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.16) -- - ------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.31 $ 10.41 ======================================================================================================= Total Return (c) 19.79% 4.10%(d) ======================================================================================================= RATIOS TO AVERAGE NET ASSETS Expenses (e) 0.38%(f) 0.62%(g)(h) Net investment income 1.64%(f) 1.41%(g)(h) Reimbursement 0.88% 19.94%(g) Portfolio turnover rate 61% 11%(d) Net assets at end of period (IN MILLIONS) $ 14 $ 4
(a) Per share data was calculated using average shares outstanding during the period. Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. (b) Rounds to less than $0.01 per share. (c) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) Does not include expenses of the investment companies in which the Fund invests. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) In accordance with a requirement of the Securities and Exchange Commission, the ratios reflect total expenses prior to the reduction of custody fees for cash balances it maintains with the custodian ("custody fees paid indirectly"). The ratios of expenses to average daily net assets and net investment income to average daily net assets net of custody fees paid indirectly would have been 0.60% and 1.43%, respectively for the period ended December 31, 2002. See accompanying notes to financial statements. 1-800-922-6769 72 Columbia Thermostat Fund >Notes to Financial Statements 1. Nature of Operations Columbia Thermostat Fund (the "Fund"), a series of Columbia Acorn Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust, commenced operations September 25, 2002. The Fund may issue an unlimited number of shares. The Fund currently offers four classes of shares: Class A, Class B, Class C and Class Z. On October 13, 2003, Class D was redesignated Class C. Class A shares are sold with a front-end sales charge.A contingent deferred sales charge may be assessed to Class A shares purchased without an initial sales charge on redemptions made within eighteen months on an original purchase of $1 million to $25 million. Class B shares are subject to a contingent deferred sales charge. Class B shares will convert to Class A shares in three, four or eight years after purchase, depending on the program under which shares are purchased. Class C shares are subject to a contingent deferred sales charge on redemptions made within one year after purchase. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares. The financial highlights for Class A, Class B and Class C shares are presented in a separate annual report. The annual report for the other series of the Trust is also included in this report. The investment objective of the Fund is to provide long-term total return. The Fund pursues its investment objective by investing in shares of other mutual funds. As a `fund of funds', under normal circumstances, the Fund allocates at least 95% of its net assets among a selected group of stock and bond mutual funds (the "Portfolio Funds") according to the current level of the Standard & Poor's 500 Stock Index in relation to predetermined ranges set by the Fund's investment adviser. As of December 31, 2003, the Fund invested in five stock Portfolio Funds (Columbia Acorn Fund, Columbia Acorn Select Fund, Columbia Growth & Income Fund, Columbia Mid Cap Value Fund, Columbia Growth Stock Fund) and three bond Portfolio Funds (Columbia Federal Securities Fund, Columbia Intermediate Bond Fund and Columbia High Yield Fund). The Fund may also invest up to 5% of its net assets plus any cash received that day in cash, repurchase agreements, high quality short-term paper and government securities. 2. Significant Accounting Policies >Security valuation Investments in Portfolio Funds are valued at their net asset value as reported by the underlying funds. High quality short-term paper and government securities having a maturity of 60 days or less from the valuation date are valued on an amortized cost basis, which approximates fair value. >Repurchase agreements The Fund may engage in repurchase agreement transactions. The Fund, through its custodian, receives delivery of underlying securities collateralizing each repurchase agreement. The Fund's investment advisor determines that the value of the underlying securities is at all times at least equal to the resale price. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. >Security transactions and investment income Portfolio Fund transactions are accounted for on the trade date (date the order to buy or sell is executed). Dividend income and realized gain distributions from other funds are recorded on the ex-dividend date. Interest income is recorded on the accrual basis and includes amortization of discounts on money market instruments and short-term debt instruments when required for federal income tax purposes. Realized gains and losses from security transactions are reported on an identified cost basis. Awards from class action litigation may be recorded as a reduction of cost. If the Fund no longer owns the applicable securities, the proceeds are recorded as realized gains. >Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. >Fund share valuation Fund shares are sold and redeemed on a continuing basis at net asset value. Net asset value per share is determined daily as of the close of trading on the New York Stock Exchange on each day the Exchange is open for trading. >Custody fees The custody fees are reduced based on the Fund's cash balance maintained with the custodian. The amount is disclosed as a reduction of total expenses in the Statement of Operations. 73 Columbia Thermostat Fund >Notes to Financial Statements, continued >Federal income taxes The Fund has complied with the special provisions of the Internal Revenue Code available to regulated investment companies and, in the manner provided therein, distributes all of its taxable income, as well as any net realized gain on sales of Portfolio Fund shares and any distributions of net realized gains received by the Fund from its Portfolio Funds, reportable for federal income tax purposes. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required. >Distributions to Shareholders Distributions to shareholders are recorded on the ex-date. 3. Federal Tax Information Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments of non-deductible expenses. 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. For the year ended December 31, 2003, permanent items identified and reclassified among the components of net assets are as follows: OVERDISTRIBUTED ACCUMULATED NET INVESTMENT NET REALIZED PAID-IN INCOME GAIN CAPITAL - ----------------------------------------------------------- (IN THOUSANDS) $ 1 $ (1) $ -- Net investment income, net realized gains (losses) and net assets were not affected by this reclassification. The tax character of distributions paid during the year ended December 31, 2003 was as follows: LONG-TERM TAX ORDINARY CAPITAL RETURN OF INCOME GAINS CAPITAL - ---------------------------------------------------- (IN THOUSANDS) $ 771 $ 10 $ -- As of December 31, 2003, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY LONG-TERM UNREALIZED INCOME CAPITAL GAINS APPRECIATION* - ----------------------------------------------------------------- (IN THOUSANDS) $ 197 $ 36 $ 9,253 * The difference between book-basis and tax-basis unrealized appreciation (depreciation), if applicable, is attributable primarily to the tax deferral of losses on wash sales. 4. Transactions with Affiliates Effective October 13, 2003, the Fund's investment advisor changed its name from Liberty Wanger Asset Management, L.P. to Columbia Wanger Asset Management, L.P. ("Columbia WAM"). Columbia WAM, a wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a wholly-owned subsidiary of Fleet National Bank, which in turn is a wholly-owned subsidiary of FleetBoston Financial Corporation ("Fleet"), furnishes continuing investment supervision to each Fund and is responsible for the overall management of the Fund's business affairs. Under the Funds' investment management agreement, fees are accrued daily and paid monthly to Columbia WAM at the annual rate of 0.10% of the Fund's average daily net assets. >Expense Limit Columbia WAM has agreed to voluntarily reimburse the direct operating expenses (exclusive of interest and fees on borrowings and expenses associated with the Fund's investment in other investment companies) exceeding 0.60% of the average annual net assets of the Fund's Class Z shares. Effective August 1, 2003, Columbia WAM has agreed to contractually reimburse the direct operating expenses (exclusive of interest and fees on borrowings and expenses associated with the Fund's investment in other investment companies) exceeding 0.25% of the average annual net assets of the Fund's Class Z shares. Columbia WAM has also contracted to provide administrative services at an annual rate of .05% of the Fund's average daily net assets. Effective October 13, 2003 Liberty Funds Distributor, Inc., changed its name to Columbia Funds Distributor, Inc. (the Distributor). The Distributor, an indirect subsidiary of Fleet, is the Fund's principal underwriter and receives no compensation on the sale of Class Z shares. The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a service and distribution fee on net assets attributable to Class A, Class B and Class C shares. Effective October 13, 2003, Liberty Funds Services, Inc., changed its name to Columbia Funds Services, Inc. (the "Transfer Agent"). The Transfer Agent, an affiliate of the investment advisor, provides shareholder services to the Fund and receives reimbursement for out-of-pocket expenses. 1-800-922-6769 74 Certain officers and trustees of the Trust are also officers of Columbia WAM. The Trust makes no direct payments to its officers and trustees who are affiliated with Columbia WAM. Trustees' fees and expenses for the year ended December 31, 2003, were $270. 5. Borrowing Arrangements The Trust participates in a $150,000,000 credit facility which was entered into to facilitate portfolio liquidity. No amounts have been borrowed under this facility for the year ended December 31, 2003. 6. Investment Transactions The aggregate cost of purchases and proceeds from sales other than short-term obligations for the year ended December 31, 2003 were: - -------------------------------------------------------------------------------- (IN THOUSANDS) Purchases $ 144,197 Proceeds from sales $ 30,493 ================================================================================ 7. Legal Proceedings The Securities and Exchange Commission (the "SEC"), the New York Attorney General and various other regulatory authorities are investigating late trading and market timing in mutual fund shares, and have sent information requests and subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG") (collectively, "Columbia"). These affiliates include the Distributor, Columbia Management Advisors, Inc. ("CMA"), and Columbia Wanger Asset Management, L.P. ("Columbia WAM"). CMA is the adviser to the Columbia Family of Funds, but is not the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered any instances where Columbia entities were knowingly involved in late trading of mutual fund shares. Columbia has identified a limited number of investors who had informal arrangements for trading shares of various funds managed by subsidiaries of CMG between 1998 and 2003. A majority of the transactions in connection with these arrangements occurred in one international fund and two domestic funds in the Columbia Family of Funds. A majority of the trading under these arrangements was made by three entities. A substantial majority of the trading had ended by October 2002. None of these arrangements exist today. Information relating to those trading arrangements has been supplied to various regulatory authorities. The SEC staff has issued notices to the effect that it has made a preliminary determination to recommend that the SEC bring civil enforcement actions, including injunctive proceedings, against the Distributor and CMA alleging that they have violated certain provisions of the federal securities laws. Columbia believes that those allegations are based principally on the trading arrangements referred to above. Columbia WAM has not been named in these notices. The Distributor and CMA are engaged in discussions with the SEC staff in an effort to reach a satisfactory resolution of these matters. However, there can be no assurance that such a resolution will be reached. Any potential resolution of these matters may include, but not be limited to, sanctions, financial penalties, damages or injunctions regarding the Distributor or CMA, and structural changes in the conduct of their business. Although Columbia does not believe that these regulatory developments or their resolution will have a material adverse effect on the Funds, or on the ability of the Distributor or Columbia WAM to provide services to the Funds, there can be no assurance that these matters or any publicity relating to these matters or other developments resulting from them will not adversely effect sales or redemptions of Fund shares or otherwise effect the Funds. Columbia Acorn Trust (the "Trust") and Columbia WAM are defendants in a lawsuit that seeks certification of a plaintiff class consisting of all persons in the United States who held shares in Columbia Acorn International Fund ("International Fund") for a period of more than 14 days during the five years prior to the filing of the lawsuit. The suit seeks compensatory and punitive damages, as well as interest, costs and attorney's fees. The lawsuit alleges, in summary, that the Trust and Columbia WAM exposed International Fund shareholders to trading by market timers by allegedly (a) failing to properly evaluate daily whether a significant event affecting the value of International Fund's securities had occurred after foreign markets had closed but before the calculation of the Fund's net asset value ("NAV"); (b) failing to implement International Fund's portfolio valuation and share pricing policies and procedures; (c) allowing portfolio valuation and share policies and procedures that benefited market timers at the expense of long-term shareholders; and (d) failing to know and implement applicable rules and regulations concerning the calculation of NAV. 75 Columbia Thermostat Fund >Notes to Financial Statements, continued The Trust and Columbia WAM also are defendants in a lawsuit that seeks certification of a plaintiff class consisting of all persons in the United States who held shares in International Fund for a period of more than 14 days, without any stated limitation on the duration of the class period. The suit seeks compensatory and punitive damages, as well as interest, costs and attorney's fees. This suit contains allegations and counts similar to those described above, and also includes an additional count under Section 36(a) of the Investment Company Act of 1940. The Trust, on behalf of International Fund, and Columbia WAM intend to defend both suits vigorously. The Trust does not believe that the pending actions will have a material adverse affect on the financial statements of any Fund, and Columbia WAM does not believe that the pending actions will have a material adverse affect on its ability to perform under its contracts with the Funds. 1-800-922-6769 76 Columbia Thermostat Fund >Unaudited Information (in thousands) FEDERAL INCOME TAX INFORMATION: For the fiscal year ended December 31, 2003, the Fund designates long-term capital gains of $36. 30.23% of the ordinary income distributed by the Fund, in the year ended December 31, 2003, qualifies for the corporate dividends received deduction. For non-corporate shareholders 30.23%, of the maximum amount allowable under the Jobs and Growth Tax Reconciliation Act of 2003, of income earned by the Fund for the period January 1, 2003 to December 31, 2003 may represent qualified dividend income. Final information will be provided in your 2003 1099-DIV From. 77 Report of Independent Auditors TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF COLUMBIA ACORN TRUST We have audited the accompanying statements of assets and liabilities, including the statements of investments of Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select, Columbia Acorn Select and Columbia Thermostat Fund, comprising the Columbia Acorn Trust, as of December 31, 2003, the related statements of operations, changes in net assets, and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of investments owned as of December 31, 2003, by correspondence with the custodian and brokers or other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective Funds of the Columbia Acorn Trust as of December 31, 2003, the results of their operations and changes in their net assets and financial highlights for the periods indicated therein, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Chicago, Illinois February 6, 2004 1-800-922-6769 78 Columbia Acorn Family of Funds Class Z Share Information MINIMUM INITIAL INVESTMENT IN COLUMBIA ACORN INTERNATIONAL, COLUMBIA ACORN INTERNATIONAL SELECT, COLUMBIA ACORN SELECT, COLUMBIA THERMOSTAT FUND $ 1,000 $ 1,000 FOR AN IRA MINIMUM INITIAL INVESTMENT IN COLUMBIA ACORN FUND AND COLUMBIA ACORN USA $ 50,000 MINIMUM SUBSEQUENT INVESTMENT $ 50 EXCHANGE FEE NONE COLUMBIA ACORN FUND ACRNX Management Fee 0.67% 12b-1 Fee None Other Expenses 0.13% -------- Expense Ratio 0.80% COLUMBIA ACORN INTERNATIONAL ACINX Management Fee 0.84% 12b-1 Fee None Other Expenses 0.21% -------- Expense Ratio 1.05% COLUMBIA ACORN USA AUSAX Management Fee 0.92% 12b-1 Fee None Other Expenses 0.19% -------- Expense Ratio 1.11% COLUMBIA ACORN INTERNATIONAL SELECT ACFFX Management Fee 0.95% 12b-1 Fee None Other Expenses 0.50% -------- Net Expense Ratio 1.45% COLUMBIA ACORN SELECT ACTWX Management Fee 0.90% 12b-1 Fee None Other Expenses 0.22% -------- Expense Ratio 1.12% COLUMBIA THERMOSTAT FUND COTZX Management Fee 0.10% 12b-1 Fee None Other Expenses 0.28% -------- Net Expense Ratio 0.38% Fees and expenses are for the year ended December 31, 2003 and for Columbia Acorn International Select and Columbia Thermostat Fund include the effect of Columbia Wanger Asset Management's undertaking to reimburse those funds for any ordinary operating expenses, net of custody fees paid indirectly, exceeding 1.45% and 0.25% of their average net assets, respectively. Prior to August 1, 2003, the reimbursement for Columbia Thermostat Fund was based on 0.60%. The expense limitation for Columbia Acorn International Select is voluntary and can be terminated by either the Fund or Columbia Wanger Asset Management, L.P. on 30 days' notice. 79 BOARD OF TRUSTEES AND MANAGEMENT OF COLUMBIA ACORN FUNDS The board of trustees serve indefinite terms of unlimited duration provided that a majority of trustees always has been elected by shareholders. The trustees appoint their own successors, provided that at least two-thirds of the trustees, after such appointment, have been elected by shareholders. Shareholders may remove a trustee, with or without cause, upon the vote of two-thirds of Acorn's outstanding shares at any meeting called for that purpose. A trustee may be removed, with or without cause, upon the vote of a majority of the trustees. The names of the trustees and officers of Acorn, the date each was first elected or appointed to office, their principal business occupations and other directorships they have held during at least the last five years, are shown below. Each trustee serves in such capacity for each of the six series of Acorn. Mr. Wanger also serves as a trustee for each of the four series of the Wanger Advisors Trust.
NUMBER OF PORTFOLIOS YEAR FIRST IN FUND NAME, POSITION(s) ELECTED OR COMPLEX WITH COLUMBIA ACORN AND APPOINTED PRINCIPAL OCCUPATION(s) DURING OVERSEEN AGE AT JANUARY 1, 2004 TO OFFICE* PAST FIVE YEARS BY TRUSTEE OTHER DIRECTORSHIPS ------------------------ ---------- ------------------------------ ---------- ------------------- TRUSTEES WHO ARE NOT INTERESTED PERSONS OF COLUMBIA ACORN: MARGARET EISEN, 50, 2002 Chair, Institute for Financial Markets; 6 Antigenics, Inc. TRUSTEE formerly managing director, (biotechnology DeGuardiola Advisors; formerly and drugs); Global managing director, North American Financial Group Equities at General Motors Asset (venture capital fund Management; prior thereto, director of funds). of Worldwide Pension Investments for DuPont Asset Management. LEO A. GUTHART, 66, 1994 Executive vice president, Honeywell 6 AptarGroup, Inc. TRUSTEE International (home and building control); (producer of dispensing chairman, Cylink valves, pumps and Corporation (supplier of encryption closures); Symbol equipment); former chairman of the Technologies, Inc. board of trustees, Hofstra (manufacturer of bar code University; chairman and chief scanning equipment). executive officer, Topspin Partners, L.P. JEROME KAHN, JR., 69, TRUSTEE 1987 Former president, William Harris 6 None. Investors, Inc. (investment adviser). STEVEN N. KAPLAN, 44, TRUSTEE 1999 Neubauer Family Professor of 6 None. Entrepreneurship and Finance, Graduate School of Business, University of Chicago. DAVID C. KLEINMAN, 68, 1972 Adjunct professor of 6 Sonic Foundry, Inc. TRUSTEE strategic management, University (software); of Chicago Graduate School of AT&T Latin America. Business; Business consultant. ALLAN B. MUCHIN, 67, 1998 Chairman emeritus, Katten Muchin 6 Alberto-Culver Company TRUSTEE Zavis Rosenman (law firm). (toiletries). ROBERT E. NASON, 67, 1998 Consultant and private investor since 6 None. TRUSTEE AND CHAIRMAN 1998; from 1990-1998, executive partner and chief executive officer, member of the executive committee of Grant Thornton, LLP (public accounting firm) and member of the policy board of Grant Thornton International. JOHN A. WING, 68, 2002 Frank Wakely Gunsaulus Professor 6 AmerUs Life Holdings TRUSTEE of Law and Finance, and chairman (life insurance); LDF, of the Center for the Study of Law Inc. and Labe Federal and Financial Markets, Illinois Bank (banking); Margo Institute of Technology; prior thereto, Caribe, Inc. (farming). chairman of the board and chief executive officer of ABN-AMRO Incorporated, formerly The Chicago Corporation, and chief executive officer of Market Liquidity Network, LLC. TRUSTEES WHO ARE INTERESTED PERSONS OF COLUMBIA ACORN: CHARLES P. MCQUAID, 50, Chief investment officer of 6 None. TRUSTEE, 1992 Columbia WAM since September TRUSTEE AND PRESIDENT (1) 2003 30, 2003; portfolio manager since 1995 and director of research from July 1992 through December 2003 of Columbia WAM; principal, WAM from July 1995 to September 29, 2000; president, Wanger Advisors Trust. RALPH WANGER, 69, 1970 Founder, former president, chief 10 Wanger Advisors Trust TRUSTEE(1) investment officer and portfolio (4 portfolios). manager, Columbia WAM (1992-2003); principal, WAM from July 1992 until September 29, 2000; president, WAM Ltd. from July 1992 to September 29, 2000; president and director, WAM Acquisition GP, Inc. since September 29, 2000; former president, Wanger Advisors Trust; director, Wanger Investment Company plc. OFFICERS OF COLUMBIA ACORN: J. KEVIN CONNAUGHTON, 39, 2001 Treasurer of the Columbia Funds and 10 None. ASSISTANT TREASURER of the Columbia All-Star Funds since December 2000 (formerly controller and chief accounting officer of the Columbia Funds and of the Columbia All-Star Funds from February 1998 to October 2000); treasurer of the Stein Roe Funds since February 2001 (formerly chief accounting officer and controller from May 2000 to February 2001); treasurer of the Galaxy Funds since September 2002; senior vice president of Columbia Funds Group since January 2001; (formerly vice president of Colonial Management Associates from February 1998 to October 2000). P. ZACHARY EGAN, 39, 2003 Analyst and portfolio manager, 6 None. VICE PRESIDENT Columbia WAM since 1999; prior thereto, a research fellow with the Robert Bosch Foundation. KENNETH A. KALINA, 44, 1995 Chief financial officer, 10 None. ASSISTANT TREASURER Columbia WAM since April 2000; assistant treasurer, Wanger Advisors Trust; fund controller, Columbia WAM since September 1995; director, New Americas Small Cap Fund. BRUCE H. LAUER, 46, 1995 Chief operating officer, Columbia 10 None. VICE PRESIDENT, SECRETARY WAM since April 1995; principal, AND TREASURER WAM from January 2000 to September 29, 2000; vice president, treasurer and secretary, Wanger Advisors Trust; director, Wanger Investment Company plc and New Americas Small Cap Fund. ROBERT A. MOHN, 42, 1997 Analyst and portfolio manager, 10 None. VICE PRESIDENT Columbia WAM since August 1992; principal, WAM from 1995 to September 29, 2000; vice president, Wanger Advisors Trust. LOUIS J. MENDES, 39, 2003 Analyst and portfolio manager, 6 None. VICE PRESIDENT Columbia WAM since 2001; prior thereto, analyst and portfolio manager, Merrill Lynch. TODD NARTER, 39, 2001 Analyst and portfolio manager, 10 None. VICE PRESIDENT Columbia WAM since June 1997; vice president, Wanger Advisors Trust. CHRISTOPHER OLSON, 39, 2001 Analyst and portfolio manager, 10 None. VICE PRESIDENT Columbia WAM since January 2001; vice president, Wanger Advisors Trust; prior thereto, director and portfolio strategy analyst with UBS Asset Management/Brinson Partners. JOHN H. PARK, 36, 1998 Director of domestic research 10 None. VICE PRESIDENT since December 2003; analyst and portfolio manager, Columbia WAM since July 1993; principal, WAM from 1998 to September 29, 2000; vice president, Wanger Advisors Trust. VINCENT P. PIETROPAOLO, 38, 2001 Vice president and senior 10 None. ASSISTANT SECRETARY counsel, Columbia Funds Group since December 1999; associate, Morgan Lewis & Bockius, October 1998 to December 1999; product manager, Putnam Investments from April 1997 to October 1998. DAVID A. ROZENSON, 49, 2003 Secretary of the Columbia Funds 10 None. CHIEF LEGAL OFFICER and of the Columbia All-Star Funds since December 2003; senior counsel, Fleet Boston Financial Corporation since January 1996; associate general counsel, Columbia Management Group since November 2002.
* Dates prior to April 1992 correspond to the date first elected or appointed as a director or officer of Acorn Fund Inc., the Trust's predecessor. (1) Trustee who is an "interested person" of the Trust and of Columbia WAM, as defined in the Investment Company Act of 1940, because he is an officer of the Trust and an employee of Columbia WAM. Effective September 30, 2003, Mr. Wanger no longer serves as president of the Trust and president, chief investment officer and portfolio manager of Columbia WAM. As of that date, Mr. McQuaid became chief investment officer of Columbia WAM, and Mr. Wanger continues to serve as an interested Trustee of the Trust and remains affiliated with Columbia WAM, acting in an advisory capacity. The address for the trustees and officers of the Trust is Columbia Wanger Asset Management, L.P., 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606. The SAI includes additional information about Fund trustees and is available, without charge, upon request by calling 1-800-345-6611. 80 INVESTMENT ADVISOR Columbia Wanger Asset Management, L.P. 227 West Monroe Street, Suite 3000 Chicago, Illinois 60606 1-800-922-6769 DISTRIBUTOR Columbia Funds Distributor, Inc. One Financial Center Boston, Massachusetts 02111-2621 TRANSFER AGENT, DIVIDEND DISBURSING AGENT Columbia Funds Services, Inc. P.O. Box 8081 Boston, Massachusetts 02266-8081 1-800-345-6611 LEGAL COUNSEL Bell, Boyd & Lloyd LLC Chicago, Illinois INDEPENDENT AUDITORS Ernst & Young LLP Chicago, Illinois THIS REPORT, INCLUDING THE SCHEDULES OF INVESTMENTS, IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF COLUMBIA ACORN TRUST. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A PROSPECTUS. FIND OUT WHAT'S NEW - VISIT OUR WEB SITE AT: WWW.COLUMBIAFUNDS.COM OUR E-MAIL ADDRESS IS: SERVICEINQUIRIES@COLUMBIAMANAGEMENT.COM SHAREHOLDERS SHOULD NOT INCLUDE PERSONAL INFORMATION SUCH AS ACCOUNT NUMBERS, SOCIAL SECURITY NUMBERS OR TAXPAYER IDENTIFICATION NUMBERS IN E-MAIL. WE ARE UNABLE TO ACCEPT ACCOUNT TRANSACTIONS SENT VIA E-MAIL. [Photo of acorns] [EAGLE HEAD LOGO APPEARS HERE] COLUMBIAFUNDS A MEMBER OF COLUMBIA MANAGEMENT GROUP (c) 2004 COLUMBIA FUNDS DISTRIBUTOR, INC. ONE FINANCIAL CENTER BOSTON, MA 0211-2621 ACN-02/728Q-1203 (02/04) 04/0210 PHOTO OF A WOMAN HOLDING FILE COLUMBIA ACORN FUNDS ANNUAL REPORT DECEMBER 31, 2003 COLUMBIA ACORN FUND COLUMBIA ACORN INTERNATIONAL COLUMBIA ACORN USA COLUMBIA ACORN INTERNATIONAL SELECT COLUMBIA ACORN SELECT COLUMBIA THERMOSTAT FUND Not FDIC May Lose Value Insured No Bank Guarantee > 2003 YEAR-END DISTRIBUTIONS The following table details the funds' year-end distributions. The record and ex-dividend date for COLUMBIA ACORN FUND and COLUMBIA ACORN SELECT was December 5, 2003 and the payable date was December 8, 2003. For COLUMBIA THERMOSTAT FUND, the record and ex-dividend date was December 26, 2003 and the payable date was December 29, 2003.
LONG-TERM SHORT-TERM CAPITAL CAPITAL ORDINARY REINVESTMENT GAINS GAINS INCOME PRICE - ---------------------------------------------------------------------------------------------------- Columbia Acorn Fund Class A $0.0201 None None $21.53 - ---------------------------------------------------------------------------------------------------- Columbia Acorn Fund Class B and C $0.0201 None None $21.10 - ---------------------------------------------------------------------------------------------------- Columbia Acorn Select Class A $0.0890 None None $17.53 - ---------------------------------------------------------------------------------------------------- Columbia Acorn Select Class B and C $0.0890 None None $17.18 - ---------------------------------------------------------------------------------------------------- Columbia Thermostat Fund Class A None None $0.1237 $12.23 - ---------------------------------------------------------------------------------------------------- Columiba Thermostat Fund Class B and C None None $0.0315 $12.25 - ----------------------------------------------------------------------------------------------------
THE DISCUSSION IN THIS REPORT OF PORTFOLIO COMPANIES IS FOR ILLUSTRATION ONLY AND IS NOT A RECOMMENDATION OF INDIVIDUAL STOCKS. THE INFORMATION IS BELIEVED TO BE ACCURATE, BUT THE INFORMATION AND THE VIEWS OF THE PORTFOLIO MANAGERS MAY CHANGE AT ANY TIME WITHOUT NOTICE. Columbia Acorn Family of Funds Annual Report 2003 TABLE OF CONTENTS COLUMBIA ACORN FAMILY OF FUNDS Share Class Performance 2 Fund Performance vs. Benchmarks 3 Squirrel Chatter: Don't Bet The Farm 4 COLUMBIA ACORN FUND In a Nutshell 6 At a Glance 7 Major Portfolio Changes 18 Statement of Investments 20 COLUMBIA ACORN INTERNATIONAL In a Nutshell 8 At a Glance 9 Major Portfolio Changes 32 Statement of Investments 34 Portfolio Diversification 38 COLUMBIA ACORN USA In a Nutshell 10 At a Glance 11 Major Portfolio Changes 39 Statement of Investments 40 COLUMBIA ACORN INTERNATIONAL SELECT In a Nutshell 12 At a Glance 13 Major Portfolio Changes 45 Statement of Investments 46 Portfolio Diversification 48 COLUMBIA ACORN SELECT In a Nutshell 14 At a Glance 15 Major Portfolio Changes 49 Statement of Investments 50 COLUMBIA THERMOSTAT FUND In a Nutshell 16 At a Glance 17 Statement of Investments 71 Statement of Assets and Liabilities 72 Statement of Operations 73 Statement of Changes in Net Assets 74 Financial Highlights 76 Notes to Financial Statements 77 COLUMBIA ACORN FAMILY OF FUNDS Statements of Assets and Liabilities 52 Statements of Operations 53 Statements of Changes in Net Assets 54 Financial Highlights 58 Notes to Financial Statements 64 Report of Independent Auditors 82 Board of Trustees and Management of Columbia Acorn Funds 84 >Net Asset Value Per Share as of 12/31/03
COLUMBIA COLUMBIA ACORN COLUMBIA COLUMBIA ACORN COLUMBIA INTERNATIONAL COLUMBIA THERMOSTAT ACORN FUND INTERNATIONAL ACORN USA SELECT ACORN SELECT FUND - ----------------------------------------------------------------------------------------------- Class A $ 22.20 $ 22.45 $ 20.74 $ 14.45 $ 18.01 $ 12.30 - ----------------------------------------------------------------------------------------------- Class B $ 21.75 $ 22.07 $ 20.36 $ 14.12 $ 17.64 $ 12.32 - ----------------------------------------------------------------------------------------------- Class C $ 21.75 $ 22.06 $ 20.36 $ 14.14 $ 17.64 $ 12.32* - -----------------------------------------------------------------------------------------------
*On October 13, 2003, Columbia Thermostat Fund Class D shares were renamed Class C shares. There is no assurance that the trends described in this report will continue or come to pass because, in part, economic and market conditions change frequently. An investment in any of these Funds presents certain risks, including stock market fluctuations due to economic and business developments. 1 Columbia Acorn Family of Funds >Share Class Performance Average Annual Total Returns through 12/31/03
CLASS A CLASS B CLASS C WITHOUT WITH WITHOUT WITH WITHOUT WITH SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE - ------------------------------------------------------------------------------------------------------------------ COLUMBIA ACORN FUND (6/10/70) - ------------------------------------------------------------------------------------------------------------------ 3 months* 14.30% 7.73% 14.10% 9.10% 14.16% 13.16% - ------------------------------------------------------------------------------------------------------------------ 1 year 44.85% 36.53% 43.89% 38.89% 43.99% 42.99% - ------------------------------------------------------------------------------------------------------------------ 5 years 14.08% 12.74% 13.62% 13.38% 13.62% 13.62% - ------------------------------------------------------------------------------------------------------------------ 10 years 13.37% 12.70% 13.14% 13.14% 13.14% 13.14% - ------------------------------------------------------------------------------------------------------------------ Life of fund 16.24% 16.03% 16.17% 16.17% 16.17% 16.17% - ------------------------------------------------------------------------------------------------------------------ COLUMBIA ACORN INTERNATIONAL (9/23/92) - ------------------------------------------------------------------------------------------------------------------ 3 months* 17.11% 10.38% 17.02% 12.02% 16.97% 15.97% - ------------------------------------------------------------------------------------------------------------------ 1 year 46.94% 38.49% 46.06% 41.06% 46.00% 45.00% - ------------------------------------------------------------------------------------------------------------------ 5 years 6.64% 5.38% 6.21% 5.89% 6.20% 6.20% - ------------------------------------------------------------------------------------------------------------------ 10 years 7.26% 6.63% 7.05% 7.05% 7.04% 7.04% - ------------------------------------------------------------------------------------------------------------------ Life of fund 10.91% 10.33% 10.71% 10.71% 10.71% 10.71% - ------------------------------------------------------------------------------------------------------------------ COLUMBIA ACORN USA (9/4/96) - ------------------------------------------------------------------------------------------------------------------ 3 months* 13.40% 6.88% 13.24% 8.24% 13.24% 12.24% - ------------------------------------------------------------------------------------------------------------------ 1 year 46.26% 37.85% 45.32% 40.32% 45.32% 44.32% - ------------------------------------------------------------------------------------------------------------------ 5 years 9.47% 8.18% 9.04% 8.76% 9.04% 9.04% - ------------------------------------------------------------------------------------------------------------------ Life of fund 13.71% 12.80% 13.41% 13.41% 13.41% 13.41% - ------------------------------------------------------------------------------------------------------------------ COLUMBIA ACORN INT'L SELECT+ (11/23/98) - ------------------------------------------------------------------------------------------------------------------ 3 months* 16.91% 10.19% 16.60% 11.60% 16.57% 15.57% - ------------------------------------------------------------------------------------------------------------------ 1 year 41.11% 33.00% 40.08% 35.08% 40.14% 39.14% - ------------------------------------------------------------------------------------------------------------------ 5 years 5.94% 4.69% 5.45% 5.12% 5.48% 5.48% - ------------------------------------------------------------------------------------------------------------------ Life of fund 7.80% 6.56% 7.32% 7.17% 7.35% 7.35% - ------------------------------------------------------------------------------------------------------------------ COLUMBIA ACORN SELECT+ (11/23/98) - ------------------------------------------------------------------------------------------------------------------ 3 months* 4.81% -1.21% 4.67% -0.33% 4.67% 3.67% - ------------------------------------------------------------------------------------------------------------------ 1 year 29.95% 22.47% 29.14% 24.14% 29.14% 28.14% - ------------------------------------------------------------------------------------------------------------------ 5 years 13.14% 11.80% 12.67% 12.42% 12.67% 12.67% - ------------------------------------------------------------------------------------------------------------------ Life of fund 14.37% 13.05% 13.91% 13.79% 13.91% 13.91% - ------------------------------------------------------------------------------------------------------------------ COLUMBIA THERMOSTAT FUND++ (9/25/02) - ------------------------------------------------------------------------------------------------------------------ 3 months* 7.20% 1.04% 7.03% 2.03% 7.03% 6.03% - ------------------------------------------------------------------------------------------------------------------ 1 year 19.43% 12.57% 18.74% 13.74% 18.74% 17.74% - ------------------------------------------------------------------------------------------------------------------ Life of fund 18.73% 13.31% 18.18% 15.16% 18.18% 18.18% - ------------------------------------------------------------------------------------------------------------------
*Not annualized. +Liberty Acorn Foreign Forty was renamed Columbia Acorn International Select and Liberty Acorn Twenty was renamed Columbia Acorn Select on 10/13/03. ++On 10/13/03, Columbia Thermostat Fund Class D shares were renamed Class C shares. PAST PERFORMANCE DOES NOT GUARANTEE 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. The "with sales charge" returns include the maximum 5.75% sales charge for Class A shares, the appropriate Class B contingent deferred sales charge for the holding period after purchase as follows: through first year--5%, second year--4%, third year--3%, fourth year--3%, fifth year--2%, sixth year--1%, thereafter--0%; and the Class C contingent deferred sales charge of 1% for the first year only. Performance of the different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursements of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Class A, B and C share (newer class shares) performance for all funds includes returns of the Fund's Class Z shares (the oldest existing Fund class) for periods prior to the inception of the newer class shares. The new class shares were launched October 16, 2000 for the five Columbia Acorn funds and March 3, 2003 for Columbia Thermostat Fund. These Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between Class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of Class A, B and C shares would have been lower. 2 >Fund Performance vs. Benchmarks Class A shares, without sales charge, Average Annual Total Returns through 12/31/03+
4TH* 1 3 5 10 LIFE QUARTER YEAR YEARS YEARS YEARS OF FUND - --------------------------------------------------------------------------------------------- COLUMBIA ACORN FUND (6/10/70) 14.30% 44.85% 9.63% 14.08% 13.37% 16.24% - --------------------------------------------------------------------------------------------- S&P 500 12.18% 28.69% -4.05% -0.57% 11.07% 12.12% - --------------------------------------------------------------------------------------------- Russell 2500 14.43% 45.51% 6.58% 9.40% 11.74% NA - --------------------------------------------------------------------------------------------- Russell 2000 14.52% 47.25% 6.27% 7.13% 9.47% NA - --------------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 14.85% 40.90% 6.83% 9.39% 11.11% NA - --------------------------------------------------------------------------------------------- Lipper Mid-Cap Core Funds Index 13.06% 36.58% 2.38% 7.89% 10.95% NA - --------------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL (9/23/92) 17.11% 46.94% -1.26% 6.64% 7.26% 10.91% - --------------------------------------------------------------------------------------------- Citigroup EMI Global ex-US 15.97% 55.02% 7.19% 6.18% 4.74% 6.28% - --------------------------------------------------------------------------------------------- MSCI EAFE 17.08% 38.59% -2.91% -0.05% 4.47% 6.16% - --------------------------------------------------------------------------------------------- Lipper Int'l Small- Cap Funds Index 14.77% 55.10% 5.45% 10.31% NA NA - --------------------------------------------------------------------------------------------- COLUMBIA ACORN USA (9/4/96) 13.40% 46.26% 12.03% 9.47% -- 13.71% - --------------------------------------------------------------------------------------------- Russell 2000 14.52% 47.25% 6.27% 7.13% -- 8.63% - --------------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 14.85% 40.90% 6.83% 9.39% -- 9.90% - --------------------------------------------------------------------------------------------- S&P 500 12.18% 28.69% -4.05% -0.57% -- 9.12% - --------------------------------------------------------------------------------------------- COLUMBIA ACORN INT'L SELECT (11/23/98) 16.91% 41.11% -5.35% 5.94% -- 7.80% - --------------------------------------------------------------------------------------------- Citigroup World ex-US Cap Range $2-10B 15.81% 49.65% 4.73% 5.92% -- 6.48% - --------------------------------------------------------------------------------------------- MSCI EAFE 17.08% 38.59% -2.91% -0.05% -- 0.75% - --------------------------------------------------------------------------------------------- Lipper International Funds Index 15.45% 36.00% -1.85% 2.13% -- 2.51% - --------------------------------------------------------------------------------------------- COLUMBIA ACORN SELECT (11/23/98) 4.81% 29.95% 8.71% 13.14% -- 14.37% - --------------------------------------------------------------------------------------------- S&P MidCap 400 13.19% 35.62% 4.84% 9.21% -- 11.28% - --------------------------------------------------------------------------------------------- Lipper Mid-Cap Growth Index 10.98% 35.42% -8.56% 2.18% -- 4.78% - --------------------------------------------------------------------------------------------- S&P 500 12.18% 28.69% -4.05% -0.57% -- 0.55% - --------------------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND (9/25/02) 7.20% 19.43% -- -- -- 18.73% - --------------------------------------------------------------------------------------------- S&P 500 12.18% 28.69% -- -- -- 29.59% - --------------------------------------------------------------------------------------------- Lehman U.S. Credit Intermediate Bond Index 0.40% 6.91% -- -- -- 7.95% - --------------------------------------------------------------------------------------------- Lehman U.S Govt. Intermediate Bond Index -0.20% 2.29% -- -- -- 2.89% - --------------------------------------------------------------------------------------------- Lipper Flexible Portfolio Funds Index 9.26% 23.03% -- -- -- 23.09% - ---------------------------------------------------------------------------------------------
*Not annualized. +Class A shares (newer class shares) performance information includes returns of the Funds' Class Z shares (the oldest existing Fund class) for periods prior to the inception of the newer class shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Current performance may be lower or higher than the performance data collected. Visit columbiafunds.com for daily performance updates. For complete information about Columbia Acorn Funds, including objectives, risks, charges and expenses, refer to a copy of the prospectus. Be sure to read it carefully before you invest. DESCRIPTION OF INDEXES: S&P 500 is a broad, market-weighted average of U.S. blue-chip company stock performance. S&P MIDCAP 400 is a broad market-weighted index of 400 stocks that are in the next size/tier down from the S&P 500. RUSSELL 2000 is a market-weighted index of 2000 U.S. companies, formed by taking the largest 3,000 companies and eliminating the largest 1,000. RUSSELL 2500 is the smallest 2,500 U.S. companies from this same group. CITIGROUP EMI GLOBAL EX-US is the bottom 20% of institutionally investable capital of developed and emerging countries, selected by index sponsor, outside the U.S. MSCI EAFE is Morgan Stanley's Europe, Australasia and Far East Index, a widely recognized international benchmark that comprises 20 major markets in proportion to world stock market capitalization. CITIGROUP WORLD EX-US CAP RANGE $2-10B is a subset of the Broad Market Index, representing a mid-cap developed market index excluding the U.S. LIPPER INDEXES include the largest funds tracked by Lipper, Inc. in the named category. LIPPER MID-CAP GROWTH INDEX, 30 mid-cap growth funds; LIPPER MID-CAP CORE FUNDS INDEX, 30 mid-cap core funds; LIPPER INTERNATIONAL FUNDS INDEX, 30 largest non-U.S. funds, not including non-U.S. small cap funds; LIPPER INTERNATIONAL SMALL-CAP FUNDS INDEX, 10 largest non-U.S. funds investing in small cap companies, including Columbia Acorn International; LIPPER SMALL-CAP CORE FUNDS INDEX, 30 largest small cap core funds, including Columbia Acorn Fund. LIPPER FLEXIBLE PORTFOLIO FUNDS INDEX is an equal dollar weighted index of the 30 largest mutual funds within the Flexible Portfolio fund classification, as defined by Lipper. LEHMAN U.S. GOVERNMENT INTERMEDIATE BOND INDEX is made up of 1 to 10 year treasury and agency bonds, excluding targeted investor notes and state and local government series bonds. The LEHMAN U.S. CREDIT INTERMEDIATE BOND INDEX is the intermediate component of the U.S. Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements. All indexes are unmanaged and returns include reinvested distributions. A more complete description of each index is included in the Fund's statement of additional information. It is not possible to invest directly in an index. 3 >Squirrel Chatter: DON'T BET THE FARM Photo of Ralph Wanger How do you run a mutual fund to get good results? Are the investing rules the same for managing small-cap/mid-cap funds and large-cap funds? Here are some of my personal opinions on these questions. We believe some basic principles apply to any stock portfolio. (1) Diversification reduces risk, so own mid-cap stocks (Columbia Acorn Select) and a small-cap fund (Columbia Acorn USA). (2) International stocks add additional beneficial diversification (Columbia Acorn International)1. (3) The market often over-values growth stocks, so pay close attention to valuation. (4) Big winners take years to develop, so think long term. So what are the differences in managing small-, mid- and large-cap funds? Many large-company portfolios are run according to the rules expressed in Charles Ellis's book, WINNING THE LOSER'S GAME. 2 He tells us to play it safe. Start with a portfolio that mirrors the market and try to avoid big losers (fraud such as Enron and WorldCom, overpriced growth such as Cisco at $80 3). One could say he starts with the S&P 500 and reduces it to the Ellis 495 by getting rid of some potential big losers. The WINNING THE LOSER'S GAME strategy may work for a big-company portfolio, but it is not the way I like to run a small-cap fund. Small-cap is a winner's game. You want to be a Barry Bonds or a Sammy Sosa and hit 50 home runs. If you get the homers, you are a hero; you can strike out a lot of times but no one will care very much. As an example, International Game Technology (IGT) has been a great long-term winner for the funds. In the 2003 season, IGT hit a grand slam - - an additional unrealized gain of $175 million!4 Even if you strike out more often than you would like, one big winner more than offsets a half-dozen $10 million losers. Some of our big winners are duly celebrated in the Scarlet A section. The funds had fine results in 2003 due to the success we had in these stocks and many others. Writing about success, however, is less colorful than writing about failure; there are more plays about Nero than about Marcus Aurelius. When it comes to investing, there are only a few ways to fail. You can buy a company that runs into unexpected problems. Sometimes you buy into a speculative company you know is high risk and the company just doesn't make it. The unfortunate speculators who bought Cisco at $80 lost mere hundreds of billions of dollars compared to the more unfortunate speculators gulled by the Enron and WorldCom frauds. Of course bubbles and speculation have a long history. The first overpricing bubble on record was the tulip-mania boom in Holland in 1636. Tulips were a new "high-tech" flower in Europe but the price of strangely colored varieties went way too high, creating a nasty collapse. Tulip-bulb farming today is still important to the Dutch but it is no longer high tech. Farmers can fool you. About 25 years ago, I put some personal money into Maine Sugar. The promoter was a potato processor in Aroostook County, Maine. He believed that the climate and soil there was favorable for growing sugar beets. He floated stock to build a sugar refinery and invited a planeload of New York analysts to come see the sugar beet fields under cultivation. The analysts got on a bus and were driven to a field where the CEO dug up a giant sugar beet. The analysts had never seen such a large sugar beet (most of them had never seen a farm, for that matter). They got back on the bus, and after another ten minutes arrived at another field. The CEO dug up a sugar beet bigger than the first one. The bus continued to another farm field where again an impressive beet was unearthed. When the analysts arrived back in New York, they wrote buy reports based on the great number of farms growing sugar beets. Maine Sugar dissolved a few months later, and the city-boy analysts realized that they had been shown the same field three times in a row. (Columbia Acorn Funds didn't own Maine Sugar). The latest foolish farm fraud is Parmalat, an Italian company in the milk business. (Parma latte, get it?) The Columbia Acorn Funds lost a few million dollars in Parmalat (see Pages 8 and 12). Big banks that did business with Parmalat could lose hundreds of millions of dollars in bad loans. One of the centerpieces of the fraud was a made-up bank deposit of 3.95 billion euros (about $5 billion). The Parmalat officials allegedly handed the auditors a hastily forged document purporting to be the bank's acknowledgement of the deposit. The auditors appear to have accepted the false affidavit without making their own inquiry ("Hey, we are facing a deadline and it's only five billion.") and allowed the company to continue its fraud for a few more months, roping us in. How could we have avoided getting caught? Talking to company management more often probably would have not helped at all; after all, the bank lenders, the bond rating agencies, and auditor were fooled, and they had much freer access to the company's internal records then any outside financial analyst could ever get. One answer would have been to talk to Parmalat's suppliers, in this case the dairy farmers. After the collapse, someone did ("Parma Farmers Had One Rule: Don't Deal With Parmalat," BLOOMBERG NEWS, January 19, 2004). Achille Coelli, director of the Union of Parma Farmers said, "Farmers here won't work with Parmalat. Tanzi [the CEO] never had a good reputation. The company was a slow payer, so only one 1-800-922-6769 4 percent of the milk produced in Parma province was sold to Parmalat." Obvious red flag? Sure. Did any analyst do this check before the collapse? Don't think so. What conclusions do we want to draw from this crying over spilt milk, besides the vaguely comforting notion that not all fraud occurs in the USA? First, a smart crook can fool some of the people all of the time. Second, really star-quality analytic work could help discover frauds sooner, but much of the time that doesn't happen. Third, complete skepticism would have you avoid fraud, but you would avoid the good investments too. An investor must balance skepticism and credulity just as one balances risk/return or growth/value. Fourth, diversification dilutes the negative effect of one bad stock. Since fraud tends to hit you one at a time, it's a strike out, but it doesn't cost you the season. The benefits you get from big winners far outweigh a few losers. 2003 SCARLET A WINNERS HEAP HIGH THE GOLDEN CORN! 5 -- JOHN GREENLEAF WHITTIER Our analysts and portfolio managers deserve a lot of credit for picking exceptional stocks but we do not rely solely on our internal investment prowess. Often we get sage advice from investment pros outside our Chicago office. We honor and thank these individuals by presenting them with the coveted Scarlet A certificate. In 2003, domestic stocks had to increase more than 150% and make more than $40 million to be considered for a Scarlet A. The international stock criteria was a return of at least 100% and a dollar gain of $20 million or more. Our thanks to Greg Jackson of Blum Capital Partners for his help on software company NOVELL. The stock was up 214% in 2003 and brought in a firm-wide gain of over $101 million. Rural cellular service provider WESTERN WIRELESS was up 250% in 2003 and provided a dollar gain of nearly $69 million. Hats off to Thomas Lee of JPMorgan for his help with this 2003 winner. Thomas confirmed our internal analysis that Western Wireless was generating free cash flow and that fears that the company could go bust were unfounded. Natural gas producer ULTRA PETROLEUM, up nearly 150%, brought in a dollar gain of over $50 million. Credit for this idea goes to Barry Sahgal of Brean Murray & Co. While this is Barry's first Scarlet A win, this is not his first contribution to the Columbia Acorn Funds. Barry also brought EVERGREEN RESOURCES to our attention in 1998, a stock that has increased over 270% during the five years we've held it in our funds. A repeat winner tops our international Scarlet A list. Ireland's ANGLO IRISH BANK was up 142% in 2003 and provided a firm-wide dollar gain of nearly $60 million. To David Smith of Davy Stockbrokers in Dublin: Thanks again! Stefan Stalmann of Dresdner Kleinwort Wasserstein in Frankfurt, Germany, earns the Scarlet A for his help with DEPFA BANK. The stock, up 139% with a $22 million gain, provides international public-sector financing. While we had built a position in Depfa Bank before speaking with Stefan, his understanding of the company reinforced our conviction and we remained invested in the stock longer than we might have on his advice, benefiting shareholders. It is noteworthy that Robert Hurkmans, a Dresdner contact in New York, encouraged us to contact Stefan. The best attributes of a good broker are credibility and being selective about providing information and analyst contacts within their own organization. So, to Robert Hurkmans, we offer kudos for darned good brokering. COLUMBIA WAM NEWS John Park has been named director of domestic research for Columbia Wanger Asset Management, L.P. John joined the firm in 1993 and has managed Columbia Acorn Select since its 1998 inception. He also became a co-manager on Columbia Acorn Fund in 2003. /s/ Ralph Wanger Ralph Wanger FOUNDER, ADVISOR AND TRUSTEE COLUMBIA WANGER ASSET MANAGEMENT, L.P. ________________________________________________________________________________ 1 For more information about Columbia Acorn Select, Columbia Acorn USA or Columbia Acorn International, including management fees and expenses, please call us at (800) 922-6769 or visit www.columbiafunds.com. Please read the prospectus carefully before you invest or send money. 2 Ellis, Charles D., WINNING THE LOSER'S GAME: TIMELESS STRATEGIES FOR SUCCESSFUL INVESTING, McGraw-Hill Trade, 4th Edition, March 14, 2002. 3 No fund advised by Columbia Wanger Asset Management, L.P., owns or has owned Enron, WorldCom or Cisco. 4 The dollar gain for the one-year period ended December 31, 2003 reflects the total gain in the stock across all funds/accounts advised by Columbia Wanger Asset Management, L.P., that held IGT. 5 Whitter, John Greenleaf, THE CORN SONG, prior to 1872. As of 12/31/03, fund positions, as a percent of net assets, in the holdings mentioned were: Parmalat: Columbia Acorn International, 0.0%; Columbia Acorn International Select, 0.0%. International Game Technology: Columbia Acorn Fund, 2.8%; Columbia Acorn Select, 2.3%. Novell: Columbia Acorn Fund, 0.9%; Columbia Acorn USA, 2.0%. Western Wireless: Columbia Acorn Fund, 0.5%; Columbia Acorn USA, 2.5%. Ultra Petroleum: Columbia Acorn Fund, 0.6%; Columbia Acorn USA, 0.8%. Evergreen Resources: Columbia Acorn Fund, 0.4%. Anglo Irish Bank: Columbia Acorn Fund, 0.5%; Columbia Acorn International, 2.2%; Columbia Acorn International Select, 5.8%. Depfa Bank: Columbia Acorn Fund, 0.2%; Columbia Acorn International, 0.9%; Columbia Acorn International Select, 2.5%. 5 Columbia Acorn Fund* >In a Nutshell Photo of Charles P. McQuaid Photo of Robert A. Mohn Photo of John H. Park Columbia Acorn Fund surged 44.85% (Class A shares, without sales charge) in 2003, our fourth best year ever. As shown on Page 3, the Fund matched the Russell 2500, slightly underperformed the Russell 2000, handily beat many peers and substantially outperformed the large-cap S&P 500. During the fourth quarter, Columbia Acorn Fund's 14.30% gain matched small-cap performance measures and moderately beat mid- and large-cap benchmarks. We've previously discussed buying good tech stocks at distressed prices, and also purchasing select telecom and biotech stocks when we believed we were being paid to take risk. Most of these stocks were up a lot, but given improved tech demand, repaired telecom balance sheets, and biotech fundamental progress, we believe additional gains seem plausible for many of the holdings. We constantly review the Fund's portfolio, looking to swap into stocks that we consider more attractive. Aspect Communications, discussed separately on this page, was Columbia Acorn Fund's biggest percentage winner, up 454% during the year. Barcode and wireless ID systems maker Unova jumped 354% on improved earnings, while software provider Novell, technology e-learning company Skillsoft Publishing, and technology staff company Igate Capital each at least doubled. The Fund's biggest loser was First Health Group, down over 20%, as competitors put pricing pressure on the firm. Columbia Acorn Fund's foreign stocks delivered an average 57.81% return for the year. The leading percentage gainer was Korean auto parts maker Hyundai Mobis, which cranked out a 171% gain on better than expected earnings. Anglo Irish Bank, discussed on Page 8, appreciated 125% and was the Fund's largest foreign winner in dollars. We continue to believe that foreign stocks on average are better values than domestic securities, so we have increased the Fund's foreign weighting to 12.7%. We currently don't expect it to exceed 15%. Small caps have outperformed large caps for nearly five years and by most measures small-cap valuations are now close to long-term average valuations relative to large caps. While we continue to find companies that we believe are attractive, the combination of fewer compelling new ideas and more existing stocks approaching sell targets has caused the Board of Trustees to take proactive steps to reduce cash inflows. Existing shareholders can continue to buy shares in Columbia Acorn Fund. The minimum for NEW eligible accounts, however, has been raised to $50,000 and several marketing channels have been closed. Please see our recent prospectus supplement for additional details. We'd like to take this opportunity to officially welcome John Emerson to Columbia Wanger Asset Management's domestic analyst team. John joined us mid-year to cover media stocks. /s/ Charles P. McQuaid /s/ Robert A. Mohn Charles P. McQuaid Robert A. Mohn LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER /s/ John H. Park John H. Park CO-PORTFOLIO MANAGER The Right Call - --------------- Columbia Wanger Asset Management's technology services and software analyst Ben Andrews always believed that technology was driving a revolution in the telecommunications industry. Though telecom-related stocks collapsed from early 2000 to early 2003, consumers worldwide still wanted hand-held devices and broadband connections, while corporations wanted increased productivity and cost savings. Call center software provider Aspect Communications suffered from management, product, and financing transitions, but had a stable customer base that generated plenty of revenue. As the economy improved, Aspect's next generation products started to grow, and the company's financing and management problems were worked out. Aspect became profitable and the stock rose over 450% in 2003. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. *LIBERTY ACORN FUND WAS RENAMED COLUMBIA ACORN FUND ON OCTOBER 13, 2003. ON SEPTEMBER 30, 2003, RALPH WANGER RELINQUISHED HIS DAILY FIRM AND PORTFOLIO MANAGEMENT RESPONSIBILITIES. AT THAT TIME, CHUCK MCQUAID BECAME THE LEAD PORTFOLIO MANAGER OF COLUMBIA ACORN FUND. MR. WANGER CONTINUES TO SERVE AS A TRUSTEE OF COLUMBIA ACORN TRUST AND AS A MEMBER OF THE COLUMBIA THERMOSTAT SUPERVISORY COMMITTEE, AND WILL REMAIN AFFILIATED WITH COLUMBIA WANGER ASSET MANAGEMENT, LP, ACTING IN AN ADVISORY CAPACITY. AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS MENTIONED WERE: ASPECT COMMUNICATIONS, 0.6%; UNOVA, 0.3%; SKILLSOFT PUBLISHING, 0.8%; IGATE CAPITAL, 0.3%; FIRST HEALTH GROUP, 1.0%; HYUNDAI MOBIS, 0.2%; ANGLO IRISH BANK, 0.5%; NOVELL, 0.9%. 1-800-922-6769 6 Columbia Acorn Fund >At a Glance Ticker Symbol: LACAX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through December 31, 2003 1 YEAR 5 YEARS 10 YEARS ------ ------- -------- Returns before NAV 44.85% 14.08% 13.37% taxes POP 36.53 12.74 12.70 - ------------------------------------------------------------------- Returns after taxes NAV 44.83 12.35 11.31 on distributions POP 36.51 11.03 10.65 - ------------------------------------------------------------------- Returns after taxes NAV 29.18 11.54 10.76 on distributions and POP 23.77 10.34 10.14 sale of fund shares - ------------------------------------------------------------------- S&P 500 (pretax) 28.69 -0.57 11.07 - ------------------------------------------------------------------- Russell 2500 (pretax) 45.51 9.40 11.74 - ------------------------------------------------------------------- Russell 2000 (pretax) 47.25 7.13 9.47 - ------------------------------------------------------------------- Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. Public offering price (POP) returns include the maximum sales charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include sales charges or contingent deferred sales charges (CDSC). COLUMBIA ACORN FUND PORTFOLIO DIVERSIFICATION >as a % of net assets, as of December 31, 2003 (PIE CHART) Consumer Goods/Services 19.9% Industrial Goods/Services 12.2% Finance 11.6% Other* 8.9% Health Care 8.6% Energy/Minerals 7.0% Real Estate 4.3% Information 27.5% Software/Services 13.8% Computer Related Hardware 8.9% Media 2.3% Telecommunications 2.5% *Other includes cash and other assets less liabilities of 7.9%. Foreign equities within the portfolio were 12.7% diversified by region as follows: 8.0% Europe; 1.7% Asia without Japan; 1.7% Canada; 0.6% Japan; 0.3% Australia; 0.2% Latin America; 0.2% New Zealand. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN FUND >December 31, 1993 through December 31, 2003 Illustration is based on a hypothetical $10,000 investment in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. The Fund commenced operations on 6/10/1970, but until 10/16/2000, offered only the shares that are now designated Class Z shares. The historical performance of Class A, B and C shares (newer class shares) for the period prior to 10/16/2000 is based on the performance of Class Z shares. The Class A, B and C share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between Class A, B and C and Class Z. Had the expense differential been reflected, the returns for periods prior to the inception of the newer class shares would have been lower. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The S&P 500 is a broad, market-weighted average of U.S. blue-chip company stock performance. The Russell 2000 is a market-weighted index of 2,000 smaller U.S. companies formed by taking the largest 3,000 U.S. companies and eliminating the largest 1,000. The Russell 2500 is the smallest 2,500 U.S. companies taken from this same group. Indexes are unmanaged and returns for the indexes and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. TOTAL NET ASSETS: $11,168.8 MILLION WITHOUT CLASS A CLASS B CLASS C CLASS Z SALES CHARGE $35,080 $34,373 $34,373 $35,721 - ------------------------------------------------------------ WITH SALES CHARGE $33,066 $34,373 $34,373 N/A (MOUNTAIN CHART) COLUMBIA COLUMBIA ACORN ACORN FUND - A FUND - A WITH SALES RUSSELL RUSSELL AT NAV CHARGE 2000 S&P 500 2500 ----------- ----------- -------- -------- -------- 12/31/93 10000.00 9425.00 10000.00 10000.00 10000.00 10050.00 9472.13 10313.50 10339.90 10316.50 9928.40 9357.51 10276.20 10059.30 10279.20 9447.86 8904.61 9733.67 9620.72 9777.62 9526.28 8978.52 9791.52 9744.11 9834.47 9418.63 8877.06 9681.58 9904.02 9733.35 9096.51 8573.46 9352.82 9661.23 9430.47 9390.33 8850.39 9506.49 9978.53 9686.05 9823.23 9258.39 10036.20 10387.60 10209.80 9700.44 9142.66 10002.60 10133.60 10106.20 9664.54 9108.83 9963.13 10361.20 10123.80 9288.59 8754.50 9560.75 9983.90 9685.05 12/31/94 9255.15 8722.98 9817.62 10132.00 9895.35 9081.16 8558.99 9693.76 10394.70 9875.73 9376.29 8837.16 10097.00 10799.90 10371.30 9512.25 8965.30 10270.90 11118.60 10625.90 9617.84 9064.81 10499.30 11446.00 10815.00 9913.10 9343.10 10679.80 11903.40 11044.00 10313.60 9720.56 11233.80 12179.90 11573.80 10814.80 10193.00 11881.00 12583.80 12256.50 10929.50 10301.00 12126.70 12615.40 12452.70 11151.30 10510.10 12343.30 13147.90 12685.60 10685.20 10070.80 11791.20 13100.90 12288.70 10990.80 10358.80 12286.60 13675.90 12814.00 12/31/95 11181.00 10538.00 12610.80 13939.40 13032.30 11362.10 10708.80 12597.30 14413.80 13124.90 11806.30 11127.50 12989.90 14547.50 13520.30 12036.60 11344.50 13254.30 14687.50 13795.50 12678.10 11949.10 13963.00 14904.10 14433.50 13130.70 12375.70 14513.30 15288.40 14825.40 12876.00 12135.60 13917.30 15346.70 14370.10 12211.60 11509.40 12701.70 14668.80 13318.10 12679.30 11950.20 13439.00 14978.20 14083.80 13145.90 12390.00 13964.40 15821.10 14694.10 13078.80 12326.80 13749.20 16257.50 14597.50 13446.40 12673.20 14315.70 17486.40 15302.90 12/31/96 13703.20 12915.20 14690.90 17139.90 15512.70 14185.50 13369.90 14984.50 18210.70 15941.30 14004.00 13198.70 14621.20 18280.30 15704.40 13366.80 12598.20 13931.20 17599.40 14993.50 13440.30 12667.50 13970.10 18650.00 15183.10 14506.10 13672.00 15524.20 19785.50 16580.80 15171.90 14299.60 16189.60 20671.90 17258.50 15948.80 15031.70 16942.90 22316.70 18269.80 16022.10 15100.80 17330.60 21066.50 18524.30 17251.00 16259.10 18599.10 22220.20 19735.40 16742.10 15779.40 17782.00 21478.20 18848.40 16742.10 15779.40 17667.00 22472.50 18932.90 12/31/97 17127.20 16142.40 17976.20 22858.30 19291.10 16824.00 15856.60 17692.50 23111.20 18996.30 18053.90 17015.80 19000.80 24778.10 20375.80 19182.20 18079.20 19784.50 26047.00 21269.40 19464.20 18345.00 19893.90 26308.90 21349.90 18728.50 17651.60 18822.40 25856.80 20358.70 19129.20 18029.30 18862.00 26907.00 20382.90 18044.60 17007.00 17335.00 26620.50 18982.70 14753.30 13905.00 13969.00 22771.80 15402.00 15398.00 14512.60 15062.10 24230.60 16495.80 16175.60 15245.50 15676.50 26201.60 17397.40 16840.40 15872.10 16497.80 27789.50 18259.20 12/31/98 18157.30 17113.30 17518.60 29390.90 19365.60 18146.40 17103.00 17751.50 30620.00 19332.40 17328.00 16331.70 16313.70 29668.30 18062.00 17511.70 16504.80 16568.40 30855.30 18448.40 18944.20 17854.90 18053.00 32050.20 20098.60 19245.40 18138.80 18316.80 31293.40 20411.00 20273.10 19107.40 19145.00 33030.10 21473.10 20567.00 19384.40 18619.70 31998.70 21051.00 19966.50 18818.40 17930.60 31840.50 20392.40 19856.70 18714.90 17934.50 30967.50 20089.00 20456.30 19280.10 18007.10 32927.20 20528.80 21906.70 20647.10 19082.40 33596.50 21688.00 12/31/99 24213.50 22821.20 21242.50 35575.30 24041.00 23625.10 22266.60 20901.30 33787.80 23488.10 25375.70 23916.60 24352.90 33148.30 26880.20 24317.50 22919.30 22747.30 36391.10 26468.80 23481.00 22130.80 21378.50 35296.30 25045.30 22985.60 21663.90 20132.50 34572.10 23843.60 23872.80 22500.10 21887.50 35424.40 25410.00 23970.70 22592.40 21183.30 34870.60 24762.90 25718.20 24239.30 22799.60 37036.50 26895.30 26147.60 24644.20 22129.50 35081.20 26020.30 25467.80 24003.40 21141.60 34932.90 25306.30 24128.20 22740.80 18971.40 32178.80 23079.20 12/31/00 26620.60 25090.00 20600.70 32336.30 25067.00 27099.80 25541.60 21673.30 33483.60 25890.70 26403.30 24885.20 20251.20 30430.50 24223.50 25196.70 23747.90 19260.60 28502.70 22894.60 27411.50 25835.30 20767.30 30717.70 24916.50 28573.80 26930.80 21277.80 30923.50 25666.00 28948.10 27283.50 22012.50 30170.80 26030.40 28380.70 26748.80 20821.00 29873.80 25099.50 27248.30 25681.50 20148.50 28003.70 24277.10 23537.10 22183.70 17436.20 25742.30 21135.40 24544.50 23133.20 18456.60 26233.20 22228.20 26414.80 24895.90 19885.50 28245.50 24025.90 12/31/01 28100.00 26484.30 21112.90 28492.90 25372.80 27816.20 26216.80 20893.30 28077.10 25057.80 27451.80 25873.30 20320.70 27535.60 24619.10 29455.80 27762.10 21953.90 28571.20 26321.20 29376.30 27687.10 22154.00 26839.00 26254.30 28477.30 26839.90 21170.70 26641.30 25484.80 27025.00 25471.10 20120.30 24743.40 24048.60 23803.60 22434.90 17081.50 22814.70 21178.70 23994.00 22614.40 17038.00 22964.50 21242.70 22556.80 21259.80 15814.40 20468.80 19559.70 23504.20 22152.70 16321.50 22270.30 20197.20 25020.20 23581.50 17778.10 23581.20 21846.10 12/31/02 24214.60 22822.20 16788.20 22195.80 20857.70 23631.00 22272.20 16323.60 21614.40 20303.50 23252.90 21915.90 15830.30 21290.10 19815.60 23536.60 22183.20 16034.20 21496.80 20004.50 25572.50 24102.10 17554.50 23267.50 21787.30 27372.80 25798.90 19438.30 24493.40 23930.10 28210.40 26588.30 19790.10 24805.80 24387.30 29519.40 27822.00 21028.40 25243.20 25698.10 31051.40 29266.00 21992.50 25735.50 26887.30 30688.10 28923.60 21586.50 25462.20 26521.50 33183.10 31275.00 23399.30 26902.60 28617.10 34258.20 32288.30 24229.70 27139.30 29694.40 12/31/03 35080.30 33063.00 24721.30 28562.70 30349.80 COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. International Game Technology 2.8% SLOT MACHINES & PROGRESSIVE JACKPOTS 2. XTO Energy 1.6% NATURAL GAS PRODUCER 3. Expeditors International of Washington 1.0% INTERNATIONAL FREIGHT FORWARDER 4. First Health Group 1.0% PPO NETWORK 5. Coach 1.0% DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 6. Novell 0.9% SECURITY & IDENTITY MANAGEMENT SOFTWARE 7. ITT Educational Services 0.9% POSTSECONDARY DEGREE PROGRAMS 8. AmeriCredit 0.8% AUTO LENDING 9. Chico's FAS 0.8% WOMEN'S SPECIALTY RETAILER 10. TCF Financial 0.8% GREAT LAKES BANK The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 7 Columbia Acorn International* >In a Nutshell Photo of P.ZACHARY EGAN Photo of LOUIS J.MENDES III Columbia Acorn International finished 2003 on a strong note. The Fund was up 17.11% (Class A shares, without sales charge) for the quarter, outperforming both the 15.97% gain of the Citigroup EMI Global ex-US Index and the 17.08% return of the MSCI EAFE Index. For the year, the Fund's return of 46.94% fell short of the Citigroup EMI Global ex-US return of 55.02% but beat the MSCI EAFE return of 38.59%. Stocks outside the Fund's core strategy, mainly stocks in the basic materials sector, soared during the year, dampening the Fund's return. Even though the Fund didn't beat the benchmark Citigroup EMI Global ex-US Index, the absolute return for the year is the third best in Columbia Acorn International's history. The best stocks in the quarter and year came from a variety of industries. ASE Test, a semiconductor packaging and testing company in Taiwan, rose 72% on a recovery in demand for semiconductors. For the year, the stock was up 271%. Improved sales drove home a 69% fourth quarter gain for South Korean auto parts maker Hyundai Mobis and an annual gain of 197%. Other winners included Global Bio-Chem Technology Group, a maker of corn starch and corn gluten headquartered in Hong Kong, up 64% in the quarter and 137% for the year; United Services Group, a temporary staffing service in the Netherlands, up 57% in the quarter and 114% for 2003; and Anglo Irish Bank, a niche middle-market bank in Ireland and the Fund's largest holding, up 48% in the fourth quarter and 125% for the year. A problem stock for the quarter was Zapf Creation, a toy manufacturer in Germany, down on weakness in its U.S. doll business. The company has made changes to its U.S. sales organization and plans to introduce new products in 2004. We believe these changes should help Zapf regain traction in the important U.S. market. The Fund's small position in Italian dairy producer Parmalat fell 55% in the quarter when it was revealed that a huge cash reserve on its books was falsified. The Fund minimized losses in the stock by halving the position when concerns first surfaced. Laggards for the year included Ireland's Waterford Wedgewood, down 51%. Its highly leveraged position hurt the stock in a year when luxury good purchases, particularly in the household goods sector, were subdued. The stock was also hurt by the weakened U.S. dollar. Singapore's Star Cruises also sank in the annual period, down 40%. The company's heavy reliance on Asian gambling cruises to support its large debt worried investors following the SARS outbreak and the expansion of gambling operations within Asia. We sold the Fund's position in the stock. We are pleased to introduce a new member to Columbia Wanger Asset Management's international analyst team. Kenneth Wooden joined the firm in early December to cover Japanese equities. Ken spent 17 years investing in Japan and is a welcome addition to the team. /s/ P. Zachary Egan /s/ Louis J. Mendes III P. Zachary Egan Louis J. Mendes III CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER Anglo Irish Bank - -------------------------------- Fills A Niche Anglo Irish Bank is one of the only true niche banking franchises in Europe. Specializing in middle-market banking, Anglo Irish Bank provides corporate lending, commercial mortgages and structured finance arrangements to corporations, partnerships and high net worth clients in Ireland and the UK. A robust lending environment and strong asset quality helped boost the return 125% in 2003 for Columbia Acorn International. Trading at just 11.8-times 2004's earnings with a consistent 30% return on equity and above average earnings growth, we believe the stock price still has room to grow. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. * LIBERTY ACORN INTERNATIONAL WAS RENAMED COLUMBIA ACORN INTERNATIONAL ON OCTOBER 13, 2003. ON SEPTEMBER 30, 2003, LEAH ZELL RELINQUISHED HER DAILY FIRM AND PORTFOLIO MANAGEMENT RESPONSIBILITIES. AT THAT TIME, CHUCK MCQUAID BECAME CHIEF INVESTMENT OFFICER OVERSEEING BOTH THE INTERNATIONAL AND DOMESTIC TEAMS. MS. ZELL REMAINS AFFILIATED WITH COLUMBIA WANGER ASSET MANAGEMENT, LP, ACTING IN AN ADVISORY CAPACITY. AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS MENTIONED WERE: ASE TEST, 1.0%; HYUNDAI MOBIS, 1.1%; GLOBAL BIO-CHEM TECHNOLOGY GROUP, 1.3%; UNITED SERVICES GROUP, 0.9%; ANGLO IRISH BANK, 2.2%; ZAPF CREATION, 0.4%; PARMALAT, 0.0%; WATERFORD WEDGEWOOD, 0.0%; STAR CRUISES, 0.0%. 1-800-922-6769 8 Columbia Acorn International > At a Glance Ticker Symbol: LAIAX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through December 31, 2003 1 YEAR 5 YEARS 10 YEARS ------- ------- --------- Returns before NAV 46.94% 6.64% 7.26% taxes POP 38.49 5.38 6.63 - ----------------------------------------------------------------------- Returns after taxes NAV 47.04 5.53 6.40 on distributions POP 38.59 4.29 5.77 - ----------------------------------------------------------------------- Returns after taxes NAV 30.73 5.45 6.08 on distributions and POP 25.22 4.35 5.51 sale of fund shares - ----------------------------------------------------------------------- Citigroup EMI Global 55.02 6.18 4.74 ex-US (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. The return after taxes on distributions may be higher than the return before taxes due to qualified foreign tax credits. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. Public offering price (POP) returns include the maximum sales charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include sales charges or contingent deferred sales charges (CDSC). COLUMBIA ACORN INTERNATIONAL PORTFOLIO DIVERSIFICATION >as a % of net assets, as of December 31, 2003 (PIE CHART) Consumer Goods/Services 23.3% Finance 10.8% Health Care 8.0% Energy/Minerals 5.8% Information Technology 13.3% Real Estate 1.7% Transportation 3.5% Other* 5.9% Industrials 27.7% *Other includes cash and other assets less liabilities of 4.5%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL >December 31, 1993 through December 31, 2003 Illustration is based on a hypothetical $10,000 investment in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. The Fund commenced operations on 9/23/1992, but until 10/16/2000, offered only the shares that are now designated Class Z shares. The historical performance of Class A, B and C shares (newer class shares) for the period prior to 10/16/2000 is based on the performance of Class Z shares. The Class A, B and C share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between Class A, B, and C and Class Z. Had the expense differential been reflected, the returns for periods prior to the inception of the newer class shares would have been lower. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The EMI Global ex-US is Citigroup's index of the bottom 20% of institutionally investable capital of developed and emerging countries, as selected by Citigroup, excluding the U.S. The index is unmanaged and returns for both the index and Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. TOTAL NET ASSETS: $1,678.3 MILLION WITHOUT CLASS A CLASS B CLASS C CLASS Z SALES CHARGE $20,162 $19,756 $19,747 $20,499 - ------------------------------------------------------- WITH SALES CHARGE $19,003 $19,756 $19,747 N/A (MOUNTAIN CHART) COLUMBIA COLUMBIA ACORN ACORN INTERNATIONAL - A CITIGROUP INTERNATIONAL - A WITH SALES EMI GLOBAL AT NAV CHARGE EX-US ----------------- ----------------- ---------- 12/31/93 10000.00 9425.00 10000.00 10433.00 9833.10 11000.10 10395.40 9797.70 11077.00 9943.24 9371.50 10895.80 10011.90 9436.17 11221.70 9955.78 9383.32 11059.50 9754.67 9193.78 11290.20 10024.90 9448.45 11423.50 10339.70 9745.13 11553.50 10345.90 9750.98 11224.50 10364.50 9768.53 11414.20 9790.29 9227.35 10756.00 12/31/94 9619.94 9066.80 10822.50 9184.16 8656.07 10372.10 9127.22 8602.40 10201.10 9291.51 8757.25 10593.10 9575.83 9025.22 10922.50 9727.13 9167.82 10782.60 9866.22 9298.92 10663.50 10403.00 9804.78 11261.00 10295.80 9703.79 10994.50 10555.20 9948.32 11068.50 10227.00 9638.93 10737.60 10081.80 9502.06 10830.00 12/31/95 10480.00 9877.39 11237.10 10890.80 10264.60 11502.30 11219.70 10574.60 11636.60 11421.70 10764.90 11882.00 11788.30 11110.50 12494.70 12136.00 11438.20 12396.80 12293.80 11586.90 12391.00 11901.60 11217.30 11910.00 12073.00 11378.80 12028.10 12149.10 11450.50 12095.20 12269.40 11563.90 12018.20 12605.50 11880.70 12225.70 12/31/96 12645.90 11918.80 11916.40 12949.40 12204.80 11744.90 13111.20 12357.40 11980.70 12917.20 12174.50 11831.80 12729.90 11997.90 11671.20 13284.90 12521.00 12359.40 13684.80 12897.90 12673.20 13775.10 12983.10 12550.90 13045.00 12295.00 12001.60 13592.90 12811.30 12193.50 12856.20 12117.00 11602.40 12719.90 11988.50 11064.80 12/31/97 12670.30 11941.80 10834.60 12849.00 12110.10 11174.70 13882.00 13083.80 12019.70 14970.40 14109.60 12600.90 15280.30 14401.60 12702.80 15541.60 14647.90 12810.70 15269.60 14391.60 12359.30 15367.30 14483.70 12281.10 13408.00 12637.00 10667.20 12818.00 12081.00 10430.80 13246.10 12484.50 11149.50 13997.20 13192.40 11533.60 12/31/98 14622.90 13782.10 11778.00 14960.70 14100.40 11695.90 14511.80 13677.40 11476.80 14793.40 13942.80 11974.00 15678.00 14776.50 12704.40 15776.80 14869.60 12392.10 17083.10 16100.80 12874.20 17691.30 16674.00 13289.50 18200.80 17154.20 13523.30 18504.70 17440.70 13461.90 19304.10 18194.10 13339.10 22195.90 20919.60 13818.90 12/31/99 26208.90 24701.90 14759.50 26111.90 24610.50 14478.20 30310.70 28567.90 15035.20 29377.20 27688.00 15102.00 25957.70 24465.10 14110.30 24029.00 22647.30 13815.20 25211.20 23761.60 14654.40 24896.10 23464.60 14168.90 25456.20 23992.50 14574.50 24158.00 22768.90 13826.20 22360.60 21074.90 12989.60 20531.50 19351.00 12417.20 12/31/00 20952.40 19747.70 12902.50 21893.20 20634.30 13142.80 20310.30 19142.50 12632.10 18350.40 17295.20 11653.70 19053.20 17957.60 12416.50 18921.70 17833.70 12391.60 17987.00 16952.70 11971.20 17262.10 16269.50 11620.10 16904.80 15932.80 11588.20 14593.90 13754.80 10079.50 15282.70 14404.00 10489.00 16134.00 15206.30 10920.20 12/31/01 16429.20 15484.50 11010.20 16026.70 15105.20 10810.80 15972.20 15053.80 10991.70 16796.40 15830.60 11707.90 17342.30 16345.10 11951.70 17262.50 16269.90 12334.10 16554.70 15602.80 11853.10 14799.90 13948.90 10840.00 14558.70 13721.60 10775.00 13251.30 12489.40 9780.43 13313.60 12548.10 10001.50 13717.00 12928.30 10375.20 12/31/02 13726.60 12937.30 10251.70 13386.20 12616.50 10079.50 13019.40 12270.80 9899.61 12822.80 12085.50 9803.18 13987.10 13182.90 10727.40 15134.10 14263.90 11641.80 15562.40 14667.50 12076.30 15895.40 14981.40 12506.40 16596.40 15642.10 13104.50 17225.40 16234.90 13703.60 18538.00 17472.00 14700.40 19032.90 17938.50 14968.00 12/31/03 20162.00 19002.70 15892.20 COLUMBIA ACORN INTERNATIONAL TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Anglo Irish Bank (Ireland) 2.2% SMALL BUSINESS & MIDDLE MARKET BANKING 2. Rhoen-Klinikum (Germany) 2.0% HOSPITAL MANAGEMENT 3. Kerry Group (Ireland) 1.5% FOOD INGREDIENTS 4. Housing Development Finance (India) 1.4% MORTGAGE LOAN PROVIDER 5. Venture (Singapore) 1.3% ELECTRONIC CONTRACT MANUFACTURER 6. Global Bio-Chem Technology Group (Hong Kong) 1.3% CORN-BASED BIOCHEMICAL PRODUCTS 7. Grafton Group (Ireland) 1.3% BUILDERS, WHOLESALERS & DIY RETAILING 8. Corus Entertainment 1.3% (Canada) TV PROGRAMMING & RADIO STATIONS 9. Talisman Energy (Canada) 1.2% OIL & GAS PRODUCER 10. Hunter Douglas (Netherlands) 1.2% DECORATIVE WINDOW COVERINGS The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 9 Columbia Acorn USA* >In a Nutshell Photo OF Robert A. Mohn Columbia Acorn USA finished 2003 up 46.26% (Class A shares, without sales charge), performing in line with the Russell 2000's 47.25% gain. During the fourth quarter, the Fund gained 13.40% vs. a 14.52% gain for the benchmark. Small caps dominated large caps in 2003. The S&P 500, up 28.69%, had a good year but did not come close to reaching small-cap returns. Technology stocks continued to lead the rally. In Columbia Acorn USA, Novell and Micros Systems were among the top five moneymakers in the Fund for the year and the quarter. Novell, up 97% for the quarter and 215% for the year, is highlighted in the box below. Micros had a 93% annual gain and 27% rise in the quarter. After years of waiting, hotels are finally starting to upgrade their computer systems. Micros has been benefiting from this initiative with revenue growth in its hotel and restaurant integration software up nearly 20%. In the financial sector, AmeriCredit and World Acceptance posted top gains. Auto lender AmeriCredit was up 104% for the year and 55% in the fourth quarter. Credit loss reports showed that for the first time in 27 months AmeriCredit had a year-over-year drop in losses in November. Personal lender World Acceptance increased 162% in the year and 47% in the quarter largely due to the strengthening economy. Freight forwarder Hub Group also bounced back with the economy, up an impressive 349% for the year and 98% for the quarter. Aspect Communications was another big percentage winner, up 310% for the year and 89% in the quarter. See Page 6 for more on this stock. The notable poor performer was First Health Group, down 20% in the year and 26% in the quarter. First Health's competition aggressively lowered prices during the year. Home health care service provider Lincare Holdings also fell as the government moved to cut oxygen reimbursement rates, a major source of revenue for Lincare Holdings. Disappointing sales marked down stock prices for retailers Gadzooks and Abercrombie & Fitch in the quarter and for the year. What a difference a year makes. Last year, all areas of the market - small, mid, large - ended the year down in double digits. This year, small-cap gains neared 50%, mid caps cleared 35% and large caps came in at about 30% (See Page 3 for index returns). So, what's next? Small caps did so well in 2003 that there is some concern that they are getting overpriced. We still believe that small caps are in for a very long period of outperformance. As for valuations, we have a list of stocks that we believe are attractive to buy at current levels. Today that list is smaller than it was six months ago but we believe there continue to be small-cap stocks to buy at good prices. /s/ Robert A. Mohn Robert A. Mohn LEAD PORTFOLIO MANAGER Novell Competes - ----------------- Novell, the leading provider of network printer, directory, and file services, is up against a formidable competitor, Microsoft. But Novell isn't backing down. The company has invested capital and leveraged existing knowledge to go after new markets. Security Identity Management and Linux are two fast-growing markets in which Novell has been building a name for itself. Columbia Wanger Asset Management's technology analyst Ben Andrews purchased Novell under the assumption that at least one of these markets would drive Novell's revenue and earnings over the next one to two years. Wall Street has become aware of Novell's push into Linux and has doubled the price of its shares. Novell's bottom line pay out has yet to come, but we believe it is on the right track. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. * LIBERTY ACORN USA WAS RENAMED COLUMBIA ACORN USA ON OCTOBER 13, 2003. AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS MENTIONED WERE: NOVELL, 2.0%; MICROS SYSTEMS, 3.3%; AMERICREDIT, 2.5%; WORLD ACCEPTANCE, 1.5%; HUB GROUP, 1.1%; ASPECT COMMUNICATIONS, 0.2%; FIRST HEALTH GROUP, 2.1%; LINCARE HOLDINGS, 1.1%; GADZOOKS, 0.1%; ABERCROMBIE & FITCH, 0.5%. 1-800-922-6769 10 Columbia Acorn USA >At a Glance Ticker Symbol: LAUAX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through December 31, 2003 LIFE OF 1 YEAR 5 YEARS FUND ------ ------ ------ Returns before NAV 46.26% 9.47% 13.71% taxes POP 37.85 8.18 12.80 - ------------------------------------------------------------------- Returns after taxes NAV 46.26 8.96 12.95 on distributions POP 37.85 7.68 12.04 - ------------------------------------------------------------------- Returns after taxes NAV 30.07 8.02 11.80 on distributions and POP 24.60 6.88 10.96 - ------------------------------------------------------------------- sale of fund shares - ------------------------------------------------------------------- Russell 2000 (pretax) 47.25 7.13 8.63 Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. Public offering price (POP) returns include the maximum sales charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include sales charges or contingent deferred sales charges (CDSC). COLUMBIA ACORN USA PORTFOLIO DIVERSIFICATION >as a % of net assets, as of December 31, 2003 (PIE CHART) Health Care 14.6% Consumer Goods/Services 14.2% Other* 7.5% Finance 10.5% Energy/Minerals 7.7% Industrial Goods/Services 6.8% Information 38.7% Software/Services 20.7% Telecommunications 8.0% Media 3.4% Computer Related Hardware 6.6% *Other includes cash and other assets less liabilities of 6.6%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN USA >September 4, 1996 through December 31, 2003 Illustration is based on a hypothetical $10,000 investment in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. The Fund commenced operations on 9/4/1996, but until 10/16/2000, offered only the shares that are now designated Class Z shares. The historical performance of Class A, B and C shares (newer class shares) for the period prior to 10/16/2000 is based on the performance of Class Z shares. The Class A, B and C share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between the Class A, B, and C and Class Z. Had the expense differential been reflected, the returns for periods prior to the inception of the newer class shares would have been lower. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The Russell 2000 is a market-weighted index of 2,000 smaller U.S. companies formed by taking the largest 3,000 U.S. companies and eliminating the largest 1,000. The index is unmanaged and returns for both the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. TOTAL NET ASSETS: $693.3 MILLION WITHOUT CLASS A CLASS B CLASS C CLASS Z SALES CHARGE $25,636 $25,138 $25,138 $26,107 - ------------------------------------------------------ WITH SALES CHARGE $24,162 $25,138 $25,138 N/A (MOUNTAIN CHART) COLUMBIA COLUMBIA ACORN USA - A ACORN USA - A WITH SALES RUSSELL AT NAV CHARGE 2000 ------------- ------------- -------- 09/04/96 10000.00 9425.00 10000.00 09/30/96 10720.00 10103.60 10359.90 10810.00 10188.50 10200.20 11259.80 10612.30 10620.50 12/31/96 11649.30 10979.50 10898.90 12209.70 11507.60 11116.70 11919.10 11233.70 10847.10 03/31/97 11479.30 10819.20 10335.30 11419.60 10762.90 10364.10 12509.00 11789.70 11517.10 06/30/97 13318.30 12552.50 12010.70 13998.90 13194.00 12569.60 14348.90 13523.80 12857.20 09/30/97 15338.90 14457.00 13798.30 15139.50 14269.00 13192.10 15169.80 14297.50 13106.80 12/31/97 15412.50 14526.30 13336.20 15076.50 14209.60 13125.70 16320.40 15381.90 14096.30 03/31/98 17400.80 16400.20 14677.70 17992.40 16957.80 14758.80 17227.70 16237.10 13964.00 06/30/98 17525.80 16518.00 13993.40 16593.40 15639.30 12860.50 13936.80 13135.40 10363.30 09/30/98 14152.80 13339.00 11174.30 14655.20 13812.50 11630.10 15404.10 14518.40 12239.40 12/31/98 16306.80 15369.10 12996.70 15778.40 14871.20 13169.40 14896.40 14039.90 12102.80 03/31/99 15017.10 14153.60 12291.70 16096.80 15171.20 13393.20 16735.90 15773.50 13588.80 06/30/99 17651.30 16636.40 14203.30 18048.50 17010.70 13813.60 16823.00 15855.70 13302.30 09/30/99 16866.70 15896.90 13305.20 17860.20 16833.20 13359.10 18810.30 17728.70 14156.80 12/31/99 20059.30 18905.90 15759.40 19054.40 17958.70 15506.30 19868.00 18725.60 18066.90 03/31/00 19820.30 18680.60 16875.80 17568.70 16558.50 15860.30 16526.90 15576.60 14935.90 06/30/00 16834.30 15866.30 16237.90 16748.40 15785.40 15715.40 17765.10 16743.60 16914.50 09/30/00 17642.50 16628.00 16417.40 17642.50 16628.00 15684.50 16613.90 15658.60 14074.50 12/31/00 18230.50 17182.20 15283.30 19382.60 18268.10 16079.00 19320.60 18209.70 15023.90 03/31/01 18866.60 17781.70 14289.00 21145.70 19929.80 15406.90 22321.30 21037.90 15785.60 06/30/01 22933.00 21614.30 16330.60 23164.60 21832.60 15446.70 22516.00 21221.30 14947.80 09/30/01 19257.90 18150.60 12935.60 19306.00 18196.00 13692.60 20433.50 19258.60 14752.60 12/31/01 21628.90 20385.20 15663.20 21875.50 20617.60 15500.30 21120.80 19906.30 15075.50 03/31/02 22911.80 21594.40 16287.10 23246.30 21909.60 16435.60 21923.60 20663.00 15706.10 06/30/02 20601.60 19417.00 14926.80 17783.30 16760.80 12672.40 17511.20 16504.30 12640.10 09/30/02 16201.40 15269.80 11732.40 16967.70 15992.10 12108.60 18438.80 17378.60 13189.20 12/31/02 17524.20 16516.60 12454.80 17252.60 16260.60 12110.10 17005.90 16028.10 11744.20 03/31/03 17043.30 16063.30 11895.40 18711.80 17635.90 13023.30 20652.30 19464.80 14420.90 06/30/03 20974.50 19768.40 14681.90 21951.90 20689.60 15600.50 23150.40 21819.30 16315.80 09/30/03 22606.40 21306.50 16014.60 24916.80 23484.00 17359.50 25447.50 23984.30 17975.50 12/31/03 25636.10 24162.00 18340.20 COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Micros Systems 3.3% INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 2. ITT Educational Services 2.6% POSTSECONDARY DEGREE PROGRAMS 3. AmeriCredit 2.5% AUTO LENDING 4. Edwards Lifesciences 2.5% HEART VALVES 5. Western Wireless 2.5% RURAL CELLULAR PHONE SERVICES 6. JDA Software 2.3% APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 7. First Health Group 2.1% PPO NETWORK 8. Novell 2.0% SECURITY & IDENTITY MANAGEMENT SOFTWARE 9. Commonwealth Telephone 2.0% RURAL PHONE FRANCHISES & CLEC 10. HCC Insurance Holdings 2.0% AVIATION INSURANCE The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 11 Columbia Acorn International Select* >In a Nutshell Photo of Todd M. Narter Photo of Christopher J. Olson After three years of posting dreary results, the international markets rose sharply in 2003. Columbia Acorn International Select finished the year up 41.11% (Class A shares, without sales charge) vs. a 49.65% gain for the benchmark Citigroup World ex-US Cap Range $2-10B Index and a 38.59% return for the large-cap MSCI EAFE Index. In the fourth quarter, the Fund gained 16.91%, outperforming the benchmark return of 15.81% and nearing the MSCI EAFE gain of 17.08%. Market interest in Japan and in more speculative stocks in general cooled in the fourth quarter, benefiting the Fund's relative return. But the Fund's more conservative stance toward Japan and higher-risk stocks dampened annual performance. Still, an annual return of nearly 42%, achieved without speculative maneuvering, should delight most shareholders. For the quarter, three of the four biggest winners in the Fund were banks offering niche services. Anglo Irish Bank, the Fund's largest holding, finished up 48% in the quarter. The corporate lending environment in the United Kingdom remains robust and Anglo Irish Bank continued to benefit. For the year, shares were up over 125%. Another winner in Columbia Acorn International Select was Den Norske Bank, a full-service commercial bank in Norway. Shares finished up 39% in the quarter and up 52% for the year. Ireland's Depfa Bank, a provider of public-sector financing, finished the quarter up 31%. For the year, shares were up 156%. The Fund's worst stocks for the quarter included Parmalat, the big dairy producer in Italy. Shares fell 55% when it was revealed that a huge cash reserve on its books was falsified. We limited the Fund's downside risk early on by halving its position in the stock when concerns first surfaced, selling those shares for a slight gain. We sold out of the Fund's remaining position shortly before the company went bankrupt. Another stock dragging down performance this quarter was Terumo, a maker of pharmaceuticals and medical supplies in Japan. Continued cuts in drug reimbursements and a steady decline in the number of new drugs coming to market slowed growth in pharmaceutical sales. The share price fell 3% during the quarter and we sold the Fund's position in the stock. /s/ Todd M. Narter /s/ Christopher J. Olson Todd M. Narter Christopher J. Olson CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER More Than The Name - ------------------------- You Know The Swatch brand name conjures up an image of a colorful, plastic watch that was a must-have for trendy teens in the '80s. While the Swatch watch continues to attract buyers, the earnings growth for this Swiss watchmaker is coming from its higher-end brands Omega and Brequet. Demand for the pricier lines is increasing in China and in the rest of the Asia Pacific region. We added the stock to Columbia Acorn International Select because we believe Swatch has a solid brand and is a low cost producer. Valuations are also good. After appreciating 27% in the quarter, the shares still sell at a discount to its peers. MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. * LIBERTY ACORN FOREIGN FORTY WAS RENAMED COLUMBIA ACORN INTERNATIONAL SELECT ON OCTOBER 13, 2003. AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS MENTIONED WERE: ANGLO IRISH BANK, 5.8%; DEN NORSKE BANK, 3.2%; DEPFA BANK, 2.5%; PARMALAT, 0.0%; TERUMO, 0.0%; SWATCH GROUP, 2.5%. 1-800-922-6769 12 Columbia Acorn International Select >At a Glance Ticker Symbol: LAFAX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through December 31, 2003 LIFE OF 1 YEAR 5 YEARS FUND ------ ------- ------ Returns before NAV 41.11% 5.94% 7.80% taxes POP 33.00 4.69 6.56 - ---------------------------------------------------------------- Returns after taxes NAV 41.30 5.86 7.72 on distributions POP 33.17 4.61 6.48 - ---------------------------------------------------------------- Returns after taxes NAV 26.90 5.10 6.75 on distributions and POP 21.62 4.01 5.65 sale of fund shares - ---------------------------------------------------------------- Citigroup World 49.65 5.92 6.48 ex-US Cap Range $2-$10B (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. The return after taxes on distributions may be higher than the return before taxes due to qualified foreign tax credits. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. Public offering price (POP) returns include the maximum sales charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include sales charges or contingent deferred sales charges (CDSC). COLUMBIA ACORN INTERNATIONAL SELECT PORTFOLIO DIVERSIFICATION >as a % of net assets, as of December 31, 2003 (PIE CHART) Consumer Goods/Services 21.6% Industrial Goods/Services 19.1% Other* 8.4% Health Care 11.4% Finance 17.0% Energy/Minerals 6.7% Information Technology 15.8% *Other includes cash and other assets less liabilities of 4.8%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT >November 23, 1998 through December 31, 2003 Illustration is based on a hypothetical $10,000 investment in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. The Fund commenced operations on 11/23/1998, but until 10/16/2000, offered only the shares that are now designated Class Z shares. The historical performance of Class A, B and C shares (newer class shares) for the period prior to 10/16/2000 is based on the performance of Class Z shares. The Class A, B and C share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between Class A, B and C and Class Z. Had the expense differential been reflected, the returns for periods prior to the inception of the newer class shares would have been lower. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Citigroup World ex-US Cap Range $2-$10B is a subset of Citigroup's Broad Market Index, representing a mid-cap developed market index excluding the U.S. The index is unmanaged and returns for the index and Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. TOTAL NET ASSETS: $43.4 MILLION CLASS A CLASS B CLASS C CLASS Z WITHOUT SALES CHARGE $14,677 $14,343 $14,363 $14,820 - ------------------------------------------------------ WITH SALES CHARGE $13,833 $14,243 $14,363 N/A (MOUNTAIN CHART) COLUMBIA COLUMBIA ACORN ACORN INTERNATIONAL CITIGROUP INTERNATIONAL SELECT - A WORLD EX-US SELECT - A WITH SALES CAP RANGE AT NAV CHARGE $2-$10B ------------- ------------- ---------- 11/23/98 10000.00 9425.00 10000.00 10140.00 9556.95 10045.10 12/31/98 10999.90 10367.40 10338.80 11789.70 11111.80 10309.80 11589.20 10922.90 10051.80 03/31/99 11978.60 11289.90 10449.20 12238.60 11534.90 11032.40 12168.80 11469.10 10566.60 06/30/99 13108.20 12354.50 10952.70 13509.40 12732.60 11362.00 13770.10 12978.30 11489.60 09/30/99 13620.00 12836.90 11529.70 14130.70 13318.20 11535.10 16996.50 16019.20 11864.40 12/31/99 19972.50 18824.10 12771.70 19661.00 18530.50 12154.30 24240.00 22846.20 12310.70 03/31/00 23088.60 21761.00 12679.70 21255.40 20033.20 12171.70 18919.40 17831.50 11975.80 06/30/00 19848.30 18707.10 12610.80 19465.30 18346.00 12203.10 20263.30 19098.20 12586.30 09/30/00 19234.00 18128.00 12168.00 18487.70 17424.70 11791.00 16126.80 15199.50 11439.80 12/31/00 17307.30 16312.10 11998.20 17862.90 16835.80 11938.60 15814.00 14904.70 11505.00 03/31/01 13694.90 12907.50 10607.50 14411.20 13582.50 11390.60 14370.80 13544.50 11293.20 06/30/01 13761.50 12970.20 10999.40 13040.40 12290.60 10723.40 12766.50 12032.50 10626.20 09/30/01 10612.80 10002.60 9391.94 11283.50 10634.80 9769.16 11903.00 11218.60 10118.30 12/31/01 12258.90 11554.00 10140.20 11628.80 10960.20 9840.78 11486.90 10826.40 9990.63 03/31/02 11893.60 11209.70 10562.20 12258.70 11553.80 10755.60 12380.10 11668.20 11097.30 06/30/02 11993.80 11304.20 10712.10 10704.50 10089.00 9752.72 10897.20 10270.60 9729.61 09/30/02 10104.90 9523.90 8859.06 10084.70 9504.86 9017.25 10328.80 9734.87 9476.41 12/31/02 10400.00 9802.04 9209.34 9892.52 9323.70 8978.22 9476.05 8931.18 8810.27 03/31/03 9557.54 9007.98 8659.79 10451.20 9850.23 9425.05 11355.20 10702.30 10100.90 06/30/03 11426.70 10769.70 10389.10 11609.60 10942.00 10806.10 12107.60 11411.40 11429.10 09/30/03 12554.40 11832.50 11900.10 13488.40 12712.90 12818.90 13773.00 12981.10 12926.80 12/31/03 14677.50 13833.50 13781.40 COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Anglo Irish Bank (Ireland) 5.8% SMALL BUSINESS & MIDDLE MARKET BANKING 2. Kerry Group (Ireland) 3.9% FOOD INGREDIENTS 3. Rhoen-Klinikum (Germany) 3.9% HOSPITAL MANAGEMENT 4. BG Group (United Kingdom) 3.5% OIL & GAS PRODUCER 5. Den Norske Bank (Norway) 3.2% LARGEST NORWEGIAN BANK 6. Talisman Energy (Canada) 3.1% OIL & GAS PRODUCER 7. Neopost (France) 2.9% POSTAGE METER MACHINES 8. Compass Group (United Kingdom) 2.9% INTERNATIONAL CONCESSION & CONTRACT CATERING 9. Lion Nathan (Australia) 2.7% AUSTRALIAN BEER BREWER/DISTRIBUTOR 10. Grafton Group (Ireland) 2.7% BUILDERS, WHOLESALERS & DIY RETAILING The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 13 Columbia Acorn Select* >In a Nutshell Photo of John H. Park Columbia Acorn Select returned 4.81% (Class A shares, without sales charge) during the fourth quarter, behind the benchmark S&P MidCap 400's 13.19% return and the S&P 500's 12.18% gain. For 2003, the Fund was up 29.95%, trailing the S&P MidCap 400's 35.62% return but beating the S&P 500's 28.69% gain. While we are pleased with the Fund's absolute result, we are disappointed that Columbia Acorn Select underperformed since it was leading its primary benchmark through the first three quarters of the year. Electronic Arts gained 97% in 2003, as sales and earnings consistently beat expectations. Guidant, the Fund's largest position, returned 92% as investors came to appreciate the company's fast growing defibrillator business as well as its potential growth making drug-eluting stents. (A stent is a little wire-mesh tube that keeps an artery open after an angioplasty procedure.) On the downside, First Health Group, one of the Fund's biggest positions, fell 20% for the year as the company lowered its sales and earnings for 2004 due to increased competition in the managed-care industry. While obviously disappointed, we believe the long-term outlook remains sound and we have added to the Fund's position. Most other losses for the year were relatively small in position size or percentages. In fact, all losses combined contributed to just a 3.16% drop for the Fund in 2003. Perhaps our biggest detractor was the conservative nature of Columbia Acorn Select; only five of the Fund's stocks were up 70% or more. While the market has rewarded the Fund's more conservative stance in the past, highly speculative stocks had the most impressive gains in 2003 and Columbia Acorn Select did not keep pace. Furthermore, as the market has bounced back, we have seen few opportunities to buy such stocks at prices that fairly compensate us for the risks incurred. I am justifiably proud of the terrific efforts put forth by our investment team in 2003. My thanks to Ralph Wanger, Chuck McQuaid, Rob Mohn, Ben Andrews, Susie Hultquist, Harold Lichtenstein, Grant McKay, Rob Chalupnik, Todd Griesbach, David Frank, and John Emerson for their invaluable contributions. I am also grateful to Shelley Maish and Mike Olah for providing Herculean efforts in trading throughout the year. Finally, thank you for your continued support as a Columbia Acorn Select shareholder. /s/ John H. Park John H. Park LEAD PORTFOLIO MANAGER Weight Watchers -- - ---------------------------------------- A Winning Loser The first question you ask a successful dieter is, "How did you lose the weight?" This marketing has contributed to Weight Watchers' unique business model by which its customers actually perpetuate the success of the business. With over 40 years in the business, the Weight Watchers' brand has become synonymous with healthy weight loss. Demand is more robust than ever with obesity rates at an all time high both domestically and in international markets. The company generates significant free cash flow due to fat profit margins and slim capital expenditure requirements, which it has been using to acquire franchises, pay down debt and repurchase stock -- all accretive to earnings. The stock has been under pressure recently as attendance growth has moderated due to the current popularity of the Atkins/high protein diet. History has shown us though that diet fads come and go, similar to excess weight, and we believe the sensibility of the Weight Watchers' program is one that dieters will return to, as will investors to the stock. COLUMBIA ACORN SELECT IS A NON-DIVERSIFIED FUND. THE PERFORMANCE OF EACH OF ITS HOLDINGS WILL HAVE A GREATER IMPACT ON THE FUND'S TOTAL RETURN, AND MAY MAKE THE FUND'S RETURNS MORE VOLATILE THAN A MORE DIVERSIFIED FUND. MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. * LIBERTY ACORN TWENTY WAS RENAMED COLUMBIA ACORN SELECT ON OCTOBER 13, 2003. AS OF 12/31/03, THE FUND'S POSITIONS AS A % OF NET ASSETS IN THE HOLDINGS MENTIONED WERE: ELECTRONIC ARTS, 3.9%; GUIDANT, 8.9%; FIRST HEALTH GROUP, 7.1%; WEIGHT WATCHERS, 3.1%. 1-800-922-6769 14 Columbia Acorn Select >At a Glance Ticker Symbol: LTFAX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through December 31, 2003 LIFE OF 1 YEAR 5 YEARS FUND ------ ------- ------- Returns before NAV 29.95% 13.14% 14.37% taxes POP 22.47 11.80 13.05 - ------------------------------------------------------------------ Returns after taxes NAV 29.81 12.57 13.81 on distributions POP 22.35 11.25 12.50 - ------------------------------------------------------------------ Returns after taxes NAV 19.56 11.21 12.33 on distributions and POP 14.70 10.02 11.15 sale of fund shares - ------------------------------------------------------------------ S&P MidCap 35.62 9.21 11.28 400 (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. Public offering price (POP) returns include the maximum sales charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include sales charges or contingent deferred sales charges (CDSC). COLUMBIA ACORN SELECT PORTFOLIO DIVERSIFICATION as a % of net assets, as of December 31, 2003 (PIE CHART) Information 27.3% Health Care 20.2% Finance 13.5% Industrial Good/Service 3.7% Other* 6.9% Consumer Goods/Services 28.4% *Cash and other assets less liabilities. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN SELECT >November 23, 1998 through December 31, 2003 Illustration is based on a hypothetical $10,000 investment in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. The Fund commenced operations on 11/23/1998, but until 10/16/2000, offered only the shares that are now designated Class Z shares. The historical performance of Class A, B and C shares (newer class shares) for the period prior to 10/16/2000 is based on the performance of Class Z shares. The Class A, B and C share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between Class A, B and C and Class Z. Had the expense differential been reflected, the returns for periods prior to the inception of the newer class shares would have been lower. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The S&P MidCap 400 is a broad, market-weighted index of 400 stocks that are in the next size/tier down from the S&P 500. The index is unmanaged and returns for the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. TOTAL NET ASSETS: $740.6 MILLION WITHOUT CLASS A CLASS B CLASS C CLASS Z SALES CHARGE $19,852 $19,446 $19,447 $20,111 - ------------------------------------------------------ WITH SALES CHARGE $18,710 $19,346 $19,447 N/A (MOUNTAIN CHART) COLUMBIA COLUMBIA ACORN ACORN SELECT - A SELECT - A WITH SALES S&P AT NAV CHARGE MIDCAP 400 ---------- ----------- ---------- 11/23/98 10000.00 9425.00 10000.00 11/30/98 10030.00 9453.28 9911.29 12/31/98 10710.00 10094.20 11108.90 11000.30 10367.80 10676.20 10709.90 10094.00 10117.20 03/31/99 11479.90 10819.80 10399.90 12709.40 11978.60 11220.20 12729.70 11997.80 11268.80 06/30/99 13040.40 12290.50 11872.20 13190.30 12431.90 11619.90 12059.90 11366.50 11221.70 09/30/99 12109.40 11413.10 10875.10 12969.10 12223.40 11429.30 13249.20 12487.40 12029.20 12/31/99 13846.80 13050.60 12744.10 13472.90 12698.20 12385.20 13553.80 12774.40 13252.00 03/31/00 14170.50 13355.60 14361.10 13463.40 12689.20 13859.60 13099.80 12346.60 13686.70 06/30/00 14319.40 13496.10 13887.70 13931.40 13130.30 14107.10 15431.80 14544.50 15682.20 09/30/00 15799.10 14890.60 15574.80 15928.60 15012.70 15046.70 14382.00 13555.00 13910.90 12/31/00 15454.80 14566.20 14975.10 15903.00 14988.60 15308.60 14972.70 14111.80 14435.00 03/31/01 14381.30 13554.40 13361.80 15421.00 14534.30 14835.80 16263.00 15327.90 15181.30 06/30/01 15989.80 15070.40 15120.00 15836.30 14925.70 14894.80 15092.00 14224.20 14407.60 09/30/01 14162.30 13348.00 12615.50 14458.30 13627.00 13173.50 15957.70 15040.10 14153.50 12/31/01 16637.50 15680.80 14884.70 16308.00 15370.30 14807.30 15957.40 15039.90 14825.60 03/31/02 16506.30 15557.20 15885.40 15606.80 14709.40 15811.10 16045.30 15122.70 15544.40 06/30/02 15770.90 14864.10 14406.70 14772.60 13923.20 13011.20 15124.20 14254.60 13076.60 09/30/02 14422.50 13593.20 12023.10 15212.80 14338.10 12544.10 15968.90 15050.70 13269.80 12/31/02 15277.40 14399.00 12724.50 15211.70 14337.10 12352.70 15233.00 14357.10 12058.50 03/31/03 15540.70 14647.10 12160.10 16429.70 15485.00 13043.00 17307.00 16311.90 14123.90 06/30/03 17757.00 16736.00 14303.90 18602.20 17532.60 14811.50 19370.50 18256.70 15483.30 09/30/03 18942.40 17853.20 15246.30 19633.80 18504.90 16399.10 19480.70 18360.50 16970.50 12/31/03 19851.70 18710.30 17256.80 COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Guidant 8.9% STENTS, DEFIBRILLATORS & OTHER CARDIAC MEDICAL DEVICES 2. First Health Group 7.1% PPO NETWORK 3. Interpublic Group 5.3% ADVERTISING 4. Synopsys 5.1% SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS 5. PeopleSoft 4.5% HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 6. TCF Financial 4.5% GREAT LAKES BANK 7. Harley-Davidson 4.0% MOTORCYCLES & RELATED MERCHANDISE 8. Electronic Arts 3.9% ENTERTAINMENT SOFTWARE 9. Moody's 3.8% RATING SERVICE FOR CREDIT OBLIGATIONS 10. Herman Miller 3.8% OFFICE FURNITURE The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 15 Columbia Thermostat Fund In a Nutshell Photo of Ralph Wanger Photo of Charles P. McQuaid Photo of Harvey Hirchhorn The Columbia Thermostat Fund completed its first full year of operations in 2003. The Fund rebalances between five stock funds and three bond funds according to a simple mechanical rule, quite like the way your home thermostat keeps the room temperature steady. The logical construction of the Fund appealed to many people, so assets at year-end were nearly $128 million, what we believe to be a very good number for a start-up fund. Investment performance for the Fund was satisfactory, up 7.20% (Class A shares, without sales charge) in the fourth quarter and 19.43% for the year Equities FOURTH QUARTER 1-YEAR WEIGHTING TOTAL RETURN TOTAL RETURN FUND IN SECTOR 2003 2003 - --------------------------------------------------------- Columbia 20% 14.45% 45.68% Acorn Fund - --------------------------------------------------------- Columbia 15% 4.97% 30.61% Acorn Select - --------------------------------------------------------- Columbia Growth 25% 9.42% 26.47% Stock Fund - --------------------------------------------------------- Columbia Growth 25% 11.77% 19.51% & Income Fund - --------------------------------------------------------- Columbia Mid Cap 15% 13.90% 27.82% Value Fund - --------------------------------------------------------- WEIGHTED AVERAGE 100% 11.02% 29.40% - --------------------------------------------------------- Fixed Income FOURTH 1-YEAR QUARTER WEIGHTI TOTAL RETURN TOTAL RETURN FUND IN SECTOR 2003 2003 - --------------------------------------------------------- Columbia Federal 30% 0.11% 2.26% Securities Fund - --------------------------------------------------------- Columbia 50% 1.46% 9.50% Intermediate Bond Fund - --------------------------------------------------------- Columbia High Yield Fund 20% 2.89% 11.49% - --------------------------------------------------------- WEIGHTED AVERAGE 100% 1.34% 7.73% - --------------------------------------------------------- Columbia Thermostat Fund Rebalancing in 2003 - --------------------------------------------------------- Stock/Fixed Income allocation 01/01/03: 70% stock, 30% fixed income Stock/Fixed Income allocation 12/31/03: 50% stock, 50% fixed income FOURTH QUARTER 1-YEAR 2003 2003 - ------------------------------------------------- Times stocks increased 0 3 - ------------------------------------------------- Times stocks decreased 3 9 - ------------------------------------------------- TOTAL 3 12 (see Page 3 for index comparisons). By construction, the Fund should be expected to have a return somewhere between the stock market and the bond market, and it did. The Fund's equity portfolio had a 29.40% return for the year, and the fixed income piece was up 7.73%. Thermostat's equity funds were 50% in small-cap, mid-cap and value funds, which was an overweighting in these categories vs. the entire market; this was a good idea in 2003, as these funds outperformed the large-company index as measured by the S&P 500 Index. The Fund's rebalancing system added some moderate value, but as the year unfolded, a high equity weighting throughout the year would have worked out better. The Thermostat system is likely to produce its best results in a market with lots of up-and-down moves. In 2003, the last 10 months of the year featured a steady uptrend for stocks, so shareholders would have done better by having all their money in an equity fund such as Columbia Acorn Fund. Of course, one cannot know that at the beginning of the year, which is why Columbia Thermostat makes sense for conservative investors. /s/ Ralph Wanger /s/ Charles P. McQuaid Ralph Wanger Charles P. McQuaid CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER /s/ Harvey Hirchhorn Harvey Hirchhorn CO-PORTFOLIO MANAGER THE VALUE OF AN INVESTMENT IN THE FUND IS BASED PRIMARILY ON THE PERFORMANCE OF THE UNDERLYING PORTFOLIO FUNDS AND THE ALLOCATION OF THE FUND'S ASSETS AMONG THEM. AN INVESTMENT IN THE UNDERLYING FUNDS MAY PRESENT CERTAIN RISKS, INCLUDING STOCK MARKET FLUCTUATIONS THAT OCCUR IN RESPONSE TO ECONOMIC AND BUSINESS DEVELOPMENTS; AND A GREATER DEGREE OF SOCIAL, POLITICAL AND ECONOMIC VOLATILITY ASSOCIATED WITH INTERNATIONAL INVESTING. INVESTING IN SMALL-AND MID-CAP STOCKS MAY PRESENT SPECIAL RISKS INCLUDING POSSIBLE ILLIQUIDITY AND GREATER PRICE VOLATILITY THAN STOCKS OF LARGER, MORE ESTABLISHED COMPANIES. CHANGES IN INTEREST RATES AND CHANGES IN THE FINANCIAL STRENGTH OF ISSUERS OF LOWER-RATED BONDS MAY ALSO AFFECT UNDERLYING FUND PERFORMANCE. THE FUND IS ALSO SUBJECT TO THE RISK THAT THE INVESTMENT ADVISER'S DECISIONS REGARDING ASSET CLASSES AND PORTFOLIO FUNDS WILL NOT ANTICIPATE MARKET TRENDS SUCCESSFULLY, RESULTING IN A FAILURE TO PRESERVE CAPITAL OR LOWER TOTAL RETURN. IN ADDITION, THE FUND MAY BUY AND SELL SHARES OF THE PORTFOLIO FUNDS FREQUENTLY. THIS MAY RESULT IN HIGHER TRANSACTION COSTS AND ADDITIONAL TAX LIABILITY. THIS IS NOT AN OFFER OF THE SHARES OF ANY OTHER MUTUAL FUND MENTIONED HEREIN. 1-800-922-6769 16 Columbia Thermostat Fund >At a Glance Ticker Symbol: COTZX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through December 31, 2003 LIFE OF 1 YEAR FUND ------ ------- Returns before taxes NAV 19.43% 18.73% POP 12.57 13.31 - ------------------------------------------------------------ Returns after taxes NAV 19.06 18.44 on distributions POP 12.21 13.08 - ------------------------------------------------------------ Returns after taxes NAV 12.70 15.83 on distributions and POP 8.23 11.21 sale of fund shares - ------------------------------------------------------------ S&P 500 (pretax) 28.69 29.59 - ------------------------------------------------------------ Lehman U.S. Credit Intermediate Bond 6.91 7.95 Index (pretax) - ------------------------------------------------------------ Lehman U.S. Govt. Intermediate Bond 2.29 2.89 Index (pretax) - ------------------------------------------------------------ Lipper Flexible Portfolio 23.03 23.09 Funds Index (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. Public offering price (POP) returns include the maximum sales charge of 5.75% for Class A shares. Net asset value (NAV) returns do not include sales charges or contingent deferred sales charges (CDSC). COLUMBIA THERMOSTAT FUND PORTFOLIO WEIGHTINGS as a % of assets in each investment category, as of December 31, 2003 (PIE CHART) STOCK MUTUAL FUNDS BOND MUTUAL FUNDS Columbia Columbia Acorn Fund 20% Federal Securities Fund 30% Columbia Acorn Select 15% Columbia Intermediate Columbia Bond Fund 50% Growth Stock Fund 25% Columbia High Yield Columbia Fund 20% Growth & Income Fund 25% Columbia Mid Cap Value Fund 15% THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA THERMOSTAT FUND >September 25, 2002 through December 31, 2003 Illustration is based on a hypothetical $10,000 investment in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. The Fund commenced operations on 9/25/2002, but until 3/3/2003, offered only Class Z shares. The historical performance of Class A, B, and C shares (newer class shares) for the period prior to 3/3/2003 is based on the performance of Class Z shares. The Class A, B and C share returns are not restated to reflect any expense differential (e.g. Rule 12b-1 fees) between Class A, B and C and Class Z. Had the expense differential been reflected, the returns for periods prior to the inception of the newer class shares would have been lower. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The S&P 500 is a broad, market-weighted average of U.S. blue-chip company stock performance. The Lehman U.S. Govt. Intermediate Bond Index is made up of 1 to 10 year treasury and agency bonds, excluding targeted investor notes and state and local government series bonds. The Lehman U.S. Credit Intermediate Bond Index is the intermediate component of the U.S. Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements. The indexes are unmanaged and returns for the indexes and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. TOTAL NET ASSETS: $127.9 MILLION WITHOUT CLASS A CLASS B CLASS C CLASS Z SALES CHARGE $12,433 $12,360 $12,360 $12,471 - -------------------------------------------------------- WITH SALES CHARGE $11,718 $11,960 $12,360 N/A (MOUNTAIN CHART) COLUMBIA THERMOSTAT COLUMBIA LEHMAN LEHMAN FUND - A THERMOSTAT U.S. GOVT. U.S. CREDIT WITH SALES FUND - A INTERMEDIATE INTERMEDIATE CHARGE AT NAV S&P 500 BOND BOND ---------- ---------- -------- ------------ ------------ 09/25/02 9425.00 10000.00 10000.00 10000.00 10000.00 09/30/02 9283.63 9850.00 9955.60 10038.80 10042.80 9632.69 10220.40 10831.90 10032.00 9962.13 10085.40 10700.70 11469.40 9952.60 10044.60 12/31/02 9812.11 10410.70 10795.60 10136.50 10306.80 9670.82 10260.80 10512.80 10114.10 10335.10 9519.95 10100.70 10355.10 10228.30 10517.50 03/31/03 9604.68 10190.60 10455.60 10230.50 10539.30 10094.50 10710.40 11316.80 10259.20 10683.90 10546.80 11190.20 11913.10 10420.30 10956.80 06/30/03 10686.00 11337.90 12065.10 10403.20 10962.70 10742.60 11398.00 12277.80 10150.40 10626.40 10959.60 11628.20 12517.20 10168.70 10658.60 09/30/03 10931.10 11598.00 12384.30 10389.10 10976.00 11298.40 11987.70 13084.90 10287.30 10878.30 11430.60 12127.90 13200.00 10288.10 10911.20 12/31/03 11718.20 12433.20 13892.30 10368.30 11019.40 COLUMBIA THERMOSTAT FUND ASSET ALLOCATION >as a % of net assets, as of December 31, 2003 (PIE CHART) Stock Mutual Funds 49.5% Bond Mutual Funds 49.6% Cash and Other Assets Less Liabilities 0.9% 17 Columbia Acorn Fund >Major Portfolio Changes in the Fourth Quarter (Unaudited) NUMBER OF SHARES --------------------------- 09/30/03 12/31/03 Additions - ---------------------------------------------------------------------------- INFORMATION 3Com 0 2,000,000 Actuate 4,534,000 6,000,000 Alliance Atlantis Communications (Canada) 500,000 750,000 Andrew 1,000,000 1,600,000 Bearing Point 0 3,100,000 Crown Castle International 3,000,000 3,500,000 DoubleClick 0 2,000,000 Igate Capital 4,500,000 4,550,000 Integrated Circuit Systems 1,005,000 1,120,000 Invision Technologies 0 255,000 IXYS 1,000,000 1,250,000 Kronos 1,180,000 1,770,000 Northeast Utilities 0 850,000 Pegasus Systems 0 300,000 PeopleSoft 3,300,000 3,400,000 Pericom Semiconductor 318,000 404,000 Perot Systems 0 900,000 Pinnacle Systems 0 1,250,000 Regent Communications 0 241,000 SES Global (Luxembourg) 332,000 560,000 Spanish Broadcasting System 700,000 1,006,000 Sybase 1,221,000 1,521,000 Symmetricom 0 1,051,000 Tellabs 1,000,000 5,000,000 THQ 1,000,000 1,200,000 Venture (Singapore) 1,840,000 2,710,000 - ---------------------------------------------------------------------------- HEALTH CARE Applied Molecular Evolution 0 252,000 CTI Molecular Imaging 674,000 1,900,000 Diagnostic Products 920,000 989,000 Enzon 1,115,000 1,665,000 Essilor International (France) 265,000 365,000 First Health Group 5,046,000 5,586,000 Gambro (Sweden) 2,100,000 2,500,000 OPG Groep (Netherlands) 365,000 420,000 Patheon (Canada) 0 433,600 Smith & Nephew (United Kingdom) 2,000,000 2,600,000 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Abercrombie & Fitch 495,000 895,000 Aeropostale 1,085,000 1,510,000 AFC Enterprises 1,500,000 2,000,000 Amer Group (Finland) 250,000 370,000 American Woodmark 375,000 422,000 Autogrill (Italy) 1,217,000 1,447,000 Billabong International (Australia) 2,950,000 3,000,000 NUMBER OF SHARES --------------------------- 09/30/03 12/31/03 - ---------------------------------------------------------------------------- Central Parking 0 900,000 Chico's FAS 2,095,000 2,495,000 Christopher & Banks 3,328,000 3,743,000 Genesco 565,000 700,000 Intralot (Greece) 0 345,000 Leapfrog Enterprises 0 1,250,000 Lion Nathan (Australia) 3,000,000 4,000,000 Masonite International (Canada) 263,700 440,000 Nobia (Sweden) 810,000 1,160,000 Orkla (Norway) 810,000 950,000 Oxford Industries 282,000 564,000 Petco Animal Supplies 815000 1,015,000 RH Donnelley 46,000 150,000 Shimano (Japan) 0 579,000 Sky City Entertainment (New Zealand) 1,500,000 5,000,000 Urban Outfitters 688,000 788,000 Weight Watchers 320,000 695,000 Winn Dixie Stores 1,750,000 4,500,000 - ---------------------------------------------------------------------------- FINANCE AmeriCredit 5,531,000 5,831,000 Anglo Irish Bank (Ireland) 2,910,000 3,200,000 BOK Financial 445,000 825,000 CityBank Lynnwood 128,000 159,000 Concord EFS 0 1,485,000 CorpBanca (Chile) 0 186,000 Depfa Bank (Ireland) 125,000 185,000 Den Norske Bank (Norway) 0 2,800,000 First Mutual Bancshares 0 46,000 Great Southern Bancorp 0 73,000 Intermediate Capital (United Kingdom) 350,000 500,000 Investment Technology Group 300,000 1,215,000 Irish Life & Permanent (Ireland) 700,000 1,000,000 Jardine Lloyd Thompson (United Kingdom) 0 1,000,000 Republic 1,634,000 1,798,000 Southwest Bancorp 0 303,000 TCF Financial 1,551,000 1,751,000 United National Group 0 595,000 West Coast Bancorp 472,000 700,000 - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Aalberts Industrie (Netherlands) 310,000 510,000 Airgas 650,000 975,000 Bilfinger Berger (Germany) 375,000 525,000 Esco Technologies 950,000 1,050,000 Esprit Holdings (Hong Kong) 0 1,500,000 Gibraltar Steel 1,300,000 1,900,000 1-800-922-6769 18 NUMBER OF SHARES --------------------------- 09/30/03 12/31/03 Additions, continued - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES (CONTINUED) Grafton Group (Ireland) 3,400,000 3,800,000 Imerys (France) 0 50,000 Intermagnetics General 363,000 500,000 Novozymes (Denmark) 316,600 450,000 Pentair 118,000 420,000 Schindler (Switzerland) 40,000 60,000 Ushio (Japan) 500,000 825,000 Watts Water Technologies 0 475,000 Wienerberger (Austria) 0 700,000 - ---------------------------------------------------------------------------- ENERGY/MINERALS Enerflex Systems (Canada) 850,000 1,050,000 FMC Technologies 1,700,000 1,900,000 Nexen (Canada) 0 400,000 Oneok 500,000 1,250,000 Quicksilver 544,000 600,000 Talisman Energy (Canada) 365,000 565,000 Tullow Oil (United Kingdom) 3,000,000 9,165,000 Westport Resources 342,000 517,000 - ---------------------------------------------------------------------------- OTHER INDUSTRIES AM NV (Netherlands) 0 133,000 Gables Residential Trust 287,000 400,000 General Growth Properties 615,000 1,845,000 Grupo Aeroportuario del Sureste (Mexico) 0 500,000 Highland Hospitality 0 380,000 Kobenhavns Lufthavne (Denmark) 100,000 140,000 LNR Property 0 291,000 Waste Connections 377,000 533,000 NUMBER OF SHARES --------------------------- 09/30/03 12/31/03 Sales - ---------------------------------------------------------------------------- INFORMATION Deutsche Boerse (Germany) 275,000 175,000 Information Holdings 800,000 600,000 RealNetworks 1,200,000 -- Torex (United Kingdom) 600,000 -- - ---------------------------------------------------------------------------- HEALTH CARE Omega Pharma (Belgium) 426,000 296,000 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Hyundai Mobis (South Korea) 575,000 465,000 ITT Educational Services 2,200,000 2,111,000 Parmalat Finanziaria (Italy) 3,500,000 -- Steiner Leisure 1,260,000 894,000 - ---------------------------------------------------------------------------- FINANCE Neuberger Berman 900,000 -- Texas Regional Bancshares 990,000 700,000 - ---------------------------------------------------------------------------- ENERGY/MINERALS Newpark Resources 4,500,000 4,750,000 Saipem (Italy) 3,200,000 2,200,000 - ---------------------------------------------------------------------------- OTHER INDUSTRIES Unisource Energy 1,200,000 1,100,000 19 Columbia Acorn Fund - ---------------------------------------------------------------------------- >Statement of Investments, December 31, 2003 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- SECURITIES: 92.1% - ---------------------------------------------------------------------------- INFORMATION: 27.5% MEDIA >TV/SATELLITE BROADCASTING: 0.4% 1,400,000 Gray Television $ 21,168 MID MARKET AFFILIATED TV STATIONS 3,300,000 TVB (Hong Kong) 16,662 TELEVISION PROGRAMMING & BROADCASTING 560,000 SES Global (Luxembourg) 5,645 SATELLITE BROADCASTING SERVICES 200,000 Young Broadcasting (b) 4,008 TELEVISION STATIONS - ---------------------------------------------------------------------------- 47,483 >RADIO BROADCASTING: 0.7% 1,200,000 Cumulus Media, Cl. A (b) 26,400 RADIO STATIONS IN SMALL CITIES 850,000 Salem Communications (b) 23,052 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 935,000 Saga Communications (b)(c) 17,326 RADIO STATIONS IN SMALL & MID-SIZED CITIES 1,006,000 Spanish Broadcasting (b) 10,563 SPANISH LANGUAGE RADIO STATIONS 241,000 Regent Communications (b) 1,530 RADIO STATIONS IN SMALL & MID-SIZED CITIES - ---------------------------------------------------------------------------- 78,871 >TELEVISION PROGRAMMING/CATV: 1.2% 2,605,000 Liberty Media (b) 30,973 CATV PROGRAMMING & MEDIA COMPANY HOLDINGS 2,500,000 Mediacom Communications (b) 21,675 CABLE TELEVISION FRANCHISES 1,000,000 Corus Entertainment (Canada) 21,279 TELEVISION PROGRAMMING & RADIO STATIONS 1,700,000 Insight Communications (b) 17,527 CATV FRANCHISES IN MIDWEST 2,750,000 Hit Entertainment (United Kingdom) 14,457 TELEVISION SHOWS FOR CHILDREN 1,500,000 United Global Com (b) 12,720 VIDEO, VOICE & DATA SERVICES OUTSIDE THE USA 750,000 Alliance Atlantis Communication (b) 11,502 (Canada) TV/MOVIE PRODUCTION/DISTRIBUTION & CATV CHANNELS - ---------------------------------------------------------------------------- 130,133 TELECOMMUNICATIONS >TELECOMMUNICATIONS/WIRELINE COMMUNICATIONS: 0.3% 900,000 Commonwealth Telephone (b) 33,975 RURAL PHONE FRANCHISES & CLEC - ---------------------------------------------------------------------------- >TELECOMMUNICATIONS EQUIPMENT: 0.9% 5,000,000 Tellabs (b) 42,150 TELECOMMUNICATIONS & CABLE EQUIPMENT 830,000 Plantronics (b) 27,100 COMMUNICATION HEADSETS 1,600,000 Andrew (b) 18,416 WIRELESS INFRASTRUCTURE EQUIPMENT NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 1,051,000 Symmetricom (b) $ 7,651 NETWORK TIMING & SYNCHRONIZATION DEVICES - ---------------------------------------------------------------------------- 95,317 >MOBILE COMMUNICATIONS: 1.3% 2,800,000 Western Wireless (b) 51,408 RURAL CELLULAR PHONE SERVICES 3,500,000 Crown Castle International (b) 38,605 COMMUNICATION TOWERS IN USA & UK 520,000 Telephone & Data Systems 32,526 CELLULAR & TELEPHONE SERVICES 1,500,000 American Tower (b) 16,230 COMMUNICATION TOWERS IN USA & MEXICO 533,000 COMARCO (b)(c) 5,863 WIRELESS NETWORK TESTING - ---------------------------------------------------------------------------- 144,632 COMPUTER RELATED HARDWARE >COMPUTER HARDWARE/RELATED SYSTEMS: 2.5% 2,500,000 Seachange International (b)(c) 38,500 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 980,000 Avocent (b) 35,790 COMPUTER CONTROL SWITCHES 494,000 Zebra Technologies (b) 32,787 BAR CODE PRINTERS 1,400,000 Unova (b) 32,130 BARCODE & WIRELESS LAN SYSTEMS 431,900 Neopost (France) 21,767 POSTAGE METERS 625,000 Excel Technologies (b)(c) 20,538 LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS 445,000 Rogers (b) 19,633 PCB LAMINATES & HIGH PERFORMANCE FOAMS 2,000,000 3Com (b) 16,340 NETWORKING EQUIPMENT 1,575,000 Cable Design Technologies (b) 14,159 NETWORKING & SPECIALTY CABLES 535,000 II VI (b) 13,803 LASER COMPONENTS 1,055,000 CTS 12,132 ELECTRONIC COMPONENTS, SENSORS & EMS 2,325,000 Concurrent Computer (b) 10,160 VIDEO ON DEMAND SYSTEMS & SERVICES 230,000 Applied Films (b) 7,595 THIN-FILM GLASS COATING EQUIPMENT - ---------------------------------------------------------------------------- 275,334 >GAMING EQUIPMENT: 3.0% 8,768,000 International Game Technology 313,018 SLOT MACHINES & PROGRESSIVE JACKPOTS 827,000 Shuffle Master (b) 28,631 CARD SHUFFLERS, CASINO GAMES & SLOT MACHINES - ---------------------------------------------------------------------------- 341,649 >CONTRACT MANUFACTURING: 0.8% 1,170,000 Jabil Circuit (b) 33,111 ELECTRONIC MANUFACTURING SERVICES 2,710,000 Venture (Singapore) 31,914 ELECTRONIC MANUFACTURING SERVICES 1-800-922-6769 20 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >CONTRACT MANUFACTURING--CONTINUED 1,300,000 Plexus (b) $ 22,321 ELECTRONIC MANUFACTURING SERVICES - ---------------------------------------------------------------------------- 87,346 >INSTRUMENTATION: 1.4% 836,000 Dionex (b) 38,473 ION & LIQUID CHROMATOGRAPHY 810,000 Mettler Toledo (b) 34,190 LABORATORY EQUIPMENT 900,000 Trimble Navigation (b) 33,516 GPS-BASED INSTRUMENTS 668,000 Varian (b) 27,876 ANALYTICAL INSTRUMENTS 2,300,000 Spectris (United Kingdom) 17,480 ELECTRONIC INSTRUMENTATION & CONTROLS 255,000 Invision Technologies (b) 8,560 MANUFACTURER OF EXPLOSIVE DETECTION SYSTEMS - ---------------------------------------------------------------------------- 160,095 >SEMICONDUCTORS/RELATED EQUIPMENT: 1.2% 1,120,000 Integrated Circuit Systems (b) 31,909 SILICON TIMING DEVICES 685,000 Littelfuse (b) 19,742 LITTLE FUSES 800,000 Semtech (b) 18,184 ANALOG SEMICONDUCTORS 519,000 Microsemi (b) 12,757 ANALOG/MIXED SIGNAL SEMICONDUCTORS 1,250,000 IXYS (b) 11,688 POWER SEMICONDUCTORS 664,000 Asyst Technologies (b) 11,520 SEMICONDUCTOR FAB AUTOMATION EQUIPMENT 565,000 Supertex (b) 10,792 MIXED-SIGNAL SEMICONDUCTORS 361,000 Actel (b) 8,700 FIELD PROGRAMMABLE GATE ARRAYS 404,000 Pericom Semiconductor (b) 4,307 SEMICONDUCTORS: INTERFACE INTEGRATED CIRCUITS - ---------------------------------------------------------------------------- 129,599 SOFTWARE/SERVICES >BUSINESS SOFTWARE: 7.0% 9,900,000 Novell (b) 104,148 SECURITY & IDENTITY MANAGEMENT SOFTWARE 3,400,000 PeopleSoft (b) 77,520 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 1,600,000 Avid Technology (b)(c) 76,800 DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS 1,770,000 Kronos (b)(c) 70,110 LABOR MANAGEMENT SOLUTIONS 4,000,000 Aspect Communications (b)(c) 63,040 CALL CENTER SOFTWARE 3,050,000 Systems & Computer Technology (b)(c) 49,868 ENTERPRISE SOFTWARE & SERVICES 1,050,000 Micros Systems (b)(c) 45,528 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 5,700,000 E.Piphany (b)(c) 41,097 CRM SOFTWARE NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 2,200,000 JDA Software Group (b)(c) $ 36,322 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 1,521,000 Sybase (b) 31,302 DATABASE SOFTWARE 2,200,000 MAPICS (b)(c) 28,798 MID MARKET ERP SOFTWARE 2,035,000 MRO Software (b)(c) 27,391 ENTERPRISE MAINTENANCE SOFTWARE 3,000,000 Lawson Software (b) 24,690 ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE 6,000,000 Actuate (b)(c) 18,660 INFORMATION DELIVERY SOFTWARE & SOLUTIONS 550,000 Hyperion Solutions (b) 16,577 BUSINESS ANALYSIS SOFTWARE 1,760,000 Witness Systems (b)(c) 16,421 CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE 5,000,000 Indus International (b)(c) 15,000 ENTERPRISE ASSET MANAGEMENT SOFTWARE 1,125,000 Radiant Systems (b) 9,461 POINT OF SALE SYSTEMS FOR CONVENIENCE STORES 500,000 SPSS (b) 8,940 STATISTICAL/BUSINESS ANALYSIS SOFTWARE 1,200,000 ScanSoft (b) 6,384 SOFTWARE TO INCORPORATE SPEECH & IMAGES TO TEXT 1,400,000 ClickSoftware Technologies (b)(c) 5,712 SERVICE CHAIN OPTIMIZATION SOFTWARE 3,300,000 BSQUARE (b)(c) 4,719 SOFTWARE TO HELP DESIGN MOBILE DEVICES 70,000 Group 1 Software (b) 1,233 ADDRESS VERIFICATION SOFTWARE - ---------------------------------------------------------------------------- 779,721 >CONSUMER SOFTWARE: 0.4% 1,200,000 THQ (b) 20,292 ENTERTAINMENT SOFTWARE 750,000 Activision (b) 13,650 ENTERTAINMENT SOFTWARE 1,250,000 Pinnacle Systems (b) 10,663 VIDEO EDITING SOFTWARE & HARDWARE - ---------------------------------------------------------------------------- 44,605 >COMPUTER SERVICES: 1.5% 4,550,000 Igate Capital (b)(c) 35,718 TECHNOLOGY STAFFING SERVICES 3,100,000 Bearing Point (b) 31,279 BUSINESS CONSULTING & TECHNOLOGY STRATEGY 3,469,000 Ciber (b)(c) 30,042 SOFTWARE SERVICES & STAFFING 4,600,000 AnswerThink Consulting (b)(c) 25,530 IT INTEGRATOR FOR FORTUNE 2000 900,000 Perot Systems (b) 12,132 BUSINESS CONSULTING & TECHNOLOGY STRATEGY 560,000 American Management Systems (b) 8,439 SOFTWARE DEVELOPMENT SERVICES 2,300,000 Analysts International (b)(c) 7,751 TECHNOLOGY STAFFING SERVICES 500,000 Pomeroy Computer Resources (b) 7,370 NETWORK INTEGRATION SERVICES 1,025,000 New Horizons Worldwide (b)(c) 5,831 COMPUTER TRAINING SERVICES - ---------------------------------------------------------------------------- 164,092 21 Columbia Acorn Fund >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >BUSINESS INFORMATION/MARKETING SERVICES/PUBLISHING: 1.5% 1,200,000 Getty Images (b) $ 60,156 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA 1,336,000 Navigant Consulting (b) 25,197 CONSULTING FIRM 2,685,000 InfoUSA (b)(c) 19,923 BUSINESS DATA FOR SALES LEADS 1,000,000 Moore: Wallace (Canada) (b) 18,733 COMMERCIAL PRINTING 950,000 Administaff (b) 16,511 PROFESSIONAL EMPLOYER ORGANIZATION 600,000 Information Holdings (b) 13,260 PATENT & OTHER BUSINESS INFORMATION 300,000 Proquest (b) 8,835 INFORMATION SERVICES FOR EDUCATION & AUTOMOTIVE MARKETS 150,000 RH Donnelley (b) 5,976 YELLOW PAGES PUBLISHER 1,700,000 PRIMEDIA (b) 4,811 SPECIALTY MAGAZINES & OTHER PUBLICATIONS - ---------------------------------------------------------------------------- 173,402 >INTERNET: 1.3% 9,900,000 Skillsoft Publishing (b)(c) 85,635 PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING) 2,500,000 RSA Security (b) 35,500 ENTERPRISE SECURITY SOFTWARE 2,000,000 DoubleClick (b) 20,440 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA 1,051,030 Vital Stream, Cl. C (b) 694 828,778 Vital Stream, Cl. B (b)(e) 520 STREAMING SERVICES FOR THE INTERNET 250,000 NeoPlanet, Series A (b)(e) 29 53,376 NeoPlanet, Series B (b)(e) 11 WEB BROWSER - ---------------------------------------------------------------------------- 142,829 >ELECTRONICS DISTRIBUTION: 0.7% 1,695,000 Avnet (b) 36,714 ELECTRONIC COMPONENTS DISTRIBUTION 780,000 Tech Data (b) 30,958 I/T DISTRIBUTOR 1,410,000 Agilysys 15,721 I/T DISTRIBUTOR - ---------------------------------------------------------------------------- 83,393 >TRANSACTION PROCESSORS: 1.4% 1,487,000 Global Payments 70,067 CREDIT CARD PROCESSOR 1,485,000 Concord EFS (b) 22,037 CREDIT CARD PROCESSOR 725,000 Euronext (France) 18,333 TRADING SERVICES FOR FINANCIAL MARKETS 600,000 Cubic 13,800 REVENUE COLLECTION & DEFENSE SYSTEMS NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 5,000,000 Hong Kong Exchanges & Clearing (Hong Kong) $ 10,820 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 175,000 Deutsche Boerse (Germany) 9,558 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 406,000 Euronet Worldwide (b) 7,308 ATM PROCESSOR 300,000 Pegasus Systems (b) 3,141 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY - ---------------------------------------------------------------------------- 155,064 ----------- INFORMATION: TOTAL 3,067,540 - ---------------------------------------------------------------------------- HEALTH CARE: 8.6% >BIOTECHNOLOGY/DRUG DELIVERY: 2.1% 519,000 Martek Biosciences (b) 33,719 FATTY ACIDS FOR BABY FORMULA & OTHER FOODS 2,055,000 Nektar Therapeutics (b) 27,969 PULMONARY DRUG DELIVERY 1,665,000 Enzon (b) 19,980 POLYMER DELIVERY TECHNOLOGY FOR IMPROVED DRUGS 1,708,000 Ciphergen Biosystems (b)(c) 19,198 PROTEIN CHIPS USED FOR DRUG TARGET DISCOVERY 426,000 NPS Pharmaceuticals (b) 13,095 SMALL MOLECULE DRUGS 900,000 Applera Celera Genomics (b) 12,519 DIAGNOSTICS & DRUG DEVELOPMENT 2,000,000 Medarex (b) 12,460 HUMANIZED ANTIBODIES 608,000 Protein Design Labs (b) 10,883 COMPUTER DESIGNED MONOCLONAL ANTIBODIES 2,800,000 Sequenom (b)(c) 8,904 HIGH SPEED DNA ANALYSIS INSTRUMENTS 1,600,000 Sangamo Biosciences (b)(c) 8,864 DRUG DISCOVERY 1,875,000 Locus Discovery, Series D Pfd. (b)(e) 7,500 HIGH THROUGHPUT RATIONAL DRUG DESIGN 1,982,000 Aclara Biosciences (b)(c) 7,234 MICROFLUIDIC SYSTEMS FOR DRUG DEVELOPMENT 635,000 Maxygen (b) 6,750 MOLECULAR BREEDING 638,000 Diversa (b) 5,901 MOLECULAR BREEDING 389,000 Atherogenic (b) 5,816 DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID ARTHRITIS, ASTHMA 865,000 Arena Pharmaceuticals (b) 5,363 NOVEL DRUG TARGETING TECHNOLOGY 304,000 Alexion Pharmaceuticals (b) 5,174 MONOCLONAL ANTIBODIES 252,000 Applied Molecular Evolution (b) 4,486 MONOCLONAL ANTIBODIES VIA MOLECULAR EVOLUTION 528,000 Pharmacyclics (b) 3,907 LIGHT ACTIVATED DRUGS FOR CANCER & VASCULAR DISEASES 461,000 SYRRX, Series C (b)(e) 2,397 X-RAY CRYSTALLOGRAPHY 1-800-922-6769 22 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED 320,000 Incyte Genomics (b) $ 2,189 BIOINFORMATICS & DRUG DEVELOPMENT 316,000 Guilford Pharmaceuticals (b) 2,142 DRUG DELIVERY & NEUROLOGY DRUGS 160,000 Myriad Genetics (b) 2,058 GENE DISCOVERY & DIAGNOSTIC PRODUCTS 1,249,999 Perlegen Sciences (b)(e) 1,950 LARGE SCALE GENE SEQUENCING 210,000 Gene Logic (b) 1,090 GENE EXPRESSION DATABASE 359,944 Microdose (b)(e) 180 DRUG INHALERS - ---------------------------------------------------------------------------- 231,728 >MEDICAL EQUIPMENT/LABORATORY SUPPLIES: 2.6% 1,629,000 Edwards Lifesciences (b) 49,000 HEART VALVES 989,000 Diagnostic Products 45,405 IMMUNODIAGNOSTIC KITS 1,900,000 CTI Molecular Imaging (b) 32,129 MEDICAL DIAGNOSTIC DEVICES 583,000 Orthofix International (b) 28,555 BONE FIXATION & STIMULATION DEVICES 2,600,000 Smith & Nephew (United Kingdom) 21,779 MEDICAL EQUIPMENT & SUPPLIES 20,000 Synthes-Stratec (Switzerland) 19,785 PRODUCTS FOR ORTHOPEDIC SURGERY 365,000 Essilor International (France) 18,855 EYEGLASS LENSES 875,000 Viasys Healthcare (b) 18,025 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 770,000 VISX (b) 17,826 LASER EYE SURGERY EQUIPMENT 520,000 ICU Medical (b) 17,826 INTRAVENOUS THERAPY PRODUCTS 600,000 Sola International (b) 11,280 SPECIALTY EYEGLASS LENSES 350,000 Haemonetics (b) 8,362 BLOOD & PLASMA COLLECTION EQUIPMENT 1,495,000 Novoste (b)(c) 7,161 RADIATION CATHETERS FOR IN-STENT RESTENOSIS - ---------------------------------------------------------------------------- 295,988 >PHARMACEUTICALS: 0.1% 138,000 Yuhan (South Korea) 7,853 ETHICAL DRUG PRODUCER 433,600 Patheon (Canada) (b) 3,905 PHARMACEUTICAL CONTRACT MANUFACTURER - ---------------------------------------------------------------------------- 11,758 >HOSPITAL MANAGEMENT: 0.2% 387,000 Rhoen-Klinikum (Germany) 19,992 HOSPITAL MANAGEMENT - ---------------------------------------------------------------------------- NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >MEDICAL SUPPLIES: 0.4% 686,000 Techne (b) $ 25,917 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES 650,000 Owens & Minor 14,242 DISTRIBUTION OF MEDICAL SUPPLIES - ---------------------------------------------------------------------------- 40,159 >SERVICES: 3.2% 5,586,000 First Health Group (b)(c) 108,704 PPO NETWORK 2,491,000 Lincare Holdings (b) 74,805 HOME HEALTH CARE SERVICES 2,592,000 NDCHealth Group (c) 66,407 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 640,000 Charles River Laboratories (b) 21,971 PHARMACEUTICAL RESEARCH 1,333,000 Dendrite International (b) 20,888 SOFTWARE FOR PHARMACEUTICAL SALES FORCE 2,500,000 Gambro (Sweden) 20,680 PRODUCTS/SERVICES FOR RENAL CARE 420,000 OPG Groep (Netherlands) 19,077 PHARMACEUTICAL WHOLESALER & RETAILER 550,000 Serologicals (b) 10,230 BLOOD COLLECTION & ANTIBODY PRODUCTION 296,000 Omega Pharma (Belgium) 9,398 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 440,000 Medquist (b) 7,066 MEDICAL TRANSCRIPTION SERVICES 700,000 Nestor Healthcare (United Kingdom) 2,574 HEALTHCARE STAFFING COMPANY - ---------------------------------------------------------------------------- 361,800 ----------- HEALTH CARE: TOTAL 961,425 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 19.9% GOODS >LEISURE VEHICLES: 1.3% 1,745,000 Harley-Davidson 82,940 MOTORCYCLES & RELATED MERCHANDISE 1,495,000 Monaco Coach (b)(c) 35,581 RECREATIONAL VEHICLES 275,000 Polaris Industries 24,360 MANUFACTURER OF LEISURE VEHICLES & RELATED PRODUCTS 2,850,000 Ducati Motor (Italy) (b) 4,930 MOTORCYCLES & RELATED MERCHANDISE - ---------------------------------------------------------------------------- 147,811 >FURNITURE/TEXTILES: 1.7% 1,275,000 Hon Industries 55,233 OFFICE FURNITURE & FIREPLACES 740,000 Mohawk Industries (b) 52,200 CARPET & FLOORING 1,900,000 Herman Miller 46,113 OFFICE FURNITURE 510,000 Furniture Brands International 14,958 FURNITURE 1,160,000 Nobia (Sweden) 12,095 KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION 23 Columbia Acorn Fund - ---------------------------------------------------------------------------- >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >FURNITURE/TEXTILES--CONTINUED 440,000 Masonite International (Canada) (b) $ 11,780 DOOR MANUFACTURER - ---------------------------------------------------------------------------- 192,379 >FOOD & BEVERAGES: 0.7% 1,600,000 Kerry Group (Ireland) 30,037 FOOD INGREDIENTS 950,000 Orkla (Norway) 21,235 DIVERSIFIED CONSUMER GOODS 4,000,000 Lion Nathan (Australia) 18,191 BEER BREWER/DISTRIBUTOR 180,000 Davide Campari (Italy) 8,731 SPIRITS & WINE - ---------------------------------------------------------------------------- 78,194 >NONDURABLES: 1.1% 2,300,000 Helen of Troy (b)(c) 53,245 HAIRDRYERS & CURLING IRONS 895,000 Scotts Company (b) 52,948 CONSUMER LAWN & GARDEN PRODUCTS 255,000 Uni-Charm (Japan) 12,544 INFANT HYGIENE & FEMININE CARE PRODUCTS 601,000 First Years (c) 8,979 INFANT & TODDLER PRODUCTS - ---------------------------------------------------------------------------- 127,716 >DURABLE GOODS: 1.3% 1,511,000 SCP Pool (b) 49,379 DISTRIBUTOR OF SWIMMING POOL SUPPLIES 605,000 Hunter Douglas (Netherlands) 28,288 WINDOW SHADES & VENETIAN BLINDS 465,000 Hyundai Mobis (South Korea) 25,016 AUTO PARTS 422,000 American Woodmark (c) 23,231 KITCHEN CABINETS 5,000,000 Techtronic Industries (Hong Kong) 13,846 POWER TOOL MANUFACTURER 579,000 Shimano (Japan) 11,998 BICYCLE COMPONENTS & FISHING TACKLE - ---------------------------------------------------------------------------- 151,758 >APPAREL: 2.0% 2,840,000 Coach (b) 107,210 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 1,370,000 Jones Apparel 48,265 WOMEN'S APPAREL 564,000 Oxford Industries 19,108 BRANDED & PRIVATE LABEL APPAREL 828,000 Steven Madden (b)(c) 16,891 WHOLESALER/RETAILER OF FASHION FOOTWEAR 3,000,000 Billabong International (Australia) 16,106 SURFWEAR APPAREL MANUFACTURER 200,000 Columbia Sportswear (b) 10,900 ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES - ---------------------------------------------------------------------------- 218,480 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------------- SERVICES >RETAIL: 5.4% 2,495,000 Chico's FAS (b) $ 92,190 WOMEN'S SPECIALTY RETAIL 3,743,000 Christopher & Banks (c) 73,101 WOMEN'S APPAREL RETAILER 1,600,000 Michaels Stores 70,720 CRAFT & HOBBY SPECIALTY RETAILER 4,500,000 Winn Dixie Stores 44,775 SUPERMARKETS IN THE SOUTHEAST US 1,510,000 Aeropostale (b) 41,404 MALL BASED TEEN RETAILER 500,000 Whole Foods Market 33,565 NATURAL FOOD SUPERMARKETS 1,070,000 Hot Topic (b) 31,522 MUSIC INSPIRED RETAILER OF APPAREL, ACCESSORIES & GIFTS 1,015,000 Petco Animal Supplies (b) 30,907 PET SUPPLIES & SERVICES 1,400,000 Borders Group 30,688 BOOKSTORES 788,000 Urban Outfitters (b) 29,195 ECLECTIC HOME & APPAREL RETAILER 536,000 Zale (b) 28,515 SPECIALTY RETAILER OF JEWELRY 895,000 Abercrombie & Fitch (b) 22,115 TEEN APPAREL RETAILER 450,000 Ann Taylor (b) 17,550 WOMEN'S APPAREL RETAILER 500,000 Pier 1 Imports 10,930 IMPORTED FURNITURE & TCHOTCHKES 700,000 Genesco (b) 10,591 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER 3,100,000 The Warehouse Group (New Zealand) 10,399 WAREHOUSE CLUB 1,015,000 Burberry Group (United Kingdom) 6,622 APPAREL RETAILER 850,000 Gaiam (b)(c) 5,058 HEALTHY LIVING CATALOG & E-COMMERCE 1,500,000 Esprit Holdings (Hong Kong) 4,985 GLOBAL APPAREL BRAND MANAGER $ 6,000 Gadzooks 5.00% Convertible (e) 4,485 TEEN APPAREL RETAILER - ---------------------------------------------------------------------------- 599,317 >TRAVEL: 0.8% 2,024,500 Intrawest (Canada) 37,440 OWNER/OPERATOR OF SKI RESORTS 3,380,000 LaQuinta (b) 21,666 OWNER/FRANCHISER OF MID-PRICED HOTELS 950,000 Vail Resorts (b) 16,150 OWNER/OPERATOR OF SKI RESORTS 725,000 Navigant International (b) 10,041 CORPORATE TRAVEL AGENCY 720,000 Jurys Doyle Hotel (Ireland) 8,799 HOTEL GROUP - ---------------------------------------------------------------------------- 94,096 1-800-922-6769 24 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >CONSUMER SERVICES: 1.9% 2,111,000 ITT Educational Services (b) $ 99,154 POSTSECONDARY DEGREE PROGRAMS 695,000 Weight Watchers (b) 26,667 WEIGHT LOSS PROGRAM 1,290,000 Coinstar (b)(c) 23,297 OWNER/OPERATOR OF COIN COUNTING MACHINES 260,000 USS (Japan) 18,395 USED CAR AUCTIONEER 1,750,000 Princeton Review (b)(c) 17,063 COLLEGE PREPARATION COURSES 2,350,000 Bally Total Fitness (b)(c) 16,450 NATIONAL CHAIN OF FITNESS CENTERS 900,000 Central Parking 13,437 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES - ---------------------------------------------------------------------------- 214,463 >ENTERTAINMENT/LEISURE PRODUCTS: 1.5% 805,000 International Speedway Motors 35,951 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 1,250,000 Leapfrog Enterprises (b) 33,163 EDUCATIONAL TOYS 1,276,000 Action Performance (c) 25,010 MOTORSPORT COLLECTIBLES & MERCHANDISING 2,765,000 Six Flags (b) 20,793 WORLDWIDE THEME PARK OPERATOR 370,000 Amer Group (Finland) 16,013 BRANDED SPORTING GOODS 363,000 Speedway Motors 10,498 MOTORSPORT RACETRACK OWNER & OPERATOR 1,750,000 Magna Entertainment, Cl. A (Canada) (b) 8,873 OWNER/OPERATOR OF THOROUGHBRED RACETRACKS 334,000 RC2 6,931 COLLECTIBLES & TOYS 345,000 Intralot (Greece) 6,729 LOTTERY & GAMING SYSTEMS & SERVICES - ---------------------------------------------------------------------------- 163,961 >CASINOS: 1.3% 2,010,000 Alliance Gaming (b) 49,546 DIVERSIFIED GAMING COMPANY 890,000 Station Casinos 27,261 CASINOS & RIVERBOATS 875,000 Argosy Gaming (b) 22,741 REGIONAL RIVERBOAT CASINOS 1,925,000 Pinnacle Entertainment (b)(c) 17,941 REGIONAL RIVERBOAT CASINOS 5,000,000 Sky City Entertainment (New Zealand) 15,102 CASINO/ENTERTAINMENT COMPLEX 635,000 Monarch Casino & Resort (b)(c) 7,004 CASINO/HOTEL IN RENO 113,000 Lakes Entertainment (b) 1,825 GAMING ENTREPRENEUR - ---------------------------------------------------------------------------- 141,420 >RESTAURANTS: 0.6% 2,000,000 AFC Enterprises (b)(c) 39,000 POPEYES, CHURCHES FRIED CHICKEN 1,447,000 Autogrill (Italy) (b) 20,675 TOLLWAY RESTAURANTS NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 243,000 Cheesecake Factory (b) $ 10,699 CASUAL DINING RESTAURANT 7,000 Kappa Create (Japan) 591 SUSHI CHAIN RESTAURANT OPERATOR - ---------------------------------------------------------------------------- 70,965 >CRUISE LINES: 0.3% 400,000 Carnival 15,892 LARGEST CRUISE LINE 894,000 Steiner Leisure (b)(c) 12,784 SPAS & HAIR/SKIN PRODUCTS ON CRUISE SHIPS - ---------------------------------------------------------------------------- 28,676 ----------- CONSUMER GOODS/SERVICES: TOTAL 2,229,236 - ---------------------------------------------------------------------------- FINANCE: 11.6% >BANKS: 4.2% 1,751,000 TCF Financial 89,914 GREAT LAKES BANK 1,608,000 Associated Banc-Corp 68,581 MIDWEST BANK 3,200,000 Anglo Irish Bank (Ireland) 50,438 SMALL BUSINESS & MIDDLE MARKET BANKING 1,122,000 Glacier Bancorp (c) 36,353 MOUNTAIN STATES BANK 825,000 BOK Financial (b) 31,944 OKLAHOMA BANK 700,000 Texas Regional Bancshares 25,900 SOUTH TEXAS BANK 1,798,000 Republic 24,255 MICHIGAN BANK 185,000 Depfa Bank (Ireland) 23,332 INTERNATIONAL PUBLIC SECTOR FINANCE 605,000 Chittenden 20,352 VERMONT & WESTERN MASSACHUSETTS BANK 2,800,000 Den Norske Bank (Norway) 18,650 LARGEST NORWEGIAN BANK 660,000 Hawthorne Financial (b)(c) 18,467 REAL ESTATE LENDER 356,000 Bank of Bermuda 16,002 OFFSHORE BANK 700,000 West Coast Bancorp 14,938 PORTLAND SMALL BUSINESS LENDER 303,000 Southwest Bancorp 5,418 OKLAHOMA SMALL BUSINESS BANK 159,000 CityBank Lynnwood 5,167 SEATTLE REAL ESTATE LENDER 186,000 CorpBanca (Chile) (b) 4,849 CHILE'S 3RD LARGEST LOCAL BANK 82,000 BankFirst 4,814 OKLAHOMA COMMUNITY BANK 170,000 Midwest Bank 3,783 CHICAGO BANK 82,000 First Financial BankShares 3,419 WEST TEXAS COMMUNITY BANK 73,000 Great Southern Bancorp 3,385 MISSOURI REAL ESTATE LENDER 46,000 First Mutual Bancshares 1,127 SEATTLE COMMUNITY BANK 25 Columbia Acorn Fund >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >BANKS--CONTINUED 29,000 Cascade Financial $ 562 SEATTLE COMMUNITY BANK - ---------------------------------------------------------------------------- 471,650 >SAVINGS & LOANS: 2.1% 2,184,000 Peoples Bank Bridgeport 71,198 CONNECTICUT SAVINGS & LOAN 947,000 Downey Financial 46,687 CALIFORNIA HOME LENDER 1,228,000 Anchor Bancorp Wisconsin (c) 30,577 WISCONSIN THRIFT 1,700,000 Housing Development Finance (India) 24,075 LEADING PROVIDER OF MORTGAGES IN INDIA 497,000 Quaker City Bancorp (c) 23,135 LA REAL ESTATE LENDER 1,000,000 Irish Life & Permanent (Ireland) 16,127 SAVINGS PRODUCTS 700,000 First Federal Capital 15,764 WISCONSIN THRIFT 190,000 Washington Federal 5,396 OLD FASHIONED MORTGAGE LENDER - ---------------------------------------------------------------------------- 232,959 >INSURANCE: 2.9% 870,000 Philadelphia Consolidated Holding (b) 42,482 SPECIALTY INSURANCE 1,320,000 HCC Insurance Holdings 41,976 AVIATION INSURANCE 826,000 Leucadia National 38,079 INSURANCE HOLDING COMPANY 1,000,000 RLI 37,460 SPECIALTY INSURANCE 138,000 Markel (b) 34,984 SPECIALTY INSURANCE 995,000 Protective Life 33,671 LIFE INSURANCE 700,000 Harleysville Group 13,923 COMMERCIAL & PERSONAL LINES INSURANCE 800,000 Ohio Casualty (b) 13,888 COMMERCIAL & PERSONAL LINES INSURANCE 650,000 Scottish Re Group (formerly known as Scottish Annuity & Life) 13,507 LIFE REINSURER 210,000 StanCorp Financial 13,205 GROUP LIFE, DISABILITY & 401K 400,000 Selective Insurance Group 12,944 COMMERCIAL & PERSONAL LINES INSURANCE 595,000 United National Group (b) 10,514 SPECIALTY INSURANCE 1,000,000 Jardine Lloyd Thompson (United Kingdom) 9,416 BUSINESS INSURANCE BROKER 355,000 Northbridge Financial (Canada) (b) 5,741 PROPERTY & CASUALTY INSURANCE 200,000 Kingsway Financial (Canada) (b) 2,259 AUTO & SPECIALTY INSURANCE - ---------------------------------------------------------------------------- 324,049 >MONEY MANAGEMENT: 1.0% 2,390,000 SEI Investments 72,823 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 855,000 Eaton Vance $ 31,327 SPECIALTY MUTUAL FUNDS 123,000 Affiliated Managers Group (b) 8,560 ASSET MANAGEMENT HOLDING COMPANY 200,000 The Investment Company of China (China) (b)(e) 246 CLOSED-END FUND - ---------------------------------------------------------------------------- 112,956 >BROKERAGE: 0.2% 1,215,000 Investment Technology Group (b) 19,622 ELECTRONIC TRADING - ---------------------------------------------------------------------------- >FINANCE COMPANIES: 1.2% 5,831,000 AmeriCredit (b) 92,888 AUTO LENDING 1,820,000 World Acceptance (b)(c) 36,236 PERSONAL LOANS 500,000 Intermediate Capital (United Kingdom) 9,425 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 900,000 DVI Health Services (b)(c) 36 LEASES BIG MEDICAL EQUIPMENT - ---------------------------------------------------------------------------- 138,585 ----------- FINANCE: TOTAL 1,299,821 - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 12.2% >STEEL: 0.8% 1,900,000 Gibraltar Steel (c) 47,785 STEEL PROCESSING 1,050,000 Worthington Industries 18,932 STEEL PROCESSING 550,000 Tenaris (Luxembourg) (b) 18,326 STEEL PIPE FOR OIL WELLS & PIPELINES - ---------------------------------------------------------------------------- 85,043 >INDUSTRIAL GOODS: 1.3% 1,400,000 Clarcor (c) 61,740 MOBILE & INDUSTRIAL FILTERS 750,000 Donaldson 44,370 INDUSTRIAL AIR FILTRATION 268,000 Mine Safety Appliances 21,309 SAFETY EQUIPMENT 500,000 Intermagnetics General (b) 11,080 SUPERCONDUCTING WIRE 100,000 Bacou Dalloz (France) 7,812 SAFETY EQUIPMENT - ---------------------------------------------------------------------------- 146,311 >INDUSTRIAL DISTRIBUTION: 1.1% 1,525,000 Watsco (c) 34,663 HVAC DISTRIBUTION 600,000 Hughes Supply 29,772 INDUSTRIAL DISTRIBUTION 3,800,000 Grafton Group (Ireland) 26,189 BUILDERS, WHOLESALERS & DIY RETAILING 975,000 Airgas 20,943 INDUSTRIAL GAS DISTRIBUTOR 900,000 Nuco2 (b)(c) 11,403 BULK CO2 GAS DISTRIBUTION TO RESTAURANTS - ---------------------------------------------------------------------------- 122,970 1-800-922-6769 26 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >CONSTRUCTION: 0.9% 488,000 Simpson $ 24,820 WALL JOINT MAKER 425,000 Florida Rock Industries 23,311 CONCRETE & AGGREGATES 700,000 Wienerberger (Austria) 18,680 BRICKS & CLAY ROOFING TILES 380,000 Daito Trust Construction (Japan) 11,279 APARTMENT BUILDER 3,000,000 Consorcio (Mexico) (b) 7,449 LOW/MEDIUM INCOME HOUSE BUILDER 750,000 McCarthy & Stone (United Kingdom) 6,922 BUILDER OF RETIREMENT APARTMENTS 216,000 Northwest Pipe Company (b) 2,877 WATER TRANSMISSION PIPE - ---------------------------------------------------------------------------- 95,338 >SPECIALTY CHEMICALS & INDUSTRIAL MATERIALS: 1.3% 1,850,000 Spartech (c) 45,584 PLASTICS DISTRIBUTION & COMPOUNDING 47,000 Geberit International (Switzerland) 23,095 PLUMBING SUPPLIES 1,000,000 Schulman 21,320 PLASTICS DISTRIBUTION & COMPOUNDING 37,000 Givaudan (Switzerland) 19,198 INDUSTRIAL FRAGRANCES & FLAVORS 450,000 Novozymes (Denmark) 16,408 INDUSTRIAL ENZYMES 50,000 Imerys (France) 10,514 INDUSTRIAL MINERALS PRODUCER 347,000 SYMYX (b) 7,131 MATERIALS & CHEMICALS - ---------------------------------------------------------------------------- 143,250 >MACHINERY: 1.2% 1,025,000 Ametek 49,466 AEROSPACE/INDUSTRIAL INSTRUMENTS 1,050,000 Esco Technologies (b)(c) 45,832 FILTRATION & TEST EQUIPMENT 420,000 Pentair 19,194 PUMPS, WATER TREATMENT & TOOLS 500,000 Cobham (United Kingdom) 10,416 AEROSPACE 285,000 Gardner Denver (b) 6,803 AIR COMPRESSORS, BLOWERS & PUMPS 150,000 Tennant 6,495 NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT - ---------------------------------------------------------------------------- 138,206 >OUTSOURCING SERVICES & TRAINING: 0.6% 1,900,000 Labor Ready (b) 24,890 TEMPORARY MANUAL LABOR 525,000 Bilfinger Berger (Germany) 17,860 CONSTRUCTION & RELATED SERVICES 9,500,000 Li & Fung (Hong Kong) 16,274 SOURCING OF CONSUMER GOODS 600,000 GP Strategies (b) 4,800 TRAINING PROGRAMS - ---------------------------------------------------------------------------- 63,824 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >CONGLOMERATES: 0.2% 5,550 Pargesa (Switzerland) $ 14,802 INDUSTRIAL & MEDIA HOLDINGS 510,000 Aalberts Industrie (Netherlands) 13,192 FLOW CONTROL & HEAT TREATMENT - ---------------------------------------------------------------------------- 27,994 >INDUSTRIAL SUPPLIERS: 0.2% 1,800,000 Xstrata (United Kingdom) 20,242 DIVERSIFIED MINING HOLDING COMPANY - ---------------------------------------------------------------------------- >LOGISTICS: 2.2% 2,900,000 Expeditors International of Washington 109,214 INTERNATIONAL FREIGHT FORWARDER 900,000 UTI Worldwide 34,137 INTERNATIONAL FREIGHT FORWARDER 1,000,000 Forward Air (b) 27,500 FREIGHT TRANSPORTATION BETWEEN AIRPORTS 1,800,000 Exel (United Kingdom) 23,729 GLOBAL LOGISTICS & FREIGHT FORWARDING 40,000,000 Sinotrans (China) 18,033 INTEGRATED LOGISTICS IN CHINA 759,000 Hub Group (b)(c) 16,349 TRUCK & RAIL FREIGHT FORWARDER 11,000,000 Sembcorp Logistics (Singapore) 12,954 LOGISTIC SERVICES FOR MARINE TRANSPORT - ---------------------------------------------------------------------------- 241,916 >WATER: 1.3% 2,400,000 Tetra Tech (b) 59,664 RESOURCE MANAGEMENT & INFRASTRUCTURE CONSULTING 856,000 Cuno (b)(c) 38,546 FILTRATION & FLUIDS CLARIFICATION 900,000 Pall 24,147 FILTRATION & FLUIDS CLARIFICATION 900,000 Insituform Technologies (b) 14,850 WATER/SEWER PIPE REPAIR 475,000 Watts Water Technologies 10,545 WATER, VALVES, REGULATORS & FILTRATION - ---------------------------------------------------------------------------- 147,752 >OTHER INDUSTRIAL SERVICES: 1.1% 1,500,000 Clark/Bardes Consulting (b)(c) 28,860 EXECUTIVE COMPENSATION & BENEFITS CONSULTING 725,000 G&K Services 26,644 UNIFORM RENTAL 825,000 Mobile Mini (b)(c) 16,269 LEASES PORTABLE STORAGE UNITS 590,000 Munters (Sweden) 14,273 MOISTURE & HUMIDITY CONTROL 60,000 Schindler (Switzerland) (b) 14,645 ELEVATOR MANUFACTURER & SERVICE PROVIDER 665,500 Zardoya Otis (Spain) 13,835 ELEVATOR MANUFACTURER & SERVICE PROVIDER 825,000 Ushio (Japan) 13,699 INDUSTRIAL LIGHT SOURCES - ---------------------------------------------------------------------------- 128,225 ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 1,361,071 - ---------------------------------------------------------------------------- 27 Columbia Acorn Fund - ---------------------------------------------------------------------------- >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- ENERGY/MINERALS: 7.0% >INDEPENDENT POWER: 0.2% 570,000 Gamesa (Spain) $ 18,737 SPANISH WIND TURBINES 720,000 Millennium Cell (b) 1,678 FUEL CELL TECHNOLOGY - ---------------------------------------------------------------------------- 20,415 >OIL/GAS PRODUCERS: 4.3% 6,300,000 XTO Energy 178,290 NATURAL GAS PRODUCER 2,550,000 Ultra Petroleum (b) 62,781 NATURAL GAS PRODUCER 1,200,000 Western Gas 56,700 OIL PRODUCER & COAL SEAM GAS PRODUCER 1,460,000 Evergreen Resources (b) 47,465 COAL SEAM GAS PRODUCER 565,000 Talisman Energy (Canada) 32,142 OIL & GAS PRODUCER 1,200,000 Southwestern Energy (b) 28,680 NATURAL GAS PRODUCER 600,000 Quicksilver (b) 19,380 NATURAL GAS & COAL SEAM GAS PRODUCER 517,000 Westport Resources (b) 15,438 OIL & GAS PRODUCER 400,000 Nexen (Canada) 14,522 OIL & GAS PRODUCER 9,165,000 Tullow Oil (United Kingdom) 14,029 OIL & GAS PRODUCER 500,000 McMoran Exploration (b) 9,375 NATURAL GAS PRODUCERS & LNG DEVELOPER 2,265,000 Tipperary (b)(c) 6,908 COAL SEAM GAS PRODUCER - ---------------------------------------------------------------------------- 485,710 >DISTRIBUTION/MARKETING/REFINING: 1.0% 1,260,000 Equitable Resources 54,079 NATURAL GAS UTILITY & PRODUCER 1,250,000 Oneok 27,600 NATURAL GAS UTILITY, MARKETING & PROCESSING 761,000 Atmos Energy 18,492 NATURAL GAS UTILITY 1,270,000 Aquila (b)(e) 8,941 ELECTRIC UTILITY HOLDING COMPANY - ---------------------------------------------------------------------------- 109,112 >OIL SERVICES: 1.5% 1,900,000 FMC Technologies (b) 44,270 OIL & GAS WELL HEAD MANUFACTURER 730,000 Carbo Ceramics 37,412 NATURAL GAS WELL STIMULANTS 4,750,000 Newpark Resources (b)(c) 22,753 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 1,750,000 Key Energy Services (b) 18,043 OIL & GAS WELL WORKOVER SERVICES 2,200,000 Saipem (Italy) 17,768 OFFSHORE CONSTRUCTION & DRILLING NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 1,050,000 Enerflex Systems (Canada) $ 16,412 NATURAL GAS COMPRESSOR 800,000 Hanover Compressor (b) 8,920 NATURAL GAS COMPRESSOR RENTAL - ---------------------------------------------------------------------------- 165,578 ----------- ENERGY/MINERALS: TOTAL 780,815 - ---------------------------------------------------------------------------- OTHER INDUSTRIES: 5.3% >REAL ESTATE: 4.3% 1,160,000 The Rouse Company 54,520 REGIONAL SHOPPING MALLS 1,845,000 General Growth Properties 51,199 REGIONAL SHOPPING MALLS 875,000 SL Green Realty 35,919 MANHATTAN OFFICE BUILDINGS 800,000 Macerich Company 35,600 REGIONAL SHOPPING MALLS 699,000 Forest City Enterprises, Cl. B 33,762 COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER 725,000 Mills 31,900 REGIONAL SHOPPING MALLS 690,000 Federal Realty Investment Trust 26,489 SHOPPING CENTERS 700,000 Manufactured Home Communities 26,355 MANUFACTURED HOME COMMUNITIES 1,375,000 Crescent Real Estate Equities 23,554 CLASS A OFFICE BUILDINGS 400,000 Chelsea Properties Group 21,924 OUTLET MALLS 975,000 Glimcher Realty Trust 21,821 REGIONAL SHOPPING MALLS 540,000 AMB Property 17,755 INDUSTRIAL PROPERTIES 700,000 Keystone Property Trust 15,463 INDUSTRIAL PROPERTIES 291,000 LNR Property 14,407 DISTRESSED PROPERTY FINANCE 400,000 Gables Residential Trust 13,896 APARTMENTS 200,000 Essex Property Trust 12,844 WEST COAST APARTMENTS 650,000 United Dominion Realty 12,480 APARTMENTS 574,000 LaSalle Hotel Properties 10,648 UPSCALE/FULL SERVICE HOTELS 190,000 Consolidated Tomoka 6,213 FLORIDA LAND OWNER 299,275 Security Capital European Realty (Luxembourg) (b)(e) 5,315 SELF STORAGE PROPERTIES 380,000 Highland Hospitality (b) 4,142 HOTEL REAL ESTATE INVESTMENT TRUST 133,000 Am NV (Netherlands) 1,032 PROPERTY DEVELOPER - ---------------------------------------------------------------------------- 477,238 1-800-922-6769 28 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >WASTE MANAGEMENT: 0.2% 533,000 Waste Connections (b) $ 20,131 SOLID WASTE MANAGEMENT - ---------------------------------------------------------------------------- >TRANSPORTATION: 0.3% 140,000 Kobenhavns Lufthavne (Denmark) 16,392 COPENHAGEN AIRPORT AUTHORITY 500,000 Grupo Aeroportaurio Del Sureste (Mexico) 8,800 CANCUN & COZUMEL AIRPORT OPERATOR 15,000,000 Comfort Group (Singapore) 7,198 TAXI SERVICE - ---------------------------------------------------------------------------- 32,390 >REGULATED UTILITIES: 0.5% 1,100,000 Unisource Energy 27,126 ELECTRIC UTILITY IN ARIZONA 850,000 Northeast Utilities 17,145 REGULATED ELECTRIC UTILITY 899,800 Red Electrica (Spain) 14,737 SPANISH POWER GRID - ---------------------------------------------------------------------------- 59,008 ----------- OTHER INDUSTRIES: TOTAL 588,767 TOTAL COMMON STOCKS AND OTHER ----------- EQUITY-LIKE SECURITIES: 92.1% 10,288,675 (COST: $6,468,313) PRINCIPAL AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 7.8% Yield 0.88% - 1.15% Due 1/02/04 - 2/14/04 $ 75,000 John Hancock Financial $ 74,936 75,000 Citicorp 74,911 74,000 Household Finance 73,966 74,000 General Electric Capital 73,917 70,000 American Express Credit 69,939 62,000 Virginia Electric & Power 61,979 59,000 Schering Plough 58,991 58,000 State Street Bank & Trust 57,955 52,000 Toyota Credit 51,955 50,193 Cambell Soup 50,183 50,000 Bayer 49,951 49,000 Marshall & IIsley 48,964 48,000 Cargill 47,983 37,000 AIG Funding 36,994 10,000 US Treasury Bill 9,998 32,863 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 1/15/06, Market Value $33,523 (repurchase proceeds: $32,865) 32,863 - ---------------------------------------------------------------------------- (AMORTIZED COST: $875,485) 875,485 ----------- TOTAL INVESTMENTS: 99.9% 11,164,160 (COST: $7,343,798) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 4,655 ----------- TOTAL NET ASSETS: 100% $11,168,815 ============================================================================ 29 Columbia Acorn Fund >Statement of Investments, continued - -------------------------------------------------------------------------------- >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investments was $7,338,384 and net unrealized appreciation was $3,825,776 consisting of gross unrealized appreciation of $4,118,963 and gross unrealized depreciation of $293,187. (b) Non-income producing security. (c) On December 31, 2003, the fund held the following percentages of the outstanding voting shares of the companies listed below: AnswerThink Consulting 10.34% Christopher & Banks 9.90% Gibraltar Steel 9.88% New Horizons Worldwide 9.87% World Acceptance 9.85% Hub Group 9.83% Skillsoft Publishing 9.80% Actuate 9.77% Indus International 9.63% Analysts International 9.50% Gaiam 9.24% Seachange International 9.19% Novoste 9.16% MAPICS 8.84% BSQUARE 8.81% Igate Capital 8.79% Systems & Computer Technology 8.78% Nuco2 8.46% MRO Software 8.22% Helen of Troy 8.18% Esco Technologies 8.17% Clark/Bardes Consulting 8.12% Witness Systems 7.96% Quaker City Bancorp 7.94% E.Piphany 7.66% JDA Software Group 7.58% COMARCO 7.39% NDCHealth Group 7.26% First Years 7.24% AFC Enterprises 7.15% Aspect Communications 7.13% Sequenom 7.00% Action Performance 6.98% Bally Total Fitness 6.91% Monarch Casino & Resort 6.80% Watsco 6.77% Sangamo Biosciences 6.45% Princeton Review 6.40% Steven Madden 6.32% Coinstar 6.07% Pinnacle Entertainment 6.03% DVI Health Services 5.93% First Health Group 5.92% Ciphergen Biosystems 5.92% Spartech 5.92% Newpark Resources 5.87% Glacier Bancorp 5.80% Micros Systems 5.79% Tipperary 5.77% Mobile Mini 5.75% Kronos 5.75% Hawthorne Financial 5.71% Aclara Biosciences 5.53% Clarcor 5.53% Ciber 5.44% Steiner Leisure 5.43% Anchor Bancorp Wisconsin 5.31% ClickSoftware Technologies 5.29% Excel Technologies 5.25% American Woodmark 5.23% Avid Technology 5.21% InfoUSA 5.14% Monaco Coach 5.14% Cuno 5.07% Saga Communications 5.05% The aggregate cost and value of these companies at December 31, 2003, was $1,322,612 and $1,914,723 respectively. Investments in affiliate companies represent 17.14% of total net assets at December 31, 2003. Investment activity and income amounts relating to affiliates during the year ended December 31, 2003 were as follows: Dividend Income $ 4,319 Net realized loss $ (225) Change in unrealized loss $ 708,696 Purchases $ 344,232 Proceeds from sales $ 89,746 In addition, additional purchases of existing portfolio holdings that were not considered affiliates in prior years, resulted in the fund owning more than 5% of the outstanding shares of certain issues at December 31, 2003. Therefore, the cost and market value affiliate disclosure amounts include both acquisitions of new investments in affiliates during the year, as well as prior year investment holdings that became affiliates during the current year. (d) On December 31, 2003, the market value of foreign securities (in thousands) represents 12.65% of total net assets. The Fund's foreign portfolio was diversified as follows: VALUE PERCENT ============ ======= Canada $ 184,588 1.65% United Kingdom 157,091 1.41 Ireland 154,922 1.39 Switzerland 91,525 0.82 France 77,281 0.69 Japan 68,506 0.61 Hong Kong 62,587 0.56 Netherlands 61,589 0.55 Italy 52,104 0.47 Singapore 52,066 0.47 Germany 47,410 0.42 Spain 47,310 0.42 Sweden 47,048 0.42 Norway 39,885 0.36 VALUE PERCENT ============ ======= Australia $ 34,297 0.31% South Korea 32,869 0.30 Denmark 32,800 0.29 Luxembourg 29,286 0.26 New Zealand 25,501 0.23 India 24,075 0.22 Austria 18,680 0.17 China 18,279 0.16 Mexico 16,249 0.15 Finland 16,013 0.14 Belgium 9,398 0.08 Greece 6,729 0.06 Chile 4,849 0.04 ------------ ------- Total Foreign Portfolio $ 1,412,937 12.65% ============ ======= 1-800-922-6769 30 (e) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. These securities are valued in good faith by the Board of Trustees. At December 31, 2003, these securities (in thousands) amounted to $31,574, which represents 0.3% of total net assets. Additional information on these securities is as follows:
ACQUISITION SHARES/ SECURITY DATES PAR (000) COST (000) VALUE (000) - ------------------------------------------------------------------------------------------- Locus Discovery, Series D Pfd. 09/05/01 1,875 $ 7,500 $ 7,500 Security Capital European Realty 08/20/98-11/12/99 299 5,985 5,315 Aquila 04/23/01-12/19/01 1,270 28,382 8,941 Perlegen Sciences 03/30/01 1,250 5,000 1,950 SYRRX, Series C 01/08/01 461 2,997 2,397 The Investment Company of China 10/22/92-03/15/00 200 1,690 246 Microdose 11/24/00 360 2,005 180 Gadzooks 5.00% Convertible 10/08/03 $ 6,000 6,000 4,485 NeoPlanet, Series A 02/12/99 250 2,000 29 NeoPlanet, Series B 02/17/00 53 641 11 Vital Stream, Cl. B 10/03/01-09/30/02 829 290 520 --------- ----------- $ 62,490 $ 31,574 ========= ===========
31 Columbia Acorn International >Major Portfolio Changes in the Fourth Quarter (Unaudited) NUMBER OF SHARES --------------------------- 09/30/03 12/31/03 Additions - ---------------------------------------------------------------------------- EUROPE >GERMANY/AUSTRIA Wienerberger (Austria) 0 300,000 Zapf Creation 240,000 300,000 >NORWAY Den Norske Bank 2,190,000 2,610,000 >SWEDEN Hexagon 250,000 293,000 >FRANCE Camaieu 0 34,000 Imerys 0 40,000 >UNITED KINGDOM/IRELAND Business Post 600,000 800,000 Expro International 2,500,000 2,700,000 Intermediate Capital 200,000 300,000 Irish Life & Permanent (Ireland) 1,000,000 1,100,000 Jardine Lloyd Thompson 0 600,000 Kensington 0 1,000,000 Nestor Healthcare 1,360,000 1,520,000 Smith & Nephew 1,400,000 1,550,000 Tullow Oil 6,500,000 8,000,000 >NETHERLANDS AM NV 0 133,000 Sligro Food Group 7,768 362,000 Vopak 800,000 900,000 >ITALY Amplifon 0 90,000 >FINLAND Sponda 0 816,000 >GREECE Intralot 0 465,000 NUMBER OF SHARES --------------------------- 09/30/03 12/31/03 - ---------------------------------------------------------------------------- ASIA >HONG KONG Esprit Holdings 0 1,500,000 >JAPAN Nissin Healthcare 0 260,000 Park 24 0 413,000 Shimano 0 543,000 >SINGAPORE Venture 1,480,000 1,920,000 >INDONESIA PT Perusahaan Gas Negara 0 30,000,000 - ---------------------------------------------------------------------------- LATIN AMERICA >CHILE CorpBanca 0 186,000 - ---------------------------------------------------------------------------- OTHER COUNTRIES >AUSTRALIA/NEW ZEALAND Sky City Entertainment (New Zealand) 2,000,000 4,000,000 Tabcorp Holdings 0 400,000 >CANADA Masonite International 240,000 420,000 Nexen 0 300,000 Patheon 600,000 1,261,000 >UNITED STATES Central European Distribution 19,700 134,600 1-800-922-6769 32 NUMBER OF SHARES --------------------------- 09/30/03 12/31/03 Sales - ---------------------------------------------------------------------------- EUROPE >GERMANY/AUSTRIA Deutsche Boerse 275,000 175,000 Software AG (Austria) 655,000 0 >SWEDEN Castellum 520,000 470,000 >FRANCE/BELGIUM Neopost 500,000 390,000 Omega Pharma (Belgium) 445,000 244,000 >UNITED KINGDOM/IRELAND Hit Entertainment 3,650,000 3,500,000 Marconi 1,075,000 0 Torex 700,000 0 Xstrata 800,000 0 >SPAIN Gamesa 530,000 435,000 Zardoya Otis 376,000 0 >NETHERLANDS Hunter Douglas 545,000 433,000 OPG Groep 377,000 349,000 >LUXEMBOURG Tenaris 424,000 400,000 >FINLAND Amer Group 384,000 185,000 >ITALY Parmalat Finanziaria 2,700,000 0 Saipem 1,500,000 0 NUMBER OF SHARES --------------------------- 09/30/03 12/31/03 - ---------------------------------------------------------------------------- ASIA >HONG KONG TVB 3,000,000 2,000,000 >INDIA Housing Development Finance 2,000,000 1,700,000 >JAPAN ARRK 220,000 180,000 >SOUTH KOREA Cheil Communications 70,000 0 S1 Corporation 500,000 0 >SINGAPORE Comfort Group 27,000,000 1,500,000 >TAIWAN Chroma Ate 6,582,972 0 - ---------------------------------------------------------------------------- OTHER COUNTRIES >AUSTRALIA/NEW ZEALAND Computershare 5,000,000 0 Jupiters 2,500,000 0 The Warehouse Group (New Zealand) 3,500,000 2,000,000 >CANADA Altagas 728,100 0 Kingsway Financial 600,000 0 Moore - Wallace 450,000 0 33 Columbia Acorn International >Statement of Investments, December 31, 2003 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 95.5% - ---------------------------------------------------------------------------- EUROPE: 61.0% >GERMANY/AUSTRIA: 7.8% 335,000 Rhoen-Klinikum Pfd. $ 18,783 300,000 Rhoen-Klinikum 15,497 HOSPITAL MANAGEMENT 500,000 GFK 14,376 MARKET RESEARCH SERVICES 550,000 Hugo Boss Designs 11,053 FASHION APPAREL 300,000 Bilfinger Berger 10,206 CONSTRUCTION & RELATED SERVICES 175,000 Deutsche Boerse 9,558 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 200,000 Flughafen Wien (Austria) 9,374 VIENNA AIRPORT AUTHORITY 325,000 Kali & Salz 8,910 POTASH PRODUCTS, FERTILIZERS, SALT & WASTE MANAGEMENT 300,000 Wienerberger (Austria) 8,006 BRICKS & CLAY ROOFING TILES 1,000,000 Takkt 7,434 MAIL ORDER RETAILER OF OFFICE & WAREHOUSE DURABLES 300,000 Zapf Creation 7,231 TOY MANUFACTURER 75,000 Beru 4,886 AUTO PARTS & ELECTRONICS 35,300 Mayr-Melnhof (Austria) 4,239 CARTONBOARD & PACKAGING 200,000 Lion Bioscience (b) 816 BIOINFORMATICS - ---------------------------------------------------------------------------- 130,369 >DENMARK: 0.7% 100,000 Kobenhavns Lufthavne 11,709 COPENHAGEN AIRPORT AUTHORITY - ---------------------------------------------------------------------------- >NORWAY: 2.5% 2,610,000 Den Norske Bank 17,384 LARGEST NORWEGIAN BANK 566,000 Orkla 12,651 DIVERSIFIED CONSUMER GOODS 1,200,000 Tomra Systems 7,219 REVERSE VENDING MACHINES 220,000 Ekornes 4,059 NICHE FURNITURE MANUFACTURER - ---------------------------------------------------------------------------- 41,313 >FINLAND: 1.5% 385,000 Jaakko Poyry 10,575 ENGINEERING CONSULTANTS IN FORESTRY, ENERGY 185,000 Amer Group 8,007 BRANDED SPORTING GOODS 816,000 Sponda 6,796 OFFICE & WAREHOUSE PROPERTY COMPANY - ---------------------------------------------------------------------------- 25,378 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >SWEDEN: 3.2% 2,800,000 Intrum Justitia $ 14,793 RECEIVABLES MANAGEMENT & DEBT COLLECTION 470,000 Castellum 11,108 OFFICE, WAREHOUSE & RETAIL PROPERTY COMPANY 950,000 Nobia 9,906 KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION 400,000 Munters 9,676 MOISTURE & HUMIDITY CONTROL 293,000 Hexagon 7,984 DIVERSIFIED ENGINEERING - ---------------------------------------------------------------------------- 53,467 >FRANCE/BELGIUM: 6.5% 390,000 Neopost 19,655 POSTAGE METER MACHINES 575,000 Euronext 14,540 TRADING SERVICES FOR FINANCIAL MARKETS 270,000 Essilor International 13,948 EYEGLASS LENSES 500,000 Fininfo 11,774 DATA FEEDS FOR FRENCH BANKS & BROKERS 130,000 Bacou Dalloz 10,155 SAFETY EQUIPMENT 40,000 Imerys 8,411 INDUSTRIAL MINERALS PRODUCER 90,000 Bonduelle 8,216 PRODUCER OF CANNED, FROZEN & FRESH VEGETABLES 244,000 Omega Pharma (Belgium) 7,747 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 90,000 Vallourec 7,484 SEAMLESS TUBES 50,000 Groupe Bourbon 5,153 FOOD RETAILER 34,000 Camaieu 2,635 WOMEN'S APPAREL RETAILER - ---------------------------------------------------------------------------- 109,718 >GREECE: 0.5% 465,000 Intralot 9,069 LOTTERY & GAMING SYSTEMS & SERVICES - ---------------------------------------------------------------------------- >UNITED KINGDOM/IRELAND: 17.8% 2,310,000 Anglo Irish Bank (Ireland) 36,410 SMALL BUSINESS & MIDDLE MARKET BANKING 1,300,000 Kerry Group (Ireland) 24,405 FOOD INGREDIENTS 3,100,000 Grafton Group (Ireland) 21,365 BUILDERS, WHOLESALERS & DIY RETAILING 3,500,000 Hit Entertainment 18,399 TELEVISION SHOWS FOR CHILDREN 1,100,000 Irish Life & Permanent (Ireland) 17,740 SAVINGS PRODUCTS 1,300,000 Exel 17,137 GLOBAL LOGISTICS & FREIGHT FORWARDING 5,800,000 RPS Group 15,245 ENVIRONMENTAL CONSULTING 120,000 Depfa Bank (Ireland) 15,135 INTERNATIONAL PUBLIC SECTOR FINANCE 2,700,000 Expro International 13,013 OFFSHORE OIL FIELD SERVICES 1-800-922-6769 34 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >UNITED KINGDOM/IRELAND--CONTINUED 1,550,000 Smith & Nephew $ 12,983 MEDICAL EQUIPMENT & SUPPLIES 600,000 Cobham 12,499 AEROSPACE 8,000,000 Tullow Oil 12,246 OIL & GAS PRODUCER 1,600,000 Bunzl 12,188 DISTRIBUTION OF DISPOSABLE PRODUCTS TO FOOD INDUSTRY 1,420,000 Spectris 10,792 ELECTRONIC INSTRUMENTS & CONTROLS 1,400,000 Euro Money Institutional Investor 9,790 FINANCIAL PUBLICATIONS 740,000 Jurys Doyle Hotel (Ireland) 9,044 HOTEL GROUP 800,000 Business Post 7,369 PARCEL & EXPRESS MAIL SERVICE 1,010,000 Burberry 6,590 APPAREL RETAILER 1,000,000 Kensington 5,846 NON-CONFORMING MORTGAGE COMPANY 300,000 Intermediate Capital 5,655 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 600,000 Jardine Lloyd Thompson 5,650 BUSINESS INSURANCE BROKER 1,520,000 Nestor Healthcare 5,589 HEALTHCARE STAFFING COMPANY 450,000 McCarthy & Stone 4,153 BUILDER OF RETIREMENT APARTMENTS - ---------------------------------------------------------------------------- 299,243 >SWITZERLAND: 6.4% 40,000 Geberit International 19,656 PLUMBING SUPPLIES 80,000 Kaba Holdings 16,164 BUILDING SECURITY SYSTEMS 30,000 Givaudan 15,566 INDUSTRIAL FRAGRANCES & FLAVORS 33,500 BKW Energie 12,969 ELECTRIC UTILITY 13,000 Synthes-Stratec 12,860 PRODUCTS FOR ORTHOPEDIC SURGERY 40,000 Schindler (b) 9,763 ELEVATOR MANUFACTURER & SERVICE PROVIDER 3,000 Pargesa 8,001 INDUSTRIAL & MEDIA CONGLOMERATE 18,000 Sika 7,769 CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION 110,000 Bachem 5,641 PEPTIDES - ---------------------------------------------------------------------------- 108,389 >ITALY: 2.2% 1,200,000 Autogrill (b) 17,145 RESTAURANTS & CATERING FOR TRAVELERS 212,000 Davide Campari 10,284 BEVERAGES 1,700,000 De Longhi 7,111 CONSUMER APPLIANCES FOR HEATING, AIR CONDITIONING & COOKING NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 90,000 Amplifon $ 2,557 HEARING AID RETAILER - ---------------------------------------------------------------------------- 37,097 >SPAIN: 3.3% 2,000,000 Abengoa 14,540 ENGINEERING & CONSTRUCTION 435,000 Gamesa 14,299 WIND TURBINES 1,139,100 Cortefiel 10,477 APPAREL RETAILER 600,000 Red Electrica 9,828 SPANISH POWER GRID 400,000 Prosegur 6,501 SECURITY GUARDS - ---------------------------------------------------------------------------- 55,645 >NETHERLANDS: 7.0% 433,000 Hunter Douglas 20,246 DECORATIVE WINDOW COVERINGS 900,000 Vopak 16,896 OIL & CHEMICAL STORAGE 349,000 OPG Groep 15,852 PHARMACEUTICAL WHOLESALER & RETAILER 687,000 United Services Group 15,710 TEMPORARY STAFFING SERVICES 585,000 IM Tech 15,169 TECHNICAL ENGINEERING 362,000 Sligro Food Group 11,152 FOOD SERVICE & WHOLESALING 420,000 Aalberts Industrie 10,864 FLOW CONTROL & HEAT TREATMENT 200,000 Fugro 10,281 SURVEY & GPS SERVICES 133,000 Am NV 1,032 PROPERTY DEVELOPER - ---------------------------------------------------------------------------- 117,202 >LUXEMBOURG: 1.6% 400,000 Tenaris (b) 13,328 STEEL PIPE FOR OIL WELLS & PIPELINES 1,280,000 SES Global 12,902 SATELLITE BROADCASTING SERVICES - ---------------------------------------------------------------------------- 26,230 ----------- EUROPE: TOTAL 1,024,829 - ---------------------------------------------------------------------------- ASIA: 22.4% >HONG KONG/CHINA: 6.6% 35,000,000 Global Bio-Chem Technology Group 21,639 CORN-BASED BIOCHEMICAL PRODUCTS 5,000,000 Techtronic Industries 13,846 POWER TOOL MANUFACTURER 2,000,000 TVB 10,098 TELEVISION PROGRAMMING & BROADCASTING 20,000,000 Sinotrans (China) 9,016 INTEGRATED LOGISTICS IN CHINA 4,000,000 Hong Kong Exchanges & Clearing 8,656 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 11,000,000 Zhejiang Expressway 7,722 TOLL ROAD BUILDER & OPERATOR 35 Columbia Acorn International >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >HONG KONG/CHINA--CONTINUED 12,000,000 Jiangsu Expressway $6,414 TOLL ROAD BUILDER & OPERATOR 15,000,000 Linmark 6,134 APPAREL/HARD GOODS SOURCING AGENT 14,500,000 Ngai Lik Industrial 5,977 CHINA BASED ELECTRONICS CONTRACT MANUFACTURER 8,000,000 Hainan Meilan Airport 5,564 CHINESE AIRPORT OPERATOR 5,000,000 Lianhua Supermarket (b) 5,281 CHINESE SUPERMARKET CHAIN 1,500,000 Esprit Holdings 4,985 GLOBAL APPAREL BRAND MANAGER 25,000,000 Lerado Group 4,830 BABY PARAPHERNALIA 803,000 Clear Media (b) 517 CHINA'S LARGEST OUTDOOR ADVERTISER - ---------------------------------------------------------------------------- 110,679 >JAPAN: 8.5% 190,000 USS 13,443 USED CAR AUCTIONEER 180,000 ARRK 11,643 PROTOTYPES & MOLDS FOR NEW PRODUCT DEVELOPMENT 1,031,000 Toyo Technica 11,404 VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION 679,900 Ushio 11,290 INDUSTRIAL LIGHT SOURCES 543,000 Shimano 11,252 BICYCLE COMPONENTS & FISHING TACKLE 346,300 Daito Trust Construction 10,279 APARTMENT BUILDER 413,000 Park 24 9,464 PARKING LOT OPERATOR 135,000 Sugi Pharmacy 9,337 DRUGSTORES 700,000 NIFCO 8,788 MOLDED PLASTIC COMPONENTS 172,000 Uni-Charm 8,461 INFANT HYGIENE & FEMININE CARE PRODUCTS 35,000 Bellsystem24 7,155 CALL CENTERS 150,000 Eneserve 6,020 POWER GENERATORS 260,000 Nissin Healthcare 5,291 MEAL PREPARATION 385,000 Daiseki 5,257 WASTE DISPOSAL & RECYCLING 325,000 Aderans 5,245 HAIR PIECES 1,150,000 OMC Card (b) 4,669 CREDIT CARD ISSUER 100,000 Taisei Lamick 2,184 PACKAGING MATERIALS & MACHINERY 7,000 Kappa Create 591 SUSHI CHAIN RESTAURANT OPERATOR - ---------------------------------------------------------------------------- 141,773 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >TAIWAN: 1.0% 1,130,000 ASE Test (b) $16,916 SEMICONDUCTOR PACKAGING & TEST SERVICES - ---------------------------------------------------------------------------- >SOUTH KOREA: 2.2% 355,000 Hyundai Mobis 19,098 AUTO PARTS 165,000 Yuhan 9,389 ETHICAL DRUG PRODUCER 100,000 Samsung Fire & Marine 5,749 NON-LIFE INSURANCE 315,000 Samyoung Heat Exchange 2,522 POWER PLANT RELATED MACHINERY - ---------------------------------------------------------------------------- 36,758 >INDONESIA: 0.3% 30,000,000 PT Perusahaan Gas Negara (b) 5,521 GAS PIPELINE OPERATOR - ---------------------------------------------------------------------------- >SINGAPORE: 2.4% 1,920,000 Venture 22,611 ELECTRONIC CONTRACT MANUFACTURER 9,000,000 Sembcorp Logistics 10,599 LOGISTIC SERVICES FOR MARINE TRANSPORT 15,000,000 Comfort Group 7,198 TAXI SERVICE - ---------------------------------------------------------------------------- 40,408 >INDIA: 1.4% 1,700,000 Housing Development Finance 24,075 MORTGAGE LOAN PROVIDER ------- ASIA: TOTAL 376,130 - ---------------------------------------------------------------------------- LATIN AMERICA: 1.4% >MEXICO: 1.1% 600,000 Grupo Aeroportuario 10,560 MEXICAN AIRPORT AUTHORITY 3,000,000 Consorcio ARA (b) 7,449 LOW/MEDIUM INCOME HOUSE BUILDER - ---------------------------------------------------------------------------- 18,009 >CHILE: 0.3% 186,000 CorpBanca (b) 4,849 CHILE'S 3RD LARGEST LOCAL BANK ------- LATIN AMERICA: TOTAL 22,858 - ---------------------------------------------------------------------------- OTHER COUNTRIES: 10.7% >AUSTRALIA/NEW ZEALAND: 3.6% 3,000,000 Billabong International 16,106 SURFWEAR APPAREL MANUFACTURER 4,000,000 Sky City Entertainment (New Zealand) 12,082 CASINO/ENTERTAINMENT COMPLEX 2,500,000 Lion Nathan 11,370 AUSTRALIAN BEER BREWER/DISTRIBUTOR 350,000 Perpetual Trustees 11,227 INVESTMENT MANAGEMENT 2,000,000 The Warehouse Group (New Zealand) 6,709 WAREHOUSE CLUB 400,000 Tabcorp Holdings 3,382 AUSTRALIA'S LARGEST GAMING COMPANY - ---------------------------------------------------------------------------- 60,876 1-800-922-6769 36 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >CANADA: 6.8% 1,000,000 Corus Entertainment $21,279 TV PROGRAMMING & RADIO STATIONS 365,000 Talisman Energy 20,764 OIL & GAS PRODUCER 300,000 Power Financial 11,498 LIFE INSURANCE & MUTUAL FUNDS 1,261,000 Patheon (b) 11,358 PHARMACEUTICAL CONTRACT MANUFACTURER 420,000 Masonite International (b) 11,245 DOOR MANUFACTURER 300,000 Nexen 10,892 OIL & GAS PRODUCER 5,000,000 Esprit Exploration (b) 10,756 NATURAL GAS PRODUCER 700,000 Shawcor 8,444 OIL & GAS PIPELINE PRODUCTS 450,000 Intrawest 8,322 OWNER/OPERATOR OF SKI RESORTS - ---------------------------------------------------------------------------- 114,558 >UNITED STATES: 0.3% 134,600 Central European Distribution (b) 4,253 SPIRITS & WINE DISTRIBUTION - ---------------------------------------------------------------------------- ------- OTHER: TOTAL 179,687 TOTAL COMMON STOCKS AND OTHER --------- EQUITY-LIKE SECURITIES: 95.5% 1,603,504 (COST: $1,163,943) PRINCIPAL AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 3.8% $ 33,000 Toyota Motor Credit 1.02% Due 1/06/04 $32,995 30,563 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 1/15/06, Market Value $31,176 (repurchase proceeds: $30,564) 30,563 - ---------------------------------------------------------------------------- (AMORTIZED COST: $63,558) 63,558 --------- TOTAL INVESTMENTS (D): 99.3% 1,667,062 (COST: $1,227,501) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.7% 11,270 ---------- TOTAL NET ASSETS: 100% $1,678,332 ============================================================================ ________________________________________________________________________________ >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investment was $1,230,952 and net unrealized appreciation was $436,110 consisting of gross unrealized appreciation of $488,906 and gross unrealized depreciation of $52,796. (b) Non-income producing security. (c) On December 31, 2003, the fund did not have any investments in affiliate companies. There were sales proceeds of $1,187, resulting in net realized losses of $2,588 in affiliate companies during the year ended December 31, 2003. There was no other investment activity. (d) On December 31, 2003, the Fund's total investments were denominated in currencies as follows: % OF CURRENCY VALUE NET ASSETS - ---------------------------------------------------------------------------- Euro $621,599 37.0% British Pounds 175,144 10.4 Japanese Yen 141,773 8.5 Canadian Dollars 114,682 6.8 Hong Kong Dollars 110,680 6.6 Swiss Francs 108,389 6.5 Other currencies less than 5% of total net assets 394,795 23.5 ---------- ------- $1,667,062 99.3% ========== ======= 37 Columbia Acorn International >Portfolio Diversification At December 31, 2003, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE (000) PERCENT - ---------------------------------------------------------------------------- >INFORMATION TECHNOLOGY Business Information and Marketing Services $48,550 2.9% Television Programming 39,678 2.4 Financial Processors 32,754 1.9 Contract Manufacturing 28,588 1.7 Instrumentation 23,012 1.4 Semiconductors and Related Equipment 16,916 1.0 Satellite Broadcasting 12,902 0.8 Television Broadcasting 10,098 0.6 Publishing 9,790 0.6 Advertising 517 0.0 - ---------------------------------------------------------------------------- 222,805 13.3 >HEALTHCARE Medical Equipment 39,791 2.4 Services 34,479 2.1 Hospital Management 34,280 2.0 Pharmaceuticals 20,747 1.2 Biotechnology/ Drug Delivery 5,641 0.3 - ---------------------------------------------------------------------------- 134,938 8.0 >CONSUMER GOODS/SERVICES Food 83,216 5.0 Retail 48,571 2.9 Furniture and Textiles 45,456 2.7 Durables Goods 37,095 2.2 Apparels 33,293 2.0 Beverage 21,654 1.3 Other Consumer Services 19,539 1.2 Restaurants 17,736 1.1 Consumer Goods Distribution 17,696 1.0 Travel 17,366 1.0 Casinos 15,464 0.9 Nondurables 10,645 0.6 Gaming 9,069 0.5 Leisure Products 8,007 0.5 Other Entertainment 7,231 0.4 - ---------------------------------------------------------------------------- 392,038 23.3 >FINANCE Banks 73,778 4.4 Insurance 29,139 1.7 Other Finance Companies 26,294 1.6 Savings and Loans 24,075 1.4 Money Management 22,725 1.4 Credit Cards 4,669 0.3 - ---------------------------------------------------------------------------- 180,680 10.8 VALUE (000) PERCENT - ---------------------------------------------------------------------------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $113,640 6.8% Industrial Materials 76,536 4.6 Outsourcing and Training Services 64,220 3.8 Conglomerates 41,389 2.5 Electrical Components 38,088 2.3 Construction 35,772 2.1 Machinery 29,396 1.7 Speciality Chemicals 23,335 1.4 Industrial Distribution 21,365 1.3 Steel 20,812 1.2 - ---------------------------------------------------------------------------- 464,553 27.7 >ENERGY/MINERALS Oil/Gas Producers 54,658 3.2 Oil Services 31,738 1.9 Independent Power 6,020 0.4 Refining/Marketing/Distribution 5,521 0.3 - ---------------------------------------------------------------------------- 97,937 5.8 >OTHER INDUSTRIES Transportation 58,541 3.5 Real Estate 29,215 1.7 Regulated Utilities 22,797 1.4 - ---------------------------------------------------------------------------- 110,553 6.6 TOTAL COMMON STOCKS AND --------- ------- OTHER EQUITY-LIKE SECURITIES: 1,603,504 95.5 SHORT-TERM OBLIGATIONS: 63,558 3.8 --------- ------- TOTAL INVESTMENTS: 1,667,062 99.3 CASH AND OTHER ASSETS LESS LIABILITIES: 11,270 0.7 ---------- ------- TOTAL NET ASSETS: $1,678,332 100.0% ============================================================================== 1-800-922-6769 38 Columbia Acorn USA >Major Portfolio Changes in the Fourth Quarter (Unaudited) NUMBER OF SHARES --------------------- 09/30/03 12/31/03 Additions - ---------------------------------------------------------------------------- INFORMATION Andrew 100,000 480,000 AnswerThink Consulting 670,000 1,005,500 Commonwealth Telephone 293,800 363,800 Crown Castle International 955,000 1,005,000 DoubleClick 0 925,600 Igate Capital 0 200,000 Integrated Circuit Systems 175,300 365,300 Kronos 221,100 331,650 Spanish Broadcasting System 150,000 603,200 Symmetricon 0 270,500 Unova 115,000 180,000 - ---------------------------------------------------------------------------- HEALTH CARE CTI Molecular Imaging 178,900 245,000 Enzon 211,400 311,500 First Health Group 714,000 744,000 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Aeropostale 150,500 290,500 Central Parking 0 181,700 Coinstar 85,000 435,000 Leapfrog Enterprises 0 50,000 Petco Animal Supplies 25,000 95,000 Winn Dixie Stores 0 710,000 - ---------------------------------------------------------------------------- FINANCE HCC Insurance Holdings 350,000 430,000 TCF Financial 79,500 131,500 United National Group 0 71,400 - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Esco Technologies 59,000 282,000 Gibraltar Steel 0 50,000 Pentair 0 63,400 - ---------------------------------------------------------------------------- ENERGY/MINERALS FMC Technologies 166,700 401,700 Newpark Resources 651,000 905,600 Quicksilver 208,800 305,000 Western Gas 123,000 136,000 - ---------------------------------------------------------------------------- OTHER INDUSTRIES Northeast Utilities 0 90,000 39 Columbia Acorn USA >Statement of Investments, December 31, 2003 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- COMMON STOCKS: 93.4% - ---------------------------------------------------------------------------- INFORMATION: 38.7% >BROADCASTING: 2.7% 333,100 Salem Communications (b) $9,034 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 603,200 Spanish Broadcasting (b) 6,334 SPANISH LANGUAGE RADIO STATIONS 138,500 Gray Television 2,094 MID MARKET AFFILIATED TV STATIONS 57,000 Saga Communications (b) 1,056 RADIO STATIONS IN SMALL & MID-SIZED CITIES - ---------------------------------------------------------------------------- 18,518 >TELEVISION PROGRAMMING: 0.7% 600,000 Mediacom Communications (b) 5,202 CABLE TELEVISION FRANCHISES - ---------------------------------------------------------------------------- >TELECOMMUNICATIONS/WIRELINE COMMUNICATIONS: 2.8% 363,800 Commonwealth Telephone (b) 13,733 RURAL PHONE FRANCHISES & CLEC 480,000 Andrew (b) 5,525 WIRELESS INFRASTRUCTURE EQUIPMENT - ---------------------------------------------------------------------------- 19,258 >TELECOMMUNICATION EQUIPMENT: 0.3% 270,500 Symmetricom (b) 1,969 NETWORK TIMING & SYNCHRONIZATION DEVICES - ---------------------------------------------------------------------------- >MOBILE COMMUNICATIONS: 4.9% 927,000 Western Wireless (b) 17,020 RURAL CELLULAR PHONE SERVICES 1,005,000 Crown Castle International (b) 11,085 COMMUNICATION TOWERS IN USA & UK 60,000 Telephone & Data Systems 3,753 CELLULAR & TELEPHONE SERVICES 182,700 COMARCO (b) 2,010 WIRELESS NETWORK TESTING - ---------------------------------------------------------------------------- 33,868 >COMPUTER SERVICES: 2.7% 786,000 RCM Technologies (b)(c) 5,793 TECHNOLOGY ENGINEERING SERVICES 1,005,500 AnswerThink Consulting (b) 5,581 IT INTEGRATOR FOR FORTUNE 2000 232,000 American Management Systems (b) 3,496 SOFTWARE DEVELOPMENT SERVICES 200,000 Igate Capital (b) 1,570 TECHNOLOGY STAFFING SERVICES 149,600 Ciber (b) 1,296 SOFTWARE SERVICES & STAFFING 256,600 Analysts International (b) 865 TECHNOLOGY STAFFING SERVICES - ---------------------------------------------------------------------------- 18,601 >BUSINESS/CONSUMER SOFTWARE: 13.6% 527,600 Micros Systems (b) 22,877 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 974,000 JDA Software (b) 16,081 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 1,330,000 Novell (b) 13,992 SECURITY & IDENTITY MANAGEMENT SOFTWARE NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 331,650 Kronos (b) $13,137 LABOR MANAGEMENT SOLUTIONS 304,991 PeopleSoft (b) 6,954 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 473,500 MRO Software (b) 6,373 ENTERPRISE MAINTENANCE SOFTWARE 653,200 E.Piphany (b) 4,710 CRM SOFTWARE 206,000 Group 1 Software (b) 3,630 ADDRESS VERIFICATION SOFTWARE 140,000 SPSS (b) 2,503 STATISTICAL ANALYSIS SOFTWARE 100,000 Aspect Communications (b) 1,576 CALL CENTER SOFTWARE 64,000 THQ (b) 1,082 ENTERTAINMENT SOFTWARE 65,000 MAPICS (b) 851 MID MARKET ERP SOFTWARE 34,000 Activision (b) 619 ENTERTAINMENT SOFTWARE - ---------------------------------------------------------------------------- 94,385 >INTERNET: 1.4% 925,600 DoubleClick (b) 9,460 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA - ---------------------------------------------------------------------------- >TRANSACTION PROCESSORS: 1.8% 211,640 Global Payments 9,972 CREDIT CARD PROCESSOR 140,000 Euronet Worldwide (b) 2,520 ATM PROCESSOR 21,000 Pegasus Systems (b) 220 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY - ---------------------------------------------------------------------------- 12,712 >BUSINESS INFORMATION/MARKETING SERVICES/PUBLISHING: 1.2% 102,800 Getty Images (b) 5,153 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA 110,000 Navigant Consulting (b) 2,075 CONSULTING FIRM 58,600 Information Holdings (b) 1,295 PATENT & OTHER BUSINESS INFORMATION - ---------------------------------------------------------------------------- 8,523 >CONTRACT MANUFACTURING: 0.3% 140,000 Plexus (b) 2,404 ELECTRONIC MANUFACTURING SERVICES - ---------------------------------------------------------------------------- >INSTRUMENTATION: 0.3% 60,000 Trimble Navigation (b) 2,234 GPS-BASED INSTRUMENTS - ---------------------------------------------------------------------------- >COMPUTER HARDWARE/SEMICONDUCTORS/ RELATED EQUIPMENT: 6.0% 186,000 Zebra Technologies (b) 12,345 BAR CODE PRINTERS 365,300 Integrated Circuit Systems (b) 10,407 SILICON TIMING DEVICES 424,100 Seachange International (b) 6,531 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 1-800-922-6769 40 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >COMPUTER HARDWARE/SEMICONDUCTORS/ RELATED EQUIPMENT--CONTINUED 180,000 Unova (b) $4,131 BARCODE & WIRELESS LAN SYSTEMS 70,000 Littelfuse (b) 2,017 LITTLE FUSES 50,000 Avocent (b) 1,826 COMPUTER CONTROL SWITCHES 200,000 Cable Design Technologies (b) 1,798 NETWORKING & SPECIALTY CABLES 40,000 Rogers (b) 1,765 PCB LAMINATES & HIGH PERFORMANCE FOAMS 70,000 IXYS (b) 654 POWER SEMICONDUCTORS - ---------------------------------------------------------------------------- 41,474 ----------- INFORMATION: TOTAL 268,608 - ---------------------------------------------------------------------------- HEALTH CARE: 14.6% >BIOTECHNOLOGY/DRUG DELIVERY: 2.9% 720,000 Nektar Therapeutics (b) 9,799 PULMONARY DRUG DELIVERY 311,500 Enzon (b) 3,738 POLYMER DELIVERY TECHNOLOGY FOR IMPROVED DRUGS 245,000 Applera Celera Genomics (b) 3,408 DIAGNOSTICS & DRUG DEVELOPMENT 375,000 Locus Discovery, Series D Pfd. (b)(d) 1,500 HIGH THROUGHPUT RATIONAL DRUG DESIGN 154,000 SYRRX, Series C (b)(d) 801 X-RAY CRYSTALLOGRAPHY 32,600 Applied Molecular Evolution (b) 580 MONOCLONAL ANTIBODIES VIA MOLECULAR EVOLUTION 363,636 Metabolex, Series F (b)(d) 53 DRUGS FOR DIABETES - ---------------------------------------------------------------------------- 19,879 >MEDICAL EQUIPMENT: 5.3% 573,000 Edwards Lifesciences (b) 17,236 HEART VALVES 220,000 Viasys Healthcare (b) 4,532 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 245,000 CTI Molecular Imaging (b) 4,143 MEDICAL DIAGNOSTIC DEVICES 98,500 ICU Medical (b) 3,377 INTRAVENOUS THERAPY PRODUCTS 135,600 VISX (b) 3,139 LASER EYE SURGERY 66,300 Diagnostic Products 3,044 IMMUNODIAGNOSTIC KITS 345,000 Novoste (b) 1,653 RADIATION CATHETERS FOR IN-STENT RESTENOSIS - ---------------------------------------------------------------------------- 37,124 >MEDICAL SUPPLIES: 1.2% 222,800 Techne (b) 8,417 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES - ---------------------------------------------------------------------------- >SERVICES: 5.2% 744,000 First Health Group (b) 14,478 PPO NETWORK NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 423,800 NDCHealth Group $10,858 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 246,800 Lincare Holdings (b) 7,411 HOME HEALTH CARE SERVICES 100,000 Dendrite International (b) 1,567 SOFTWARE FOR PHARMACEUTICAL SALES FORCE 40,000 Charles River Laboratories (b) 1,373 PHARMACEUTICAL RESEARCH 26,000 Medquist (b) 418 MEDICAL TRANSCRIPTION SERVICES - ---------------------------------------------------------------------------- 36,105 ------- HEALTH CARE: TOTAL 101,525 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 14.2% >-CONSUMER SERVICES: 4.2% 387,000 ITT Educational Services (b) 18,177 POSTSECONDARY DEGREE PROGRAMS 435,000 Coinstar (b) 7,856 OWNER/OPERATOR OF COIN COUNTING MACHINES 181,700 Central Parking 2,713 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES 48,900 Bally Total Fitness (b) 342 NATIONAL CHAIN OF FITNESS CENTERS - ---------------------------------------------------------------------------- 29,088 >APPAREL: 1.2% 197,600 Steven Madden (b) 4,031 WHOLESALER/RETAILER OF FASHION FOOTWEAR 64,000 Coach (b) 2,416 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 59,200 Oxford Industries 2,006 BRANDED & PRIVATE LABEL APPAREL - ---------------------------------------------------------------------------- 8,453 >ENTERTAINMENT/LEISURE PRODUCTS: 1.0% 91,300 International Speedway Motors 4,077 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 70,000 Action Performance 1,372 MOTORSPORT COLLECTIBLES & MERCHANDISING 50,000 Leapfrog Enterprises (b) 1,327 EDUCATIONAL TOYS - ---------------------------------------------------------------------------- 6,776 >DURABLE GOODS: 0.2% 30,000 American Woodmark 1,651 KITCHEN CABINETS - ---------------------------------------------------------------------------- >FURNITURE: 0.5% 85,000 Herman Miller 2,063 OFFICE FURNITURE 20,000 Mohawk Industries (b) 1,411 CARPET & FLOORING - ---------------------------------------------------------------------------- 3,474 >NONDURABLES: 1.4% 167,200 Scotts Company (b) 9,892 CONSUMER LAWN & GARDEN PRODUCTS - ---------------------------------------------------------------------------- 41 Columbia Acorn USA >Statement of Investments, continued NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >RETAIL: 5.7% 290,500 Aeropostale (b) $7,966 MALL BASED TEEN RETAILER 710,000 Winn Dixie Stores 7,064 SUPERMARKETS IN THE SOUTHEAST US 343,750 Christopher & Banks 6,713 WOMEN'S APPAREL RETAILER 116,600 Urban Outfitters (b) 4,320 MULTI CHANNEL LIFESTYLE RETAILER 130,000 Abercrombie & Fitch (b) 3,212 TEEN APPAREL RETAILER 95,000 Petco Animal Supplies (b) 2,893 PET SUPPLIES & SERVICES 50,000 Michaels Stores 2,210 CRAFT & HOBBY SPECIALTY RETAILER 50,000 Ann Taylor (b) 1,950 WOMEN'S APPAREL RETAILER 95,000 Genesco (b) 1,437 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER 547,000 Gadzooks (b)(c) 848 TEEN APPAREL RETAILER 20,000 Chico's FAS (b) 739 WOMEN'S SPECIALTY RETAIL - ---------------------------------------------------------------------------- 39,352 ----------- CONSUMER GOODS/SERVICES: TOTAL 98,686 - ---------------------------------------------------------------------------- FINANCE: 10.5% >BANKS: 1.7% 131,500 TCF Financial 6,753 GREAT LAKES BANK 158,125 Chittenden 5,319 VERMONT & WEST MASSACHUSETTS BANK - ---------------------------------------------------------------------------- 12,072 >FINANCE COMPANIES: 4.0% 1,091,500 AmeriCredit (b) 17,388 AUTO LENDING 520,200 World Acceptance (b) 10,357 PERSONAL LOANS - ---------------------------------------------------------------------------- 27,745 >SAVINGS & LOAN: 1.3% 110,000 Downey Financial 5,423 CALIFORNIA HOME LENDER 116,400 Anchor Bancorp Wisconsin 2,898 WISCONSIN THRIFT 16,500 Peoples Bank Bridgeport 538 CONNECTICUT SAVINGS & LOAN - ---------------------------------------------------------------------------- 8,859 >MONEY MANAGEMENT: 0.2% 40,000 SEI Investments 1,219 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT - ---------------------------------------------------------------------------- >INSURANCE: 3.3% 430,000 HCC Insurance Holdings 13,674 AVIATION INSURANCE 17,000 Markel (b) 4,310 SPECIALTY INSURANCE - ---------------------------------------------------------------------------- NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 97,000 Harleysville Group $1,929 COMMERCIAL & PERSONAL LINES INSURANCE 35,000 Philadelphia Consolidated Holding (b) 1,709 SPECIALTY INSURANCE 71,400 United National Group (b) 1,262 SPECIALTY INSURANCE - ---------------------------------------------------------------------------- 22,884 ----------- FINANCE: TOTAL 72,779 - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 6.8% >SPECIALTY CHEMICALS/INDUSTRIAL MATERIALS: 0.6% 95,000 Spartech 2,341 PLASTICS DISTRIBUTION & COMPOUNDING 70,000 Schulman 1,492 PLASTICS DISTRIBUTION & COMPOUNDING - ---------------------------------------------------------------------------- 3,833 >STEEL: 0.2% 50,000 Gibraltar Steel 1,257 STEEL PROCESSING - ---------------------------------------------------------------------------- >INDUSTRIAL DISTRIBUTION: 0.3% 100,000 Nuco2 (b) 1,267 BULK CO2 GAS DISTRIBUTION TO RESTAURANTS 50,000 Airgas 1,074 INDUSTRIAL GAS DISTRIBUTOR - ---------------------------------------------------------------------------- 2,341 >CONSTRUCTION: 0.2% 30,000 Florida Rock Industries 1,645 CONCRETE & AGGREGATES - ---------------------------------------------------------------------------- >MACHINERY: 2.6% 282,000 Esco Technologies (b) 12,309 FILTRATION & TEST EQUIPMENT 63,400 Pentair 2,898 PUMPS, WATER TREATMENT & TOOLS 55,000 Ametek 2,654 AEROSPACE/INDUSTRIAL INSTRUMENTS - ---------------------------------------------------------------------------- 17,861 >WATER: 0.9% 134,000 Cuno (b) 6,034 FILTRATION & FLUIDS CLARIFICATION - ---------------------------------------------------------------------------- >INDUSTRIAL GOODS: 0.0% 10,300 Intermagnetics General (b) 228 SUPERCONDUCTING WIRE - ---------------------------------------------------------------------------- >LOGISTICS: 1.3% 346,000 Hub Group (b) 7,453 TRUCK & RAIL FREIGHT FORWARDER 59,600 Forward Air (b) 1,639 FREIGHT TRANSPORTATION BETWEEN AIRPORTS - ---------------------------------------------------------------------------- 9,092 1-800-922-6769 42 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >INDUSTRIAL SERVICES: 0.7% 206,900 Insurance Auto Auctions (b) $ 2,700 AUTO SALVAGE SERVICES 95,000 Clark/Bardes Consulting (b) 1,828 EXECUTIVE COMPENSATION & BENEFITS CONSULTING - ---------------------------------------------------------------------------- 4,528 ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 46,819 - ---------------------------------------------------------------------------- ENERGY/MINERALS: 7.7% >OIL SERVICES: 2.6% 401,700 FMC Technologies (b) 9,360 OIL & GAS WELL HEAD MANUFACTURER 905,600 Newpark Resources (b) 4,338 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 61,000 Carbo Ceramics 3,126 NATURAL GAS WELL STIMULANTS 135,000 Key Energy Services (b) 1,392 OIL & GAS WELL WORKOVER SERVICES - ---------------------------------------------------------------------------- 18,216 >OIL & GAS PRODUCERS: 3.4% 305,000 Quicksilver (b) 9,851 NATURAL GAS & COAL SEAM GAS PRODUCER 136,000 Western Gas 6,426 OIL & COAL SEAM GAS PRODUCER 215,000 Ultra Petroleum (b) 5,293 NATURAL GAS PRODUCER 82,100 Southwestern Energy (b) 1,962 NATURAL GAS PRODUCER - ---------------------------------------------------------------------------- 23,532 >DISTRIBUTION/MARKETING/REFINING: 1.7% 193,000 Atmos Energy 4,690 NATURAL GAS UTILITY 99,600 Equitable Resources 4,275 NATURAL GAS UTILITY & PRODUCER 75,000 Oneok 1,656 NATURAL GAS UTILITY, MARKETING & PROCESSING 115,000 Aquila (b)(d) 810 ELECTRIC UTILITY HOLDING COMPANY - ---------------------------------------------------------------------------- 11,431 ----------- ENERGY/MINERALS: TOTAL 53,179 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------------- OTHER INDUSTRIES: 0.9% >REAL ESTATE: 0.6% 47,000 The Rouse Company $2,209 REGIONAL SHOPPING MALLS 100,000 Crescent Real Estate Equities 1,713 CLASS A OFFICE BUILDINGS 35,000 Highland Hospitality (b) 381 HOTEL REAL ESTATE INVESTMENT TRUST - ---------------------------------------------------------------------------- 4,303 >REGULATED UTILITIES: 0.3% 90,000 Northeast Utilities 1,815 REGULATED ELECTRIC UTILITY - ---------------------------------------------------------------------------- ----------- OTHER INDUSTRIES: TOTAL 6,118 ----------- TOTAL COMMON STOCKS: 93.4% 647,714 (COST: $489,314) SHORT-TERM OBLIGATIONS: 6.4% $22,000 American General Finance Yield 1.04% Due 1/06/04 21,997 22,529 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 1/15/06, Market Value $22,981 (repurchase proceeds: $22,530) 22,529 - ---------------------------------------------------------------------------- (AMORTIZED COST: $44,526) 44,526 ----------- TOTAL INVESTMENTS: 99.8% 692,240 (COST: $533,840) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.2% 1,034 ----------- TOTAL NET ASSETS: 100% $ 693,274 ============================================================================ ________________________________________________________________________________ >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investment is $533,937 and net unrealized appreciation was $158,303 consisting of gross unrealized appreciation of $190,029 and gross unrealized depreciation of $31,726. (b) Non-income producing security. (c) On December 31, 2003, the fund held the following percentages of the outstanding voting shares of the companies listed below: RCM Technologies 7.38% Gadzooks 5.97% The aggregate cost and value of these companies at December 31, 2003, were $9,999 and $6,641, respectively. Investments in affiliate companies represent 0.96% of total net assets at December 31, 2003. The change in unrealized gain in these companies amounted to $795 during the year ended December 31, 2003. There were purchases of $1,032 in affiliated companies during the year. 43 Columbia Acorn USA >Statement of Investments, continued (d) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. These securities are valued in good faith by the Board of Trustees. At December 31, 2003, these securities (in thousands) amounted to $3,164, which represents 0.5% of total net assets. Additional information on these securities is as follows: ACQUISITION SECURITY DATES SHARES (000) COST (000) VALUE (000) - ------------------------------------------------------------------------------ Locus Discovery, Series D Pfd. 09/05/01 375 $1,500 $1,500 SYRRX, Series C 01/04/01 154 1,001 801 Aquila 10/25/01-11/14/01 115 2,433 810 Metabolex, Series F 02/11/00 364 2,000 53 --------- ------- $6,934 $3,164 ========= ======= 1-800-922-6769 44 Columbia Acorn International Select >Major Portfolio Changes in the Fourth Quarter (Unaudited) NUMBER OF SHARES --------------------- 09/30/03 12/31/03 Additions - ---------------------------------------------------------------------------- EUROPE >NORWAY Den Norske Bank 201,000 209,500 Orkla 19,000 38,000 >SWEDEN Gambro 0 58,000 >UNITED KINGDOM/IRELAND BG Group 200,000 300,000 Irish Life & Permanent (Ireland) 45,000 70,000 Jardine Lloyd Thompson 0 45,000 Smith & Nephew 75,000 90,000 - ---------------------------------------------------------------------------- ASIA >HONG KONG Esprit Holdings 0 200,000 >JAPAN Shimano 0 33,800 Ushio 0 26,000 NUMBER OF SHARES --------------------- 09/30/03 12/31/03 Sales - ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Hit Entertainment 190,000 90,000 Marconi 54,000 0 Reed Elsevier 90,000 0 >NETHERLANDS Wolters Kluwer 28,000 0 >ITALY Parmalat Finanziaria 230,000 0 - ---------------------------------------------------------------------------- ASIA >HONG KONG TVB 210,000 40,000 >JAPAN Terumo 34,000 0 45 Columbia Acorn International Select >Statement of Investments, December 31, 2003 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- COMMON STOCKS: 95.2% - ---------------------------------------------------------------------------- EUROPE: 70.9% >GERMANY: 5.4% 30,000 Rhoen-Klinikum $1,682 HOSPITAL MANAGEMENT 12,000 Deutsche Boerse 655 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS - ---------------------------------------------------------------------------- 2,337 >NORWAY: 5.2% 209,500 Den Norske Bank 1,395 LARGEST NORWEGIAN BANK 38,000 Orkla 849 DIVERSIFIED CONSUMER GOODS - ---------------------------------------------------------------------------- 2,244 >SWEDEN: 1.1% 58,000 Gambro 480 PRODUCTS/SERVICES FOR RENAL CARE - ---------------------------------------------------------------------------- >FRANCE/BELGIUM: 8.5% 25,000 Neopost 1,260 POSTAGE METER MACHINES 22,000 Essilor International 1,136 EYEGLASS LENSES 35,000 Euronext 885 TRADING SERVICES FOR FINANCIAL MARKETS 2,000 Imerys 421 INDUSTRIAL MINERALS PRODUCER - ---------------------------------------------------------------------------- 3,702 >UNITED KINGDOM/IRELAND: 35.6% 160,000 Anglo Irish Bank (Ireland) 2,522 SMALL BUSINESS & MIDDLE MARKET BANKING 90,000 Kerry Group (Ireland) 1,690 FOOD INGREDIENTS 300,000 BG Group 1,536 OIL & GAS PRODUCER 185,000 Compass Group 1,255 INTERNATIONAL CONCESSION & CONTRACT CATERER 170,000 Grafton Group (Ireland) 1,172 BUILDERS, WHOLESALERS & DIY RETAILING 70,000 Irish Life & Permanent (Ireland) 1,129 SAVINGS PRODUCTS 8,700 Depfa Bank (Ireland) 1,097 INTERNATIONAL PUBLIC SECTOR FINANCE 120,000 Bunzl 914 DISTRIBUTION OF DISPOSABLE PRODUCTS TO FOOD INDUSTRY 40,000 Cobham 833 AEROSPACE 90,000 Smith & Nephew 754 MEDICAL EQUIPMENT & SUPPLIES 60,000 British Sky Broadcasting (b) 753 DIGITAL SATELLITE BROADCASTING 45,000 Exel 593 GLOBAL LOGISTICS & FREIGHT FORWARDING 90,000 Hit Entertainment 473 TELEVISION SHOWS FOR CHILDREN 45,000 Jardine Lloyd Thompson 424 BUSINESS INSURANCE BROKER NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- 48,000 Burberry $313 APPAREL RETAILER - ---------------------------------------------------------------------------- 15,458 >SWITZERLAND: 8.8% 9,000 Swatch Group 1,080 WATCH & ELECTRONICS MANUFACTURER 4,000 Schindler (b) 976 ELEVATOR MANUFACTURER & SERVICE PROVIDER 900 Synthes-Stratec 890 PRODUCTS FOR ORTHOPEDIC SURGERY 1,700 Givaudan 882 INDUSTRIAL FRAGRANCES & FLAVORS - ---------------------------------------------------------------------------- 3,828 >ITALY: 2.1% 65,000 Autogrill (b) 929 RESTAURANTS & CATERING FOR TRAVELERS - ---------------------------------------------------------------------------- >SPAIN: 2.3% 60,000 Red Electrica 983 SPANISH POWER GRID - ---------------------------------------------------------------------------- >LUXEMBOURG: 1.9% 25,000 Tenaris 833 STEEL PIPE FOR OIL WELLS & PIPELINES ----------- EUROPE: TOTAL 30,794 - ---------------------------------------------------------------------------- ASIA: 14.1% >HONG KONG: 2.0% 200,000 Esprit Holdings 665 GLOBAL APPAREL BRAND MANAGER 40,000 TVB 202 TELEVISION PROGRAMMING & BROADCASTING - ---------------------------------------------------------------------------- 867 >JAPAN: 9.5% 10,000 Hoya 918 OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES 8,000 Nidec 764 ELECTRIC MOTORS 10,000 USS 708 USED CAR AUCTIONEER 33,800 Shimano 700 BICYCLE COMPONENTS & FISHING TACKLE 19,700 Daito Trust Construction 585 APARTMENT BUILDER 26,000 Ushio 432 INDUSTRIAL LIGHT SOURCES - ---------------------------------------------------------------------------- 4,107 >SINGAPORE: 2.6% 96,000 Venture 1,131 ELECTRONIC CONTRACT MANUFACTURER ----------- ASIA: TOTAL 6,105 1-800-922-6769 46 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- OTHER COUNTRIES: 10.2% >AUSTRALIA: 2.7% 260,000 Lion Nathan $ 1,182 AUSTRALIAN BEER BREWER/DISTRIBUTOR - ---------------------------------------------------------------------------- >CANADA: 7.5% 24,000 Talisman Energy 1,365 OIL & GAS PRODUCER 52,000 Corus Entertainment 1,106 TELEVISION PROGRAMMING & RADIO STATIONS 20,000 Power Financial 767 LIFE INSURANCE & MUTUAL FUNDS - ---------------------------------------------------------------------------- 3,238 ----------- OTHER: TOTAL 4,420 ----------- TOTAL COMMON STOCKS: 95.2% 41,319 (COST: $28,565) PRINCIPAL AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 4.4% $ 1,930 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 8/15/04, Market Value $1,970 (repurchase proceeds: $1,930) $ 1,930 - ---------------------------------------------------------------------------- (AMORTIZED COST: $1,930) 1,930 ----------- TOTAL INVESTMENTS (c): 99.6% 43,249 (COST: $30,495) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.4% 157 TOTAL NET ASSETS: 100% $ 43,406 ============================================================================ ________________________________________________________________________________ >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investments is $30,741 and net unrealized appreciation was $12,508, consisting of gross unrealized appreciation of $12,513 and gross unrealized depreciation of $5. (b) Non-income producing security. (c) On December 31, 2003, the Fund's total investments were denominated in currencies as follows: % OF CURRENCY VALUE NET ASSETS ----------------------------------------------------------------- Euro $15,560 35.8% British Pounds 7,848 18.1 Japanese Yen 4,107 9.5 Swiss Francs 3,829 8.8 Canadian Dollars 3,246 7.5 Norwegian Krone 2,245 5.2 Other currencies less than 5% of total net assets 6,414 14.7 ------- ------ $43,249 99.6% ======= ====== 47 Columbia Acorn International Select >Portfolio Diversification At December 31, 2003, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE(000) PERCENT - ---------------------------------------------------------------------------- >INFORMATION TECHNOLOGY Television Programming $ 1,579 3.6% Financial Processors 1,540 3.5 Contract Manufacturing 1,131 2.6 Television Broadcasting 955 2.2 Semiconductors and Related Equipment 918 2.1 Computer Hardware and Related Equipment 764 1.8 - ---------------------------------------------------------------------------- 6,887 15.8 >HEALTHCARE Medical Equipment 2,780 6.4 Hospital Management 1,682 3.9 Services 480 1.1 - ---------------------------------------------------------------------------- 4,942 11.4 >CONSUMER GOODS/SERVICES Food 2,539 5.9 Restaurants 2,184 5.0 Durable Goods 1,780 4.1 Beverage 1,182 2.7 Retail 978 2.3 Consumer Goods Distribution 708 1.6 - ---------------------------------------------------------------------------- 9,371 21.6 >FINANCE Banks 5,014 11.6 Insurance 1,553 3.6 Money Management 767 1.8 - ---------------------------------------------------------------------------- 7,334 17.0 VALUE(000) PERCENT - ---------------------------------------------------------------------------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $1,569 3.6% Electrical Components 1,265 2.9 Machinery 1,260 2.9 Industrial Distribution 1,172 2.7 Outsourcing and Training Services 914 2.1 Speciality Chemicals 882 2.0 Steel 833 1.9 Industrial Materials 421 1.0 - ---------------------------------------------------------------------------- 8,316 19.1 >ENERGY/MINERALS Oil/Gas Producers 2,901 6.7 - ---------------------------------------------------------------------------- 2,901 6.7 >OTHER INDUSTRIES Regulated Utilities 983 2.3 Real Estate 585 1.3 - ---------------------------------------------------------------------------- 1,568 3.6 ---------- ----------- TOTAL COMMON STOCKS: 41,319 95.2 ---------- ----------- SHORT-TERM OBLIGATIONS: 1,930 4.4 ---------- ----------- TOTAL INVESTMENTS: 43,249 99.6 CASH AND OTHER ASSETS LESS LIABILITIES: 157 0.4 ---------- ----------- NET ASSETS: $ 43,406 100.0% ============================================================================ 1-800-922-6769 48 Columbia Acorn Select >Major Portfolio Changes in the Fourth Quarter (Unaudited) NUMBER OF SHARES --------------------------- 09/30/03 12/31/03 Additions - ---------------------------------------------------------------------------- INFORMATION Interpublic Group 2,500,000 2,520,000 PeopleSoft 1,330,000 1,475,000 Synopsys 1,060,000 1,120,000 - ---------------------------------------------------------------------------- HEALTH CARE First Health Group 2,150,000 2,700,000 Guidant 1,070,000 1,090,000 Lincare Holdings 480,000 490,000 Techne 415,000 440,000 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Abercrombie & Fitch 640,000 660,000 Herman Miller 1,060,000 1,160,000 Weight Watchers 0 600,000 - ---------------------------------------------------------------------------- FINANCE Markel 87,000 110,000 TCF Financial 480,000 650,000 NUMBER OF SHARES --------------------------- 09/30/03 12/31/03 Sales - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Safeway 1,150,000 1,050,000 49 Columbia Acorn Select >Statement of Investments, December 31, 2003 NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- COMMON STOCKS: 93.1% - ---------------------------------------------------------------------------- INFORMATION: 27.3% >INSTRUMENTATION: 2.4% 560,000 Tektronix $ 17,696 ANALYTICAL INSTRUMENTS - ---------------------------------------------------------------------------- >GAMING EQUIPMENT: 2.3% 470,000 International Game Technology 16,779 SLOT MACHINES & PROGRESSIVE JACKPOTS - ---------------------------------------------------------------------------- >CONSUMER SOFTWARE: 3.9% 600,000 Electronic Arts (b) 28,668 ENTERTAINMENT SOFTWARE - ---------------------------------------------------------------------------- >BUSINESS SOFTWARE: 9.6% 1,120,000 Synopsys (b) 37,811 SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS 1,475,000 PeopleSoft 33,630 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE - ---------------------------------------------------------------------------- 71,441 >ADVERTISING: 5.3% 2,520,000 Interpublic Group (b) 39,312 ADVERTISING - ---------------------------------------------------------------------------- >BUSINESS INFORMATION: 3.8% 470,000 Moody's 28,459 RATINGS SERVICE FOR CREDIT OBLIGATIONS ----------- INFORMATION: TOTAL 202,355 - ---------------------------------------------------------------------------- HEALTH CARE: 20.2% >MEDICAL EQUIPMENT: 8.9% 1,090,000 Guidant 65,618 STENTS, DEFIBRILLATORS & OTHER CARDIAC MEDICAL DEVICES - ---------------------------------------------------------------------------- >SERVICES: 9.1% 2,700,000 First Health Group (b) 52,542 PPO NETWORK 490,000 Lincare Holdings (b) 14,715 HOME HEALTH CARE SERVICES - ---------------------------------------------------------------------------- 67,257 >HOSPITAL/LABORATORY SUPPLIES: 2.2% 440,000 Techne (b) 16,623 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES ----------- HEALTH CARE: TOTAL 149,498 - ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 28.4% >LEISURE VEHICLES: 4.0% 620,000 Harley-Davidson 29,469 MOTORCYCLES & RELATED MERCHANDISE - ---------------------------------------------------------------------------- >CONSUMER SERVICES: 3.1% 600,000 Weight Watchers (b) 23,022 WEIGHT LOSS PROGRAM - ---------------------------------------------------------------------------- NUMBER OF SHARES VALUE (000) - ---------------------------------------------------------------------------- >RETAIL: 8.6% 660,000 Costco $ 24,539 WAREHOUSE SUPERSTORES 1,050,000 Safeway (b) 23,005 RETAIL FOOD & DRUG STORES 660,000 Abercrombie & Fitch (b) 16,309 TEEN APPAREL RETAILER - ---------------------------------------------------------------------------- 63,853 >ENTERTAINMENT: 2.6% 440,000 International Speedway Motors 19,650 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR - ---------------------------------------------------------------------------- >FURNITURE & MANUFACTURERS: 10.1% 1,160,000 Herman Miller 28,153 OFFICE FURNITURE 350,000 Mohawk Industries (b) 24,689 CARPET & FLOORING 580,000 Coach (b) 21,895 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES - ---------------------------------------------------------------------------- 74,737 ----------- >CONSUMER GOODS/SERVICES: TOTAL 210,731 - ---------------------------------------------------------------------------- FINANCE: 13.5% >BANKS: 7.4% 650,000 TCF Financial 33,377 GREAT LAKES BANK 500,000 Associated Banc-Corp 21,325 MIDWEST BANK - ---------------------------------------------------------------------------- 54,702 >INSURANCE: 3.8% 110,000 Markel (b) 27,886 SPECIALTY INSURANCE - ---------------------------------------------------------------------------- >MONEY MANAGEMENT: 2.3% 570,000 SEI Investments 17,368 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT ----------- FINANCE: TOTAL 99,956 - ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 3.7% >LOGISTICS: 3.7% 720,000 Expeditors International of Washington 27,115 INTERNATIONAL FREIGHT FORWARDER ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 27,115 ----------- TOTAL COMMON STOCKS: 93.1% 689,655 (COST: $579,443) 1-800-922-6769 50 PRINCIPAL AMOUNT (000) VALUE (000) - ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 5.6% $ 18,000 American General Finance Yield 1.00% Due 1/05/04 $ 17,998 23,170 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 1/15/06, Market Value $23,635 (repurchase proceeds: $23,171) 23,170 - ---------------------------------------------------------------------------- (AMORTIZED COST: $41,168) 41,168 ----------- TOTAL INVESTMENTS: 98.7% 730,823 (COST: $620,611) CASH AND OTHER ASSETS LESS LIABILITIES: 1.3% 9,796 ----------- TOTAL NET ASSETS: 100% $ 740,619 ============================================================================ >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investments is $620,847 and net unrealized appreciation was $109,976, consisting of gross unrealized appreciation of $132,180 and gross unrealized depreciation of $22,204. (b) Non-income producing security. 51 Columbia Acorn Family of Funds >Statements of Assets and Liabilities
COLUMBIA COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA ACORN ACORN ACORN INTERNATIONAL ACORN DECEMBER 31, 2003 FUND INTERNATIONAL USA SELECT SELECT ------------------ ----------------- --------------- ------------- --------------- (IN THOUSANDS) ASSETS Investments, at Cost $ 7,343,798 $ 1,227,501 $ 533,840 $ 30,495 $ 620,611 ------------------ ----------------- --------------- ------------- --------------- Investment, at Value $ 11,164,160 $ 1,667,062 $ 692,240 $ 43,249 $ 730,823 Cash 4,064 -- 1 1 -- Foreign currency (cost: Columbia Acorn Fund $5,413; Columbia Acorn International $13,096; Columbia Acorn International Select $7) 5,405 13,251 -- 7 -- Receivable for: Investments sold 812 -- 206 -- -- Fund shares sold 28,319 1,278 1,764 122 10,986 Dividends and interest 4,645 2,632 83 123 43 Expense reimbursement due from Advisor -- -- -- 29 -- Deferred Trustees' Compensation Investments 924 396 64 -- -- Other assets -- -- 2 -- 7 ------------------ ----------------- --------------- ------------- --------------- Total Assets 11,208,329 1,684,619 694,360 43,531 741,859 LIABILITIES Payable for: Investments purchased 14,534 2,601 162 27 -- Fund shares redeemed 18,617 2,125 623 45 879 Foreign capital gains tax 1,515 813 -- -- -- Custodian 58 58 2 6 1 Management fee -- 4 -- -- -- 12b-1 Service & Distribution fees 2,524 65 111 5 245 Legal & audit fees 109 66 25 17 -- Reports to shareholders 252 53 23 14 22 Deferred Trustees' fees 924 396 64 -- 25 Transfer agent fee 884 103 74 8 65 Other liabilities 97 3 2 3 3 ------------------ ----------------- --------------- ------------- --------------- Total Liabilities 39,514 6,287 1,086 125 1,240 ------------------ ----------------- --------------- ------------- --------------- NET ASSETS $ 11,168,815 $ 1,678,332 $ 693,274 $ 43,406 $ 740,619 ================== ================= =============== ============= =============== COMPOSITION OF NET ASSETS Paid in capital $ 7,331,293 $ 1,462,493 $ 548,134 $ 68,842 $ 630,664 Undistributed net investment income (Accumulated net investment loss) 6,955 16,493 92 142 (21) Accumulated net realized gain (loss) 11,734 (238,525) (13,352) (38,346) (236) Net unrealized appreciation (depreciation) on: Investments (net of unrealized PFIC gains of $1,215 for Columbia Acorn International) 3,820,362 438,346 158,400 12,754 110,212 Foreign currency transactions (1,529) (475) -- 14 -- ------------------ ----------------- --------------- ------------- --------------- NET ASSETS $ 11,168,815 $ 1,678,332 $ 693,274 $ 43,406 $ 740,619 ================== ================= =============== ============= =============== Net asset value per share -- Class A (a) $ 22.20 $ 22.45 $ 20.74 $ 14.45 $ 18.01 (Net assets/shares) ($1,982,260/89,282) ($52,872/2,355) ($89,650/4,322) ($2,557/177) ($264,679/14,700) Maximum offering price per share -- Class A (b) $ 23.55 $ 23.82 $ 22.01 $ 15.33 $ 19.11 (Net asset value per share/ front-end sales charge) ($22.20/.9425) ($22.45/.9425) ($20.74/.9425) ($14.45/.9425) ($18.01/.9425) Net asset value and offering price per share -- Class B (a) $ 21.75 $ 22.07 $ 20.36 $ 14.12 $ 17.64 (Net assets/shares) ($1,221,931/56,168) ($39,800/1,803) ($66,175/3,250) ($3,162/224) ($118,064/6,694) Net asset value and offering price per share -- Class C (a) $ 21.75 $ 22.06 $ 20.36 $ 14.14 $ 17.64 (Net assets/shares) ($900,016/41,377) ($22,990/1,042) ($35,662/1,752) ($3,691/261) ($64,212/3,641) Net asset value, offering price and redemption price per share -- Class Z $ 22.56 $ 22.66 $ 21.01 $ 14.58 $ 18.20 (Net assets/shares) ($7,064,608/313,127) ($1,562,670/68,955) ($501,787/23,886)($33,996/2,331) ($293,664/16,138)
(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 accompanying notes to financial statements. See accompanying notes to financial statements. 1-800-922-6769 52 Columbia Acorn Family of Funds >Statements of Operations For the Year Ended December 31, 2003
COLUMBIA COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA ACORN ACORN ACORN INTERNATIONAL ACORN (IN THOUSANDS) FUND INTERNATIONAL USA SELECT SELECT ----------- ----------- ----------- ----------- ----------- INVESTMENT INCOME: Dividend income $ 70,311 33,963 $ 1,380 $ 745 $ 1,767 Interest income 7,373 717 406 15 294 ----------- ----------- ----------- ----------- ----------- 77,684 34,680 1,786 760 2,061 Foreign taxes withheld (1,354) (3,216) -- (62) -- ----------- ----------- ----------- ----------- ----------- Total Investment Income 76,330 31,464 1,786 698 2,061 EXPENSES: Management fees 52,118 11,792 4,194 330 3,817 Administration fees 3,905 703 227 17 212 12b-1 Service & Distribution fees 18,497 588 884 59 1,375 Custody fees 794 950 11 45 18 Legal and audit fees 488 121 66 24 42 Transfer agent fees 8,051 923 496 60 690 Trustees' fees 369 70 21 4 14 Registration and blue sky fees 316 76 116 94 140 Reports to shareholders 1,419 267 161 68 148 Other expenses 288 40 18 8 24 ----------- ----------- ----------- ----------- ----------- Total expenses 86,245 15,530 6,194 709 6,480 Less custody fees paid indirectly (4) --* --* --* -- Less reimbursement of expenses by Advisor -- -- -- (147) -- ----------- ----------- ----------- ----------- ----------- Net Expenses 86,241 15,530 6,194 562 6,480 ----------- ----------- ----------- ----------- ----------- Net Investment Income (Loss) (9,911) 15,934 (4,408) 136 (4,419) NET REALIZED AND UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS: Net realized gain (loss) on: Investments 90,703 (7,250) 7,301 (445) 8,643 Foreign currency transactions (21) 106 -- 20 -- ----------- ----------- ----------- ----------- ----------- Net realized gain (loss) 90,682 (7,144) 7,301 (425) 8,643 =========== =========== =========== =========== =========== Net change in net unrealized appreciation/ depreciation on: Investments 2,975,943 562,281 172,313 12,936 95,023 Foreign currency transactions (1,268) (291) -- -- -- ----------- ----------- ----------- ----------- ----------- Net change in unrealized appreciation/ depreciation 2,974,675 561,990 172,313 12,936 95,023 =========== =========== =========== =========== =========== Net realized and unrealized gain 3,065,357 554,846 179,614 12,511 103,666 ----------- ----------- ----------- ----------- ----------- Net Increase in Net Assets resulting from Operations $ 3,055,446 $ 570,780 $ 175,206 $ 12,647 $ 99,247 =========== =========== =========== =========== ===========
* Rounds to less than $500. See accompanying notes to financial statements. 53 Columbia Acorn Family of Funds >Statements of Changes in Net Assets
COLUMBIA COLUMBIA ACORN ACORN FUND INTERNATIONAL YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED INCREASE (DECREASE) IN NET ASSETS DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, ------------ ------------ ------------ ------------ (IN THOUSANDS) 2003 2002 2003 2002 OPERATIONS: Net investment income (loss) $ (9,911) $ (5,079) $ 15,934 $ 11,854 Net realized gain (loss) on investments, forward foreign currency contracts and foreign currency transactions 90,682 (57,609) (7,144) (88,618) Change in net unrealized appreciation (depreciation) of investments, forward foreign currency contracts and foreign currency transactions 2,974,675 (778,655) 561,990 (188,391) ------------ ------------ ------------ ------------ Net Increase (Decrease) from Operations 3,055,446 (841,343) 570,780 (265,155) DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- (106) (24) Net realized gain -- Class A (1,752) -- -- -- Net investment income -- Class B -- -- -- -- Net realized gain -- Class B (1,116) -- -- -- Net investment income -- Class C -- -- -- -- Net realized gain -- Class C (813) -- -- -- Net investment income -- Class Z -- -- (5,829) (9,265) Net realized gain -- Class Z (6,236) -- -- -- ------------ ------------ ------------ ------------ Total Distribution to Shareholders (9,917) -- (5,935) (9,289) SHARE TRANSACTIONS: Subscriptions -- Class A 1,041,782 645,380 45,279 264,875 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- -- -- Distributions reinvested -- Class A 1,584 -- 80 17 Redemptions -- Class A (259,438) (134,555) (42,948) (251,764) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class A 783,928 510,825 2,411 13,128 Subscriptions -- Class B 364,144 490,366 11,463 15,847 Distributions reinvested -- Class B 1,018 -- -- -- Redemptions -- Class B (88,744) (67,763) (5,639) (6,194) ------------ ------------ ------------ ------------ Net Increase -- Class B 276,418 422,603 5,824 9,653 Subscriptions -- Class C 375,513 330,698 14,870 43,176 Distributions reinvested -- Class C 673 -- -- -- Redemptions -- Class C (73,548) (53,861) (13,396) (40,348) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class C 302,638 276,837 1,474 2,828 Subscriptions -- Class Z 1,682,204 917,983 220,802 649,314 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- -- -- Distributions reinvested -- Class Z 5,443 -- 5,336 8,562 Redemptions -- Class Z (667,986) (509,628) (434,204) (768,033) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class Z 1,019,661 408,355 (208,066) (110,157) ------------ ------------ ------------ ------------ Net Increase (Decrease) from Share Transactions 2,382,645 1,618,620 (198,357) (84,548) ------------ ------------ ------------ ------------ Redemption Fees -- -- 400 -- ------------ ------------ ------------ ------------ Total Increase (Decrease) in Net Assets 5,428,174 777,277 366,888 (358,992) NET ASSETS: Beginning of period 5,740,641 4,963,364 1,311,444 1,670,436 ------------ ------------ ------------ ------------ End of period $ 11,168,815 $ 5,740,641 $ 1,678,332 $ 1,311,444 ============ ============ ============ ============ UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS OR OVERDISTRIBUTED NET INVESTMENT INCOME) $ 6,955 $ 3,601 $ 16,493 $ 5,460 ============ ============ ============ ============ COLUMBIA COLUMBIA ACORN ACORN USA INTERNATIONAL SELECT INCREASE (DECREASE) IN NET ASSETS YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, ------------ ------------ ------------ ------------ (in thousands) 2003 2002 2003 2002 OPERATIONS: Net investment income (loss) $ (4,408) $ (2,949) $ 136 $ 39 Net realized gain (loss) on investments, forward foreign currency contracts and foreign currency transactions 7,301 (17,552) (425) (6,845) Change in net unrealized appreciation (depreciation) of investments, forward foreign currency contracts and foreign currency transactions 172,313 (56,039) 12,936 1,151 ------------ ------------ ------------ ------------ Net Increase (Decrease) from Operations 175,206 (76,540) 12,647 (5,655) DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- -- -- Net realized gain -- Class A -- -- -- -- Net investment income -- Class B -- -- -- -- Net realized gain -- Class B -- -- -- -- Net investment income -- Class C -- -- -- -- Net realized gain -- Class C -- -- -- -- Net investment income -- Class Z -- -- (19) -- Net realized gain -- Class Z -- -- -- -- ------------ ------------ ------------ ------------ Total Distribution to Shareholders -- -- (19) -- SHARE TRANSACTIONS: Subscriptions -- Class A 60,457 35,469 2,350 54,708 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- 22 -- -- Distributions reinvested -- Class A -- -- -- -- Redemptions -- Class A (23,188) (15,616) (3,212) (54,724) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class A 37,269 19,875 (862) (16) Subscriptions -- Class B 19,327 33,711 1,577 2,363 Distributions reinvested -- Class B -- -- -- -- Redemptions -- Class B (8,053) (13,914) (989) (2,245) ------------ ------------ ------------ ------------ Net Increase -- Class B 11,274 19,797 588 118 Subscriptions -- Class C 13,056 14,839 3,211 5,117 Distributions reinvested -- Class C -- -- -- -- Redemptions -- Class C (4,575) (5,070) (3,564) (5,510) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class C 8,481 9,769 (353) (393) Subscriptions -- Class Z 221,496 125,400 23,389 72,837 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- 10,075 -- -- Distributions reinvested -- Class Z -- -- 18 -- Redemptions -- Class Z (83,975) (75,563) (25,393) (79,344) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class Z 137,521 59,912 (1,986) (6,507) ------------ ------------ ------------ ------------ Net Increase (Decrease) from Share Transactions 194,545 109,353 (2,613) (6,798) ------------ ------------ ------------ ------------ Redemption Fees -- -- 39 -- ------------ ------------ ------------ ------------ Total Increase (Decrease) in Net Assets 369,751 32,813 10,054 (12,453) NET ASSETS: Beginning of period 323,523 290,710 33,352 45,805 ------------ ------------ ------------ ------------ End of period $ 693,274 $ 323,523 $ 43,406 $ 33,352 ============ ============ ============ ============ UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS OR OVERDISTRIBUTED NET INVESTMENT INCOME) $ 92 $ (50) $ 142 $ 5 ============ ============ ============ ============ COLUMBIA ACORN SELECT INCREASE (DECREASE) IN NET ASSETS YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ------------ ------------ (in thousands) 2003 2002 OPERATIONS: Net investment income (loss) $ (4,419) $ (1,224) Net realized gain (loss) on investments, forward foreign currency contracts and foreign currency transactions 8,643 (508) Change in net unrealized appreciation (depreciation) of investments, forward foreign currency contracts and foreign currency transactions 95,023 (7,857) ------------ ------------ Net Increase (Decrease) from Operations 99,247 (9,589) DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- Net realized gain -- Class A (1,172) -- Net investment income -- Class B -- -- Net realized gain -- Class B (563) -- Net investment income -- Class C -- -- Net realized gain -- Class C (301) -- Net investment income -- Class Z -- -- Net realized gain -- Class Z (2,145) -- ------------ ------------ Total Distribution to Shareholders (4,181) -- SHARE TRANSACTIONS: Subscriptions -- Class A 237,520 31,504 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- Distributions reinvested -- Class A 1,096 -- Redemptions -- Class A (30,378) (10,199) ------------ ------------ Net Increase (Decrease) -- Class A 208,238 21,305 Subscriptions -- Class B 78,641 27,565 Distributions reinvested -- Class B 507 -- Redemptions -- Class B (9,321) (5,862) ------------ ------------ Net Increase -- Class B 69,827 21,703 Subscriptions -- Class C 50,838 8,806 Distributions reinvested -- Class C 257 -- Redemptions -- Class C (4,391) (2,268) ------------ ------------ Net Increase (Decrease) -- Class C 46,704 6,538 Subscriptions -- Class Z 301,467 46,496 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- Distributions reinvested -- Class Z 1,920 -- Redemptions -- Class Z (150,913) (17,872) ------------ ------------ Net Increase (Decrease) -- Class Z 152,474 28,624 ------------ ------------ Net Increase (Decrease) from Share Transactions 477,243 78,170 ------------ ------------ Redemption Fees -- -- ------------ ------------ Total Increase (Decrease) in Net Assets 572,309 68,581 NET ASSETS: Beginning of period 168,310 99,729 ------------ ------------ End of period $ 740,619 $ 168,310 ============ ============ UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS OR OVERDISTRIBUTED NET INVESTMENT INCOME) $ (21) $ (11) ============ ============
See accompanying notes to financial statements. 1-800-922-6769 54-55 Spread Columbia Acorn Family of Funds >Statements of Changes in Net Assets, continued
COLUMBIA COLUMBIA ACORN ACORN FUND INTERNATIONAL YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, ------------ ------------ ------------ ------------ (IN THOUSANDS) 2003 2002 2003 2002 NUMBER OF FUND SHARES OF BENEFICIAL INTEREST: Subscriptions -- Class A 56,202 38,478 2,734 15,488 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- -- -- Shares issued in reinvestment and capital gains -- Class A 73 -- 5 1 Less shares redeemed -- Class A (14,204) (8,482) (2,590) (14,677) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class A 42,071 29,996 149 812 Subscriptions -- Class B 20,371 29,099 653 923 Shares issued in reinvestment and capital gains -- Class B 48 -- -- -- Less shares redeemed -- Class B (5,154) (4,407) (343) (376) ------------ ------------ ------------ ------------ Net Increase -- Class B 15,265 24,692 310 547 Subscriptions -- Class C 20,690 19,804 911 2,573 Shares issued in reinvestment and capital gains -- Class C 32 -- -- -- Less shares redeemed -- Class C (4,207) (3,475) (833) (2,396) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class C 16,515 16,329 78 177 Subscriptions -- Class Z 89,984 54,769 13,104 38,166 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- -- -- Shares issued in reinvestment and capital gains -- Class Z 249 -- 313 484 Less shares redeemed -- Class Z (36,502) (31,314) (25,027) (45,408) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class Z 53,731 23,455 (11,610) (6,758) ------------ ------------ ------------ ------------ Net Increase (Decrease) in Shares of Beneficial Interest 127,582 94,472 (11,073) (5,222) ------------ ------------ ------------ ------------ COLUMBIA COLUMBIA ACORN ACORN USA INTERNATIONAL SELECT YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, ------------ ------------ ------------ ------------ (IN THOUSANDS) 2003 2002 2003 2002 NUMBER OF FUND SHARES OF BENEFICIAL INTEREST: Subscriptions -- Class A 3,345 2,124 216 4,749 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- 2 -- -- Shares issued in reinvestment and capital gains -- Class A -- -- -- -- Less shares redeemed -- Class A (1,309) (1,009) (294) (4,731) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class A 2,036 1,117 (78) 18 Subscriptions -- Class B 1,087 2,019 137 220 Shares issued in reinvestment and capital gains -- Class B -- -- -- -- Less shares redeemed -- Class B (512) (937) (95) (211) ------------ ------------ ------------ ------------ Net Increase -- Class B 575 1,082 42 9 Subscriptions -- Class C 724 892 311 459 Shares issued in reinvestment and capital gains -- Class C -- -- -- -- Less shares redeemed -- Class C (279) (335) (339) (495) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class C 445 557 (28) (36) Subscriptions -- Class Z 12,184 7,498 2,239 6,884 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- 724 -- -- Shares issued in reinvestment and capital gains -- Class Z -- -- 2 -- Less shares redeemed -- Class Z (4,772) (4,844) (2,435) (7,419) ------------ ------------ ------------ ------------ Net Increase (Decrease) -- Class Z 7,412 3,378 (194) (535) ------------ ------------ ------------ ------------ Net Increase (Decrease) in Shares of Beneficial Interest 10,468 6,134 (258) (544) ------------ ------------ ------------ ------------ COLUMBIA ACORN SELECT YEAR ENDED YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: DECEMBER 31, DECEMBER 31, ------------ ------------ (IN THOUSANDS) 2003 2002 NUMBER OF FUND SHARES OF BENEFICIAL INTEREST: Subscriptions -- Class A 14,227 2,229 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- Shares issued in reinvestment and capital gains -- Class A 63 -- Less shares redeemed -- Class A (1,869) (735) ------------ ------------ Net Increase (Decrease) -- Class A 12,421 1,494 Subscriptions -- Class B 4,854 1,955 Shares issued in reinvestment and capital gains -- Class B 30 -- Less shares redeemed -- Class B (601) (431) ------------ ------------ Net Increase -- Class B 4,283 1,524 Subscriptions -- Class C 3,102 630 Shares issued in reinvestment and capital gains -- Class C 15 -- Less shares redeemed -- Class C (271) (164) ------------ ------------ Net Increase (Decrease) -- Class C 2,846 466 Subscriptions -- Class Z 18,117 3,286 Proceeds from shares issued in connection with the tax-free transfer of assets from Stein Roe Small Company Growth Fund -- -- Shares issued in reinvestment and capital gains -- Class Z 108 -- Less shares redeemed -- Class Z (8,676) (1,263) ------------ ------------ Net Increase (Decrease) -- Class Z 9,549 2,023 ------------ ------------ Net Increase (Decrease) in Shares of Beneficial Interest 29,099 5,507 ------------ ------------
See accompanying notes to financial statements. 1-800-922-6769 56-57 Spread Columbia Acorn Family of Funds >Financial Highlights COLUMBIA ACORN FUND
Class A Shares YEAR ENDED DECEMBER 31, -------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.34 $ 17.80 $ 17.19 $ 17.88 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.07) (0.07) (0.05) 0.01 Net realized and unrealized gain (loss) 6.95 (2.39) 1.01 1.22 ----------- ---------- --------- --------- Total from Investment Operations 6.88 (2.46) 0.96 1.23 ----------- ---------- --------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- (0.06) From net realized gains (0.02) -- (0.35) (1.86) ----------- ---------- --------- --------- Total Distributions Declared to Shareholders (0.02) -- (0.35) (1.92) ----------- ---------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 22.20 $ 15.34 $ 17.80 $ 17.19 =========== ========== ========= ========= Total Return (c) 44.85% (13.82)% 5.56% 7.40%(d) ----------- ---------- --------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (e) 1.33% 1.42% 1.42% 1.25%(f)(g) Net investment income (loss) (e) (0.36)% (0.45)% (0.33)% 0.17%(f)(g) Portfolio turnover rate 10% 13% 20% 29%(d) Net assets at end of period (000's) $ 1,982,260 $ 724,121 $ 306,405 $ 18,252
(a) Class A Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized. (g) The ratios of expenses and net investment loss to average net assets, previously reported as 1.03% and 0.39% respectively, were revised to reflect all class specific expenses in this period.
CLASS B SHARES YEAR ENDED DECEMBER 31, -------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.13 $ 17.67 $ 17.17 $ 17.88 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.18) (0.17) (0.16) (0.01) Net realized and unrealized gain (loss) 6.82 (2.37) 1.01 1.22 ----------- ---------- --------- --------- Total from Investment Operations 6.64 (2.54) 0.85 1.21 ----------- ---------- --------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- (0.06) From net realized gains (0.02) -- (0.35) (1.86) ----------- ---------- --------- --------- Total Distributions Declared to Shareholders (0.02) -- (0.35) (1.92) ----------- ---------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 21.75 $ 15.13 $ 17.67 $ 17.17 =========== ========== ========= ========= Total Return (c) 43.89% (14.37)% 4.92% 7.27%(d) ----------- ---------- --------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (e) 1.98% 2.07% 2.07% 1.90%(f)(g) Net investment loss (e) (1.01)% (1.10)% (0.98)% (0.48)%(f)(g) Portfolio turnover rate 10% 13% 20% 29%(d) Net assets at end of period (000's) $ 1,221,931 $ 618,727 $ 286,422 $ 15,951
(a) Class B Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized. (g) The ratios of expenses and net investment loss to average net assets, previously reported as 1.68% and (0.26)% respectively, were revised to reflect all class specific expenses in this period.
Class C Shares YEAR ENDED DECEMBER 31, -------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.12 $ 17.66 $ 17.17 $ 17.88 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.18) (0.17) (0.17) (0.01) Net realized and unrealized gain (loss) 6.83 (2.37) 1.01 1.22 ----------- ---------- --------- --------- Total from Investment Operations 6.65 (2.54) 0.84 1.21 ----------- ---------- --------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- (0.06) From net realized gains (0.02) -- (0.35) (1.86) ----------- ---------- --------- --------- Total Distributions Declared to Shareholders (0.02) -- (0.35) (1.92) ----------- ---------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 21.75 $ 15.12 $ 17.66 $ 17.17 =========== ========== ========= ========= Total Return (c) 43.99% (14.38)% 4.86% 7.27%(d) ----------- ---------- --------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (e) 1.98% 2.07% 2.07% 1.90%(f)(g) Net investment loss (e) (1.01)% (1.10)% (0.98)% (0.48)%(f)(g) Portfolio turnover rate 10% 13% 20% 29%(d) Net assets at end of period (000's) $ 900,016 $ 376,024 $ 150,727 $ 8,510
(a) Class C Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized. (g) The ratios of expenses and net investment loss to average net assets, previously reported as 1.68% and (0.26)% respectively, were revised to reflect all class specific expenses in this period. 1-800-922-6769 See accompanying notes to financial statements 58 COLUMBIA ACORN INTERNATIONAL
Class A Shares YEAR ENDED DECEMBER 31, ------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.32 $ 18.35 $ 23.84 $ 28.67 INCOME FROM INVESTMENT OPERATIONS Net investment income (b) 0.10 0.05 0.01 0.02 Net realized and unrealized gain (loss) 7.08 (3.07) (5.11) (1.26) --------- ---------- --------- -------- Total from Investment Operations 7.18 (3.02) (5.10) (1.24) --------- ---------- --------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.05) (0.01) -- -- From net realized gains -- -- (0.39) (3.59) --------- ---------- --------- -------- Total Distributions Declared to Shareholders (0.05) (0.01) (0.39) (3.59) --------- ---------- --------- -------- NET ASSET VALUE, END OF PERIOD $ 22.45 $ 15.32 $ 18.35 $ 23.84 ========= ========== ========= ======== Total Return (c) 46.94% (16.46)% (21.59)% (4.85)%(d) --------- ---------- --------- -------- RATIOS TO AVERAGE NET ASSETS Expenses (e) 1.59% 1.56% 1.65% 1.26%(f)(g) Net investment income (e) 0.57% 0.30% 0.03% 0.73%(f)(g) Portfolio turnover rate 40% 52% 45% 63%(d) Net assets at end of period (000's) $ 52,872 $ 33,806 $ 25,587 $ 10,323
(a) Class A Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized. (g) The ratios of expenses and net investment loss to average net assets, previously reported as 1.59% and 0.40% respectively, were revised to reflect all classes specific expenses in this period.
Class B Shares YEAR ENDED DECEMBER 31, ------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.11 $ 18.22 $ 23.81 $ 28.67 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.02) (0.06) (0.12) 0.01 Net realized and unrealized gain (loss) 6.98 (3.05) (5.08) (1.28) --------- ---------- --------- -------- Total from Investment Operations 6.96 (3.11) (5.20) (1.27) --------- ---------- --------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains -- -- (0.39) (3.59) --------- ---------- --------- -------- Total Distributions Declared to Shareholders -- -- (0.39) (3.59) --------- ---------- --------- -------- NET ASSET VALUE, END OF PERIOD $ 22.07 $ 15.11 $ 18.22 $ 23.81 ========= ========== ========= ======== Total Return (c) 46.06% (17.07)% (22.04)% (4.97)%(d) --------- ---------- --------- -------- RATIOS TO AVERAGE NET ASSETS Expenses (e) 2.24% 2.21% 2.30% 1.91%(f)(g) Net investment income (loss) (e) (0.10)% (0.35)% (0.62)% 0.08%(f)(g) Portfolio turnover rate 40% 52% 45% 63%(d) Net assets at end of period (000's) $ 39,800 $ 22,560 $ 17,235 $ 5,675
(a) Class B Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized. (g) The ratios of expenses and net investment loss to average net assets, previously reported as 2.24% and (0.25)% respectively, were revised to reflect all classes specific expenses in this period.
Class C Shares YEAR ENDED DECEMBER 31, ------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.11 $ 18.21 $ 23.81 $ 28.67 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.01) (0.06) (0.13) 0.01 Net realized and unrealized gain (loss) 6.96 (3.04) (5.08) (1.28) --------- ---------- --------- -------- Total from Investment Operations 6.95 (3.10) (5.21) (1.27) --------- ---------- --------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains -- -- (0.39) (3.59) --------- ---------- --------- -------- Total Distributions Declared to Shareholders -- -- (0.39) (3.59) --------- ---------- --------- -------- NET ASSET VALUE, END OF PERIOD $ 22.06 $ 15.11 $ 18.21 $ 23.81 ========= ========== ========= ======== Total Return (c) 46.00% (17.02)% (22.08)% (4.97)%(d) --------- ---------- --------- -------- RATIOS TO AVERAGE NET ASSETS Expenses (e) 2.24% 2.21% 2.30% 1.91%(f)(g) Net investment income (loss) (e) (0.06)% (0.35)% (0.62)% 0.08%(f)(g) Portfolio turnover rate 40% 52% 45% 63%(d) Net assets at end of period (000's) $ 22,990 $ 14,575 $ 14,327 $ 3,965
(a) Class C Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized. (g) The ratios of expenses and net investment loss to average net assets, previously reported as 2.24% and (0.25)% respectively, were revised to reflect all classes specific expenses in this period. See accompanying notes to financial statements 59 Columbia Acorn Family of Funds >Financial Highlights continued COLUMBIA ACORN USA
Class A Shares YEAR ENDED DECEMBER 31, ------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 14.18 $ 17.50 $ 14.88 $ 13.83 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.22) (0.19) (0.19) (0.01) Net realized and unrealized gain (loss) 6.78 (3.13) 2.96 1.06 --------- ---------- --------- -------- Total from Investment Operations 6.56 (3.32) 2.77 1.05 --------- ---------- --------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains -- -- (0.15) -- --------- ---------- --------- -------- Total Distributions Declared to Shareholders -- -- (0.15) -- --------- ---------- --------- -------- NET ASSET VALUE, END OF PERIOD $ 20.74 $ 14.18 $ 17.50 $ 14.88 ========= ========== ========= ======== Total Return (c) 46.26% (18.97)% 18.65% 7.59%(d) --------- ---------- --------- -------- RATIOS TO AVERAGE NET ASSETS Expenses (e) 1.65% 1.74% 1.84% 1.41%(f)(g) Net investment loss (e) (1.26)% (1.21)% (1.13)% (0.73)%(f)(g) Portfolio turnover rate 7% 31% 24% 45%(d) Net assets at end of period (000's) $ 89,650 $ 32,422 $ 20,455 $ 798
(a) Class A Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized. (g) The ratios of expenses and net investment loss to average net assets, previously reported as 1.17% and (0.49)% respectively, were revised to reflect all class specific expenses in this period.
Class B Shares YEAR ENDED DECEMBER 31, ------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 17.40 $ 14.87 $ 13.83 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.32) (0.29) (0.30) (0.03) Net realized and unrealized gain (loss) 6.67 (3.10) 2.96 1.07 --------- ---------- --------- -------- Total from Investment Operations 6.35 (3.39) 2.66 1.04 --------- ---------- --------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains -- -- (0.13) -- --------- ---------- --------- -------- Total Distributions Declared to Shareholders -- -- (0.13) -- --------- ---------- --------- -------- NET ASSET VALUE, END OF PERIOD $ 20.36 $ 14.01 $ 17.40 $ 14.87 ========= ========== ========= ======== Total Return (c) 45.32% (19.48)% 17.92% 7.52%(d) --------- ---------- --------- -------- RATIOS TO AVERAGE NET ASSETS Expenses (e) 2.30% 2.39% 2.49% 2.06%(f)(g) Net investment loss (e) (1.91)% (1.86)% (1.78)% (1.38)%(f)(g) Portfolio turnover rate 7% 31% 24% 45%(d) Net assets at end of period (000's) $ 66,175 $ 37,478 $ 27,722 $ 685
(a) Class B Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized. (g) The ratios of expenses and net investment loss to average net assets, previously reported as 1.82% and (1.14)% respectively, were revised to reflect all class specific expenses in this period.
Class C Shares YEAR ENDED DECEMBER 31, ------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 17.40 $ 14.87 $ 13.83 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.32) (0.29) (0.30) (0.03) Net realized and unrealized gain (loss) 6.67 (3.10) 2.96 1.07 --------- ---------- --------- -------- Total from Investment Operations 6.35 (3.39) 2.66 1.04 --------- ---------- --------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains -- -- (0.13) -- --------- ---------- --------- -------- Total Distributions Declared to Shareholders -- -- (0.13) -- --------- ---------- --------- -------- NET ASSET VALUE, END OF PERIOD $ 20.36 $ 14.01 $ 17.40 $ 14.87 ========= ========== ========= ======== Total Return (c) 45.32% (19.48)% 17.92% 7.52%(d) --------- ---------- --------- -------- RATIOS TO AVERAGE NET ASSETS Expenses (e) 2.30% 2.39% 2.49% 2.06%(f)(g) Net investment loss (e) (1.91)% (1.86)% (1.78)% (1.38)%(f)(g) Portfolio turnover rate 7% 31% 24% 45%(d) Net assets at end of period (000's) $ 35,662 $ 18,313 $ 13,049 $ 347
(a) Class C Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized. (g) The ratios of expenses and net investment loss to average net assets, previously reported as 1.82% and (1.14)% respectively, were revised to reflect all class specific expenses in this period. 1-800-922-6769 See accompanying notes to financial statements 60 COLUMBIA ACORN INTERNATIONAL SELECT
Class A Shares YEAR ENDED DECEMBER 31, -------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 10.24 $ 12.07 $ 17.15 $ 17.71 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.03 (0.01) (0.09) (0.03) Net realized and unrealized gain (loss) 4.18 (1.82) (4.90) (0.53) -------- -------- -------- --------- Total from Investment Operations 4.21 (1.83) (4.99) (0.56) -------- -------- -------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- (0.01) -- From net realized gains -- -- (0.08) -- -------- -------- -------- --------- Total Distributions Declared to Shareholders -- -- (0.09) -- -------- -------- -------- --------- NET ASSET VALUE, END OF PERIOD $ 14.45 $ 10.24 $ 12.07 $ 17.15 ======== ======== ======== ========= Total Return (c) 41.11%(d) (15.16)%(d) (29.17)%(d) (3.16)%(e) -------- -------- -------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.80% 1.80% 1.80% 1.68%(g)(h) Net investment income (loss) (f) 0.24% (0.09)% (0.67)% (1.18)%(g)(h) Reimbursement 0.44% 0.33% 0.23% -- Portfolio turnover rate 69% 102% 82% 79%(e) Net assets at end of period (000's) $ 2,557 $ 2,612 $ 2,861 $ 3,172
(a) Class A Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.29% and (0.79)% respectively, were revised to reflect all class specific expenses in this period.
Class B Shares YEAR ENDED DECEMBER 31, -------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 10.08 $ 11.96 $ 17.13 $ 17.71 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.06) (0.08) (0.18) (0.05) Net realized and unrealized gain (loss) 4.10 (1.80) (4.90) (0.53) -------- -------- -------- --------- Total from Investment Operations 4.04 (1.88) (5.08) (0.58) -------- -------- -------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- (0.01) -- From net realized gains -- -- (0.08) -- -------- -------- -------- --------- Total Distributions Declared to Shareholders -- -- (0.09) -- -------- -------- -------- --------- NET ASSET VALUE, END OF PERIOD $ 14.12 $ 10.08 $ 11.96 $ 17.13 ======== ======== ======== ========= Total Return (c) 40.08%(d) (15.72)%(d) (29.73)%(d) (3.27)%(e) -------- -------- -------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.45% 2.45% 2.45% 2.33%(g)(h) Net investment loss (f) (0.52)% (0.74)% (1.32)% (1.83)%(g)(h) Reimbursement 0.44% 0.33% 0.23% -- Portfolio turnover rate 69% 102% 82% 79%(e) Net assets at end of period (000's) $ 3,162 $ 1,835 $ 2,069 $ 1,551
(a) Class B Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.94% and (1.44)% respectively, were revised to reflect all class specific expenses in this period.
Class C Shares YEAR ENDED DECEMBER 31, -------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 10.09 $ 11.97 $ 17.14 $ 17.71 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.05) (0.08) (0.18) (0.05) Net realized and unrealized gain (loss) 4.10 (1.80) (4.90) (0.52) -------- -------- -------- --------- Total from Investment Operations 4.05 (1.88) (5.08) (0.57) -------- -------- -------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- (0.01) -- From net realized gains -- -- (0.08) -- -------- -------- -------- --------- Total Distributions Declared to Shareholders -- -- (0.09) -- -------- -------- -------- --------- NET ASSET VALUE, END OF PERIOD $ 14.14 $ 10.09 $ 11.97 $ 17.14 ======== ======== ======== ========= Total Return (c) 40.14%(d) (15.71)%(d) (29.71)%(d) (3.22)%(e) -------- -------- -------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.45% 2.45% 2.45% 2.33%(g)(h) Net investment loss (f) (0.41)% (0.74)% (1.32)% (1.83)%(g)(h) Reimbursement 0.44% 0.33% 0.23% -- Portfolio turnover rate 69% 102% 82% 79%(e) Net assets at end of period (000's) $ 3,691 $ 2,915 $ 3,885 $ 3,399
(a) Class C Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.94% and (1.44)% respectively, were revised to reflect all class specific expenses in this period. See accompanying notes to financial statements 61 Columbia Acorn Family of Funds >Financial Highlights continued COLUMBIA ACORN SELECT
Class A Shares Year Ended December 31, ---------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 13.93 $ 15.17 $ 14.12 $ 13.47 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.20) (0.16) (0.10) (0.01) Net realized and unrealized gain (loss) 4.37 (1.08) 1.18 0.86 -------- --------- --------- ---------- Total from Investment Operations 4.17 (1.24) 1.08 0.85 -------- --------- --------- ---------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- (0.01) From net realized gains (0.09) -- (0.03) (0.19) -------- --------- --------- ---------- Total Distributions Declared to Shareholders (0.09) -- (0.03) (0.20) -------- --------- --------- ---------- NET ASSET VALUE, END OF PERIOD $ 18.01 $ 13.93 $ 15.17 $ 14.12 ======== ========= ========= ========== Total Return (c) 29.95% (8.17)%(d) 7.65%(d) 6.32%(e) -------- --------- --------- ---------- RATIOS TO AVERAGE NET ASSETS Expenses 1.63%(f) 1.70%(f) 1.70% 1.61%(f)(g)(h) Net investment loss (1.15)%(f) (1.11)%(f) (0.79)% (0.62)%(f)(g)(h) Reimbursement -- 0.10% 0.18% -- Portfolio turnover rate 16% 40% 82% 116%(e) Net assets at end of period (000's) $264,679 $ 31,742 $ 11,900 $ 3,267
(a) Class A Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 0.76% and 0.23% respectively, were revised to reflect all class specific expenses in this period.
Class B Shares YEAR ENDED DECEMBER 31, ------------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD 13.73 $ 15.05 $ 14.10 $ 13.47 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.29) (0.25) (0.20) (0.01) Net realized and unrealized gain (loss) 4.29 (1.07) 1.18 0.84 --------- ---------- --------- --------- Total from Investment Operations 4.00 (1.32) 0.98 0.83 --------- ---------- --------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- (0.01) From net realized gains (0.09) -- (0.03) (0.19) --------- ---------- --------- --------- Total Distributions Declared to Shareholders (0.09) -- (0.03) (0.20) --------- ---------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 17.64 $ 13.73 $ 15.05 $ 14.10 ========= ========== ========= ========= Total Return (c) 29.14% (8.77)%(d) 6.95%(d) 6.17%(e) --------- ---------- --------- --------- RATIOS TO AVERAGE NET ASSETS Expenses 2.28%(f) 2.35%(f) 2.35% 2.26%(f)(g)(h) Net investment loss (1.80)%(f) (1.76)%(f) (1.44)% (1.27)%(f)(g)(h) Reimbursement -- 0.10% 0.18% -- Portfolio turnover rate 16% 40% 82% 116%(e) Net assets at end of period (000's) $ 118,064 $ 33,106 $ 13,358 $ 4,249
(a) Class B Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.41% and (0.42)% respectively, were revised to reflect all class specific expenses in this period. 1-800-922-6769 See accompanying notes to financial statements 62
COLUMBIA ACORN SELECT (continued) Class C Shares YEAR ENDED DECEMBER 31, ---------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 13.73 $ 15.05 $ 14.10 $ 13.47 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.30) (0.25) (0.20) (0.01) Net realized and unrealized gain (loss) 4.30 (1.07) 1.18 0.84 ---------- ---------- ---------- ---------- Total from Investment Operations 4.00 (1.32) 0.98 0.83 ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- (0.01) From net realized gains (0.09) -- (0.03) (0.19) ---------- ---------- ---------- ---------- Total Distributions Declared to Shareholders (0.09) -- (0.03) (0.20) ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 17.64 $ 13.73 $ 15.05 $ 14.10 ========== ========== ========== ========== Total Return (c) 29.14% (8.77)%(d) 6.95%(d) 6.17%(e) ---------- ---------- ---------- ---------- RATIOS TO AVERAGE NET ASSETS Expenses 2.28%(f) 2.35%(f) 2.35% 2.26%(f)(g)(h) Net investment loss (1.80)%(f) (1.76)%(f) (1.44)% (1.27)%(f)(g)(h) Reimbursement -- 0.10% 0.18% -- Portfolio turnover rate 16% 40% 82% 116%(e) Net assets at end of period (000's) $ 64,212 $ 10,919 $ 4,945 $ 1,070
(a) Class C Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.41% and (0.42)% respectively, were revised to reflect all class specific expenses in this period. See accompanying notes to financial statements 63 Columbia Acorn Family of Funds >Notes to Financial Statements 1. Nature of Operations Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select (the "Funds") are series of Columbia Acorn Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust. The investment objective of each Fund is to seek long-term growth of capital. The Funds may issue an unlimited number of shares. The Funds offer four classes of shares: Class A, Class B, Class C and Class Z. Class A shares are sold with a front-end sales charge. A contingent deferred sales charge ("CDSC") is assessed to Class A shares purchased without an initial sales charge on redemptions made within eighteen months on an original purchase of $1 million to $25 million. Class B shares are subject to a contingent deferred sales charge. Class B shares will convert to Class A shares in three, four or eight years after purchase, depending on the program under which shares are purchased. Class C shares are subject to a contingent deferred sales charge on redemptions made within one year after purchase. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares. Generally, you may exchange your Class Z or Class A shares of the Fund for shares of another fund at no additional charge. However, if you exchange Class Z shares of Columbia Acorn International or Columbia Acorn International Select that you have owned 60 days or less for Class Z shares of a fund distributed by Columbia Funds Distributor, Inc., that does not have a redemption fee (including Columbia Acorn Fund, Columbia Acorn USA and Columbia Acorn Select), the Fund will charge you a redemption fee of 2% of the redemption proceeds. Exchanges between Columbia Acorn International and Columbia Acorn International Select (or a fund distributed by Columbia Funds Distributor, Inc. that has a redemption fee) will not be subject to the 2% redemption fee. In addition, if you redeem shares of Columbia Acorn International or Columbia Acorn International Select that you have owned 60 days or less, the Fund will charge you a redemption fee of 2% of redemption proceeds, with certain exceptions. See "Fund Policy on Trading of Fund Shares and Redemption Fees" as disclosed within the Funds' prospectus for more information. The financial highlights for Class Z shares are presented in a separate annual report. The annual financial statements for the Columbia Thermostat Fund, another Fund of the Trust, begin on page 71 of this report. Effective October 13, 2003, the Funds changed their name from Liberty Acorn Fund to Columbia Acorn Fund, Liberty Acorn International to Columbia Acorn International, Liberty Acorn USA to Columbia Acorn USA, Liberty Acorn Foreign Forty to Columbia Acorn International Select and Liberty Acorn Twenty to Columbia Acorn Select. Also on that date, the Trust changed its name from Liberty Acorn Trust to Columbia Acorn Trust. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are borne pro rata on the basis of the relative net assets of all classes, except each class bears certain expenses unique to that class such as distribution services, transfer agent, and certain other class specific expenses. Differences in class expenses may result in payment of different dividend distributions for each class. All the share classes of the Trust have equal rights with respect to voting subject to class specific arrangements. On July 26, 2002, Columbia Acorn USA acquired all of the net assets of the Stein Roe Small Company Growth Fund ("Stein Roe Fund") pursuant to a plan of reorganization approved by the Stein Roe Fund shareholders on June 28, 2002. The acquisition was accomplished by a tax-free exchange of 1,139,488 shares of the Stein Roe Fund (valued at $10,096,640) for 726,123 shares of Columbia Acorn USA. The net assets of the Stein Roe Fund were combined with the net assets of Columbia Acorn USA on the acquisition date and included $3,125,202 of unrealized depreciation on investment. The aggregate net assets of Columbia Acorn USA immediately before and after acquisition were $306,945,066 and $317,041,706, respectively. 2. Significant Accounting Policies >Security valuation Investments are stated at fair value. Securities traded on securities exchanges or in over-the-counter markets in which transaction prices are reported are valued at the last sales price at the time of valuation. If a security is traded principally on the Nasdaq Stock Market Inc., the SEC-approved Nasdaq Official Closing Price will be applied. Securities for which there are no reported sales on the valuation date are valued at the latest bid quotation. Money market instruments having a maturity of 60 days or less from the valuation date are valued on an amortized cost basis, which approximates fair value. Securities for which quotations are not available are valued at a fair value as determined in good faith by the Board of Trustees. >Repurchase agreements The Funds may engage in repurchase agreement transactions. The Funds, through their custodians, receive delivery of underlying securities collateralizing repurchase agreements. The Funds' investment advisor determines 1-800-922-6769 64 that the value of the underlying securities is at all times at least equal to the resale price. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. >Foreign currency translations Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and dividend and interest income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such transactions. The gain or loss resulting from changes in foreign exchange rates is included with net realized and unrealized gain or loss from investments, as appropriate. >Security transactions and investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities are recorded as soon as the information is available to the Funds. Interest income is recorded on the accrual basis and includes amortization of discounts on money market instruments and long-term debt instruments when required for federal income tax purposes. Realized gains and losses from security transactions are reported on an identified cost basis. Awards from class action litigation may be recorded as a reduction of cost. If the Funds no longer own the applicable securities, the proceeds are recorded as realized gains. The Funds estimate components of distributions from Real Estate Investment Trusts (REITs). Distributions received in excess of income are recorded as a reduction of the cost of the related investments. Results of operations for the year reflect a change in estimate of these components using more current tax reporting received from REIT investments. The change in estimate had no impact on each of the Fund's net assets. >Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. >Financial instruments Each Fund may purchase or sell exchange-traded financial futures contracts, which are contracts that obligate that Fund to make or take delivery of a financial instrument or the cash value of a securities index at a specified future date at a specified price. The Funds enter into such contracts to hedge a portion of their portfolio. Gains and losses are reflected as "Net Realized Gain (Loss) on Futures" in the Statements of Operations. Additionally, each Fund, except for Columbia Acorn USA and Columbia Acorn Select, may engage in portfolio hedging with respect to changes in foreign currency exchange rates by entering into forward foreign currency contracts to purchase or sell foreign currencies. The Statements of Operations reflect gains and losses as realized for closed forward foreign currency contracts and unrealized for open contracts. The Funds bear the market risk that arises from changes in the value of financial instruments and securities indices (futures contracts) or from changes in foreign currency rates (forward foreign currency contracts) and the credit risk should a counterparty fail to perform under such contracts. None of the Funds entered into any futures contracts or forward foreign currency contracts during the year ended December 31, 2003. >Fund share valuation Fund shares are sold and redeemed on a continuing basis at net asset value. Net asset value per share is determined daily as of the close of trading on the New York Stock Exchange on each day the Exchange is open for trading. All income, expenses (other than the Class A, Class B and Class C 12b-1 and distribution fees, and Class A, Class B, Class C and Class Z shares Transfer Agent fees) and realized and unrealized gains (losses) of a fund are allocated to each class proportionately on a daily basis for purposes of determining the net asset value of each class. Redemption fees are allocated to paid-in-capital of each class proportionately for the purposes of determining net asset value of each class. >Custody fees Custody fees are reduced based on each Fund's cash balances maintained with the custodian. The amount is disclosed as a reduction of total expenses in the Statement of Operations. >Federal income taxes The Funds have complied with the special provisions of the Internal Revenue Code available to regulated investment companies and, in the manner provided therein, distribute all their taxable income, as well as any net realized gain on sales of investments and foreign currency transactions reportable for federal income tax purposes. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required. >Distributions to Shareholders Distributions to shareholders are recorded on the ex-date. 65 Columbia Acorn Family of Funds >Notes to Financial Statements continued 3. Federal Tax Information Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for deferral of losses from wash sales, straddle deferrals, mark-to-market on futures contracts, current year distribution payable, foreign currency transactions, net operating losses, passive foreign investment companies, capital loss carryforwards, post-October losses and non-deductible expenses. Reclassifications are made to the Funds' capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. For the year ended December 31, 2003, permanent items identified and reclassified among the components of net assets are as follows: UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET ACCUMULATED NET INVESTMENT NET REALIZED PAID-IN UNREALIZED LOSS) GAIN (LOSS) CAPITAL APPRECIATION --------------- ------------ -------- ------------ (IN THOUSANDS) Columbia Acorn Fund $13,265 $(13,067) $ (607) $ 409 Columbia Acorn International 1,034 (7,045) -- 6,011 Columbia Acorn USA 4,550 3,217 (7,767) -- Columbia Acorn International Select 20 (20) -- -- Columbia Acorn Select 4,409 (4,146) (263) -- Net investment income, net realized gains (losses) and net assets were not affected by this reclassification. The tax character of distributions paid during the years ended December 31, 2003 and December 31, 2002 were as follows: LONG-TERM ORDINARY CAPITAL DECEMBER 31, 2003 INCOME GAINS - ----------------- --------- ---------- (IN THOUSANDS) Columbia Acorn Fund $ -- $9,917 Columbia Acorn Internationa l5,935 -- Columbia Acorn USA -- -- Columbia Acorn International Select 19 -- Columbia Acorn Select 736 3,445 Ordinary December 31, 2002 Income - ----------------- --------- (IN THOUSANDS) Columbia Acorn International $ 9,289 As of December 31, 2003, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY LONG-TERM UNREALIZED INCOME CAPITAL GAINS APPRECIATION* -------------- ------------- ------------- (IN THOUSANDS) Columbia Acorn Fund $ -- $ 14,205 $ 3,824,239 Columbia Acorn International 16,894 -- 435,632 Columbia Acorn USA -- -- 158,303 Columbia Acorn International Select 154 -- 12,522 Columbia Acorn Select -- -- 109,976 *The difference between book-basis and tax-basis unrealized appreciation, if applicable, is attributable primarily to the tax deferral of losses on wash sales, REIT adjustments and foreign currency transactions. For the year ended December 31, 2003, the following capital loss carryforwards are available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code: YEAR OF COLUMBIA COLUMBIA ACORN COLUMBIA EXPIRATION ACORN FUND INTERNATIONAL ACORN USA - ---------- ----------- -------------- --------- (IN THOUSANDS) 2009 $ -- $ 111,479 $ 3,035 2010 -- 76,335 10,064 2011 -- 48,476 -- ----------- -------------- --------- TOTAL $ -- $ 236,290 $13,099 YEAR OF COLUMBIA ACORN COLUMBIA ACORN EXPIRATION INTERNATIONAL SELECT SELECT - ---------- -------------------- -------------- (IN THOUSANDS) 2009 $23,084 $ -- 2010 12,528 -- 2011 2,488 -- -------------------- -------------- TOTAL $38,100 $ -- Capital loss carryforwards utilized during the year ended December 31, 2003, were as follows: Columbia Acorn $38,258 Columbia Acorn USA 5,383 Columbia Acorn Select 530 Expired capital loss carryforwards, if any, are recorded as a reduction of paid-in capital. 1-800-922-6769 66 Columbia Acorn Fund and Columbia Acorn International have elected to mark-to-market their investments in Passive Foreign Investment Companies ("PFIC's") for federal income tax purposes. Gains and losses relating to PFIC's are treated as ordinary income for federal income tax purposes. A summary of transactions relating to PFIC's is as follows (in thousands): COLUMBIA ACORN FUND - -------------------------------------------------------------------------------- (IN THOUSANDS) Cumulative unrealized appreciation on PFIC's recognized in prior years at December 31, 2002 $ 409 Unrealized appreciation (depreciation) on PFIC's recognized for federal income tax purposes during 2003 -- Unrealized appreciation recognized in prior years on PFIC's sold during 2003 (409) ---------- Cumulative unrealized appreciation on PFIC's carried forward at December 31, 2003 $ -- ---------- COLUMBIA ACORN INTERNATIONAL - -------------------------------------------------------------------------------- (IN THOUSANDS) Cumulative unrealized appreciation on PFIC's recognized in prior years at December 31, 2002 $ 7,225 Unrealized appreciation (depreciation) on PFIC's recognized for federal income tax purposes during 2003 1,215 Unrealized appreciation recognized in prior years on PFIC's sold during 2003 (7,225) ---------- Cumulative unrealized appreciation on PFIC's carried forward at December 31, 2003 $ 1,215 ---------- 4. Transactions with Affiliates Effective October 13, 2003, the Fund's investment advisor changed its name from Liberty Wanger Asset Management, L.P. to Columbia Wanger Asset Management, L.P. ("Columbia WAM"). Columbia WAM, a wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a wholly-owned subsidiary of Fleet National Bank, which in turn is a wholly-owned subsidiary of FleetBoston Financial Corporation ("Fleet"), furnishes continuing investment supervision to each Fund and is responsible for the overall management of the Funds' business affairs. Under the Funds' investment management agreement, fees are accrued daily and paid monthly to Columbia WAM at the annual rates shown in the table below for each fund. COLUMBIA ACORN FUND - -------------------------------------------------------------------------------- Net asset value: On the first $700 million .75% Next $1.3 billion .70% Net assets in excess of $2 billion .65% COLUMBIA ACORN INTERNATIONAL - -------------------------------------------------------------------------------- Net asset value: On the first $100 million 1.20% Next $400 million .95% Net assets in excess of $500 million .75% COLUMBIA ACORN USA - -------------------------------------------------------------------------------- Net asset value: On the first $200 million .95% Net assets in excess of $200 million .90% COLUMBIA ACORN INTERNATIONAL SELECT - -------------------------------------------------------------------------------- On average daily net assets: .95% COLUMBIA ACORN SELECT - -------------------------------------------------------------------------------- On average daily net assets: .90% >Expense Limit Columbia WAM has voluntarily agreed to reimburse the ordinary operating expenses (exclusive of distribution and service fees, interest, taxes and extraordinary expenses, if any) exceeding 1.45% of the average annual net assets for Columbia Acorn International Select Class A, B and C shares and 1.35% of the average annual net assets for Columbia Acorn Select Class A, B and C shares. Columbia WAM also provides administrative services to each Fund at an annual rate of .05% of average daily net assets. Effective October 13, 2003, Liberty Funds Distributor, Inc. changed its name to Columbia Funds Distributor, Inc. (the Distributor). The Distributor, an indirect subsidiary of Fleet, is each Fund's principal underwriter and receives no compensation on the sale of Class Z shares. For the year ended December 31 2003, Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select have been advised that the Distributor retained $1,525,281 in underwriting discounts on the sale of Class A shares and received contingent deferred sales charges of $1,676,890, $90,066, $131,820, $9,893, $154,202, respectively, on Class A, Class B and Class C share redemptions. Each Fund has adopted a 12b-1 plan which requires it to pay the Distributor a monthly service fee equal to 0.25% annually, of the average daily net assets attributable to Class A, Class B and Class C shares. The 12b-1 plan also requires each Fund to pay the Distributor a monthly distribution fee equal to 0.10%, 0.75% and 0.75% annually, of the average daily net assets attributable to Class A, Class B and Class C shares, respectively. Effective October 13, 2003, Liberty Funds Services, Inc. changed its name to Columbia Funds Services, Inc. (the "Transfer Agent"). The Transfer Agent, an affiliate of the investment advisor, provides shareholder services to the 67 Columbia Acorn Family of Funds >Notes to Financial Statements continued Funds and receives reimbursement for out-of-pocket expenses. Transfer Agent fees are comprised of 0.07% annually, of the average daily net assets attributable to Class A, Class B and Class C shares plus charges based on the number of shareholder accounts and transactions. Certain officers and trustees of the Trust are also officers of Columbia WAM. The Trust makes no direct payments to its officers or trustees who are affiliated with Columbia WAM. Trustees' fees and expenses for the year ended December 31, 2003 are as follows: - ---------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 369 Columbia Acorn International 70 Columbia Acorn USA 20 Columbia Acorn International Select 4 Columbia Acorn Select 14 - ---------------------------------------------------------------- The Trust provides a deferred compensation plan for its trustees. Under that plan, a trustee may elect to defer all or a portion of his or her compensation. Amounts deferred are retained by the Trust and represent an unfunded obligation of the Trust. The value of amounts deferred is determined by reference to the change in value of Class Z shares of one or more series of the Trust or a money market fund as specified by the trustee. Benefits under the deferred compensation plan are payable upon retirement. During the year ended December 31, 2003, the Funds engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. Those transactions complied with Rule 17a-7 under the Investment Company Act of 1940 and were as follows: FUNDS PURCHASES SALES - ---------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 32,474 $ 5,329 Columbia Acorn International 7,022 33,552 Columbia Acorn USA 1,032 -- Columbia Acorn International Select -- 45 Columbia Acorn Select -- 1,204 - ---------------------------------------------------------------- 5. Borrowing Arrangements The Trust participates in a $150 million credit facility, which was entered into to facilitate portfolio liquidity. No amounts have been borrowed under this facility for the year ended December 31, 2003. 6. Investment Transactions The aggregate cost of purchases and proceeds from sales other than short-term obligations for the year ended December 31, 2003 were: COLUMBIA ACORN FUND - -------------------------------------------------------------------------------- (IN THOUSANDS) 2003 Investment securities Purchases $2,754,813 Proceeds from sales 692,955 ================================================================================ COLUMBIA ACORN INTERNATIONAL - -------------------------------------------------------------------------------- (IN THOUSANDS) 2003 Investment securities Purchases 533,515 Proceeds from sales 712,236 ================================================================================ COLUMBIA ACORN USA - -------------------------------------------------------------------------------- (IN THOUSANDS) 2003 Investment securities Purchases 198,615 Proceeds from sales 29,091 ================================================================================ COLUMBIA ACORN INTERNATIONAL SELECT - -------------------------------------------------------------------------------- (IN THOUSANDS) 2003 Investment securities Purchases 22,844 Proceeds from sales 25,103 ================================================================================ COLUMBIA ACORN SELECT - -------------------------------------------------------------------------------- (IN THOUSANDS) 2003 Investment securities Purchases 490,046 Proceeds from sales 62,409 ================================================================================ 7. Legal Proceedings The Securities and Exchange Commission (the "SEC"), the New York Attorney General and various other regulatory authorities are investigating late trading and market timing in mutual fund shares, and have sent information requests and subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG") (collectively, "Columbia"). These affiliates include the Distributor, Columbia Management Advisors, Inc. ("CMA"), and Columbia Wanger Asset Management, L.P. ("Columbia WAM"). CMA is the adviser to the Columbia Family of Funds, but is not the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered any instances where Columbia entities were knowingly involved in late trading of mutual fund shares. Columbia has identified a limited number of investors who had informal arrangements for trading shares of various funds managed by subsidiaries of CMG between 1998 and 2003. A majority of the transactions in connection with these arrangements occurred in one international fund and two domestic funds 1-800-922-6769 68 in the Columbia Family of Funds. A majority of the trading under these arrangements was made by three entities. A substantial majority of the trading had ended by October 2002. None of these arrangements exist today. Information relating to those trading arrangements has been supplied to various regulatory authorities. The SEC staff has issued notices to the effect that it has made a preliminary determination to recommend that the SEC bring civil enforcement actions, including injunctive proceedings, against the Distributor and CMA alleging that they have violated certain provisions of the federal securities laws. Columbia believes that those allegations are based principally on the trading arrangements referred to above. Columbia WAM has not been named in these notices. The Distributor and CMA are engaged in discussions with the SEC staff in an effort to reach a satisfactory resolution of these matters. However, there can be no assurance that such a resolution will be reached. Any potential resolution of these matters may include, but not be limited to, sanctions, financial penalties, damages or injunctions regarding the Distributor or CMA, and structural changes in the conduct of their business. Although Columbia does not believe that these regulatory developments or their resolution will have a material adverse effect on the Funds, or on the ability of the Distributor or Columbia WAM to provide services to the Funds, there can be no assurance that these matters or any publicity relating to these matters or other developments resulting from them will not adversely effect sales or redemptions of Fund shares or otherwise effect the Funds. Columbia Acorn Trust (the "Trust") and Columbia WAM are defendants in a lawsuit that seeks certification of a plaintiff class consisting of all persons in the United States who held shares in Columbia Acorn International Fund ("International Fund") for a period of more than 14 days during the five years prior to the filing of the lawsuit. The suit seeks compensatory and punitive damages, as well as interest, costs and attorney's fees. The lawsuit alleges, in summary, that the Trust and Columbia WAM exposed International Fund shareholders to trading by market timers by allegedly (a) failing to properly evaluate daily whether a significant event affecting the value of International Fund's securities had occurred after foreign markets had closed but before the calculation of the Fund's net asset value ("NAV"); (b) failing to implement International Fund's portfolio valuation and share pricing policies and procedures; (c) allowing portfolio valuation and share policies and procedures that benefited market timers at the expense of long-term shareholders; and (d) failing to know and implement applicable rules and regulations concerning the calculation of NAV. The Trust and Columbia WAM also are defendants in a lawsuit that seeks certification of a plaintiff class consisting of all persons in the United States who held shares in International Fund for a period of more than 14 days, without any stated limitation on the duration of the class period. The suit seeks compensatory and punitive damages, as well as interest, costs and attorney's fees. This suit contains allegations and counts similar to those described above, and also includes an additional count under Section 36(a) of the Investment Company Act of 1940. The Trust, on behalf of International Fund, and Columbia WAM intend to defend both suits vigorously. The Trust does not believe that the pending actions will have a material adverse affect on the financial statements of any Fund, and Columbia WAM does not believe that the pending actions will have a material adverse affect on its ability to perform under its contracts with the Funds. 69 Columbia Acorn Family of Funds >Unaudited Information FEDERAL INCOME TAX INFORMATION: COLUMBIA ACORN FUND For the fiscal year ended December 31, 2003, the Fund designates long-term capital gains of $24,122. COLUMBIA ACORN INTERNATIONAL FUND Foreign taxes paid during the fiscal year ended December 31, 2003, amounted to $3,216 ($0.04 per share) are expected to be passed through to shareholders as 100% allowable foreign tax credits on Form 1099-DIV for the year ended December 31, 2003. Gross income derived from sources within foreign countries amounted to $33,962 ($0.46 per share) for the fiscal year ended December 31, 2003. COLUMBIA ACORN INTERNATIONAL SELECT FUND Foreign taxes paid during the fiscal year ended December 31, 2003, amounted to $62 ($0.02 per share) are expected to be passed through to shareholders as 100% allowable foreign tax credits on Form 1099-DIV for the year ended December 31, 2003. Gross income derived from sources within foreign countries amounted to $745 ($0.25 per share) for the fiscal year ended December 31, 2003. COLUMBIA ACORN SELECT FUND For the fiscal year ended December 31, 2003, the Fund designates long-term capital gains of $3,445. 100% of the ordinary income distributed by the Fund, in the year ended December 31, 2003, qualifies for the corporate dividends received deduction. For non-corporate shareholders 100%, or the maximum amount allowable under the Job and Growth Tax Relief Reconciliation Act of 2003, of income earned by the Fund for the period January 1, 2003 to December 31, 2003 may represent qualified dividend income. Final information will be provided in your 2003 1099-DIV form. 1-800-922-6769 70 Columbia Thermostat Fund >Statement of Investments, December 31, 2003 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) - ---------------------------------------------------------------- >STOCK FUNDS: 49.5% 981 Columbia Growth & Income Fund, Class Z $ 15,899 1,719 Columbia Growth Stock Fund, Class Z (b) 15,870 559 Columbia Acorn Fund, Class Z 12,613 393 Columbia Mid Cap Value Fund, Class Z 9,502 522 Columbia Acorn Select, Class Z (b) 9,501 - ---------------------------------------------------------------- TOTAL STOCK FUNDS (COST: $54,614) 63,385 >BOND FUNDS: 49.6% 3,469 Columbia Intermediate Bond Fund, Class Z 31,739 1,775 Columbia Federal Securities Fund, Class Z 19,061 1,453 Columbia High Yield Fund, Class Z 12,696 - ---------------------------------------------------------------- TOTAL BOND FUNDS (COST: $62,988) 63,496 >SHORT-TERM OBLIGATION: 0.8% $ 972 Repurchase Agreement with State Street Bank & Trust Co., dated 12/31/03, due 1/02/04 at 0.85% collateralized by Federal National Mortgage Association Notes maturing 6/17/05, Market Value $996 (repurchase proceeds: $972) 972 - ---------------------------------------------------------------- (COST: $972) 972 ----------- TOTAL INVESTMENTS: 99.9% 127,853 (COST: $118,574) CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 76 ----------- TOTAL NET ASSETS: 100% $ 127,929 ================================================================ >Notes to Statement of Investments (in thousands) (a) At December 31, 2003, for federal income tax purposes cost of investments was $118,600 and net unrealized appreciation was $9,253, consisting of gross unrealized appreciation of $9,349 and gross unrealized depreciation of $96. (b) Non-income producing. 71 Columbia Thermostat Fund >Statement of Assets and Liabilities
DECEMBER 31, 2003 - ----------------- (IN THOUSANDS) ASSETS Investments, at value (cost: $118,574) $ 127,853 Cash 8 Receivable for: Fund shares sold 1,655 Dividends 219 Expense reimbursement due from Advisor 167 -------------- Total Assets 129,902 LIABILITIES Payable for: Investments purchased 1,782 Fund shares redeemed 53 Transfer agent fees 29 Custody fees 2 Reports to shareholders 19 12b-1 Service & Distribution fees 74 Other liabilities 14 -------------- Total Liabilities 1,973 -------------- NET ASSETS $ 127,929 ============== COMPOSITION OF NET ASSETS Paid in capital $ 118,444 Accumulated net realized gain 206 Net unrealized appreciation on investments 9,279 -------------- NET ASSETS $ 127,929 ============== Net asset value per share-- Class A (a) $ 12.30 (Net assets/shares) ($42,271/3,437) Maximum offering price per share-- Class A (b) $ 13.05 (Net asset value per share/front-end sales charge) ($12.30/0.9425) Net asset value and offering price per share-- Class B (a) $ 12.32 (Net assets/shares) ($51,501/4,179) Net asset value and offering price per share-- Class C (a) $ 12.32 (Net assets/shares) ($20,087/1,631) Net asset value, offering price and redemption price per share-- Class Z $ 12.31 (Net assets/shares) ($14,070/1,143)
(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. 1-800-922-6769 See accompanying notes to financial statements. 72 Columbia Thermostat Fund >Statement of Operations For the Year Ended December 31, 2003 (IN THOUSANDS) - -------------- INVESTMENT INCOME: Dividends from investment company shares $ 1,135 Interest income 27 --------- Total Investment Income 1,162 EXPENSES: Management fees 49 Administration fees 25 12b-1 Services & Distribution fees 299 Transfer agent fees 134 Trustees fees --* Custody fees 28 Registration and blue sky fees 159 Reports to shareholders 85 Other expenses 37 --------- Total expenses 816 Less custody fees paid indirectly --* Less reimbursement of expenses by Advisor (350) --------- Net Expenses 466 --------- Net Investment Income 696 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Realized gain distributions from investment company shares 272 Net unrealized appreciation on investments 9,219 --------- Net realized and unrealized gain 9,491 --------- Net Increase in Net Assets resulting from Operations $ 10,187 ========= *Rounds to less than $500. See accompanying notes to financial statements. 73 Columbia Thermostat Fund >Statement of Changes in Net Assets YEAR ENDED PERIOD ENDED INCREASE IN NET ASSETS DECEMBER 31, DECEMBER 31, - ---------------------- ----------- ----------- (IN THOUSANDS) 2003 (a) 2002 (b) OPERATIONS: Net investment income $ 696 $ 9 Net realized gain on investments 272 10 Net unrealized appreciation 9,219 60 ----------- ---------- Net Increase from Operations 10,187 79 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income-- Class A (395) -- Net realized gain-- Class A (21) -- Net investment income-- Class B (108) -- Net realized gain-- Class B (30) -- Net investment income-- Class C (43) -- Net realized gain-- Class C (10) -- Net investment income-- Class Z (160) -- Net realized gain-- Class Z (14) -- ----------- ---------- Total Distribution to Shareholders (781) -- SHARE TRANSACTIONS: Subscriptions-- Class A 40,815 -- Distributions reinvested-- Class A 373 -- Redemptions-- Class A (1,441) -- ----------- ---------- Net Increase-- Class A 39,747 -- Subscriptions-- Class B 48,741 -- Distributions reinvested-- Class B 125 -- Redemptions-- Class B (1,176) -- ----------- ---------- Net Increase-- Class B 47,690 -- Subscriptions-- Class C 19,668 -- Distributions reinvested-- Class C 44 -- Redemptions-- Class C (1,015) -- ----------- ---------- Net Increase-- Class C 18,697 -- Subscriptions-- Class Z 9,094 4,089 Distributions reinvested-- Class Z 166 -- Redemptions-- Class Z (1,023) (16) ----------- ---------- Net Increase-- Class Z 8,237 4,073 ----------- ---------- Net Increase from Share Transactions 114,371 4,073 ----------- ---------- Total Increase in Net Assets 123,777 4,152 ----------- ---------- NET ASSETS: Beginning of period 4,152 -- ----------- ---------- End of period $ 127,929 $ 4,152 =========== ========== OVERDISTRIBUTED (UNDISTRIBUTED) NET INVESTMENT INCOME $-- $9 =========== ========== (a) Class A, Class B, and Class D commenced operations March 3, 2003. On October 13, 2003, Class D was redesignated Class C. (b) Class Z commenced operations September 25, 2002. 1-800-922-6769 See accompanying notes to financial statements. 74
YEAR ENDED PERIOD ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: DECEMBER 31, DECEMBER 31, - ----------------------------------------- ----------- ----------- (IN THOUSANDS) 2003 (a) 2002 (b) Subscriptions-- Class A 3,529 -- Shares issued in reinvestment and capital gains-- Class A 31 -- Less shares redeemed-- Class A (123) -- ----------- ----------- Net Increase-- Class A 3,437 -- Subscriptions-- Class B 4,268 -- Shares issued in reinvestment and capital gains-- Class B 10 -- Less shares redeemed-- Class B (99) -- ----------- ----------- Net Increase-- Class B 4,179 -- Subscriptions-- Class C 1,712 -- Shares issued in reinvestment and capital gains-- Class C 4 -- Less shares redeemed-- Class C (85) -- ----------- ----------- Net Increase-- Class C 1,631 -- Subscriptions-- Class Z 821 400 Shares issued in reinvestment and capital gains-- Class Z 14 -- Less shares redeemed-- Class Z (91) (1) ----------- ----------- Net Increase-- Class Z 744 399 ----------- ----------- Net Increase in Shares of Beneficial Interest 9,991 399 ----------- -----------
(a) Class A, Class B, Class D commenced operations March 3, 2003. On October 13, 2003, Class D was redesignated Class C. (b) Class Z commenced operations September 25, 2002. See accompanying notes to financial statements. 75 Columbia Thermostat Fund >Financial Highlights INCEPTION MARCH 3, 2003 THROUGH Class A Shares DECEMBER 31, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 10.10 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.18 Net realized and unrealized gain 2.15 -------------- Total from Investment Operations 2.33 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.13) From net realized gains (0.00)(b) -------------- Total Distributions Declared to Shareholders (0.13) -------------- NET ASSET VALUE, END OF PERIOD $ 12.30 ============== Total Return 23.10%(c)(d) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (e)(f) 0.57%(g) Net investment income (f) 1.86%(g) Reimbursement (f) 0.66%(g) Portfolio turnover rate 61%(c) Net assets at end of period (000's) $ 42,271 (a) Per share data was calculated using average shares outstanding during the period. Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. (b) Represents less than $0.01. (c) Not annualized. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Does not include expenses of the investment companies in which the Fund invests. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. INCEPTION MARCH 3, 2003 THROUGH CLASS B SHARES DECEMBER 31, ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 10.10 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.10 Net realized and unrealized gain 2.16 ----------- Total from Investment Operations 2.26 ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.04) From net realized gains (0.00)(b) ----------- Total Distributions Declared to Shareholders (0.04) ----------- NET ASSET VALUE, END OF PERIOD $ 12.32 =========== Total Return 22.38%(c)(d) RATIOS TO AVERAGE NET ASSETS Expenses (e)(f) 1.32%(g) Net investment income (f) 1.06%(g) Reimbursement (f) 0.66%(g) Portfolio turnover rate 61%(c) Net assets at end of period (000's) $ 51,501 (a) Per share data was calculated using average shares outstanding during the period. Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. (b) Represents less than $0.01. (c) Not annualized. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Does not include expenses of the investment companies in which the Fund invests. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. INCEPTION MARCH 3, 2003 THROUGH Class C Shares DECEMBER 31, ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 10.10 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.11 Net realized and unrealized gain 2.15 ----------- Total from Investment Operations 2.26 ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.04) From net realized gains (0.00)(b) ----------- Total Distributions Declared to Shareholders (0.04) ----------- NET ASSET VALUE, END OF PERIOD $ 12.32 =========== Total Return 22.38%(c)(d) ----------- RATIOS TO AVERAGE NET ASSETS Expenses (e)(f) 1.32%(g) Net investment income (f) 1.10%(g) Reimbursement (f) 0.66%(g) Portfolio turnover rate 61%(c) Net assets at end of period (000's) $ 20,087 (a) Per share data was calculated using average shares outstanding during the period. Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. (b) Represents less than $0.01. (c) Not annualized. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Does not include expenses of the investment companies in which the Fund invests. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. 1-800-922-6769 See accompanying notes to financial statements. 76 Columbia Thermostat Fund >Notes to Financial Statements 1. Nature of Operations Columbia Thermostat Fund (the "Fund"), a series of Columbia Acorn Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust, commenced operations September 25, 2002. The Fund may issue an unlimited number of shares. The Fund currently offers four classes of shares: Class A, Class B, Class C and Class Z. On October 13, 2003, Class D was redesignated Class C. Class A shares are sold with a front-end sales charge. A contingent deferred sales charge may be assessed to Class A shares purchased without an initial sales charge on redemptions made within eighteen months on an original purchase of $1 million to $25 million. Class B shares are subject to a contingent deferred sales charge. Class B shares will convert to Class A shares in three, four or eight years after purchase, depending on the program under which shares are purchased. Class C shares are subject to a contingent deferred sales charge on redemptions made within one year after purchase. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares. The financial highlights for Class Z shares are presented in a separate annual report. The annual report for the other series of the Trust is also included in this report. The investment objective of the Fund is to provide long-term total return. The Fund pursues its investment objective by investing in shares of other mutual funds. As a `fund of funds', under normal circumstances, the Fund allocates at least 95% of its net assets among a selected group of stock and bond mutual funds (the "Portfolio Funds") according to the current level of the Standard & Poor's 500 Stock Index in relation to predetermined ranges set by the Fund's investment adviser. As of December 31, 2003, the Fund invested in five stock Portfolio Funds (Columbia Acorn Fund, Columbia Acorn Select Fund, Columbia Growth & Income Fund, Columbia Mid Cap Value Fund, Columbia Growth Stock Fund) and three bond Portfolio Funds (Columbia Federal Securities Fund, Columbia Intermediate Bond Fund and Columbia High Yield Fund). The Fund may also invest up to 5% of its net assets plus any cash received that day in cash, repurchase agreements, high quality short-term paper and government securities. 2. Significant Accounting Policies >Security valuation Investments in Portfolio Funds are valued at their net asset value as reported by the underlying funds. High quality short-term paper and government securities having a maturity of 60 days or less from the valuation date are valued on an amortized cost basis, which approximates fair value. >Repurchase agreements The Fund may engage in repurchase agreement transactions. The Fund, through its custodian, receives delivery of underlying securities collateralizing each repurchase agreement. The Fund's investment advisor determines that the value of the underlying securities is at all times at least equal to the resale price. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. >Security transactions and investment income Portfolio Fund transactions are accounted for on the trade date (date the order to buy or sell is executed). Dividend income and realized gain distributions from other funds are recorded on the ex-dividend date. Interest income is recorded on the accrual basis and includes amortization of discounts on money market instruments and short-term debt instruments when required for federal income tax purposes. Realized gains and losses from security transactions are reported on an identified cost basis. Awards from class action litigation may be recorded as a reduction of cost. If the Fund no longer owns the applicable securities, the proceeds are recorded as realized gains. >Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. >Fund share valuation Fund shares are sold and redeemed on a continuing basis at net asset value. Net asset value per share is determined daily as of the close of trading on the New York Stock Exchange on each day the Exchange is open for trading. >Custody fees The custody fees are reduced based on the Fund's cash balance maintained with the custodian. The amount is disclosed as a reduction of total expenses in the Statement of Operations. 77 Columbia Thermostat Fund >Notes to Financial Statements, Continued >Federal income taxes The Fund has complied with the special provisions of the Internal Revenue Code available to regulated investment companies and, in the manner provided therein, distributes all of its taxable income, as well as any net realized gain on sales of Portfolio Fund shares and any distributions of net realized gains received by the Fund from its Portfolio Funds, reportable for federal income tax purposes. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required. >Distributions to Shareholders Distributions to shareholders are recorded on the ex-date. 3. Federal Tax Information Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments of non-deductible expenses. 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. For the year ended December 31, 2003, permanent items identified and reclassified among the components of net assets are as follows: OVERDISTRIBUTED ACCUMULATED NET INVESTMENT NET REALIZED PAID-IN INCOME GAIN CAPITAL - -------------------------------------------------------------- (in thousands) $ 1 $ (1) $ -- Net investment income, net realized gains (losses) and net assets were not affected by this reclassification. The tax character of distributions paid during the year ended December 31, 2003 was as follows: LONG-TERM TAX ORDINARY CAPITAL RETURN OF INCOME GAINS CAPITAL - -------------------------------------------------------------- (in thousands) $ 771 $ 10 $ -- As of December 31, 2003, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY LONG-TERM UNREALIZED INCOME CAPITAL GAINS APPRECIATION* - -------------------------------------------------------------- (in thousands) $ 197 $ 36 $ 9,253 * The difference between book-basis and tax-basis unrealized appreciation (depreciation), if applicable, is attributable primarily to the tax deferral of losses on wash sales. 4. Transactions with Affiliates Effective October 13, 2003, the Fund's investment advisor changed its name from Liberty Wanger Asset Management, L.P. to Columbia Wanger Asset Management, L.P. ("Columbia WAM"). Columbia WAM, a wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a wholly-owned subsidiary of Fleet National Bank, which in turn is a wholly-owned subsidiary of FleetBoston Financial Corporation ("Fleet"), furnishes continuing investment supervision to each Fund and is responsible for the overall management of the Fund's business affairs. Under the Funds' investment management agreement, fees are accrued daily and paid monthly to Columbia WAM at the annual rate of 0.10% of the Fund's average daily net assets. >Expense Limit Columbia WAM has agreed to voluntarily reimburse the direct operating expenses (exclusive of distribution and service fees, interest, taxes, extraordinary expenses, if any, and expenses associated with the Fund's investment in other investment companies) exceeding 0.60% of the average annual net assets of the Fund's Class A, B and C shares. Effective August 1, 2003, Columbia WAM has agreed to contractually reimburse the direct operating expenses (exclusive of distribution and service fees, interest, taxes, extraordinary expenses, if any, and expenses associated with the Fund's investment in other investment companies) exceeding 0.25% of the average annual net assets of the Fund's Class A, B and C shares. Columbia WAM has also contracted to provide administrative services at an annual rate of .05% of the Fund's average daily net assets. Effective October 13, 2003 Liberty Funds Distributor, Inc., changed its name to Columbia Funds Distributor, Inc. (the Distributor). The Distributor, an indirect subsidiary of Fleet, is the Fund's principal underwriter and receives no compensation on the sale of Class Z shares. For the year ended December 31 2003, the Fund has been advised that the Distributor retained $178,252 in underwriting discounts on the sale of Class A and Class D shares prior to the share re-designation of Class D to Class C shares. The Fund has been advised that the Distributor received contingent deferred sales charges of $0, $26,208 and $557 on Class A, Class B and Class C share redemptions, respectively. 1-800-922-6769 78 The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a monthly service fee equal to 0.25% annually, of the average daily net assets attributable to Class A, Class B and Class C shares. The 12b-1 plan also requires the Fund to pay the Distributor a monthly distribution fee equal to 0.25%, 0.75% and 0.75% annually, of the average daily net assets attributable to Class A, Class B and Class C shares, respectively. Effective October 13, 2003, Liberty Funds Services, Inc., changed its name to Columbia Funds Services, Inc. (the "Transfer Agent"). The Transfer Agent, an affiliate of the investment advisor, provides shareholder services to the Fund and receives reimbursement for out-of-pocket expenses. Transfer Agent fees are comprised of 0.07% annually, of the average daily net assets attributable to Class A, Class B and Class C shares plus charges based on the number of shareholder accounts and transactions. Certain officers and trustees of the Trust are also officers of Columbia WAM. The Trust makes no direct payments to its officers and trustees who are affiliated with Columbia WAM. Trustees' fees and expenses for the year ended December 31, 2003, were $270. 5. Borrowing Arrangements The Trust participates in a $150 million credit facility, which was entered into to facilitate portfolio liquidity. No amounts have been borrowed under this facility for the year ended December 31, 2003. 6. Investment Transactions The aggregate cost of purchases and proceeds from sales other than short-term obligations for the year ended December 31, 2003 were: - ------------------------------------------------------------ (in thousands) Purchases $ 144,197 Proceeds from sales $ 30,493 ============================================================ 7. Legal Proceedings The Securities and Exchange Commission (the "SEC"), the New York Attorney General and various other regulatory authorities are investigating late trading and market timing in mutual fund shares, and have sent information requests and subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG") (collectively, "Columbia"). These affiliates include the Distributor, Columbia Management Advisors, Inc. ("CMA"), and Columbia Wanger Asset Management, L.P. ("Columbia WAM"). CMA is the adviser to the Columbia Family of Funds, but is not the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered any instances where Columbia entities were knowingly involved in late trading of mutual fund shares. Columbia has identified a limited number of investors who had informal arrangements for trading shares of various funds managed by subsidiaries of CMG between 1998 and 2003. A majority of the transactions in connection with these arrangements occurred in one international fund and two domestic funds in the Columbia Family of Funds. A majority of the trading under these arrangements was made by three entities. A substantial majority of the trading had ended by October 2002. None of these arrangements exist today. Information relating to those trading arrangements has been supplied to various regulatory authorities. The SEC staff has issued notices to the effect that it has made a preliminary determination to recommend that the SEC bring civil enforcement actions, including injunctive proceedings, against the Distributor and CMA alleging that they have violated certain provisions of the federal securities laws. Columbia believes that those allegations are based principally on the trading arrangements referred to above. Columbia WAM has not been named in these notices. The Distributor and CMA are engaged in discussions with the SEC staff in an effort to reach a satisfactory resolution of these matters. However, there can be no assurance that such a resolution will be reached. Any potential resolution of these matters may include, but not be limited to, sanctions, financial penalties, damages or injunctions regarding the Distributor or CMA, and structural changes in the conduct of their business. Although Columbia does not believe that these regulatory developments or their resolution will have a material adverse effect on the Funds, or on the ability of the Distributor or Columbia WAM to provide services to the Funds, there can be no assurance that these matters or any publicity relating to these matters or other developments resulting from them will not adversely effect sales or redemptions of Fund shares or otherwise effect the Funds. Columbia Acorn Trust (the "Trust") and Columbia WAM are defendants in a lawsuit that seeks certification of a plaintiff class consisting of all persons in the United States who held shares in Columbia Acorn International Fund ("International Fund") for a period of more than 14 days during the five years prior to the filing of the lawsuit. The suit seeks compensatory and punitive damages, as well as interest, costs and attorney's fees. The lawsuit alleges, in summary, that the Trust and Columbia WAM exposed 79 Columbia Thermostat Fund >Notes to Financial Statements, Continued International Fund shareholders to trading by market timers by allegedly (a) failing to properly evaluate daily whether a significant event affecting the value of International Fund's securities had occurred after foreign markets had closed but before the calculation of the Fund's net asset value ("NAV"); (b) failing to implement International Fund's portfolio valuation and share pricing policies and procedures; (c) allowing portfolio valuation and share policies and procedures that benefited market timers at the expense of long-term shareholders; and (d) failing to know and implement applicable rules and regulations concerning the calculation of NAV. The Trust and Columbia WAM also are defendants in a lawsuit that seeks certification of a plaintiff class consisting of all persons in the United States who held shares in International Fund for a period of more than 14 days, without any stated limitation on the duration of the class period. The suit seeks compensatory and punitive damages, as well as interest, costs and attorney's fees. This suit contains allegations and counts similar to those described above, and also includes an additional count under Section 36(a) of the Investment Company Act of 1940. The Trust, on behalf of International Fund, and Columbia WAM intend to defend both suits vigorously. The Trust does not believe that the pending actions will have a material adverse affect on the financial statements of any Fund, and Columbia WAM does not believe that the pending actions will have a material adverse affect on its ability to perform under its contracts with the Funds. 1-800-922-6769 80 Columbia Thermostat Fund >Unaudited Information (in thousands) FEDERAL INCOME TAX INFORMATION: For the fiscal year ended December 31, 2003, the Fund designates long-term capital gains of $36. 30.23% of the ordinary income distributed by the Fund, in the year ended December 31, 2003, qualifies for the corporate dividends received deduction. For non-corporate shareholders 30.23%, of the maximum amount allowable under the Jobs and Growth Tax Reconciliation Act of 2003, of income earned by the Fund for the period January 1, 2003 to December 31, 2003 may represent qualified dividend income. Final information will be provided in your 2003 1099-DIV From. 81 REPORT OF INDEPENDENT AUDITORS TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF COLUMBIA ACORN TRUST We have audited the accompanying statements of assets and liabilities, including the statements of investments of Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select, Columbia Acorn Select and Columbia Thermostat Fund, comprising the Columbia Acorn Trust, as of December 31, 2003, the related statements of operations, changes in net assets, and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of investments owned as of December 31, 2003, by correspondence with the custodian and brokers or other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective Funds of the Columbia Acorn Trust as of December 31, 2003, the results of their operations and changes in their net assets and financial highlights for the periods indicated therein, in conformity with accounting principles generally accepted in the United States. /s/ERNST & YOUNG LLP Chicago, Illinois February 6, 2004 1-800-922-6769 82 This page intentionally left blank. 83 BOARD OF TRUSTEES AND MANAGEMENT OF COLUMBIA ACORN FUNDS The board of trustees serve indefinite terms of unlimited duration provided that a majority of trustees always has been elected by shareholders. The trustees appoint their own successors, provided that at least two-thirds of the trustees, after such appointment, have been elected by shareholders. Shareholders may remove a trustee, with or without cause, upon the vote of two-thirds of Acorn's outstanding shares at any meeting called for that purpose. A trustee may be removed, with or without cause, upon the vote of a majority of the trustees. The names of the trustees and officers of Acorn, the date each was first elected or appointed to office, their principal business occupations and other directorships they have held during at least the last five years, are shown below. Each trustee serves in such capacity for each of the six series of Acorn. Mr. Wanger also serves as a trustee for each of the four series of the Wanger Advisors Trust.
YEAR FIRST NUMBER OF NAME, POSITION(S) WITH ELECTED OR PORTFOLIOS IN FUND COLUMBIA ACORN AND AGE APPOINTED TO PRINCIPAL OCCUPATION(S) DURING COMPLEX OVERSEEN AT JANUARY 1, 2004 OFFICE* PAST FIVE YEARS BY TRUSTEE/OFFICER OTHER DIRECTORSHIPS - ------------------------------------------------------------------------------------------------------------------------------- TRUSTEES WHO ARE NOT INTERESTED PERSONS OF COLUMBIA ACORN: Margaret Eisen, 50, 2002 Chair, Institute for Financial 6 Antigenics, Inc. Trustee Markets; formerly managing (biotechnology and director, DeGuardiola Advisors; drugs); Global formerly managing director, Financial Group North American Equities at (venture capital fund General Motors Asset Management; of funds). prior thereto, director of Worldwide Pension Investments for DuPont Asset Management. Leo A. Guthart, 66, 1994 Executive vice president, 6 AptarGroup, Inc. (producer Trustee Honeywell International of dispensing valves, pumps (home and building control); and closures); Symbol chairman, Cylink Corporation Technologies, Inc. (supplier of encryption (manufacturer of bar equipment); former chairman of code scanning equipment). the board of trustees, Hofstra University; chairman and chief executive officer, Topspin Partners, L.P. Jerome Kahn, Jr., 1987 Former president, William Harris 6 None. 69, Trustee Investors, Inc. (investment adviser). Steven N. Kaplan, 44, 1999 Neubauer Family Professor of 6 None. Trustee Entrepreneurship and Finance, Graduate School of Business, University of Chicago. David C. Kleinman, 68, 1972 Adjunct professor of strategic 6 Sonic Foundry, Inc. Trustee management, University of (software); AT&T Latin Chicago Graduate School of America Business; Business consultant. Allan B. Muchin, 67, 1998 Chairman emeritus, Katten Muchin 6 Alberto-Culver Company Trustee Zavis Rosenman (law firm). (toiletries). Robert E. Nason, 67, 1998 Consultant and private investor 6 None. Trustee and Chairman since 1998; from 1990-1998, executive partner and chief executive officer, member of the executive committee of Grant Thornton, LLP public accounting (firm) and member of the policy board of Grant Thornton International. John A. Wing, 68, 2002 Frank Wakely Gunsaulus Professor 6 AmerUs Life Holdings (life Trustee of Law and Finance, and insurance); LDF, Inc. and chairman of the Center for the Labe Federal Bank (banking); Study of Law and Financial Margo Caribe, Inc. (farming). of Technology; prior thereto, chairman of the board and chief executive officer of ABN-AMRO Incorporated, formerly The Chicago Corporation and chief executive officer of Market Liquidity Network, LLC. TRUSTEES WHO ARE INTERESTED PERSONS OF COLUMBIA ACORN: Charles P. Chief investment officer of 10 None. McQuaid, 50, Columbia WAM since September 30, Trustee, 1992 2003; portfolio manager since Trustee and President(1) 2003 1995 and director of research from July 1992 through December 2003 of Columbia WAM; principal, WAM from July 1995 to September 29, 2000; president, Wanger Advisors Trust. Ralph Wanger, 69, 1970 Founder, former president, chief 10 Wanger Advisors Trust Trustee(1) investment officer and portfolio (4 portfolios). manager, Columbia WAM (1992-2003); principal, WAM from July 1992 until September 29, 2000; president, WAM Ltd. from July 1992 to September 29, 2000; president and director, WAM Acquisition GP, Inc. since September 29, 2000; former president, Wanger Advisors Trust; director, Wanger Investment Company plc. OFFICERS OF COLUMBIA ACORN: J. Kevin Connaughton, 39, 2001 Treasurer of the Columbia Funds 10 None. Assistant Treasurer and of the Columbia All-Star Funds since December 2000 (formerly controller and chief accounting officer of the Columbia Funds and of the Columbia All-Star Funds from February 1998 to October 2000); treasurer of the Stein Roe Funds since February 2001 (formerly chief accounting officer and controller from May 2000 to February 2001); treasurer of the Galaxy Funds since September 2002; senior vice president of Columbia Funds Group since January 2001; (formerly vice president of Colonial Management Associates from February 1998 to October 2000) P. Zachary Egan, 35, 2003 Analyst and portfolio manager, 6 None. Vice President Columbia WAM since 1999; prior thereto, a research fellow with the Robert Bosch Foundation. Kenneth A. Kalina, 44, 1995 Chief financial officer, Columbia 10 None. Assistant Treasurer WAM since April 2000; assistant treasurer, Wanger Advisors Trust; fund controller, Columbia WAM since September 1995; director, New Americas Small Cap Fund. Bruce H. Lauer, 46, 1995 Chief operating officer, Columbia 10 None. Vice President, WAM since April 1995; principal, Secretary WAM from January 2000 to and Treasurer September 29, 2000; vice president, treasurer and secretary, Wanger Advisors Trust; director, Wanger Investment Company plc and New Americas Small Cap Fund. Robert A. Mohn, 42, 1997 Analyst and portfolio manager, 10 None. Vice President Columbia WAM since August 1992; principal, WAM from 1995 to September 29, 2000; vice president, Wanger Advisors Trust. Louis J. Mendes, 39, 2003 Analyst and portfolio manager, 6 None. Vice President Columbia WAM since 2001; prior thereto, analyst and portfolio manager, Merrill Lynch. Todd Narter, 39, 2001 Analyst and portfolio manager, 10 None. Vice President Columbia WAM since June 1997; vice president, Wanger Advisors Trust. Christopher Olson, 39, 2001 Analyst and portfolio manager, 10 None. Vice President Columbia WAM since January 2001; vice president, Wanger Advisors Trust; prior thereto, director and portfolio strategy analyst with UBS Asset Management/Brinson Partners. John H. Park, 36, 1998 Director of domestic research 10 None. Vice President since December 2003 ; analyst and portfolio manager, Columbia WAM since July 1993; principal, WAM from 1998 to September 29, 2000; vice president, Wanger Advisors Trust. Vincent P. 2001 Vice president and senior counsel, 10 None. Pietropaolo, 38, Columbia Funds Group since Assistant Secretary December 1999; associate, Morgan Lewis & Bockius, October 1998 to December 1999; product manager, Putnam Investments from April 1997 to October 1998. David A. Rozenson, 49, 2003 Secretary of the Columbia Funds 10 None. Chief Legal Officer and of the Columbia All-Star Funds since December 2003; senior counsel, Fleet Boston Financial Corporation since January 1996; associate general counsel, Columbia Management Group since November 2002.
* Dates prior to April 1992 correspond to the date first elected or appointed as a director or officer of Acorn Fund Inc., the Trust's predecessor. (1) Trustee who is an "interested person" of the Trust and of Columbia WAM, as defined in the Investment Company Act of 1940, because he is an officer of the Trust and an employee of Columbia WAM. Effective September 30, 2003, Mr. Wanger no longer serves as president of the Trust and president, chief investment officer and portfolio manager of Columbia WAM. As of that date, Mr. McQuaid became chief investment officer of Columbia WAM, and Mr. Wanger continues to serve as an interested Trustee of the Trust and remains affiliated with Columbia WAM, acting in an advisory capacity. The address for the trustees and officers of the Trust is Columbia Wanger Asset Management, L.P., 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606. The SAI includes additional information about Fund trustees and is available, without charge, upon request by calling 1-800-345-6611. 84 Columbia Acorn Funds ANNUAL REPORT, DECEMBER 31,2003 PRSRT STD U.S. POSTAGE [EAGLE HEAD LOGO APPEARS HERE] PAID HOLLISTON, MA COLUMBIAFUNDS PERMIT NO.20 A MEMBER OF COLUMBIA MANAGEMENT GROUP (c) 2004 COLUMBIA FUNDS DISTRIBUTOR, INC. ONE FINANCIAL CENTER, BOSTON, MA 0211-2621 800.345.6611 www.columbiafunds.com ACN-02/729Q-1203 (02/04) 04/0529 ITEM 2. CODE OF ETHICS. (a) The registrant has, as of the end of the period covered by this report, adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. (b) During the period covered by this report, there were not any amendments to a provision of the code of ethics adopted in 2(a) above. (c) During the period covered by this report, there were not any waivers or implicit waivers to a provision of the code of ethics adopted in 2(a) above. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Trustees has determined that David C. Kleinman, Robert E. Nason and John A. Wing, each of whom are members of the registrant's Board of Trustees and Audit Committee, each qualify as an audit committee financial expert. Mr. Kleinman, Mr. Nason and Mr. Wing are each independent trustees, as defined in paragraph (a)(2) of this item's instructions. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. 4(a) Aggregate Audit Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended December 31, 2003 and December 31, 2002 are as follows: 2003 2002 $238,400 $224,200 Audit Fees include amounts related to the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. (b) Aggregate Audit-Related Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended December 31, 2003 and December 31, 2002 are as follows: 2003 2002 $24,000 $14,000 Audit-Related Fees include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported in Audit Fees above. In fiscal year 2003, Audit-Related Fees relate to certain agreed-upon procedures performed for semi-annual shareholder reports. Audit-Related Fees in fiscal year 2002 relate to certain agreed-upon procedures conducted during the conversion of the registrant's accounting system as well as agreed-upon procedures relating to a fund merger. The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. The percentage of Audit-Related services to the registrant that were approved under the "de minimis" exception during the fiscal years ended December 31, 2003 and December 31, 2002 are as follows: 2003 2002 0% N/A The pre-approval requirements for services to the investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal year ended December 31, 2003, there were no Audit-Related Fees that were approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X. The percentage of Audit-Related fees required to be approved under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X that were approved under the "de minimis" exception during the fiscal years ended December 31, 2003 and December 31, 2002 are as follows: 2003 2002 0% N/A (c) Aggregate Tax Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended December 31, 2003 and December 31, 2002 are as follows: 2003 2002 $35,300 $31,100 Tax Fees include amounts for professional services by the principal accountant for tax compliance, tax advice and tax planning. Tax Fees in fiscal year 2003 primarily relate to the review of annual tax returns, the review of calculations of required shareholder distributions and assistance with claims for foreign tax refunds. Tax fees in fiscal year 2002 primarily relate to the review of annual tax returns and the review of calculations of required shareholder distributions. The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. The percentage of Tax Fees billed to the registrant that were approved under the "de minimis" exception during the fiscal years ended December 31, 2003 and December 31, 2002 are as follows: 2003 2002 4% N/A The pre-approval requirements for services to the investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal year ended December 31, 2003, there were no Tax Fees that were approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X. The percentage of Tax Fees required to be approved under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X that were approved under the "de minimis" exception during the fiscal years ended December 31, 2003 and December 31, 2002 are as follows: 2003 2002 0% N/A (d) Aggregate All Other Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended December 31, 2003 and December 31, 2002 are as follows: 2003 2002 $0 $0 All Other Fees include amounts for products and services provided by the principal accountant, other than the services reported in (a)-(c) above. The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. The percentage of All Other Fees billed to the registrant that were approved under the "de minimis" exception during the fiscal years ended December 31, 2003 and December 31, 2002 are as follows: 2003 2002 0% N/A The pre-approval requirements for services to the investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal year ended December 31, 2003, there were no All Other Fees that were approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X. The percentage of All Other Fees required to be approved under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X that were approved under the "de minimis" exception during the fiscal years ended December 31, 2003 and December 31, 2002 are as follows: 2003 2002 0% N/A (e)(1) Audit Committee Pre-Approval Policies and Procedures The policy of the registrant's Audit Committee is to specifically pre-approve (i) all audit and non-audit (including audit related, tax and all other) services provided by the registrant's independent auditor to the registrant and individual funds (collectively "Fund Services") and (ii) all non-audit services provided by the registrant's independent auditor to the funds' adviser or a control affiliate of the adviser, that relate directly to the funds' operations and financial reporting (collectively "Fund-related Adviser Services"). A "control affiliate" is an entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the funds, and the term "adviser" is deemed to exclude any unaffiliated sub-adviser whose role is primarily portfolio management and is sub-contracted or overseen by another investment adviser. If such Fund Services or Fund-related Adviser Services are required during the period between the Audit Committee's regularly scheduled meetings, the Chairman of the Audit Committee has the authority to pre-approve the service, with reporting to the full Audit Committee at the next regularly scheduled meeting. The Audit Committee will waive pre-approval of Fund Services or Fund-related Adviser Services provided that the requirements under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are met. (f) Not applicable. (g) All non-audit fees billed by the registrant's accountant for services rendered to the registrant for the fiscal years ended December 31, 2003 and December 31, 2002 are disclosed in 4(b)-(d) above. All non-audit fees billed by the registrant's accountant for services rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for the fiscal years ended December 31, 2003 and December 31, 2002 are also disclosed in 4(b)-(d) above. There were no such fees during the last two fiscal years. (h) The registrant's Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant's adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant's independence. The Audit Committee determined that the provision of such services is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. RESERVED. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable at this time. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer, based on their evaluation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant's management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR attached hereto as Exhibit 99.CODE ETH (a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. (a)(3) Not applicable. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) Columbia Acorn Trust ------------------------------------------------------------------- By (Signature and Title) /s/ Charles P. McQuaid ------------------------------------------------------- Charles P. McQuaid, President Date March 4, 2004 --------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title) /s/ Charles P. McQuaid ------------------------------------------------------- Charles P. McQuaid, President Date March 4, 2004 --------------------------------------------------------------------------- By (Signature and Title) /s/ Bruce H. Lauer ------------------------------------------------------- Bruce H. Lauer, Treasurer Date March 4, 2004 --------------------------------------------------------------------------- EX-99.CODE ETH 3 file002.txt CODE OF ETHICS COLUMBIA MANAGEMENT GROUP FAMILY OF FUNDS CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS EFFECTIVE DATE: JULY 30, 2003 I. COVERED OFFICERS/PURPOSE OF THE CODE This Code of Ethics (the "Code") for the investment companies within the Columbia Management Group fund complex (collectively the "Funds" and each, a "Fund") applies to the Funds' Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, and Director of Trustee Administration, if any (the "Covered Officers") for the purpose of promoting: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely and understandable disclosure in reports and documents that a Fund files with, or submits to, the Securities and Exchange Commission ("SEC"), and in other public communications made by a Fund; o compliance with applicable laws and governmental rules and regulations; o the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o accountability for adherence to the Code. Each Covered Officer shall adhere to a high standard of business ethics and shall be sensitive to situations that may give rise to actual or apparent conflicts of interest. II. ADMINISTRATION OF THE CODE ADMINISTRATION. The Boards of Trustees and Boards of Directors of the Funds (collectively, the "Board") shall designate an individual to be primarily responsible for the administration of the Code (the "Code Officer"). The administration of the Code shall be supervised by the Columbia Management Group Compliance Department. In the absence of the Code Officer, his or her designee shall serve as the Code Officer, but only on a temporary basis. Each Fund has designated a chief legal officer (the "Chief Legal Officer") for purposes of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. The Chief Legal Officer of a Fund shall assist the Fund's Code Officer in administration of this Code. The Chief Legal Officer shall be responsible for applying this Code to specific situations in which questions are presented under it (in consultation with Fund counsel, where appropriate) and has the authority to interpret this Code in any particular situation. However, any waivers sought by a Covered Officer must be approved by each Audit Committee of the Funds (collectively, the "Audit Committee"). III. MANAGING CONFLICTS OF INTEREST OVERVIEW. A "conflict of interest" occurs when a Covered Officer's personal economic interests interferes with the interests of, or his/her service to, a Fund. For example, a conflict of interest would arise if a Covered Officer, or a family member, receives improper personal benefits as a result of the Covered Officer's position with a Fund. Certain conflicts of interest arise out of the relationships between Covered Officers and a Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (the "Company Act") and the Investment Advisers Act of 1940 (the "Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with a Fund because of their status as "affiliated persons" of the Fund. A Fund's and its investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of those provisions. This Code does not, and is not intended to, repeat or replace those programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts may arise from, or as a result of, the contractual relationship between a Fund and its investment adviser, administrator, principal underwriter, pricing and bookkeeping agent and/or transfer agent (each, a "Service Provider") of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for a Fund or for a Service Provider, or for both), be involved in establishing policies and implementing decisions that will have different effects on the Service Provider and a Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Fund and the Service Provider and is consistent with the performance by the Covered Officers of their duties as officers of a Fund. In addition, it is recognized by the Board that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions of the Company Act and the Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of a Fund. Each Covered Officer must: o not use personal influence or personal relationships to influence investment decisions or financial reporting by a Fund whereby the Covered Officer or an immediate family member would benefit personally to the detriment of a Fund; and o not cause a Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer or an immediate family member rather than the benefit of the Fund. 1 There are some conflict of interest situations that must be approved by the Code Officer, after consultation with the Chief Legal Officer. Those situations include, but are not limited to,: o service as director on the board of any public or private company; o the receipt of any gifts in excess of $100 in the aggregate from a third party that does or seeks to do business with the Funds during any 12-month period; o the receipt of any entertainment from any company with which a Fund has current or prospective business dealings, unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; o any material ownership interest in, or any consulting or employment relationship with, any Fund service providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof; o a direct or indirect material financial interest in commissions, transaction charges or spreads paid by a Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. IV. DISCLOSURE AND COMPLIANCE Each Covered Officer shall: o be familiar with the disclosure requirements generally applicable to the Funds; o not knowingly misrepresent, or cause others to misrepresent, facts about any Fund to others, whether within or outside the Fund, - ----------------------- 1 For purposes of this Code, personal trading activity of the Covered Officers shall be monitored in accordance with the Columbia Management Group Code of Ethics. Each Covered Officer shall be considered an "Access Person" under such Code. The term "immediate family" shall have the same meaning as provided in such Code. including to the Fund's trustees and auditors, and to governmental regulators and self-regulatory organizations; o to the extent appropriate within his/her area of responsibility, consult with other officers and employees of the Funds and the adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and o promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. V. REPORTING AND ACCOUNTABILITY Each Covered Officer must: o upon adoption of the Code (or after becoming a Covered Officer), affirm in writing to the Board that he/she has received, read and understands the Code; o annually affirm to the Board compliance with the requirements of the Code; o not retaliate against any other Covered Officer or any employee of the Funds or their affiliated persons for reports of potential violations that are made in good faith; o notify the Chief Legal Officer and the Code Officer promptly if he/she knows of any violation of this Code; and o respond to questionnaires circulated periodically in connection with the preparation of disclosure documents for the Funds. The Code Officer shall maintain records of all activities related to this Code. The Funds will follow the procedures set forth below in investigating and enforcing this Code: o The Chief Legal Officer and/or the Code Officer will take all appropriate action to investigate any potential violation reported to him/her; o If, after such investigation, the Chief Legal Officer and the Code Officer believes that no violation has occurred, the Code Officer will notify the person(s) reporting the potential violation, and no further action is required; o Any matter that the Chief Legal Officer and/or the Code Officer determines may be a violation will be reported to the Audit Committee; o If the Audit Committee determines that a violation has occurred, it will inform and make a recommendation to the Board, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to the Chief Executive Officer of Columbia Management Group; or a recommendation to sanction or dismiss the Covered Officer; o The Audit Committee will be responsible for granting waivers in its sole discretion; o Any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. The Chief Legal Officer shall: o report to the Audit Committee quarterly any approvals provided in accordance with Section III of this Code; and o report to the Audit Committee quarterly any violations of, or material issues arising under, this Code. VI. OTHER POLICIES AND PROCEDURES This Code shall be the sole code of ethics adopted by the Funds for the purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other polices or procedures of the Funds or the Funds' Service Providers govern or purport to govern the behavior or activities (including, but not limited to, personal trading activities) of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Funds' and their investment advisers' and principal underwriter's codes of ethics under Rule 17j-1 under the Company Act and any policies and procedures of the Service Providers are separate requirements applicable to the Covered Officers and are not part of this Code. VII. AMENDMENTS All material amendments to this Code must be approved or ratified by the Board, including a majority of independent directors. VIII. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Board, the Covered Officers, the Chief Legal Officer, the Code Officer, outside audit firms and legal counsel to the Funds, and senior management of Columbia Management Group. IX. INTERNAL USE The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Fund, as to any fact, circumstance, or legal conclusion. EX-99.CERT 4 file003.txt CERTIFICATIONS I, Charles P. McQuaid, certify that: 1. I have reviewed this report on Form N-CSR of Columbia Acorn Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 4, 2004 /s/ Charles P. McQuaid ----------------------------- Charles P. McQuaid, President I, Bruce H. Lauer, certify that: 1. I have reviewed this report on Form N-CSR of Columbia Acorn Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 4, 2004 /s/ Bruce H. Lauer ------------------------------ Bruce H. Lauer, Treasurer EX-99.906CERT 5 file004.txt CERTIFICATIONS CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Certified Shareholder Report of Columbia Acorn Trust (the "Trust") on Form N-CSR for the period ending December 31, 2003, as filed with the Securities and Exchange Commission on the date hereof ("the Report"), each of the undersigned hereby certifies that, to his knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Date: March 4, 2004 /s/ Charles P. McQuaid ---------------------------------- Charles P. McQuaid, President Date: March 4, 2004 /s/ Bruce H. Lauer ---------------------------------- Bruce H. Lauer, Treasurer A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission (the "Commission") or its staff upon request. This certification is being furnished to the Commission solely pursuant to 18 U.S.C.ss.1350 and is not being filed as part of the Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----