N-CSR 1 file001.txt COLUMBIA FUNDS TRUST I UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSRS CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-2214 --------------------- Columbia Funds Trust I ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) One Financial Center, Boston, Massachusetts 02111 ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Russell Kane, 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: 1-617-772-3363 ------------------- Date of fiscal year end: 10/31/2003 ------------------ Date of reporting period: 10/31/2003 ----------------- 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. Columbia Tax-Managed Funds Annual Report October 31, 2003 Photo of: Man and woman smiling at each other. WE ARE COLUMBIA FUNDS! INSIDE - MANAGEMENT'S DISCUSSION OF THE CHANGES EFFECTIVE OCTOBER 13, 2003. President's Message Photo of: Joseph R. Palombo Dear Shareholder: As you know, your fund has been part of a larger investment management organization. Prior to 2001, it was part of Liberty Financial, whose affiliated asset management companies included Colonial, Stein Roe and Newport. In 2001, these companies became part of the asset management division of FleetBoston Financial Corp., which you know as Columbia Management Group (CMG). Earlier this year, six of the asset management firms brought together under the CMG umbrella were consolidated and renamed Columbia Management Advisors, Inc. On October 13, 2003, we took the natural next step in this process by changing the name of our funds from Liberty to Columbia. We have also modified certain fund names that existed under both the Liberty and Columbia brands. Here are the new names: FORMER NAME NEW NAME ----------------------------------------------------- Liberty Tax-Managed Columbia Tax-Managed Aggressive Growth Fund Aggressive Growth Fund Liberty Tax-Managed Columbia Tax-Managed Growth Fund Growth Fund Liberty Tax Managed Columbia Tax Managed Growth Fund II Growth Fund II Liberty Tax-Managed Columbia Tax-Managed Value Fund Value Fund A complete list of new fund names and other information related to these changes are available online at our new website address: www.columbiafunds.com. A CONSOLIDATED IDENTITY The consolidation of our management under a single organization and the renaming of our funds are part of a larger effort to create a consistent identity. Having taken these additional steps, we believe it will be easier for shareholders to do business with us. All funds are now listed under "Columbia" in the mutual fund listings section of your newspaper (depending on the newspaper's listing requirements). All service inquiries are now handled by Columbia Funds Services, Inc., the new name of our shareholder service organization. What has not changed is our commitment to our mutual fund shareholders. We remain committed to providing the best possible customer service and to offering a wide variety of mutual funds to help you pursue your long-term financial goals. Should you have questions, please call Columbia Funds at 800-345-6611. In the report that follows, the portfolio managers of each fund discuss in depth the investment strategies and other factors that affected your fund's performance during the period. We encourage you to read the report carefully. As always, we thank you for your business and we look forward to continuing to serve your investment needs. Sincerely, /s/ Joseph R. Palombo Joseph R. Palombo President Not FDIC Insured May Lose Value No Bank Guarantee Economic and market conditions can change frequently. There is no assurance that the trends described in this report will continue or commence. No taxable income or capital gains distribution since inception AVERAGE ANNUAL TOTAL RETURNS, CLASS A SHARES WITH SALES CHARGE FOR THE PERIOD THAT ENDED 10/31/03 1-YEAR 5-YEAR LIFE -------------------------------------------------------------------------------- COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH FUND (SINCE 8/1/00) RETURNS BEFORE TAXES 14.49 N/A -13.00 RETURNS AFTER TAXES ON DISTRIBUTIONS 14.49 N/A -13.00 RETURNS AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES 8.90 N/A -10.05 S&P MIDCAP 400 INDEX 30.73 N/A 4.55 RUSSELL MIDCAP GROWTH INDEX 39.30 N/A -11.38 -------------------------------------------------------------------------------- COLUMBIA TAX-MANAGED GROWTH FUND (SINCE 12/30/96) RETURNS BEFORE TAXES 13.50 -1.62 3.00 RETURNS AFTER TAXES ON DISTRIBUTIONS 13.50 -1.62 3.00 RETURNS AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES 8.29 -1.29 2.44 S&P 500 INDEX 20.80 0.53 6.55 -------------------------------------------------------------------------------- COLUMBIA TAX-MANAGED GROWTH FUND II (SINCE 3/7/00) RETURNS BEFORE TAXES 13.18 N/A -10.96 RETURNS AFTER TAXES ON DISTRIBUTIONS 13.18 N/A -10.96 RETURNS AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES 8.09 N/A -8.48 S&P 500 INDEX 20.80 N/A -5.36 -------------------------------------------------------------------------------- COLUMBIA TAX-MANAGED VALUE FUND (SINCE 6/1/99) RETURNS BEFORE TAXES 7.08 N/A -5.11 RETURNS AFTER TAXES ON DISTRIBUTIONS 7.08 N/A -5.11 RETURNS AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES 4.35 N/A -4.01 S&P 500 INDEX 20.80 N/A -3.24 RUSSELL 1000 VALUE INDEX 22.87 N/A 0.34 -------------------------------------------------------------------------------- Indexes do not reflect any deduction for fees, expenses or taxes. After-tax returns are shown for class A shares only; after-tax returns for other share classes will vary. NO NEW TAXES In keeping with our funds' objective, we once again can report returns without passing taxable distributions to our shareholders. For those keeping track, this marks the fourteenth consecutive report -- covering the past seven years for the Columbia Tax-Managed Growth Fund, the eldest in our tax-managed family -- in which we have been able to report that there has been no payment of taxable distributions. We want to remind you that while we can't guarantee this will always be the case, we are proud of our "non-taxing" track record and will strive to continue the streak. The chart on this page offers a comparison between pre-tax and after-tax returns for the Columbia family of tax-managed funds. As you can see, the returns after taxes on distributions retained the full percentage returns before taxes for the time periods shown, assuming that shares were held through the end of the period. In this case, total returns after taxes on distributions were the same as the pre-tax returns because none of the funds distributed taxable gains during the period. In the future, the funds may be required to distribute taxable income and capital gains from time to time. In addition, market conditions may limit the funds' ability to generate tax losses or to avoid dividend income. Excessive shareholder redemptions may also require the funds to sell securities and realize gains. Finally, the ability to use certain tax-management techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the historically highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and the after-tax returns shown may not be relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH FUND NET ASSET VALUE PER SHARE as of 10/31/03 ($) Class A 7.82 Class B 7.63 Class C 7.63 Class Z 7.83 COLUMBIA TAX-MANAGED GROWTH FUND NET ASSET VALUE PER SHARE as of 10/31/03 ($) Class A 13.09 Class B 12.43 Class C 12.43 Class E 13.02 Class F 12.44 Class Z 13.24 COLUMBIA TAX-MANAGED GROWTH FUND II NET ASSET VALUE PER SHARE as of 10/31/03 ($) Class A 8.33 Class B 8.10 Class C 8.08 Class Z 8.39 COLUMBIA TAX-MANAGED VALUE FUND NET ASSET VALUE PER SHARE as of 10/31/03 ($) Class A 10.10 Class B 9.80 Class C 9.80 Class Z 10.22 1 Portfolio Manager's Report - Columbia Tax-Managed Aggressive Growth Fund Top 10 holdings as of 10/31/03 (%) Electronic Arts 2.7 Barr Laboratories 2.7 Education Management 2.5 Corporate Executive Board 2.3 Microchip Technology 2.2 Caremark Rx 1.9 UnitedHealth Group 1.9 Amphenol, Class A 1.7 Fair Isaac 1.7 Bed Bath & Beyond 1.6 Portfolio holdings are calculated as a percentage of total net assets. Since the fund is actively managed, there can be no guarantee the fund will continue to maintain the same portfolio holdings in the future. For the 12-month period ended October 31, 2003, Columbia Tax-Managed Aggressive Growth Fund class A shares returned 21.43% without sales charge. Although we are pleased to report such strong absolute performance, the fund trailed both the Russell Midcap Growth Index, which returned 39.30%, and the S&P MidCap 400 Index, which returned 30.73%.1 The fund also came out behind the 30.87% return for the Lipper Mid-Cap Growth Funds Category.2 Our bias toward higher-quality stocks with consistent earnings records was a handicap, as lower-quality stocks with more erratic earnings posted the biggest gains. We lost additional ground by investing in companies at the larger end of the mid-cap spectrum as smaller-cap names led the market rally. Weak stock selection, particularly in the technology and consumer discretionary sectors, and an above-average stake in energy further detracted from relative returns. TECHNOLOGY AND INDUSTRIALS GAIN IN AN IMPROVING ECONOMY Stocks made an amazing comeback, as interest rates stayed low and fears about the economy and war with Iraq eased. Technology stocks were the strongest gainers, buoyed by hopes that an improving economy would boost long-delayed corporate spending. The fund's top performers included VERITAS Software and Electronic Arts, a video game producer.3 Unfortunately, the fund's below-average stake in technology early on and its focus on higher-quality names kept it from fully participating in the sector's gains. Later in the period, we increased the fund's technology weighting, adding more cyclical stocks such as Amkor Technology, a leading manufacturer of packaging for semiconductors, and Jabil Circuit, an electronic services manufacturer. Both stocks generated strong returns as their prospects are closely linked to ---------------- 1 On October 13, 2003, the fund changed its benchmark from the Russell Midcap Growth Index to the S&P MidCap 400 Index. 2 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as those of the fund. 3 Holdings are disclosed as a percentage of net assets as of October 31, 2003 and are subject to change: VERITAS Software (1.5%), Electronic Arts (2.7%), Amkor Technology (0.9%), Jabil Circuit (0.9%), Education Management (2.5%), Barr Laboratories (2.7%), Caremark Rx (1.9%), Williams-Sonoma (1.5%) and Bed Bath & Beyond (1.6%). 2 the economic outlook. Industrials also contributed positively to the fund's return, led by for-profit education companies, such as Education Management, which benefited from strong enrollment growth and the rise of online education. STRONG GAINS FROM HEALTH CARE Health care stocks produced strong absolute gains during the period, driven by generic pharmaceutical medical equipment and biotech-related companies. Barr Laboratories, a generic pharmaceutical company, and Caremark Rx, a pharmacy benefits manager, were particular standouts for the fund. Our investment in health maintenance organizations (HMOs), however, detracted from returns as investors began to worry that health care premium rate increases had peaked. We reduced the fund's overall stake in health care, trimming its investment in HMOs and hospitals, and selling weak performers, such as Biovail, a generic pharmaceutical company. DISAPPOINTING RETURNS FROM CONSUMER AND ENERGY Consumer discretionary stocks rallied as consumer spending remained strong and the economy showed signs of recovery. However, the fund's positive return trailed the sector's overall gain. The fund's focus was on traditional media stocks, such as radio, at a time when the biggest winners were Internet-related names, such as Amazon and Yahoo!, which the fund did not own. The fund also missed out by not owning some of the better performing hotel, restaurant and leisure stocks. We pared back on media names, but held on to retailers with strong earnings growth, such as Williams-Sonoma and Bed Bath & Beyond. The fund's above-average stake in energy stocks also hurt performance, as exploration and production companies took a conservative approach to spending. This dampened earnings prospects for oil service companies, leading to modest gains for the sector. OPTIMISTIC OUTLOOK FOR HIGH-QUALITY STOCKS We expect a positive backdrop for stocks. Interest rates remain low and the economy is improving, bolstered by strong consumer spending and higher corporate spending. However, we think that only those companies that deliver on earnings expectations will see their stock prices rise. We believe high-quality stocks, which continue to make up the core of the fund's portfolio, will do well in this environment. We will continue to focus on tax efficiency by harvesting losses to offset gains, and by maintaining a longer investing timeframe than is typical in most mid-cap growth funds. /s/ Richard J. Johnson Richard J. Johnson, CFA, has managed Columbia Tax-Managed Aggressive Growth Fund since March 2002. -------------------------------------------------------------------------------- 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. The fund's approach offers the potential for long-term growth, but also involves the possibility of losses due to the sensitivity of growth stock prices to changes in current or expected earnings. Certain active tax-reduction techniques are used only if the fund's advisor believes they will help the fund achieve its investment goals. The fund expects to distribute taxable income and capital gains from time to time. Market conditions may limit the fund's ability to generate tax losses or to avoid dividend income. The ability to use certain tax-management techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. -------------------------------------------------------------------------------- Bar Chart: TOP 5 SECTORS as of 10/31/03 (%) Information technology 36.5 Health care 19.8 Consumer discretionary 15.8 Industrials 12.8 Energy 6.8 Sector breakdowns are calculated as a percentage of net assets. Since the fund is actively managed, there can be no guarantee the fund will continue to maintain these breakdowns in the future. 3 Performance Information - Columbia Tax-Managed Aggressive Growth Fund Value of a $10,000 investment 8/1/00 - 10/31/03 Performance of a $10,000 investment 8/1/00 - 10/31/03 ($) without with sales sales charge charge ------------------------------- Class A 6,747 6,358 ------------------------------- Class B 6,583 6,386 ------------------------------- Class C 6,583 6,583 ------------------------------- Class Z 6,756 n/a ------------------------------- Mountain Chart: CLASS A SHARES CLASS A SHARES S&P RUSSELL WITHOUT WITH SALES MIDCAP 400 MIDCAP SALES CHARGE CHARGE INDEX INDEX 8/1/00 10000 9425 10000 10000 11648 10978 11117 11508 11709 11035 11041 10945 10664 10051 10667 10197 8335 7856 9862 7981 8914 8401 10616 8401 9500 8954 10853 8881 7723 7279 10233 7345 6757 6368 9473 6294 7343 6921 10518 7343 7516 7083 10763 7308 7809 7360 10720 7312 7334 6912 10560 6819 6842 6448 10215 6325 5815 5480 8944 5279 6048 5700 9339 5834 6557 6180 10034 6463 6877 6481 10553 6708 6825 6433 10498 6490 6575 6196 10511 6122 6963 6563 11262 6589 6877 6481 11209 6241 6756 6367 11020 6055 6342 5977 10213 5386 5660 5334 9222 4863 5565 5245 9270 4846 5366 5058 8522 4461 5556 5237 8891 4807 5694 5366 9406 5183 5392 5082 9020 4870 5358 5050 8756 4822 5254 4952 8548 4780 5254 4952 8620 4869 5539 5220 9245 5201 5988 5643 10012 5701 6109 5757 10139 5783 6238 5879 10499 5989 6566 6189 10976 6319 6239 5880 10808 6196 10/31/03 6747 6358 11556 6753 MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.COLUMBIAFUNDS.COM FOR DAILY PERFORMANCE UPDATES. Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. On October 13, 2003, the fund's primary benchmark was changed to the Russell Midcap Growth Index. During the reporting period, the fund's primary benchmark was the S&P MidCap 400 Index. The S&P MidCap 400 Index tracks the performance of mid-capitalization US stocks. The Russell Midcap Growth Index is an unmanaged index that measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. Unlike the fund, indices are not investments, do not incur fees, expenses or taxes, and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from August 1, 2000.
AVERAGE ANNUAL TOTAL RETURN AS OF 10/31/03 (%) Share class A B C Z Inception date 8/1/00 8/1/00 8/1/00 8/1/00 ------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge ------------------------------------------------------------------------------------------------------------------- 1-year 21.43 14.49 20.54 15.54 20.54 19.54 21.77 ------------------------------------------------------------------------------------------------------------------- Life -11.40 -13.00 -12.06 -12.88 -12.06 -12.06 -11.36 ------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN AS OF 9/30/03 (%) Share class A B C Z ------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge ------------------------------------------------------------------------------------------------------------------- 1-year 16.24 9.55 15.52 10.52 15.36 14.36 16.75 ------------------------------------------------------------------------------------------------------------------- Life -13.84 -15.45 -14.45 -15.27 -14.49 -14.49 -13.77 -------------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. All results shown assume reinvestment of distributions. The graph and tables do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. 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: 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 results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Performance for different share classes varies based on differences in sales charges and fees associated with each class. 4 Portfolio Managers' Report - Columbia Tax-Managed Growth Funds COLUMBIA TAX-MANAGED GROWTH FUND TOP 10 HOLDINGS as of 10/31/03 (%) Wal-Mart 3.0 St. Jude Medical 2.7 AstraZeneca 2.7 Citigroup 2.6 Cisco Systems 2.6 RenaissanceRe Holdings 2.6 Fannie Mae 2.5 Texas Instruments 2.5 Zimmer Holdings 2.5 Nabors Industries 2.5 COLUMBIA TAX-MANAGED GROWTH FUND II TOP 10 HOLDINGS as of 10/31/03 (%) Wal-Mart 3.0 RenaissanceRe Holdings 2.8 AstraZeneca 2.7 Lowe's Companies 2.6 St. Jude Medical 2.6 Cisco Systems 2.6 Texas Instruments 2.5 Citigroup 2.5 Microchip Technology 2.5 Zimmer Holdings 2.5 Portfolio holdings are calculated as a percentage of total net assets. Since the fund is actively managed, there can be no guarantee the fund will continue to maintain the same portfolio holdings in the future. For the 12-month period ended October 31, 2003, Columbia Tax-Managed Growth Fund class A shares returned 20.42% without sales charge. Columbia Tax-Managed Growth Fund II class A shares returned 20.03% without sales charge. These investment returns, while solidly positive, slightly trailed their benchmark, the S&P 500 Index, which returned 20.80%. STOCKS RECOVER ON RENEWED INVESTOR CONFIDENCE The stock market experienced a strong rebound from its mid-March lows, as investors gained increasing confidence that the economy and corporate profits would recover. Higher quality large capitalization stocks, such as those represented by the funds' core holdings, participated in the recovery but generally lagged the performance of small- and mid-cap stocks as investors became more comfortable with taking on additional risk. BASIC MATERIALS, HEALTH CARE AND TECHNOLOGY SECTORS ENJOY GAINS During the course of the last fiscal year, we positioned the funds for an economic and stock market recovery. Yet we maintained significant exposure to core longer-term growth holdings. Initially, we built up the funds' positions in consumer and financial stocks, which typically benefit from expectations of a strengthening in the economy. Then, as economic activity picked up and the outlook for business spending improved, we increased the funds' holdings in such economically sensitive sectors as basic materials and technology. Phelps Dodge, Cisco Systems, Texas Instruments and Xilinx were standouts in these sectors.1 We also lowered ---------------- 1 Holdings are disclosed as a percentage of net assets as of October 31, 2003 and are subject to change: Phelps Dodge (1.1% in Growth, 1.2% in Growth II), Cisco Systems (2.6% in Growth, 2.6% in Growth II), Texas Instruments (2.5% in Growth, 2.5% in Growth II), Xilinx (1.1% in Growth, 1.0% in Growth II), Amgen (2.0% in Growth, 2.1% in Growth II), Medtronic (2.3% in Growth, 2.2% in Growth II), St. Jude Medical (2.7% in Growth, 2.6% in Growth II), Zimmer Holdings (2.5% in Growth, 2.5% in Growth II), AstraZeneca (2.7% in Growth, 2.7% in Growth II), Comcast (2.1% in Growth, 2.1% in Growth II), Lowe's Companies (2.5% in Growth, 2.6% in Growth II), Viacom (2.4% in Growth, 2.3% in Growth II) and Kohl's (2.1% in Growth, 2.2% in Growth II). 5 our exposure to consumer discretionary and financial stocks during the course of the year because we were concerned that investors might rotate out of these former leaders as the economic rebound broadened to other sectors. Among the funds' core longer-term growth holdings, we maintained significant exposure to health care, particularly biotechnology leader Amgen and medical equipment stocks such as Medtronic, St. Jude Medical and Zimmer Holdings. We believe the long-term growth potential for these companies remains attractive. Additionally, we purchased pharmaceutical company AstraZeneca because we feel its new product pipeline is promising. Overall, health care was a strong contributor to the funds' investment results. INSURERS AND RETAILERS DISAPPOINT Although we trimmed our overall stake in financial stocks, we maintained an above-average investment in the insurance area. Our insurance investments did not pay off during the period, although we believe that valuations and earnings prospects remain attractive. Consumer discretionary holdings also detracted from performance, as favorable performances by Comcast and Lowe's Companies were offset by disappointing returns from Viacom and Kohl's. Energy stocks turned in weak returns, as investors questioned the sustainability of recent high commodity prices. EXPECTATIONS FOR CONTINUED ECONOMIC RECOVERY The economy and the stock market climate have improved considerably since the sharp market downturn during 2000-2002. We believe there is considerable evidence that a much-awaited economic recovery is indeed occurring, and that investor confidence in equities is in the process of being restored. There are likely to be periods ahead when investors question the sustainability of the economic recovery, but we expect higher business spending and a better employment outlook to help fuel continued growth. If interest rates remain low and corporate profits rise, we believe there should be further upside potential for the equity markets. A rotation back to larger capital ization stocks would also be a welcome development for growth stock investors. PRESERVING TAX EFFICIENCY During the year, we have actively harvested significant realized losses that resulted from the stock market's weak returns between 2000 and 2002. The funds, therefore, have no capital gains to report for the period. We believe that they should be able to sustain their record of tax efficiency for some time to come. /s/ William M. Hughes William M. Hughes is a senior equity analyst at Stein Roe Investment Counsel, LLC, sub-advisor to the funds. He is also a member of the investment management team for Columbia Tax-Managed Growth Fund and Columbia Tax-Managed Growth Fund II. No single individual has primary management responsibility over the funds' portfolio securities. -------------------------------------------------------------------------------- The funds' approach offers the potential for long-term growth, but also involves the possibility of losses due to the sensitivity of growth stock prices to changes in current or expected earnings. Certain active tax-reduction techniques are used only if the funds' advisor believes they will help the funds achieve their investment goals. The funds expect to distribute taxable income and capital gains from time to time. Market conditions may limit the funds' ability to generate tax losses or to avoid dividend income. The ability to use certain tax-management techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. -------------------------------------------------------------------------------- 6 COLUMBIA TAX-MANAGED GROWTH FUND TOP 5 SECTORS as of 10/31/03 (%) INFORMATION TECHNOLOGY 20.6 FINANCIALS 19.9 HEALTH CARE 18.1 CONSUMER DISCRETIONARY 14.4 INDUSTRIALS 9.6 COLUMBIA TAX-MANAGED GROWTH FUND II TOP 5 SECTORS as of 10/31/03 (%) INFORMATION TECHNOLOGY 20.7 FINANCIALS 20.0 HEALTH CARE 17.9 CONSUMER DISCRETIONARY 14.6 INDUSTRIALS 9.6 Sector breakdowns are calculated as a percentage of net assets. Since the funds are actively managed, there can be no guarantee the funds will continue to maintain these breakdowns in the future. 7 Performance Information - Columbia Tax-Managed Growth Fund Value of a $10,000 investment 12/30/96 - 10/31/03 Performance of a $10,000 investment 12/30/96 - 10/31/03 ($) without with sales sales charge charge -------------------------------- Class A 12,986 12,239 -------------------------------- Class B 12,331 12,331 -------------------------------- Class C 12,331 12,331 -------------------------------- Class E 12,917 12,335 -------------------------------- Class F 12,341 12,341 -------------------------------- Class Z 13,135 n/a -------------------------------- CLASS A SHARES CLASS A SHARES WITHOUT WITH S&P 500 SALES CHARGE SALES CHARGE INDEX 12/30/96 10000 9425 10000 9960 9387 9827 10386 9789 10441 10227 9639 10523 9672 9116 10090 9959 9387 10693 10723 10107 11344 11239 10593 11852 12131 11434 12795 11595 10928 12079 12349 11639 12741 11943 11256 12315 12221 11518 12885 12389 11677 13107 12627 11901 13252 13500 12724 14208 14086 13276 14935 14076 13267 15086 13728 12939 14827 14036 13229 15429 13926 13125 15265 11674 11003 13058 12429 11714 13895 13281 12517 15025 14204 13387 15935 15048 14183 16853 15227 14351 17557 15029 14165 17011 15743 14838 17692 16080 15155 18376 15732 14828 17943 17002 16024 18939 16575 15622 18348 16456 15510 18258 16148 15220 17757 17051 16071 18882 17240 16249 19265 19275 18166 20400 18342 17287 19375 18510 17446 19009 19532 18409 20868 18720 17643 20240 17827 16802 19825 18709 17633 20315 18670 17596 19998 19900 18756 21240 18907 17820 20118 18232 17184 20034 16130 15203 18455 16319 15380 18546 17459 16456 19204 15366 14482 17453 14166 13351 16346 15187 14314 17616 15128 14258 17734 14821 13969 17303 14673 13829 17134 13681 12894 16061 12183 11482 14763 12580 11857 15045 13642 12857 16199 13691 12904 16342 13354 12586 16103 13136 12381 15793 13672 12886 16386 12829 12091 15393 12749 12016 15280 11608 10941 14192 10825 10202 13086 10913 10286 13171 9892 9323 11739 10785 10165 12773 11460 10801 13525 10666 10053 12731 10527 9922 12397 10478 9875 12211 10617 10007 12330 11520 10857 13346 11986 11297 14049 11877 11194 14229 12205 11503 14479 12522 11802 14762 12254 11550 14605 10/31/03 12986 12239 15425 MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.COLUMBIAFUNDS.COM FOR DAILY PERFORMANCE UPDATES. Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. The S&P 500 Index tracks the performance of 500 widely held, large-capitalization US stocks. Unlike the fund, indices are not investments, do not incur fees, expenses, or taxes and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from December 30, 1996. AVERAGE ANNUAL TOTAL RETURN AS OF 10/31/03 (%)
Share class A B C E F Z Inception date 12/30/96 12/30/96 12/30/96 12/30/96 12/30/96 1/11/99 ---------------------------------------------------------------------------------------------------------------------- without with without with without with without with without with without sales sales sales sales sales sales sales sales sales sales sales charge charge charge charge charge charge charge charge charge charge charge ---------------------------------------------------------------------------------------------------------------------- 1-year 20.42 13.50 19.63 14.63 19.63 18.63 20.33 14.92 19.50 14.50 20.80 ---------------------------------------------------------------------------------------------------------------------- 5-year -0.45 -1.62 -1.19 -1.59 -1.19 -1.19 -0.51 -1.43 -1.19 -1.59 -0.23 ---------------------------------------------------------------------------------------------------------------------- Life 3.90 3.00 3.11 3.11 3.11 3.11 3.82 3.12 3.13 3.13 4.07 ---------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN AS OF 9/30/03 (%) Share class A B C E F Z ---------------------------------------------------------------------------------------------------------------------- without with without with without with without with without with without sales sales sales sales sales sales sales sales sales sales sales charge charge charge charge charge charge charge charge charge charge charge ---------------------------------------------------------------------------------------------------------------------- 1-year 23.87 16.75 22.93 17.93 22.93 21.93 23.77 18.20 22.91 17.91 24.25 ---------------------------------------------------------------------------------------------------------------------- 5-year -0.29 -1.46 -1.02 -1.42 -1.02 -1.02 -0.34 -1.25 -1.02 -1.42 -0.05 ---------------------------------------------------------------------------------------------------------------------- Life 3.05 2.15 2.28 2.28 2.28 2.28 2.98 2.28 2.30 2.30 3.24 ----------------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. All results shown assume reinvestment of distributions. The graph and tables do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. The "with sales charge" returns include the maximum 5.75% sales charge for class A shares, 4.50% for class E shares, the appropriate class B and class F contingent deferred sales charge for the holding period after purchase as follows: 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 results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Performance for different share classes varies based on differences in sales charges and fees associated with each class. Class Z share performance information includes returns for the fund's class A shares (as its expense structure more closely resembles that of the newer class) for periods prior to the inception of the newer class of shares. These class A share returns were not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class A and class Z shares. Had the expense differential been reflected, the returns for the periods prior to the inception of the class Z shares would have been higher. 8 Performance Information - Columbia Tax-Managed Growth Fund II Value of a $10,000 investment 3/7/00 - 10/31/03 Performance of a $10,000 investment 3/7/00 - 10/31/03 ($) without with sales sales charge charge -------------------------------- Class A 6,942 6,544 -------------------------------- Class B 6,750 6,548 -------------------------------- Class C 6,733 6,733 -------------------------------- Class Z 6,992 n/a -------------------------------- CLASS A SHARES CLASS A SHARES WITHOUT WITH S&P 500 SALES CHARGE SALES CHARGE INDEX 3/7/00 10000 9425 10000 10450 9849 10778 9859 9292 10454 9442 8899 10239 9866 9299 10492 9883 9315 10329 10492 9889 10970 10017 9441 10391 9625 9072 10347 8516 8027 9532 8666 8168 9578 9266 8733 9918 8091 7626 9014 7499 7068 8442 8075 7610 9098 8008 7547 9159 7832 7382 8937 7732 7287 8849 7207 6793 8295 6457 6086 7625 6599 6219 7771 7224 6808 8367 7307 6887 8440 7065 6659 8317 6990 6588 8157 7307 6887 8463 6865 6471 7950 6824 6431 7891 6257 5897 7330 5832 5497 6759 5849 5513 6803 5308 5002 6063 5783 5450 6597 6141 5788 6985 5700 5372 6575 5649 5325 6403 5608 5285 6307 5691 5364 6368 6158 5804 6893 6399 6031 7256 6341 5976 7349 6516 6141 7478 6691 6307 7624 6550 6173 7543 10/31/03 6942 6544 8177 MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.COLUMBIAFUNDS.COM FOR DAILY PERFORMANCE UPDATES. Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. The S&P 500 Index tracks the performance of 500 widely held large-capitalization US stocks. Unlike the fund, indices are not investments, do not incur fees or expenses, and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from March 7, 2000.
AVERAGE ANNUAL TOTAL RETURN AS OF 10/31/03 (%) Share class A B C Z Inception date 3/7/00 3/7/00 3/7/00 3/7/00 ------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge ------------------------------------------------------------------------------------------------------------------- 1-year 20.03 13.18 19.12 14.12 19.17 18.17 20.37 ------------------------------------------------------------------------------------------------------------------- Life -9.51 -10.96 -10.20 -10.95 -10.26 -10.26 -9.33 ------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN AS OF 9/30/03 (%) Share class A B C Z ------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge ------------------------------------------------------------------------------------------------------------------- 1-year 23.39 16.27 22.60 17.60 22.47 21.47 23.75 ------------------------------------------------------------------------------------------------------------------- Life -11.19 -12.64 -11.86 -12.61 -11.92 -11.92 -11.00 -------------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. All results shown assume reinvestment of distributions. The graph and tables do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. 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: 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 results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Performance for different share classes varies based on differences in sales charges and fees associated with each class. 9 Portfolio Managers' Report - Columbia Tax-Managed Value Fund TOP 10 HOLDINGS as of 10/31/03 (%) Citigroup 6.5 Exxon Mobil 2.7 Bank of America 2.6 U.S. Bancorp 2.1 Berkshire Hathaway, Class A 2.1 Wells Fargo 2.1 Waste Management 2.1 Lincoln National 2.1 American International Group 2.1 ConocoPhillips 2.0 Portfolio holdings are calculated as a percentage of total net assets. Since the fund is actively managed, there can be no guarantee the fund will continue to maintain the same portfolio holdings in the future. For the 12-month period that ended October 31, 2003, Columbia Tax-Managed Value Fund class A shares returned 13.61% without sales charge. The fund did not perform as well as the Russell 1000 Value Index, which returned 22.87%, or the S&P 500 Index, which returned 20.80% for the period.1 It also trailed the Lipper Multi-Cap Value Category average, which returned 24.72%.2 Poor stock selection in the consumer staples and telecommunications sectors hurt returns during the first half of the period, accounting for the bulk of the fund's underperformance. The fund's emphasis on higher-quality, large-cap value stocks also restrained its gains when markets rallied sharply and aggressive stocks were the best performers. ECONOMIC GROWTH TOOK HOLD IN SECOND HALF Stocks made little headway during the first part of 2003, weighed down by economic uncertainty and a lack of investor confidence leading up to the war with Iraq. The market finally bottomed in mid-March, then started to rally in April as major military conflict came to a swift end. The economy quickly began showing more definite signs of recovery, while earnings at many companies strengthened. Investors grew more optimistic, fueling a strong rally in stock prices. ALLOCATIONS ADJUSTED TO MATCH INDEX MORE CLOSELY We took several steps during the period to bring some sector weightings closer to the Russell 1000 Value Index. Beginning in April, the fund modified its sector allocations to take advantage of improving market conditions. Specifically, we added to the fund's financial holdings, focusing on stocks with attractive valuations such as U.S. Bancorp and State Street Corp.3 We also increased the fund's exposure to large-cap, high-quality value companies in basic materials, consumer discretionary and industrials--three sectors that tend to respond well to a growing economy. ---------------- 1 On October 13, 2003, the fund changed its benchmark from the S&P 500 Index to the Russell 1000 Value Index. 2 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as those of the fund. 3 Holdings are disclosed as of October 31, 2003, as a percentage of net assets and are subject to change: U.S. Bancorp (2.1%), State Street Corp. (0.8%), ConAgra Foods (1.0%), Textron (1.8%), Dover Corp. (1.1%), Citigroup (6.5%), J.P. Morgan Chase (2.0%) and Wendy's International (1.6%). 10 We also reduced the fund's overweight positions in sectors that tend to lag when the economy improves, such as health care, telecommunications and consumer staples. CONSUMER STAPLES HURT, INDUSTRIALS HELPED PERFORMANCE In the first part of the period, sizable holdings in ConAgra Foods, Sara Lee and Safeway in the consumer staples sector detracted from performance when they were hit hard by poor earnings results. We later eliminated Sara Lee and Safeway from the portfolio. In the industrial group, improving economic conditions helped generate strong returns from manufacturing companies Textron and Dover Corp., both on an absolute basis and relative to the sector's performance in the Russell benchmark. Textron's products range from golf carts to Cessna airplanes and Bell helicopters. Dover manages more than 50 companies including manufacturers of garbage trucks and can-making machinery as well as electronic components and ink-jet printers. Both of these companies trade at modest valuations and should benefit from an expanding economy. FINANCIALS AND CONSUMER DISCRETIONARY FARED WELL In the financial area, Citigroup, a large holding, and J.P. Morgan Chase were both strong contributors to fund performance. Earnings at both companies benefited from improved credit quality and renewed strength in the capital markets. The fund also benefited from its position in McDonald's Corp. when the company's revitalized menu offerings led to improved sales momentum and a rising share price. McDonald's rebounded after being severely depressed during the first few months of 2003, and we sold the fund's shares at a profit. We initiated a position in Wendy's International, which experienced a dramatic increase in same-store sales during the period. We believe that well-managed fast food restaurants have the potential to do well as the economy recovers. VALUE OPPORTUNITIES Despite the relatively high valuations in the market today, we remain confident that equities will provide long-term investors with good relative returns. Recent evidence points to an expanding economy, which has the potential to lead to higher corporate earnings in years to come. We expect the fund's increased exposure to industrial and basic materials to contribute to strong returns if the economy continues to expand. /s/ Gregory M. Miller /s/ Richard Dahlberg Gregory M. Miller has co-managed the fund since April 2003. Richard Dahlberg became a co-manager of the fund in October 2003. In November 2003, Brian Cunningham also became a co-manager of the fund. -------------------------------------------------------------------------------- Value stocks are securities of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor. If the advisor's assessment of a company's prospects is wrong, the price of its stock may not approach the value the advisor has placed on it. Certain active tax-reduction techniques are used only if the fund's advisor believes they will help the fund achieve its investment goals. The fund expects to distribute taxable income and capital gains from time to time. Market conditions may limit the fund's ability to generate tax losses or to avoid dividend income. The ability to use certain tax-management techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. -------------------------------------------------------------------------------- COLUMBIA TAX-MANAGED VALUE FUND TOP 5 SECTORS as of 10/31/03 (%) FINANCIALS 33.3 ENERGY 12.1 INDUSTRIALS 9.2 CONSUMER DISCRETIONARY 8.2 CONSUMER STAPLES 7.1 Sector breakdowns are calculated as a percentage of net assets. Since the fund is actively managed, there can be no guarantee the fund will continue to maintain these breakdowns in the future. 11 Performance Information - Columbia Tax-Managed Value Fund Value of a $10,000 investment 6/1/99 - 10/31/03 Value of a $10,000 investment 6/1/99 - 10/31/03 ($) without with sales sales charge charge ------------------------------- Class A 8,417 7,933 ------------------------------- Class B 8,167 8,003 ------------------------------- Class C 8,167 8,167 ------------------------------- Class Z 8,517 n/a ------------------------------- CLASS A CLASS A SHARES SHARES RUSSELL S&P S&P WITHOUT WITH 1000 500 500/BARRA SALES CHARGE SALES CHARGE VALUE INDEX VALUE INDEX 6/1/99 10000 9425 10000 10000 10000 10200 9614 10290 10555 10427 9733 9173 9989 10226 10107 9358 8820 9618 10176 9851 8641 8144 9282 9897 9466 8866 8356 9817 10523 10001 8799 8294 9740 10737 9942 8749 8246 9787 11369 10316 8357 7877 9468 10799 9988 7741 7295 8765 10594 9363 8624 8128 9834 11631 10340 8774 8269 9720 11280 10271 9215 8685 9822 11049 10303 8724 8222 9373 11322 9896 8607 8112 9490 11146 10094 9090 8567 10018 11838 10771 9124 8599 10110 11213 10769 9507 8960 10359 11166 10970 9440 8897 9974 10286 10408 9982 9408 10474 10336 10944 9940 9369 10514 10703 11406 9906 9337 10222 9727 10650 9565 9015 9861 9110 10229 9698 9140 10344 9818 10923 9881 9313 10577 9884 11038 9614 9061 10342 9644 10680 9864 9297 10320 9549 10495 9814 9249 9906 8951 9889 9447 8903 9209 8228 8949 9497 8951 9130 8385 8949 9863 9296 9660 9028 9517 9938 9367 9888 9108 9662 9722 9163 9812 8975 9397 9596 9044 9828 8802 9314 10088 9507 10293 9133 9791 9655 9100 9940 8579 9300 9621 9068 9989 8516 9337 8530 8039 9416 7909 8748 7822 7372 8540 7293 7802 7897 7443 8605 7341 7856 6780 6391 7648 6543 6958 7405 6979 8215 7118 7536 7997 7537 8732 7538 8066 7630 7192 8353 7095 7647 7347 6925 8151 6909 7437 6923 6525 7934 6806 7235 6898 6501 7947 6872 7226 7414 6988 8646 7438 7940 8014 7553 9205 7830 8525 8198 7726 9320 7930 8587 8156 7687 9459 8070 8778 8289 7812 9607 8227 8967 8122 7655 9512 8140 8805 10/31/03 8417 7933 10151 8647 9406 MUTUAL FUND PERFORMANCE CHANGES OVER TIME. PLEASE VISIT WWW.COLUMBIAFUNDS.COM FOR DAILY PERFORMANCE UPDATES. Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. On October 13, 2003, the fund's primary benchmark was changed to the Russell 1000 Value Index. During the reporting period, the fund's primary benchmark was S&P 500 Index. The S&P 500 Index tracks the performance of 500 widely held large-capitalization US stocks. The Russell 1000 Value Index is an unmanaged index that measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The value index contains firms with lower price-to-book ratios. The S&P 500/Barra Value Index is constructed by dividing the stocks in the S&P 500 Index by a single attribute: price-to-book ratio. The value index contains firms with lower price-to-book ratios. Unlike the fund, indices are not investments, do not incur fees, expenses or taxes, and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from June 1, 1999. AVERAGE ANNUAL TOTAL RETURN AS OF 10/31/03 (%)
Share class A B C Z Inception date 6/1/99 6/1/99 6/1/99 6/1/99 ------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge ------------------------------------------------------------------------------------------------------------------- 1-year 13.61 7.08 12.90 7.90 12.90 11.90 14.06 ------------------------------------------------------------------------------------------------------------------- Life -3.83 -5.11 -4.48 -4.92 -4.48 -4.48 -3.57 ------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN AS OF 9/30/03 (%) Share class A B C Z ------------------------------------------------------------------------------------------------------------------- without with without with without with without sales sales sales sales sales sales sales charge charge charge charge charge charge charge ------------------------------------------------------------------------------------------------------------------- 1-year 19.78 12.89 18.99 13.99 18.99 17.99 20.24 ------------------------------------------------------------------------------------------------------------------- Life -4.68 -5.97 -5.34 -5.78 -5.34 -5.34 -4.43 -------------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future investment results. The principal value and investment returns will fluctuate, resulting in a gain or loss on sale. All results shown assume reinvestment of distributions. The graph and tables do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. 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: 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 results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Performance for different share classes varies based on differences in sales charges and fees associated with each class. 12 Investment Portfolio -- Columbia Tax-Managed Aggressive Growth Fund October 31, 2003
Common Stocks - 96.0% Shares Value ---------------------------------------------------------------------------------------- CONSUMER DISCRETIONARY - 15.8% Auto Components - 0.9% Gentex Corp. 3,310 $ 129,255 ----------- Distributors - 1.3% CDW Corp. 3,100 186,155 ----------- Hotels, Restaurants & Leisure - 2.1% Brinker International, Inc. (a) 3,020 96,127 Hilton Hotels Corp. 8,100 128,304 MGM Mirage 1,920 68,160 ----------- 292,591 ----------- Household Durables - 1.4% Garmin Ltd. 4,000 200,120 ----------- Internet & Catalog Retail - 1.1% InterActive Corp. (a) 4,260 156,385 ----------- Leisure Equipment & Products - 0.5% Brunswick Corp. 2,500 74,175 ----------- Media - 2.5% Cox Radio, Inc., Class A (a) 6,080 134,490 Univision Communications, Inc., Class A (a) 3,440 116,788 Westwood One, Inc. (a) 3,320 99,368 ----------- 350,646 ----------- Multi-Line Retail - 1.7% Dollar Tree Stores, Inc. (a) 2,910 111,104 Family Dollar Stores, Inc. 2,870 125,161 ----------- 236,265 ----------- Specialty Retail - 3.4% Bed Bath & Beyond, Inc. (a) 5,380 227,251 Rent-A-Center, Inc. (a) 1,400 43,764 Williams-Sonoma, Inc. (a) 5,940 209,860 ----------- 480,875 ----------- Textiles, Apparel & Luxury Goods - 0.9% Reebok International Ltd. 3,200 124,640 ----------- ---------------------------------------------------------------------------------------- CONSUMER STAPLES - 1.3% Food & Drug Retailing - 0.8% Whole Foods Market, Inc. (a) 1,870 110,779 ----------- Food Products - 0.5% Dean Foods Co. (a) 2,400 72,600 ----------- ---------------------------------------------------------------------------------------- ENERGY - 6.8% Energy Equipment & Services - 4.1% BJ Services Co. (a) 4,080 133,865 Nabors Industries Ltd. (a) 2,050 77,490 National-Oilwell, Inc. (a) 5,850 111,560 Noble Corp. (a) 3,160 108,483 Patterson-UTI Energy, Inc. (a) 4,990 142,664 ----------- 574,062 ----------- Shares Value ---------------------------------------------------------------------------------------- Oil & Gas - 2.7% Apache Corp. 2,150 $ 149,898 Murphy Oil Corp. 2,090 123,268 XTO Energy, Inc. 4,760 112,669 ----------- 385,835 ----------- ---------------------------------------------------------------------------------------- FINANCIALS - 3.0% Insurance - 3.0% Ambac Financial Group, Inc. 2,890 204,439 Axis Capital Holdings Ltd. 3,340 83,667 StanCorp Financial Group, Inc. 2,160 136,188 ----------- 424,294 ----------- ---------------------------------------------------------------------------------------- HEALTH CARE - 19.8% Biotechnology - 2.2% Amylin Pharmaceuticals, Inc. (a) 2,400 65,592 Gilead Sciences, Inc. (a) 2,100 114,618 ICOS Corp. (a) 2,970 138,758 ----------- 318,968 ----------- Health Care Equipment & Supplies - 2.2% Boston Scientific Corp. (a) 1,590 107,675 Hillenbrand Industries, Inc. 1,220 72,627 Varian Medical Systems, Inc. (a) 2,090 133,635 ----------- 313,937 ----------- Health Care Providers & Services - 12.1% Anthem, Inc. (a) 2,210 151,230 Caremark Rx, Inc. (a) 10,740 269,037 Community Health Systems, Inc. (a) 5,580 134,032 DaVita, Inc. (a) 5,350 187,785 First Health Group Corp. (a) 3,990 97,396 Health Management Associates, Inc. 4,900 108,535 Lincare Holdings, Inc. (a) 3,410 132,785 Manor Care, Inc. 4,300 143,104 Renal Care Group, Inc. (a) 3,900 146,289 UnitedHealth Group, Inc. 5,280 268,646 WellChoice, Inc. (a) 2,200 71,500 ----------- 1,710,339 ----------- Pharmaceuticals - 3.3% Barr Laboratories, Inc. (a) 4,920 377,708 Teva Pharmaceutical Industries Ltd., ADR 1,430 81,353 ----------- 459,061 ----------- ---------------------------------------------------------------------------------------- INDUSTRIALS - 12.8% Aerospace & Defense - 0.9% Raytheon Co. 4,620 122,338 ----------- See notes to investment portfolio. 13 Investment Portfolio -- Columbia Tax-Managed Aggressive Growth Fund (continued) October 31, 2003 Common Stocks (continued) Shares Value ---------------------------------------------------------------------------------------- INDUSTRIALS (continued) Commercial Services & Supplies - 8.9% Allied Waste Industries, Inc. (a) 11,700 $ 131,976 CheckFree Corp. (a) 2,700 74,331 Cintas Corp. 1,850 78,921 Corporate Executive Board Co. (a) 6,400 326,464 DST Systems, Inc. (a) 1,800 68,076 Education Management Corp. (a) 5,690 359,494 Monster Worldwide, Inc. (a) 5,600 142,632 Robert Half International, Inc. (a) 3,330 78,621 ----------- 1,260,515 ----------- Electrical Equipment - 1.1% American Power Conversion Corp. (a) 7,790 157,592 ----------- Trading Companies & Distributors - 1.9% Fastenal Co. 3,860 171,654 Grainger (W.W.), Inc. 2,160 98,885 ----------- 270,539 ----------- ---------------------------------------------------------------------------------------- INFORMATION TECHNOLOGY - 36.5% Communications Equipment - 3.0% 3Com Corp. (a) 20,090 144,648 Comverse Technology, Inc. (a) 6,220 112,209 Scientific-Atlanta, Inc. 3,700 109,520 UTStarcom, Inc. (a) 1,990 62,685 ----------- 429,062 ----------- Computers & Peripherals - 1.1% Lexmark International, Inc. (a) 2,040 150,164 ----------- Electronic Equipment & Instruments - 6.4% Agilent Technologies, Inc. (a) 4,300 107,156 Amphenol Corp., Class A (a) 4,150 243,812 AU Optronics Corp., ADR 6,575 89,288 Jabil Circuit, Inc. (a) 4,800 133,680 Sanmina-SCI Corp. (a) 11,900 125,545 Symbol Technologies, Inc. 6,960 86,930 Vishay Intertechnology, Inc. (a) 6,600 123,750 ----------- 910,161 ----------- Semiconductor Equipment & Products - 12.4% Agere Systems, Inc., Class A (a) 38,410 133,667 Altera Corp. (a) 3,870 78,290 Amkor Technology, Inc. (a) 6,800 128,180 ASML Holding NV, New York Shares (a) 4,400 77,220 Fairchild Semiconductor International, Inc., (a) 8,190 185,094 Marvell Technology Group Ltd. (a) 3,430 150,474 MEMC Electronic Materials Inc. (a) 5,700 63,840 Microchip Technology, Inc. 9,580 313,362 Shares Value ---------------------------------------------------------------------------------------- National Semiconductor Corp. (a) 2,560 $ 104,013 Novellus Systems, Inc. (a) 2,660 109,831 QLogic Corp. (a) 1,300 72,865 Taiwan Semiconductor Manufacturing Co., Ltd., ADR (a) 16,694 184,636 Teradyne, Inc. (a) 6,390 145,564 ----------- 1,747,036 ----------- Software - 13.6% Amdocs Ltd. (a) 9,820 210,737 BEA Systems, Inc. (a) 8,100 112,590 BMC Software, Inc. (a) 6,920 120,270 Electronic Arts, Inc. (a) 3,850 381,304 Fair Isaac Corp. 3,700 235,986 Intuit, Inc. (a) 2,540 126,949 Mercury Interactive Corp. (a) 4,000 185,760 PeopleSoft, Inc. (a) 3,700 76,812 Siebel Systems, Inc. (a) 11,610 146,170 Symantec Corp. (a) 1,570 104,640 VERITAS Software Corp. (a) 6,040 218,346 ----------- 1,919,564 ----------- Total Common Stocks (Cost of $10,810,360) 13,567,953 ----------- Investment Company - 0.7% ---------------------------------------------------------------------------------------- MSCI Japan Index Fund, IShares Inc. (Cost of $103,452) 11,100 102,564 ----------- Short-Term Obligation - 4.3% Par ---------------------------------------------------------------------------------------- Repurchase agreement with State Street Bank & Trust Co., dated 10/31/03, due 11/03/03 at 0.930% collateralized by a U.S. Treasury Bond maturing 08/21/21 market value $626,750 (repurchase proceeds $609,047) (Cost of $609,000) $609,000 609,000 ----------- Total Investments - 101.0% (Cost of $11,522,812) (b) 14,279,517 ----------- Other Assets & Liabilities, Net - (1.0%) (146,599) ---------------------------------------------------------------------------------------- NET ASSETS - 100.0% $14,132,918 =========== Notes to Investment Portfolio: (a) Non-income producing. (b) Cost for federal income tax purposes is $11,578,764. Acronym Name ------- ---- ADR American Depositary Receipt See notes to financial statements. 14
Investment Portfolio -- Columbia Tax-Managed Growth Fund October 31, 2003
Common Stocks - 96.9% Shares Value ---------------------------------------------------------------------------------------- CONSUMER DISCRETIONARY - 14.4% Media - 6.8% Comcast Corp., Class A (a) 210,000 $ 6,850,200 Univision Communications, Inc., Class A (a) 230,000 7,808,500 Viacom, Inc., Class B (a) 198,872 7,929,027 ------------ 22,587,727 ------------ Multi-Line Retail - 5.1% Kohl's Corp. (a) 125,000 7,008,750 Wal-Mart Stores, Inc. 167,800 9,891,810 ------------ 16,900,560 ------------ Specialty Retail - 2.5% Lowe's Companies, Inc. 138,000 8,132,340 ------------ ---------------------------------------------------------------------------------------- CONSUMER STAPLES - 6.4% Beverages - 2.3% PepsiCo, Inc. 157,800 7,545,996 ------------ Food & Drug Retailing - 2.2% Walgreen Co. 213,000 7,416,660 ------------ Household Products - 1.9% Procter & Gamble Co. 64,500 6,339,705 ------------ ---------------------------------------------------------------------------------------- ENERGY - 5.3% Energy Equipment & Services - 3.4% Nabors Industries Ltd. (a) 218,000 8,240,400 Noble Corp. (a) 90,000 3,089,700 ------------ 11,330,100 ------------ Oil & Gas - 1.9% Exxon Mobil Corp. 166,000 6,072,280 ------------ ---------------------------------------------------------------------------------------- FINANCIALS - 19.9% Banks - 2.0% Bank of America Corp. 86,300 6,535,499 ------------ Diversified Financials - 9.4% Citigroup, Inc. 181,155 8,586,747 Fannie Mae 116,200 8,330,378 Lehman Brothers Holdings, Inc. 108,775 7,831,800 Merrill Lynch & Co., Inc. 111,030 6,572,976 ------------ 31,321,901 ------------ Insurance - 8.5% American International Group, Inc. 121,854 7,412,379 Chubb Corp. 85,700 5,725,617 RenaissanceRe Holdings Ltd. 187,980 8,455,340 XL Capital Ltd., Class A 93,800 6,519,100 ------------ 28,112,436 ------------ ---------------------------------------------------------------------------------------- HEALTH CARE - 18.1% Biotechnology - 2.0% Amgen, Inc. (a) 105,200 6,497,152 ------------ Shares Value ---------------------------------------------------------------------------------------- Health Care Equipment & Supplies - 7.6% Medtronic, Inc. 168,500 $ 7,678,545 St. Jude Medical, Inc. (a) 155,000 9,014,800 Zimmer Holdings, Inc. (a) 130,000 8,295,300 ------------ 24,988,645 ------------ Health Care Providers & Services - 1.7% Express Scripts, Inc., Class A (a) 102,600 5,634,792 ------------ Pharmaceuticals - 6.8% Abbott Laboratories 140,417 5,984,573 AstraZeneca PLC, ADR 187,500 8,940,000 Pfizer, Inc. 243,250 7,686,700 ------------ 22,611,273 ------------ ---------------------------------------------------------------------------------------- INDUSTRIALS - 9.6% Electrical Equipment - 2.2% Emerson Electric Co. 128,300 7,281,025 ------------ Industrial Conglomerates - 1.8% General Electric Co. 211,910 6,147,509 ------------ Machinery - 5.6% Deere & Co. 103,000 6,243,860 Eaton Corp. 58,000 5,813,920 Illinois Tool Works, Inc. 87,000 6,398,850 ------------ 18,456,630 ------------ ---------------------------------------------------------------------------------------- INFORMATION TECHNOLOGY - 20.6% Communications Equipment - 2.6% Cisco Systems, Inc. (a) 404,700 8,490,606 ------------ Computers & Peripherals - 5.0% Dell, Inc. (a) 100,000 3,612,000 Hewlett-Packard Co. 290,000 6,469,900 Lexmark International, Inc. (a) 90,000 6,624,900 ------------ 16,706,800 ------------ IT Consulting & Services - 2.0% Affiliated Computer Services, Inc., Class A (a) 133,000 6,507,690 ------------ Semiconductor Equipment & Products - 7.1% Intel Corp. 100,000 3,305,000 Microchip Technology, Inc. 248,900 8,141,519 Texas Instruments, Inc. 286,975 8,299,317 Xilinx, Inc. (a) 115,000 3,645,500 ------------ 23,391,336 ------------ Software - 3.9% Microsoft Corp. 281,400 7,358,610 Symantec Corp. (a) 85,000 5,665,250 ------------ 13,023,860 ------------ ---------------------------------------------------------------------------------------- MATERIALS - 2.6% Metals & Mining - 1.1% Phelps Dodge Corp. (a) 60,000 3,704,400 ------------ See notes to investment portfolio. 15 Investment Portfolio -- Columbia Tax-Managed Growth Fund (continued) October 31, 2003 Common Stocks (continued) Shares Value ---------------------------------------------------------------------------------------- MATERIALS (continued) Paper & Forest Products - 1.5% International Paper Co. 121,500 $ 4,781,025 ------------ Total Common Stocks (Cost of $259,190,000) 320,517,947 ------------ Short-Term Obligation - 2.9% Par ---------------------------------------------------------------------------------------- Repurchase agreement with State Street Bank & Trust Co., dated 10/31/03, due 11/03/03 at 0.930% collateralized by a U.S. Treasury Bond maturing 08/15/17 market value $9,930,656 (repurchase proceeds $9,731,754) (Cost of $9,731,000) $9,731,000 9,731,000 ------------ Total Investments - 99.8% (Cost of $268,921,000) (b) 330,248,947 ------------ Other Assets & Liabilities, Net - 0.2% 646,474 ---------------------------------------------------------------------------------------- Net Assets - 100.0% $330,895,421 ============
Notes to Investment Portfolio: (a) Non-income producing. (b) Cost for federal income tax purposes is $271,873,415. Acronym Name ------- ---- ADR American Depositary Receipt See notes to financial statements. 16 Investment Portfolio -- Columbia Tax-Managed Growth Fund II October 31, 2003
Common Stocks - 97.1% Shares Value ---------------------------------------------------------------------------------------- CONSUMER DISCRETIONARY - 14.6% Media - 6.8% Comcast Corp., Class A (a) 29,800 $ 972,076 Univision Communications, Inc., Class A (a) 33,030 1,121,368 Viacom, Inc., Class B (a) 26,800 1,068,516 ----------- 3,161,960 ----------- Multi-Line Retail - 5.2% Kohl's Corp. (a) 17,900 1,003,653 Wal-Mart Stores, Inc. 23,470 1,383,557 ----------- 2,387,210 ----------- Specialty Retail - 2.6% Lowe's Companies, Inc. 20,800 1,225,744 ----------- ---------------------------------------------------------------------------------------- CONSUMER STAPLES - 6.5% Beverages - 2.3% PepsiCo, Inc. 22,500 1,075,950 ----------- Food & Drug Retailing - 2.2% Walgreen Co. 28,500 992,370 ----------- Household Products - 2.0% Procter & Gamble Co. 9,500 933,755 ----------- ---------------------------------------------------------------------------------------- ENERGY - 5.2% Energy Equipment & Services - 3.3% Nabors Industries Ltd. (a) 29,400 1,111,320 Noble Corp. (a) 12,500 429,125 ----------- 1,540,445 ----------- Oil & Gas - 1.9% Exxon Mobil Corp. 24,000 877,920 ----------- ---------------------------------------------------------------------------------------- FINANCIALS - 20.0% Banks - 2.0% Bank of America Corp. 12,100 916,333 ----------- Diversified Financials - 9.5% Citigroup, Inc. 24,795 1,175,283 Fannie Mae 15,585 1,117,289 Lehman Brothers Holdings, Inc. 15,425 1,110,600 Merrill Lynch & Co., Inc. 16,700 988,640 ----------- 4,391,812 ----------- Insurance - 8.5% American International Group, Inc. 17,463 1,062,274 Chubb Corp. 11,600 774,996 RenaissanceRe Holdings Ltd. 28,400 1,277,432 XL Capital Ltd., Class A 12,200 847,900 ----------- 3,962,602 ----------- ---------------------------------------------------------------------------------------- HEALTH CARE - 17.9% Biotechnology - 2.1% Amgen, Inc. (a) 16,000 988,160 ----------- Shares Value ---------------------------------------------------------------------------------------- Health Care Equipment & Supplies - 7.3% Medtronic, Inc. 22,400 $ 1,020,768 St. Jude Medical, Inc. (a) 21,000 1,221,360 Zimmer Holdings, Inc. (a) 18,000 1,148,580 ----------- 3,390,708 ----------- ---------------------------------------------------------------------------------------- Health Care Providers & Services - 1.7% Express Scripts, Inc., Class A (a) 14,200 779,864 ----------- Pharmaceuticals - 6.8% Abbott Laboratories 19,800 843,876 AstraZeneca PLC, ADR 26,500 1,263,520 Pfizer, Inc. 33,287 1,051,869 ----------- 3,159,265 ----------- ---------------------------------------------------------------------------------------- INDUSTRIALS - 9.6% Electrical Equipment - 2.2% Emerson Electric Co. 17,700 1,004,475 ----------- Industrial Conglomerates - 2.3% General Electric Co. 37,155 1,077,867 ----------- Machinery - 5.1% Deere & Co. 11,200 678,944 Eaton Corp. 8,000 801,920 Illinois Tool Works, Inc. 12,000 882,600 ----------- 2,363,464 ----------- ---------------------------------------------------------------------------------------- INFORMATION TECHNOLOGY - 20.7% Communications Equipment - 2.6% Cisco Systems, Inc. (a) 56,495 1,185,265 ----------- Computers & Peripherals - 5.2% Dell, Inc. (a) 14,000 505,680 Hewlett-Packard Co. 44,000 981,640 Lexmark International, Inc. (a) 12,600 927,486 ----------- 2,414,806 ----------- IT Consulting & Services - 2.0% Affiliated Computer Services, Inc., Class A (a) 19,000 929,670 ----------- Semiconductor Equipment & Products - 7.1% Intel Corp. 15,000 495,750 Microchip Technology, Inc. 35,425 1,158,752 Texas Instruments, Inc. 40,750 1,178,490 Xilinx, Inc. (a) 15,000 475,500 ----------- 3,308,492 ----------- Software - 3.8% Microsoft Corp. 36,400 951,860 Symantec Corp. (a) 12,000 799,800 ----------- 1,751,660 ----------- ---------------------------------------------------------------------------------------- See notes to investment portfolio. 17 Investment Portfolio -- Columbia Tax-Managed Growth Fund II (continued) October 31, 2003 Common Stocks (continued) Shares Value ---------------------------------------------------------------------------------------- MATERIALS - 2.6% Metals & Mining - 1.2% Phelps Dodge Corp. (a) 8,700 $ 537,138 ----------- Paper & Forest Products - 1.4% International Paper Co. 17,000 668,950 ----------- Total Common Stocks (Cost of $40,228,931) 45,025,885 ----------- Short-Term Obligation - 2.6% Par ---------------------------------------------------------------------------------------- Repurchase agreement with State Street Bank & Trust Co., dated 10/31/03, due 11/03/03 at 0.930% collateralized by a U.S. Treasury Bond maturing 08/15/20 market value $1,219,750 (repurchase proceeds $1,195,093) (Cost of $1,195,000) $1,195,000 1,195,000 ----------- Total Investments - 99.7% (Cost of $41,423,931) (b) 46,220,885 ----------- Other Assets & Liabilities, Net - 0.3% 125,620 ---------------------------------------------------------------------------------------- Net Assets - 100.0% $46,346,505 ===========
Notes to Investment Portfolio: (a) Non-income producing. (b) Cost for federal income tax purposes is $41,917,597. Acronym Name ------- ---- ADR American Depositary Receipt See notes to financial statements. 18 Investment Portfolio -- Columbia Tax-Managed Value Fund October 31, 2003
Common Stocks - 95.5% Shares Value ---------------------------------------------------------------------------------------- CONSUMER DISCRETIONARY - 8.2% Auto Components - 0.9% Delphi Corp. 84,600 $ 752,940 ----------- Hotels, Restaurants & Leisure - 1.6% Wendy's International, Inc. 33,400 1,237,470 ----------- Leisure Equipment & Products - 0.5% Mattel, Inc. 20,900 404,624 ----------- Media - 4.2% Gannett Co., Inc. 5,000 420,550 Interpublic Group of Companies, Inc. 57,800 860,064 McGraw-Hill Companies, Inc. 13,100 877,045 Time Warner, Inc. (a) 55,700 851,653 Viacom Inc., Class A 9,800 390,432 ----------- 3,399,744 ----------- Specialty Retail - 1.0% Office Depot, Inc. (a) 54,800 818,164 ----------- ---------------------------------------------------------------------------------------- CONSUMER STAPLES - 7.1% Beverages - 1.7% PepsiCo, Inc. 28,200 1,348,524 ----------- Food Products - 2.0% ConAgra Foods, Inc. 34,800 829,632 Kraft Foods, Inc., Class A 26,800 779,880 ----------- 1,609,512 ----------- Household Products - 3.4% Clorox Co. 18,300 828,990 Kimberly-Clark Corp. 16,500 871,365 Procter & Gamble Co. 10,500 1,032,045 ----------- 2,732,400 ----------- ---------------------------------------------------------------------------------------- ENERGY - 12.1% Energy Equipment & Services - 2.9% Baker Hughes, Inc. 29,100 822,366 Halliburton Co. 64,100 1,530,708 ----------- 2,353,074 ----------- Oil & Gas - 9.2% BP PLC 36,900 1,563,822 ConocoPhillips 28,230 1,613,345 Exxon Mobil Corp. 60,000 2,194,800 Marathon Oil Corp. 41,300 1,221,241 Royal Dutch Petroleum Co. 17,800 789,964 ----------- 7,383,172 ----------- ---------------------------------------------------------------------------------------- Shares Value ---------------------------------------------------------------------------------------- FINANCIALS - 33.3% Banks - 10.7% Bank of America Corp. 27,500 $ 2,082,575 Bank of New York Co., Inc. 38,000 1,185,220 Bank One Corp. 34,500 1,464,525 Fifth Third Bancorp 8,300 481,068 U.S. Bancorp 63,600 1,731,192 Wells Fargo & Co. 30,000 1,689,600 ----------- 8,634,180 ----------- Diversified Financials - 13.2% American Express Co. 17,100 802,503 Citigroup, Inc. 109,900 5,209,260 Countrywide Financial Corp. 5,700 599,184 Freddie Mac 24,300 1,363,959 J.P. Morgan Chase & Co. 44,800 1,608,320 Morgan Stanley 7,500 411,525 State Street Corp. 11,700 612,612 ----------- 10,607,363 ----------- Insurance - 9.4% AFLAC, Inc. 11,900 434,112 Ambac Financial Group, Inc. 11,400 806,436 American International Group, Inc. 27,400 1,666,742 Berkshire Hathaway, Inc., Class A (a) 22 1,711,820 Lincoln National Corp. 42,000 1,677,060 Travelers Property Casualty Corp. 50,600 828,322 Willis Group Holdings Ltd. 13,700 456,210 ----------- 7,580,702 ----------- ---------------------------------------------------------------------------------------- HEALTH CARE - 6.6% Health Care Providers & Services - 2.9% Aetna, Inc. 25,900 1,486,919 McKesson Corp. 27,500 832,425 ----------- 2,319,344 ----------- Pharmaceuticals - 3.7% Bristol-Myers Squibb Co. 30,300 768,711 Johnson & Johnson 7,800 392,574 Merck & Co., Inc. 20,700 915,975 Pfizer, Inc. 28,200 891,120 ----------- 2,968,380 ----------- ---------------------------------------------------------------------------------------- INDUSTRIALS - 9.2% Aerospace & Defense - 3.7% General Dynamics Corp. 10,000 837,000 Honeywell International, Inc. 29,200 893,812 Raytheon Co. 31,100 823,528 United Technologies Corp. 4,900 414,981 ----------- 2,969,321 ----------- See notes to investment portfolio. 19 Investment Portfolio -- Columbia Tax-Managed Value Fund (continued) October 31, 2003 Common Stocks (continued) Shares Value ---------------------------------------------------------------------------------------- INDUSTRIALS (continued) Commercial Services & Supplies - 2.6% Avery Dennison Corp. 7,700 $ 404,866 Waste Management, Inc. 64,770 1,678,838 ----------- 2,083,704 ----------- Industrial Conglomerates - 1.8% Textron, Inc. 29,100 1,445,979 ----------- Machinery - 1.1% Dover Corp. 23,200 905,264 ----------- ---------------------------------------------------------------------------------------- INFORMATION TECHNOLOGY - 6.0% Communications Equipment - 1.2% Nokia Oyj, ADR 56,800 965,032 ----------- Computers & Peripherals - 1.0% International Business Machines Corp. 9,100 814,268 ----------- IT Consulting & Services - 1.8% Accenture Ltd., Class A (a) 60,800 1,422,720 ----------- Office Electronics - 1.6% Xerox Corp. (a) 120,500 1,265,250 ----------- Software - 0.4% Microsoft Corp. 13,400 350,410 ----------- ---------------------------------------------------------------------------------------- MATERIALS - 2.8% Chemicals - 1.1% Air Products & Chemicals, Inc. 20,200 917,282 ----------- Paper & Forest Products - 1.7% MeadWestvaco Corp. 32,200 834,624 Weyerhaeuser Co. 8,100 487,863 ----------- 1,322,487 ----------- ---------------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES - 4.9% Diversified Telecommunication Services - 4.9% BellSouth Corp. 49,200 1,294,452 CenturyTel, Inc. 5,600 200,200 SBC Communications, Inc. 52,900 1,268,542 Verizon Communications, Inc. 36,400 1,223,040 ----------- 3,986,234 ----------- ---------------------------------------------------------------------------------------- UTILITIES - 5.3% Electric Utilities - 4.4% American Electric Power Co., Inc. 26,600 749,854 Consolidated Edison, Inc. 30,400 1,230,288 PG&E Corp. (a) 27,500 672,375 TXU Corp. 39,300 896,826 ----------- 3,549,343 ----------- Shares Value ---------------------------------------------------------------------------------------- Multi-Utilities & Unregulated Power - 0.9% Duke Energy Corp. 42,600 $ 773,190 ----------- Total Common Stocks (Cost of $68,666,940) 76,920,077 ----------- Investment Company - 0.7% ---------------------------------------------------------------------------------------- Russel 1000 Value Index, IShares (Cost of $527,680) 9,700 530,202 ----------- Short-Term Obligation - 3.4% Par ---------------------------------------------------------------------------------------- Repurchase agreement with State Street Bank & Trust Co., dated 10/31/03, due 11/03/03 at 0.930% collateralized by a U.S. Treasury Bond maturing 08/15/17 market value $2,833,263 (repurchase proceeds $2,774,215) (Cost of $2,774,000) $2,774,000 2,774,000 ----------- Total Investments - 99.6% (Cost of $71,968,620) (b) 80,224,279 ----------- Other Assets & Liabilities, Net - 0.4% 322,598 ---------------------------------------------------------------------------------------- NET ASSETS - 100.0% $80,546,877 ===========
Notes to Investment Portfolio: (a) Non-income producing. (b) Cost for federal income tax purposes is $72,112,642. Acronym Name ------- ---- ADR American Depositary Receipt See notes to financial statements. 20 Statements of Assets & Liabilities October 31, 2003
COLUMBIA COLUMBIA TAX-MANAGED TAX-MANAGED AGGRESSIVE GROWTH FUND GROWTH FUND -------------------------------------------------------------------------------------------------------------------- ASSETS: Investments, at cost $ 11,522,812 $268,921,000 ------------ ------------ Investments, at value 14,279,517 330,248,947 Cash $ 526 $ 72 Receivables for: Investments sold 170,508 3,293,052 Fund shares sold 117,650 103,291 Dividends 1,182 290,186 Interest 16 251 Expense reimbursement due from Investment Advisor/Administrator 24,890 -- Deferred Trustees' compensation plan 726 12,025 Other assets 60 -- ----------- ---------- Total Assets 14,595,075 333,947,824 ------------ ------------ LIABILITIES: Payable for: Investments purchased 389,409 1,661,891 Fund shares repurchased 12,780 763,189 Investment advisory fee 9,460 171,491 Administration fee 2,269 73,665 Transfer agent fee 8,065 126,552 Pricing and bookkeeping fees 1,717 12,958 Audit fee 20,000 19,800 Distribution and service fees 8,712 206,122 Deferred Trustees' fees 726 12,025 Other liabilities 9,019 4,710 ----------- ---------- Total Liabilities 462,157 3,052,403 ------------ ------------ NET ASSETS $ 14,132,918 $330,895,421 ============ ============ COMPOSITION OF NET ASSETS: Paid-in capital $ 25,886,939 $460,153,541 Accumulated net investment loss (986) (16,158) Accumulated net realized loss (14,509,740) (190,569,909) Net unrealized appreciation on investments 2,756,705 61,327,947 ------------ ------------ NET ASSETS $ 14,132,918 $330,895,421 ============ ============ CLASS A: Net assets $ 3,838,024 $ 69,764,044 Shares outstanding 491,102 5,329,784 ============ ============ Net asset value per share $ 7.82(a) $ 13.09(a) ============ ============ Maximum offering price per share (net asset value/0.9425) $ 8.30(b) $ 13.89(b) ============ ============ CLASS B: Net assets $ 8,632,371 $213,481,017 Shares outstanding 1,131,294 17,177,706 ============ ============ Net asset value and offering price per share $ 7.63(a) $ 12.43(a) ============ ============ CLASS C: Net assets $ 1,644,309 $ 30,035,491 Shares outstanding 215,558 2,417,233 ============ ============ Net asset value and offering price per share $ 7.63(a) $ 12.43(a) ============ ============ CLASS E: Net assets $ -- $ 6,908,071 Shares outstanding -- 530,617 ============ ============ Net asset value and redemption price per share $ -- $ 13.02 ============ ============ Maximum offering price per share (net asset value/0.9550) $ -- $ 13.63(b) ============ ============ CLASS F: Net assets $ -- $ 10,265,234 Shares outstanding -- 824,945 ============ ============ Net asset value and offering price per share $ -- $ 12.44(a) ============ ============ CLASS Z: Net assets $ 18,214 $ 441,564 Shares outstanding 2,325 33,342 ============ ============ Net asset value, offering and redemption price per share $ 7.83 $ 13.24 ============ ============
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. (b) On sales of $50,000 or more the offering price is reduced. See notes to financial statements. 21
Statements of Assets & Liabilities (continued) October 31, 2003 COLUMBIA COLUMBIA TAX-MANAGED TAX-MANAGED GROWTH FUND II VALUE FUND -------------------------------------------------------------------------------------------------------------------- ASSETS: Investments, at cost $ 41,423,931 $ 71,968,620 ------------ ------------ Investments, at value 46,220,885 80,224,279 Cash $ 948 $ 608 Receivables for: Investments sold 463,979 461,580 Fund shares sold 27,913 83,849 Dividends 39,635 177,903 Interest 31 72 Deferred Trustees' compensation plan 1,855 3,157 ----------- ---------- Total Assets 46,755,246 80,951,448 ------------ ------------ LIABILITIES: Expense reimbursement due to Investment Advisor/Administrator 10,483 -- Payable for: Investments purchased 229,466 -- Fund shares repurchased 50,759 211,912 Investment advisory fee 31,914 56,022 Administration fee 8,224 14,525 Transfer agent fee 18,173 30,795 Pricing and bookkeeping fees 1,334 4,222 Trustees' fees -- 255 Audit fee 24,000 23,090 Distribution and service fees 30,897 52,374 Deferred Trustees' fees 1,855 3,157 Other liabilities 1,636 8,219 ----------- ---------- Total Liabilities 408,741 404,571 ------------ ------------ NET ASSETS $ 46,346,505 $ 80,546,877 ============ ============ COMPOSITION OF NET ASSETS: Paid-in capital $ 73,936,978 $ 99,155,925 Undistributed net investment income (accumulated net investment loss) (2,387) 141,865 Accumulated net realized loss (32,385,040) (27,006,572) Net unrealized appreciation on investments 4,796,954 8,255,659 ------------ ------------ NET ASSETS $ 46,346,505 $ 80,546,877 ============ ============ CLASS A: Net assets $ 7,515,112 $ 16,724,554 Shares outstanding 902,323 1,656,061 ============ ============ Net asset value per share $ 8.33(a) $ 10.10(a) ============ ============ Maximum offering price per share (net asset value/0.9425) $ 8.84(b) $ 10.72(b) ============ ============ CLASS B: Net assets $ 31,556,583 $ 50,116,915 Shares outstanding 3,897,546 5,115,563 ============ ============ Net asset value and offering price per share $ 8.10(a) $ 9.80(a) ============ ============ CLASS C: Net assets 6,443,762 $ 13,673,612 Shares outstanding 797,618 1,395,895 ============ ============ Net asset value and offering price per share $ 8.08(a) $ 9.80(a) ============ ============ CLASS Z: Net assets $ 831,048 $ 31,796 Shares outstanding 99,028 3,111 ============ ============ Net asset value, offering and redemption price per share $ 8.39 $ 10.22 ============ ============
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. (b) On sales of $50,000 or more the offering price is reduced. See notes to financial statements. 22 Statements of Operations For the Year Ended October 31, 2003
COLUMBIA COLUMBIA TAX-MANAGED TAX-MANAGED AGGRESSIVE GROWTH FUND GROWTH FUND -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends $ 31,741 $ 3,535,545 Interest 5,596 76,770 Other income -- 3,366 ----------- ------------- Total Investment Income (net of foreign taxes withheld of $471 and $11,473, respectively) 37,337 3,615,681 ----------- ------------- EXPENSES: Investment advisory fee $ 98,583 $ 1,906,575 Administration fee 24,646 794,406 Service fee: Class A 7,180 162,307 Class B 19,821 519,012 Class C 3,782 74,018 Class E -- 15,352 Class F -- 23,066 Distribution fee: Class A 1,436 -- Class B 59,464 1,557,036 Class C 11,347 222,055 Class E -- 6,141 Class F -- 69,199 Transfer agent fee 44,148 724,312 Pricing and bookkeeping fees 13,622 107,345 Trustees' fees 5,925 14,569 Custody fee 6,768 7,371 Audit fee 28,141 23,550 Registration fee 49,248 63,335 Other expenses 9,223 61,318 ----------- ----------- Total Expenses 383,334 6,350,967 Fees and expenses waived or reimbursed by Investment Advisor/Administrator (126,247) -- Custody earnings credit (21) (19) ----------- ----------- Net Expenses 257,066 6,350,948 ----------- ------------- Net Investment Loss (219,729) (2,735,267) ----------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on investments 39,575 (14,431,179) Net change in unrealized appreciation/depreciation on investments 2,524,929 73,959,918 ----------- ------------- Net Gain 2,564,504 59,528,739 ----------- ------------- NET INCREASE IN NET ASSETS FROM OPERATIONS $ 2,344,775 $ 56,793,472 =========== =============
See notes to financial statements. 23 Statements of Operations (continued) For the Year Ended October 31, 2003
COLUMBIA COLUMBIA TAX-MANAGED TAX-MANAGED GROWTH FUND II VALUE FUND -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends $ 491,023 $ 2,006,840 Interest 12,162 15,531 Other income 13,974 -- ----------- ------------- Total Investment Income (net of foreign taxes withheld of $1,739 and $23,671, respectively) 517,159 2,022,371 ----------- ------------- EXPENSES: Investment advisory fee $ 354,298 $ 667,173 Administration fee 88,575 166,836 Service fee: Class A 17,993 44,339 Class B 75,320 125,831 Class C 15,463 38,317 Distribution fee: Class A -- 8,868 Class B 225,960 377,494 Class C 46,388 114,950 Transfer agent fee 111,368 186,045 Pricing and bookkeeping fees 11,442 37,168 Trustees' fees 7,264 9,322 Custody fee 3,394 7,106 Other expenses 86,109 94,017 ---------- ---------- Total Expenses 1,043,574 1,877,466 Fees and expenses waived or reimbursed by Investment Advisor/Administrator (108,703) -- Custody earnings credit (96) (13) ---------- ---------- Net Expenses 934,775 1,877,453 ----------- ------------- Net Investment Income (Loss) (417,616) 144,918 ----------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investments (2,632,362) (11,323,355) Net change in unrealized appreciation/depreciation on investments 10,813,804 21,142,163 ----------- ------------- Net Gain 8,181,442 9,818,808 ----------- ------------- NET INCREASE IN NET ASSETS FROM OPERATIONS $ 7,763,826 $ 9,963,726 =========== =============
See notes to financial statements. 24 Statements of Changes in Net Assets
COLUMBIA COLUMBIA TAX-MANAGED TAX-MANAGED AGGRESSIVE GROWTH FUND GROWTH FUND ---------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, 2003 2002 2003 2002 ---------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment loss $ (219,729) $ (308,001) $ (2,735,267) $ (3,370,720) Net realized gain (loss) on investments 39,575 (2,855,344) (14,431,179) (56,235,239) Net change in unrealized appreciation/depreciation on investments 2,524,929 1,853,314 73,959,918 (3,638,348) ----------- ----------- ------------ ------------ Net Increase (Decrease) from Operations 2,344,775 (1,310,031) 56,793,472 (63,244,307) ----------- ----------- ------------ ------------ SHARE TRANSACTIONS: Class A: Subscriptions 2,125,101 918,229 6,638,498 8,721,673 Redemptions (1,688,965) (1,895,664) (15,690,904) (32,084,446) ----------- ----------- ------------ ------------ Net Increase (Decrease) 436,136 (977,435) (9,052,406) (23,362,773) ----------- ----------- ------------ ------------ Class B: Subscriptions 671,525 1,187,026 6,283,356 13,151,957 Redemptions (1,759,818) (3,112,236) (46,212,326) (81,597,675) ----------- ----------- ------------ ------------ Net Decrease (1,088,293) (1,925,210) (39,928,970) (68,445,718) ----------- ----------- ------------ ------------ Class C: Subscriptions 81,847 529,404 2,908,437 5,562,656 Redemptions (418,954) (1,152,931) (8,956,641) (15,790,888) ----------- ----------- ------------ ------------ Net Decrease (337,107) (623,527) (6,048,204) (10,228,232) ----------- ----------- ------------ ------------ Class E: Subscriptions -- -- 105,637 224,389 Redemptions -- -- (150,292) (238,932) ----------- ----------- ------------ ------------ Net Decrease -- -- (44,655) (14,543) ----------- ----------- ------------ ------------ Class F: Subscriptions -- -- 197,836 527,180 Redemptions -- -- (330,673) (353,318) ----------- ----------- ------------ ------------ Net Increase (Decrease) -- -- (132,837) 173,862 ----------- ----------- ------------ ------------ Class Z: Subscriptions 11,910 408,190 482,349 -- Redemptions -- (397,190) (154,915) (850,740) ----------- ----------- ------------ ------------ Net Increase (Decrease) 11,910 11,000 327,434 (850,740) ----------- ----------- ------------ ------------ Net Decrease from Share Transactions (977,354) (3,515,172) (54,879,638) (102,728,144) ----------- ----------- ------------ ------------ Total Increase (Decrease) in Net Assets 1,367,421 (4,825,203) 1,913,834 (165,972,451) NET ASSETS: Beginning of period 12,765,497 17,590,700 328,981,587 494,954,038 ----------- ----------- ------------ ------------ End of period $14,132,918 $12,765,497 $330,895,421 $328,981,587 =========== =========== ============ ============ Accumulated net investment loss $ (986) $ (505) $ (16,158) $ (13,849) =========== =========== ============ ============
See notes to financial statements. 25 Statements of Changes in Net Assets (continued)
COLUMBIA COLUMBIA TAX-MANAGED TAX-MANAGED AGGRESSIVE GROWTH FUND GROWTH FUND ---------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, 2003 2002 2003 2002 ---------------------------------------------------------------------------------------------------------------------- CHANGES IN SHARES: Class A: Subscriptions 306,687 120,292 560,514 680,896 Redemptions (254,160) (258,069) (1,375,186) (2,614,841) ----------- ----------- ------------ ------------ Net Increase (Decrease) 52,527 (137,777) (814,672) (1,933,945) ----------- ----------- ------------ ------------ Class B: Subscriptions 105,120 161,551 587,037 1,049,853 Redemptions (274,407) (440,359) (4,268,593) (7,007,740) ----------- ----------- ------------ ------------ Net Decrease (169,287) (278,808) (3,681,556) (5,957,887) ----------- ----------- ------------ ------------ Class C: Subscriptions 12,186 70,516 270,413 455,735 Redemptions (64,957) (163,218) (820,762) (1,341,588) ----------- ----------- ------------ ------------ Net Decrease (52,771) (92,702) (550,349) (885,853) ----------- ----------- ------------ ------------ Class E: Subscriptions -- -- 8,644 17,655 Redemptions -- -- (13,658) (21,839) ----------- ----------- ------------ ------------ Net Decrease -- -- (5,014) (4,184) ----------- ----------- ------------ ------------ Class F: Subscriptions -- -- 17,598 42,623 Redemptions -- -- (29,586) (31,434) ----------- ----------- ------------ ------------ Net Increase (Decrease) -- -- (11,988) 11,189 ----------- ----------- ------------ ------------ Class Z: Subscriptions 1,861 51,745 40,880 -- Redemptions -- (59,967) (14,872) (64,379) ----------- ----------- ------------ ------------ Net Increase (Decrease) 1,861 (8,222) 26,008 (64,379) ----------- ----------- ------------ ------------
See notes to financial statements. 26 Statements of Changes in Net Assets (continued)
COLUMBIA COLUMBIA TAX-MANAGED TAX-MANAGED GROWTH FUND II VALUE FUND --------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, 2003 2002 2003 2002 --------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income (loss) $ (417,616) $ (530,798) $ 144,918 $ (248,818) Net realized loss on investments (2,632,362) (9,333,607) (11,323,355) (15,507,933) Net change in unrealized appreciation/depreciation on investments 10,813,804 2,290,838 21,142,163 (14,402,670) ----------- ----------- ------------ ------------ Net Increase (Decrease) from Operations 7,763,826 (7,573,567) 9,963,726 (30,159,421) ----------- ----------- ------------ ------------ SHARE TRANSACTIONS: Class A: Subscriptions 1,444,961 2,585,072 3,592,454 10,989,897 Redemptions (2,899,754) (3,053,453) (8,719,434) (10,381,631) ----------- ----------- ------------ ------------ Net Increase (Decrease) (1,454,793) (468,381) (5,126,980) 608,266 ----------- ----------- ------------ ------------ Class B: Subscriptions 1,882,364 5,060,865 3,240,450 17,390,433 Redemptions (6,472,623) (11,451,939) (11,898,465) (16,719,891) ----------- ----------- ------------ ------------ Net Increase (Decrease) (4,590,259) (6,391,074) (8,658,015) 670,542 ----------- ----------- ------------ ------------ Class C: Subscriptions 713,546 2,105,388 1,542,556 9,058,575 Redemptions (1,816,426) (3,549,281) (7,135,678) (7,028,058) ----------- ----------- ------------ ------------ Net Increase (Decrease) (1,102,880) (1,443,893) (5,593,122) 2,030,517 ----------- ----------- ------------ ------------ Class Z: Subscriptions 41,354 434,351 28,960 -- Redemptions (248,762) (700,801) -- -- ----------- ----------- ------------ ------------ Net Increase (Decrease) (207,408) (266,450) 28,960 -- ----------- ----------- ------------ ------------ Net Increase (Decrease) from Share Transactions (7,355,340) (8,569,798) (19,349,157) 3,309,325 ----------- ----------- ------------ ------------ Total Increase (Decrease) in Net Assets 408,486 (16,143,365) (9,385,431) (26,850,096) NET ASSETS: Beginning of period 45,938,019 62,081,384 89,932,308 116,782,404 ----------- ----------- ------------ ------------ End of period $46,346,505 $45,938,019 $ 80,546,877 $ 89,932,308 =========== =========== ============ ============ Undistributed net investment income (accumulated net investment loss) $ (2,387) $ (1,690) $ 141,865 $ (3,053) =========== =========== ============ ============
See notes to financial statements. 27 Statements of Changes in Net Assets (continued)
COLUMBIA COLUMBIA TAX-MANAGED TAX-MANAGED GROWTH FUND II VALUE FUND --------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, 2003 2002 2003 2002 --------------------------------------------------------------------------------------------------------------------- CHANGES IN SHARES: Class A: Subscriptions 201,123 307,872 393,479 962,625 Redemptions (407,311) (396,592) (961,953) (990,919) ----------- ----------- ------------ ------------ Net Decrease (206,188) (88,720) (568,474) (28,294) ----------- ----------- ------------ ------------ Class B: Subscriptions 266,693 618,499 359,993 1,548,507 Redemptions (911,307) (1,495,782) (1,316,603) (1,691,536) ----------- ----------- ------------ ------------ Net Decrease (644,614) (877,283) (956,610) (143,029) ----------- ----------- ------------ ------------ Class C: Subscriptions 100,076 257,090 169,090 809,984 Redemptions (258,061) (453,851) (785,239) (702,641) ----------- ----------- ------------ ------------ Net Increase (Decrease) (157,985) (196,761) (616,149) 107,343 ----------- ----------- ------------ ------------ Class Z: Subscriptions 5,807 59,549 3,007 -- Redemptions (34,998) (83,691) -- -- ----------- ----------- ------------ ------------ Net Increase (Decrease) (29,191) (24,142) 3,007 -- ----------- ----------- ------------ ------------
See notes to financial statements. 28 Notes to Financial Statements October 31, 2003 Note 1. Organization Columbia Funds Trust I (the "Trust"), formerly Liberty Funds Trust I, is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Information presented in these financial statements pertains to the following diversified portfolios (individually referred to as a "Fund", collectively referred to as the "Funds"): Columbia Tax-Managed Aggressive Growth Fund ("Aggressive Growth Fund"), Formerly Liberty Tax-Managed Aggressive Growth Fund Columbia Tax-Managed Growth Fund ("Growth Fund"), Formerly Liberty Tax-Managed Growth Fund Columbia Tax-Managed Growth Fund II ("Growth Fund II"), Formerly Liberty Tax-Managed Growth Fund II Columbia Tax-Managed Value Fund ("Value Fund"), Formerly Liberty Tax-Managed Value Fund Investment Goal Each Fund seeks long-term capital growth while reducing shareholder exposure to taxes. Aggressive Growth Fund invests primarily in common stocks of small capitalization and middle capitalization companies that the Fund's investment advisor believes have growth potential. Growth Fund, Growth Fund II and Value Fund invest primarily in large capitalization and middle capitalization stocks. Fund Shares The Funds may issue an unlimited number of shares. Aggressive Growth Fund, Growth Fund II, and Value Fund each offer four classes of shares: Class A, Class B, Class C and Class Z. Growth Fund offers six classes of shares: Class A, Class B, Class C, Class E, Class F and Class Z. Each share class has its own sales charge and expense structure. Class A shares are subject to a maximum front-end sales charge of 5.75% based on the amount of initial investment. Class A shares purchased without an initial sales charge in accounts aggregating $1 million to $25 million at the time of purchase are subject to a 1.00% contingent deferred sales charge ("CDSC") on shares sold within eighteen months of the time of purchase. Class B shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class B shares will convert to Class A shares in a certain number of years after purchase, depending on the program under which shares were purchased. Class C shares are subject to a 1.00% CDSC on shares sold within one year after purchase. Class E and Class F shares are trust shares. Such shares are held in an irrevocable trust on behalf of the shareholder until a trust termination date, as specified by the shareholder. At such time, the shares pass to the shareholder's beneficiary. Class E shares are subject to a maximum front-end sales charge of 4.50% based on the amount of initial investment. Class E shares purchased without an initial sales charge in accounts aggregating $500,000 to $5 million at the time of purchase are subject to a 1.00% CDSC on shares sold within eighteen months of the time of purchase. Class F shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class F shares will convert into Class E shares after eight years. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in each Fund's prospectus. Effective October 13, 2003, Liberty Tax-Managed Aggressive Growth Fund, Liberty Tax-Managed Growth Fund, Liberty Tax-Managed Growth Fund II, and Liberty Tax-Managed Value Fund changed their names to Columbia Tax-Managed Aggressive Growth Fund, Columbia Tax-Managed Growth Fund, Columbia Tax-Managed Growth Fund II, and Columbia Tax-Managed Value Fund, respectively. Also on that date, the Trust changed its name from Liberty Funds Trust I to Columbia Funds Trust I. Note 2. Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting 29 Notes to Financial Statements (continued) October 31, 2003 policies consistently followed by the Funds in the preparation of their financial statements. Security Valuation Equity securities are valued at the last sale price at the close of the principal exchange on which they trade. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets. Short-term obligations maturing within 60 days are valued at amortized cost, which approximates market value. Investments in other investment companies are valued at net asset value. Investments for which market quotations are not readily available are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Security Transactions Security transactions are accounted for on the date the securities are purchased, sold or mature. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. Repurchase Agreements The Funds may engage in repurchase agreement transactions with institutions that the Funds' investment advisor has determined are creditworthy. The Funds, through their custodian, receive delivery of underlying securities collateralizing a repurchase agreement. Collateral securities are marked-to-market daily to ensure that their market value is at least equal, at all times to the repurchase price. (In the event that the market value of the collateral securities declines below the repurchase price of the repurchase agreement, additional securities will be required to be segregated.) A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty, including possible delays or restrictions upon each Fund's ability to dispose of the underlying securities, and a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. Income Recognition Interest income is recorded on the accrual basis. Corporate actions and dividend income are recorded on the ex-date. Determination of Class Net Asset Values All income, expenses (other than class-specific expenses, as shown on the Statements of Operations), and realized and unrealized gains (losses), are allocated to each class on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class. Federal Income Tax Status Each Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, by distributing substantially all of its taxable or tax-exempt income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, by distributing in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, each Fund will not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded. Distributions to Shareholders The Funds are managed using investment strategies that are designed to reduce (but not eliminate) the Funds' payment of taxable distributions to shareholders. From time to time, the Funds expect to distribute taxable income and capital gains. Distributions to shareholders are recorded on ex-date. Net realized capital gains, if any, are distributed at least annually. Income and capital gains dividends are determined in accordance with income tax regulations which may differ from GAAP. Note 3. Federal Tax Information The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to each Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. 30 Notes to Financial Statements (continued) October 31, 2003 For the year ended October 31, 2003 permanent differences resulting primarily from differing treatments for net operating losses were identified and reclassified among the components of the Funds' net assets as follows: UNDISTRIBUTED (ACCUMULATED) ACCUMULATED NET INVESTMENT NET REALIZED PAID-IN INCOME (LOSS) GAIN (LOSS) CAPITAL --------------- ------------ ------- Aggressive Growth Fund ...... $ 219,248 $-- $ (219,248) Growth Fund ...... 2,732,958 1 (2,732,959) Growth Fund II 416,919 -- (416,919) Value Fund .. -- 1 (1) Net investment income (loss) and net realized gains (losses), as disclosed on the Statements of Operations, and net assets were not affected by this reclassification. As of October 31, 2003, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED NET ORDINARY LONG-TERM UNREALIZED INCOME CAPITAL GAINS APPRECIATION* --------------- ------------- ------------- Aggressive Growth Fund ...... $-- $-- $ 2,700,753 Growth Fund ...... -- -- 58,375,532 Growth Fund II -- -- 4,303,288 Value Fund .. 145,817 -- 8,111,637 * The differences between book-basis and tax-basis net unrealized appreciation are primarily due to deferral of losses from wash sales. Unrealized appreciation (depreciation) at October 31, 2003, based on cost of investments for federal income tax purposes, was: UNREALIZED UNREALIZED NET UNREALIZED APPRECIATION DEPRECIATION APPRECIATION -------------- -------------- -------------- Aggressive Growth Fund ...... $ 2,836,332 $ (135,579) $ 2,700,753 Growth Fund ...... 64,320,970 (5,945,438) 58,375,532 Growth Fund II 6,889,134 (2,585,846) 4,303,288 Value Fund .. 9,680,590 (1,568,953) 8,111,637 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: AGGRESSIVE GROWTH GROWTH GROWTH VALUE EXPIRING IN: FUND FUND FUND II FUND ------------ ----------- ------------ ----------- ----------- 2005 $ -- $ 559,490 $ -- $ -- 2006 -- 9,583,819 -- -- 2007 -- 1,695,876 -- -- 2008 599,602 16,678,334 1,602,453 96,769 2009 11,034,417 90,676,212 18,063,082 -- 2010 2,819,769 55,723,137 9,577,005 15,493,033 2011 -- 12,700,626 2,648,834 11,272,748 ----------- ------------ ----------- ----------- Total $14,453,788 $187,617,494 $31,891,374 $26,862,550 =========== ============ =========== =========== Capital loss carryforwards of $49,141 were utilized and/or expired during the year ended October 31, 2003 for the Aggressive Growth Fund. For the Growth Fund, Growth FundII and Value Fund, no capital loss carryforwards were utilized and/or expired for the year ended October 31, 2003. Expired capital loss carryforwards are recorded as a reduction of paid-in capital. Note 4. Fees and Compensation Paid to Affiliates Investment Advisor/Administrator Merger On April 1, 2003, Stein Roe & Farnham Incorporated, the previous investment advisor to the Funds, and Colonial Management Associates, Inc., the previous administrator to the Funds, merged into Columbia Management Advisors, Inc. ("Columbia"), formerly known as Columbia Management Co., an indirect, wholly owned subsidiary of FleetBoston Financial Corporation. As a result of the merger, Columbia now serves as the Funds' investment advisor and administrator. The merger did not change the way the Funds are managed, the investment personnel assigned to manage the Funds or the fees paid by the Funds. 31 Notes to Financial Statements (continued) October 31, 2003 Investment Advisory Fee Columbia is the investment advisor of each of the Funds and receives a monthly fee based on each Fund's average daily net assets at the following annual rates: FEES ON AVERAGE DAILY NET ASSETS ----------------- Aggressive Growth Fund 0.80% Growth Fund 0.60% Value Fund 0.80% FEES ON AVERAGE FEES ON AVERAGE DAILY NET ASSETS DAILY NET ASSETS OVER $500 UP TO $500 MILLION MILLION ------------------ ----------------- Growth Fund II 0.80% 0.75% For the year ended October 31, 2003, the effective investment advisory fee rate for Growth Fund II was 0.80%. At a meeting held on October 8, 2003, the Board of Trustees approved a change of the investment advisory fee structure for the Funds. Effective November 1, 2003, Columbia will receive a monthly fee based on each Fund's average daily net as follows: FEES ON AVERAGE DAILY FEES ON NET ASSETS FEES ON AVERAGE OF $500 AVERAGE DAILY NET MILLION BUT DAILY NET ASSETS UNDER LESS THAN ASSETS OVER $500 MILLION $1 BILLION $1 BILLION ------------- ------------ ------------ Aggressive Growth Fund 0.80% 0.75% 0.70% Growth Fund 0.60% 0.55% 0.50% Growth Fund II 0.80% 0.75% 0.70% Value Fund 0.80% 0.75% 0.70% Stein Roe Investment Counsel LLC ("SRIC"), which is not affiliated with Columbia, was retained by Columbia as sub-advisor to Growth Fund and Growth Fund II. As sub-advisor, SRIC is responsible for daily investment operations, including placing all orders for the purchase and sale of portfolio securities for the two funds. Columbia pays SRIC a monthly sub-advisory fee equal to a base rate of 0.20% annually of the average daily net assets for each of the two funds. This base fee of 0.20% can be adjusted quarterly to an annual rate as high as 0.25% or to an annual rate as low as 0.15% depending on the investment performance, as determined by Morningstar, Inc.'s Large Blend category, of each Fund over a specified period of time. In addition, Columbia's contract with SRIC provides that SRIC shall not receive a fee less than $350,000 per annum in the aggregate for managing both Growth Fund and Growth Fund II. Administration Fee Columbia provides administrative and other services for a monthly fee based on each Fund's average daily net assets at the following annual rates: Aggressive Growth Fund 0.20% Growth Fund 0.25% Growth Fund II 0.20% Value Fund 0.20% At a meeting held on October 8, 2003, the Board of Trustees approved an administration fee reduction for the Funds to go into effect on November 1, 2003. As a result of the fee reduction, Columbia will receive a monthly fee based on each Fund's average daily net assets at the following annual rates: Aggressive Growth Fund 0.05% Growth Fund 0.25% Growth Fund II 0.05% Value Fund 0.05% Pricing and Bookkeeping Fees Columbia is responsible for providing pricing and bookkeeping services to each Fund under a pricing and bookkeeping agreement. Under a separate agreement (the "Outsourcing Agreement"), Columbia has delegated those functions to State Street Corporation ("State Street"). Under its pricing and bookkeeping agreement with the Funds, Columbia receives from each Fund an annual flat fee of $10,000 paid monthly, and in any month that a Fund's average daily net assets exceed $50 million, an additional monthly fee. The additional fee rate is calculated by taking into account the fees payable to State Street under the Outsourcing Agreement. This rate is applied to the average daily net assets of each Fund for that month. The Funds also pay out-of-pocket costs for 32 Notes to Financial Statements (continued) October 31, 2003 pricing services. Columbia pay the total fees collected to State Street under the Outsourcing Agreement. For the year ended October 31, 2003, the effective pricing and bookkeeping fee rates were as follows: FUND FEE RATE ---- -------- Aggressive Growth Fund 0.111% Growth Fund 0.034% Growth Fund II 0.026% Value Fund 0.045% Transfer Agent Fee Columbia Funds Services, Inc. (the "Transfer Agent"), formerly Liberty Funds Services, Inc., an affiliate of Columbia, provides shareholder services for a monthly fee equal to 0.06% annually of each Fund's average daily net assets plus flat-rate charges based on the number of shareholder accounts and transactions. For the year ended October 31, 2003, the effective transfer agent fee rates were as follows: Aggressive Growth Fund 0.22% Growth Fund 0.14% Growth Fund II 0.15% Value Fund 0.13% The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. Effective October 13, 2003 Liberty Funds Services, Inc. changed its name to Columbia Funds Services, Inc. At a meeting held on October 8, 2003, the Board of Trustees approved a change of the transfer agent fee structure of the Funds. Effective November 1, 2003, each Fund will be charged an annual fee of $28.00 per open account for transfer agent fees. The Transfer Agent will continue to receive reimbursement for certain out-of-pocket expenses. Underwriting Discounts, Service and Distribution Fees Effective October 13, 2003, Liberty Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia and the Funds' principal underwriter, changed its name to Columbia Funds Distributor, Inc. For the year ended October 31, 2003, the Distributor has retained net underwriting discounts as follows: FRONT-END SALES CHARGE ------------------ CLASS A CLASS E -------- ------- Aggressive Growth Fund $1,444 $-- Growth Fund 9,435 -- Growth Fund II 2,992 -- Value Fund 2,327 -- CDSC -------------------------------------- CLASS A CLASS B CLASS C CLASS F ------- ------- ------- ------- Aggressive Growth Fund $ -- $36,904 $ 32 $ -- Growth Fund -- 681,783 1,116 1,694 Growth Fund II 27 102,631 97 -- Value Fund 1,250 199,832 2,425 -- The Funds have adopted a 12b-1 plan (the "Plan") which requires the payment of a monthly distribution and service fee to the Distributor. The fee rates for each Fund, as a percentage of average daily net assets for each share class, are as follows: DISTRIBUTION FEES: CLASS A CLASS B CLASS C CLASS E CLASS F ------- ------- ------- ------- ------- Aggressive Growth Fund 0.05% 0.75% 0.75% N/A N/A Growth Fund N/A 0.75% 0.75% 0.10% 0.75% Growth Fund II N/A 0.75% 0.75% N/A N/A Value Fund 0.05% 0.75% 0.75% N/A N/A SERVICE FEES: CLASS A CLASS B CLASS C CLASS E CLASS F ------- ------- ------- ------- ------- Aggressive Growth Fund 0.25% 0.25% 0.25% N/A N/A Growth Fund 0.25% 0.25% 0.25% 0.25% 0.25% Growth Fund II 0.25% 0.25% 0.25% N/A N/A Value Fund 0.25% 0.25% 0.25% N/A N/A The CDSC and the fees received from the Plan are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares. 33 Notes to Financial Statements (continued) October 31, 2003 Expense Limits and Fee Waivers Columbia has voluntarily agreed to waive fees and reimburse the Funds for certain expenses so that total expenses (exclusive of service fees, distribution fees, brokerage commissions, interest, taxes and extraordinary expenses, if any) would not exceed certain expense limitations. Columbia, at its discretion, may revise or discontinue these arrangements any time. For the year ended October 31, 2003, total expenses were limited to the following percentages annually of the Funds' average daily net assets: AVERAGE DAILY NET ASSETS ----------------- Aggressive Growth Fund 1.25% AVERAGE AVERAGE DAILY NET ASSETS DAILY NET ASSETS OVER UP TO $100 MILLION $100 MILLION ------------------ ---------------- Growth Fund II 1.25% 1.50% Custody Credits Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement. Fees Paid to Officers and Trustees The Funds pay no compensation to their officers, all of whom are employees of Columbia or its affiliates. The Funds' Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Funds' assets. Note 5. Portfolio Information Purchases and Sales of Securities For the year ended October 31, 2003, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were as follows: PURCHASES SALES --------- ----- Aggressive Growth Fund $ 13,777,463 $ 15,149,974 Growth Fund 120,437,800 178,583,388 Growth Fund II 15,455,172 23,202,053 Value Fund 55,687,891 76,416,118 Note 6. Line of Credit The Funds and other affiliated funds participate in a $350,000,000 credit facility, which is used for temporary or emergency purposes to facilitate portfolio liquidity. Interest is charged to each Fund based on its borrowings. In addition, each Fund has agreed to pay commitment fees on its pro-rata portion of the unutilized line of credit. The commitment fee is included in "Other expenses" on the Statements of Operations. Prior to April 26, 2003, the Funds participated in a separate credit agreement with terms similar to their existing agreement. For the year ended October 31, 2003, the Funds did not borrow under these agreements. Note 7. Concentration of Credit Risk The Funds may focus their investments in certain industries, subjecting them to greater risk than funds that are more diversified. 34 Financial Highlights - Columbia Tax-Managed Aggressive Growth Fund Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31, ------------------------------------------------------------- Class A Shares 2003 2002 2001 2000(a) -------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.44 $ 7.01 $ 12.36 $ 11.59 ------- ------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.08) (0.09) (0.09) (0.04) Net realized and unrealized gain (loss) on investments 1.46 (0.48) (5.26) 0.81 ------- ------- -------- ------- Total from Investment Operations 1.38 (0.57) (5.35) 0.77 ------- ------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 7.82 $ 6.44 $ 7.01 $ 12.36 ======= ======= ======== ======= Total return (c)(d) 21.43% (8.13)% (43.28)% 6.64%(e) ======= ======= ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (f) 1.55% 1.55% 1.55% 1.55%(g) Net investment loss (f) (1.25)% (1.27)% (1.05)% (1.19)%(g) Waiver/reimbursement 1.02% 0.69% 0.85% 1.82%(g) Portfolio turnover rate 116% 121% 188% 47%(e) Net assets, end of period (000's) $ 3,838 $ 2,825 $ 4,043 $ 5,227
(a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
Year Ended October 31, ---------------------------------------------------------- Class B Shares 2003 2002 2001 2000(a) ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.33 $ 6.95 $ 12.34 $ 11.59 ------- ------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.13) (0.14) (0.15) (0.06) Net realized and unrealized gain (loss) on investments 1.43 (0.48) (5.24) 0.81 ------- ------- -------- ------- Total from Investment Operations 1.30 (0.62) (5.39) 0.75 ------- ------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 7.63 $ 6.33 $ 6.95 $ 12.34 ======= ======= ======== ======= Total return (c)(d) 20.54% (8.92)% (43.68)% 6.47%(e) ======= ======= ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (f) 2.25% 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.95)% (1.97)% (1.75)% (1.89)%(g) Waiver/reimbursement 1.02% 0.69% 0.85% 1.82%(g) Portfolio turnover rate 116% 121% 188% 47%(e) Net assets, end of period (000's) $ 8,632 $ 8,238 $ 10,979 $ 18,080 (a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
35 Financial Highlights - Columbia Tax-Managed Aggressive Growth Fund (continued) Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31, ---------------------------------------------------------- Class C Shares 2003 2002 2001 2000(a) ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.33 $ 6.95 $ 12.34 $ 11.59 ------- ------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.13) (0.14) (0.15) (0.06) Net realized and unrealized gain (loss) on investments 1.43 (0.48) (5.24) 0.81 ------- ------- -------- ------- Total from Investment Operations 1.30 (0.62) (5.39) 0.75 ------- ------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 7.63 $ 6.33 $ 6.95 $ 12.34 ======= ======= ======== ======= Total return (c)(d) 20.54% (8.92)% (43.68)% 6.47%(e) ======= ======= ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (f) 2.25% 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.95)% (1.97)% (1.75)% (1.89)%(g) Waiver/reimbursement 1.02% 0.69% 0.85% 1.82%(g) Portfolio turnover rate 116% 121% 188% 47%(e) Net assets, end of period (000's) $ 1,644 $ 1,699 $ 2,508 $ 1,567 (a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
Year Ended October 31, --------------------------------------------------------- Class Z Shares 2003 2002 2001 2000(a) ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.43 $ 7.03 $ 12.37 $ 11.59 ------- ------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.07) (0.07) (0.07) (0.03) Net realized and unrealized gain (loss) on investments 1.47 (0.53) (5.27) 0.81 ------- ------- -------- ------- Total from Investment Operations 1.40 (0.60) (5.34) 0.78 ------- ------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 7.83 $ 6.43 $ 7.03 $ 12.37 ======= ======= ======== ======= Total return (c) 21.77% (8.53)% (43.17)% 6.73%(d) ======= ======= ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (e) 1.25% 1.25% 1.25% 1.25%(f) Net investment loss (e) (0.95)% (0.97)% (0.75)% (0.89)%(f) Waiver/reimbursement 1.02% 0.69% 0.85% 1.82%(f) Portfolio turnover rate 116% 121% 188% 47%(d) Net assets, end of period (000's) $ 18 $ 3 $ 61 $ 128 (a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized.
36 Financial Highlights - Columbia Tax-Managed Growth Fund Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31, --------------------------------------------------------------------------- Class A Shares 2003 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.87 $ 12.68 $ 18.38 $ 17.19 $ 13.39 ------- -------- -------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (a) (0.03) (0.02) (0.06) (0.12) (0.03) Net realized and unrealized gain (loss) on investments 2.25 (1.79) (5.64) 1.31 3.83 ------- -------- -------- -------- ------- Total from Investment Operations 2.22 (1.81) (5.70) 1.19 3.80 ------- -------- -------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 13.09 $ 10.87 $ 12.68 $ 18.38 $ 17.19 ======= ======== ======== ======== ======= Total return (b) 20.42% (14.27)% (31.01)% 6.92% 28.38% ======= ======== ======== ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (c) 1.42% 1.41% 1.39% 1.44% 1.64% Net investment loss (c) (0.28)% (0.18)% (0.38)% (0.67)% (0.21)% Portfolio turnover rate 39% 42% 82% 69% 80% Net assets, end of period (000's) $69,764 $66,760 $102,403 $163,502 $97,531
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (c) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%.
Year Ended October 31, --------------------------------------------------------------------------- Class B Shares 2003 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.39 $ 12.22 $ 17.85 $ 16.82 $ 13.20 -------- -------- -------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (a) (0.11) (0.11) (0.17) (0.26) (0.15) Net realized and unrealized gain (loss) on investments 2.15 (1.72) (5.46) 1.29 3.77 -------- -------- -------- -------- ------- Total from Investment Operations 2.04 (1.83) (5.63) 1.03 3.62 -------- -------- -------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 12.43 $ 10.39 $ 12.22 $ 17.85 $ 16.82 ======== ======== ======== ======== ======== Total return (b) 19.63% (14.98)% (31.54)% 6.12% 27.42% ======== ======== ======== ======== ======== RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (c) 2.17% 2.16% 2.14% 2.19% 2.39% Net investment loss (c) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)% Portfolio turnover rate 39% 42% 82% 69% 80% Net assets, end of period (000's) $213,481 $216,801 $327,645 $532,082 $303,726
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming no contingent deferred sales charge. (c) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. 37 Financial Highlights - Columbia Tax-Managed Growth Fund (continued) Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31, --------------------------------------------------------------------------- Class C Shares 2003 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.39 $ 12.21 $ 17.85 $ 16.82 $ 13.20 ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (a) (0.11) (0.11) (0.17) (0.26) (0.15) Net realized and unrealized gain (loss) on investments 2.15 (1.71) (5.47) 1.29 3.77 ------- ------- ------- ------- ------- Total from Investment Operations 2.04 (1.82) (5.64) 1.03 3.62 ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 12.43 $ 10.39 $ 12.21 $ 17.85 $ 16.82 ======= ======= ======= ======= ======= Total return (b) 19.63% (14.91)% (31.60)% 6.12% 27.42% ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (c) 2.17% 2.16% 2.14% 2.19% 2.39% Net investment loss (c) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)% Portfolio turnover rate 39% 42% 82% 69% 80% Net assets, end of period (000's) $30,035 $30,837 $47,069 $80,232 $46,869 (a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming no contingent deferred sales charge. (c) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%.
Year Ended October 31, --------------------------------------------------------------------------- Class E Shares 2003 2002 2001 2000(a) 1999 ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.82 $ 12.63 $ 18.34 $ 17.17 $ 13.36 ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.04) (0.03) (0.07) (0.14) (0.05) Net realized and unrealized gain (loss) on investments 2.24 (1.78) (5.64) 1.31 3.83 ------- ------- ------- ------- ------- Total from Investment Operations 2.20 (1.81) (5.71) 1.17 3.78 ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 13.02 $ 10.82 $ 12.63 $ 18.34 $ 17.14 ======= ======= ======= ======= ======= Total return (c) 20.33% (14.33)% (31.13)% 6.81% 28.29% ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (d) 1.52% 1.51% 1.49% 1.54% 1.74% Net investment loss (d) (0.38)% (0.28)% (0.48)% (0.77)% (0.31)% Portfolio turnover rate 39% 42% 82% 69% 80% Net assets, end of period (000's) $ 6,908 $ 5,794 $ 6,820 $ 9,171 $ 1,089 (a) Class E shares were collapsed into Class G shares on February 28, 2000, which were then redesignated Class E shares. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no initial sales charge. (d) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%.
38 Financial Highlights - Columbia Tax-Managed Growth Fund (continued) Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31, --------------------------------------------------------------------------- Class F Shares 2003 2002 2001 2000(a) 1999 ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.41 $ 12.23 $ 17.87 $ 16.83 $ 13.21 ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.11) (0.11) (0.17) (0.26) (0.15) Net realized and unrealized gain (loss) on investments 2.14 (1.71) (5.47) 1.30 3.71 ------- ------- ------- ------- ------- Total from Investment Operations 2.03 (1.82) (5.64) 1.04 3.56 ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 12.44 $ 10.41 $ 12.23 $ 17.87 $ 16.77 ======= ======= ======= ======= ======= Total return (c) 19.50% (14.88)% (31.56)% 6.18% 26.95% ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (d) 2.17% 2.16% 2.14% 2.19% 2.39% Net investment loss (d) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)% Portfolio turnover rate 39% 42% 82% 69% 80% Net assets, end of period (000's) $10,265 $ 8,709 $10,101 $13,368 $ 2,025 (a) Class F shares were collapsed into Class H shares on February 28, 2000, which were then redesignated Class F shares. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%.
Year Ended October 31, --------------------------------------------------------------------------- Class Z Shares 2003 2002 2001 2000 1999(a) ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.96 $ 12.76 $ 18.46 $ 17.23 $ 15.56 ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (b) (0.01) 0.01 (0.02) (0.08) (0.02) Net realized and unrealized gain (loss) on investments 2.29 (1.81) (5.68) 1.31 1.69 ------- ------- ------- ------- ------- Total from Investment Operations 2.28 (1.80) (5.70) 1.23 1.67 ------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 13.24 $ 10.96 $ 12.76 $ 18.46 $ 17.23 ======= ======= ======= ======= ======= Total return 20.80% (14.11)% (30.88)% 7.14% 10.73%(c) ======= ======= ======= ======= ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (d) 1.17% 1.16% 1.14% 1.19% 0.79%(e) Net investment income (loss) (d) (0.03)% 0.07% (0.13)% (0.42)% (0.13)%(e) Portfolio turnover rate 39% 42% 82% 69% 80% Net assets, end of period (000's) $ 442 $ 80 $ 915 $ 1,941 $ 1 (a) Class Z shares were initially offered on January 11, 1999. (b) Per share data was calculated using average shares outstanding during the period. (c) Not annualized. (d) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (e) Annualized.
39 Financial Highlights - Columbia Tax-Managed Growth Fund II Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31, ---------------------------------------------------------- Class A Shares 2003 2002 2001 2000(a) ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.94 $ 7.92 $ 11.55 $ 12.00 ------- ------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.02) (0.02) (0.04) (0.07) Net realized and unrealized gain (loss) on investments 1.41 (0.96) (3.59) (0.38) ------- ------- -------- ------- Total from Investment Operations 1.39 (0.98) (3.63) (0.45) ------- ------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 8.33 $ 6.94 $ 7.92 $ 11.55 ======= ======= ======== ======= Total return (c)(d) 20.03% (12.37)% (31.43)% (3.75)%(e) ======= ======= ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (f) 1.50% 1.50% 1.50% 1.50%(g) Net investment loss (f) (0.33)% (0.29)% (0.42)% (0.84)%(g) Waiver/reimbursement 0.25% 0.20% 0.16% 0.62%(g) Portfolio turnover rate 36% 49% 90% 32%(e) Net assets, end of period (000's) $ 7,515 $ 7,692 $ 9,486 $ 6,769
(a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
Year Ended October 31, ---------------------------------------------------------- Class B Shares 2003 2002 2001 2000(a) ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.80 $ 7.82 $ 11.51 $ 12.00 ------- ------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.08) (0.08) (0.11) (0.12) Net realized and unrealized gain (loss) on investments 1.38 (0.94) (3.58) (0.37) ------- ------- -------- ------- Total from Investment Operations 1.30 (1.02) (3.69) (0.49) ------- ------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 8.10 $ 6.80 $ 7.82 $ 11.51 ======= ======= ======== ======= Total return (c)(d) 19.12% (13.04)% (32.06)% (4.08)%(e) ======= ======= ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (f) 2.25% 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.08)% (1.04)% (1.17)% (1.59)%(g) Waiver/reimbursement 0.25% 0.20% 0.16% 0.62%(g) Portfolio turnover rate 36% 49% 90% 32%(e) Net assets, end of period (000's) $31,557 $30,871 $ 42,391 $50,859 (a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
40 Financial Highlights - Columbia Tax-Managed Growth Fund II (continued) Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31, ---------------------------------------------------------- Class C Shares 2003 2002 2001 2000(a) ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.78 $ 7.80 $ 11.50 $ 12.00 ------- ------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.08) (0.08) (0.11) (0.12) Net realized and unrealized gain (loss) on investments 1.38 (0.94) (3.59) (0.38) ------- ------- -------- ------- Total from Investment Operations 1.30 (1.02) (3.70) (0.50) ------- ------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 8.08 $ 6.78 $ 7.80 $ 11.50 ======= ======= ======== ======= Total return (c)(d) 19.17% (13.08)% (32.17)% (4.17)%(e) ======= ======= ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (f) 2.25% 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.08)% (1.04)% (1.17)% (1.59)%(g) Waiver/reimbursement 0.25% 0.20% 0.16% 0.62%(g) Portfolio turnover rate 36% 49% 90% 32%(e) Net assets, end of period (000's) $ 6,444 $ 6,481 $ 8,994 $ 5,801 (a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
Year Ended October 31, ---------------------------------------------------------- Class Z Shares 2003 2002 2001 2000(a) ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.97 $ 7.95 $ 11.58 $ 12.00 ------- ------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.01) --(c) (0.02) (0.05) Net realized and unrealized gain (loss) on investments 1.43 (0.98) (3.61) (0.37) ------- ------- -------- ------- Total from Investment Operations 1.42 (0.98) (3.63) (0.42) ------- ------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 8.39 $ 6.97 $ 7.95 $ 11.58 ======= ======= ======== ======= Total return (d) 20.37% (12.33)% (31.35)% (3.50)%(e) ======= ======= ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (f) 1.25% 1.25% 1.25% 1.25%(g) Net investment loss (f) (0.08)% (0.04)% (0.17)% (0.59)%(g) Waiver/reimbursement 0.25% 0.20% 0.16% 0.62%(g) Portfolio turnover rate 36% 49% 90% 32%(e) Net assets, end of period (000's) $ 831 $ 894 $ 1,211 $ 4,740 (a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Rounds to less than $0.01 per share. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
41 Financial Highlights - Columbia Tax-Managed Value Fund Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31, --------------------------------------------------------------------------- Class A Shares 2003 2002 2001 2000 1999(a) ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.89 $ 11.40 $ 11.41 $ 10.64 $ 12.00 ------- -------- -------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.07 0.04 0.04 0.04 --(c) Net realized and unrealized gain (loss) on investments 1.14 (2.55) (0.05) 0.73 (1.36) ------- -------- -------- -------- ------- Total from Investment Operations 1.21 (2.51) (0.01) 0.77 (1.36) ------- -------- -------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 10.10 $ 8.89 $ 11.40 $ 11.41 $ 10.64 ======= ======== ======== ======== ======= Total return (d) 13.61% (22.02)% (0.09)% 7.24% (11.33)%(e) ======= ======== ======== ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (f) 1.70% 1.61% 1.71% 1.80% 1.77%(g) Net investment income (f) 0.72% 0.34% 0.32% 0.39% --%(g)(h) Portfolio turnover rate 68% 72% 47% 76% 19%(e) Net assets, end of period (000's) $16,725 $ 19,767 $ 25,694 $ 14,017 $ 7,528 (a) The Fund commenced investment operations on June 1, 1999. (b) Per share data was calculated using average shares outstanding during the period. (c) Rounds to less than $0.01 per share. (d) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. (h) Rounds to less than 0.01%.
Year Ended October 31, --------------------------------------------------------------------------- Class B Shares 2003 2002 2001 2000 1999(a) ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.68 $ 11.22 $ 11.30 $ 10.61 $ 12.00 ------- -------- -------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (b) --(c) (0.04) (0.04) (0.03) (0.04) Net realized and unrealized gain (loss) on investments 1.12 (2.50) (0.04) 0.72 (1.35) ------- -------- -------- -------- ------- Total from Investment Operations 1.12 (2.54) (0.08) 0.69 (1.39) ------- -------- -------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61 ======= ======== ======== ======== ======= Total return (d) 12.90% (22.64)% (0.71)% 6.50% (11.58)%(e) ======= ======== ======== ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (f) 2.40% 2.31% 2.41% 2.50% 2.60%(g) Net investment income (loss) (f) 0.02% (0.36)% (0.38)% (0.31)% (0.83)%(g) Portfolio turnover rate 68% 72% 47% 76% 19%(e) Net assets, end of period (000's) $50,117 $ 52,701 $ 69,720 $ 49,112 $ 14,622
(a) The Fund commenced investment operations on June 1, 1999. (b) Per share data was calculated using average shares outstanding during the period. (c) Rounds to less than $0.01 per share. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 42 Financial Highlights - Columbia Tax-Managed Value Fund (continued) Selected data for a share outstanding throughout each period is as follows:
Year Ended October 31, --------------------------------------------------------------------------- Class C Shares 2003 2002 2001 2000 1999(a) ----------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.68 $ 11.22 $ 11.30 $ 10.61 $ 12.00 ------- -------- -------- -------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (b) --(c) (0.04) (0.04) (0.03) (0.04) Net realized and unrealized gain (loss) on investments 1.12 (2.50) (0.04) 0.72 (1.35) ------- -------- -------- -------- ------- Total from Investment Operations 1.12 (2.54) (0.08) 0.69 (1.39) ------- -------- -------- -------- ------- NET ASSET VALUE, END OF PERIOD $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61 ======= ======== ======== ======== ======= Total return (d) 12.90% (22.64)% (0.71)% 6.50% (11.58)%(e) ======= ======== ======== ======== ======= RATIOS TO AVERAGE NET ASSETS/ SUPPLEMENTAL DATA: Expenses (f) 2.40% 2.31% 2.41% 2.50% 2.60%(g) Net investment income (loss) (f) 0.02% (0.36)% (0.38)% (0.31)% (0.83)%(g) Portfolio turnover rate 68% 72% 47% 76% 19%(e) Net assets, end of period (000's) $13,674 $ 17,463 $ 21,367 $ 10,331 $ 4,137
(a) The Fund commenced investment operations on June 1, 1999. (b) Per share data was calculated using average shares outstanding during the period. (c) Rounds to less than $0.01 per share. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
Year Ended October 31, --------------------------------------------------------------------------- Class Z Shares 2003 2002 2001 2000 1999(a) ----------------------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 8.96 $ 11.46 $ 11.43 $ 10.65 $ 12.00 ------- -------- -------- -------- ------- Income from Investment Operations: Net investment income (b) 0.10 0.07 0.07 0.07 0.01 Net realized and unrealized gain (loss) on investments 1.16 (2.57) (0.04) 0.71 (1.36) ------- -------- -------- -------- ------- Total from Investment Operations 1.26 (2.50) 0.03 0.78 (1.35) ------- -------- -------- -------- ------- Net Asset Value, End of Period $ 10.22 $ 8.96 $ 11.46 $ 11.43 $ 10.65 ======= ======== ======== ======== ======= Total return 14.06% (21.82)% 0.26% 7.32% (11.25)%(c) ======= ======== ======== ======== ======= Ratios to Average Net Assets/ Supplemental Data: Expenses (d) 1.40% 1.31% 1.41% 1.50% 1.50%(e) Net investment income (d) 1.02% 0.64% 0.62% 0.69% 0.27%(e) Portfolio turnover rate 68% 72% 47% 76% 19%(c) Net assets, end of period (000's) $ 32 $ 1 $ 1 $ 1 $ 2,396
(a) The Fund commenced investment operations on June 1, 1999. (b) Per share data was calculated using average shares outstanding during the period. (c) Not annualized. (d) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (e) Annualized. 43 Report of Ernst & Young LLP, Independent Auditors TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF COLUMBIA FUNDS TRUST I: COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH FUND COLUMBIA TAX-MANAGED GROWTH FUND II We have audited the accompanying statements of assets and liabilities, including the Investment Portfolios, of Columbia Tax-Managed Aggressive Growth Fund and Columbia Tax-Managed Growth Fund II (formerly Liberty Tax-Managed Aggressive Growth Fund and Liberty Tax-Managed Growth Fund II, respectively) (collectively, the "Funds") (two of the series constituting Columbia Funds Trust I (formerly Liberty Funds Trust I)), as of October 31, 2003, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of 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. Our procedures included confirmation of securities owned as of October 31, 2003 by correspondence with the custodian and brokers, or by 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 Columbia Tax-Managed Aggressive Growth Fund and Columbia Tax-Managed Growth Fund II (two of the series of Columbia Funds Trust I) at October 31, 2003, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Boston, Massachusetts December 9, 2003 44 Report of Independent Auditors TO THE TRUSTEES OF COLUMBIA TRUST I AND THE SHAREHOLDERS OF: COLUMBIA TAX-MANAGED GROWTH FUND AND COLUMBIA TAX-MANAGED VALUE FUND In our opinion, the accompanying statements of assets and liabilities, including the investment portfolios, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia Tax-Managed Growth Fund and Columbia Tax-Managed Value Fund (formerly Liberty Tax-Managed Growth Fund and Liberty Tax-Managed Value Fund) (each a series of Columbia Funds Trust I, formerly Liberty Funds Trust I) (collectively "the Funds") at October 31,2003, and the results of their operations, the changes in their net assets, and their financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Boston, Massachusetts December 11, 2003 45 Trustees Effective October 8, 2003, Patrick J. Simpson and Richard L. Woolworth were appointed to the Board of Trustees of the Funds. Messrs. Simpson and Woolworth had been directors/trustees of 15 Columbia Funds and 20 funds in the CMG Fund Trust. Also effective October 8, 2003, the incumbent trustees of the Funds were elected as directors of the 15 Columbia Funds and as trustees of the 20 funds in the CMG Fund Trust. The new combined Board of Trustees/Directors of the Funds now oversees 124 funds in the Columbia Funds complex (including the former Liberty Funds, former Stein Roe Funds, Columbia Funds and CMG Funds). Several of these trustees/directors also serve on the Boards of other funds in the Columbia Funds complex. The Trustees/Directors serve terms of indefinite duration. The names, addresses and ages of the Trustees/Directors and officers of the Funds in the Columbia Funds complex, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of portfolios overseen by each Trustee/Director and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the Columbia Funds complex. The Statement of Additional Information (SAI) contains additional information about the Trustees and is available without charge upon request by calling the Fund's distributor at 800-345-6611.
Number of Year first portfolios in elected or Columbia Funds Other Position appointed Principal occupation(s) complex overseen directorships Name, address and age with Funds to office1 during past five years by Trustee/Director held ---------------------------------------------------------------------------------------------------------------------------------- DISINTERESTED TRUSTEES Douglas A. Hacker (age 48) Trustee 1996 Executive Vice President-Strategy 124 Orbitz (an online P.O. Box 66100 of United Airlines (airline) since ticket broker) Chicago, IL 60666 December, 2002 (formerly President of UAL Loyalty Services (airline) from September, 2001 to December, 2002; Executive Vice President and Chief Financial Officer of United Airlines from March, 1993 to September, 2001; Senior Vice President and Chief Financial Officer of UAL, Inc. prior thereto). Janet Langford Kelly (age 45) Trustee 1996 Chief Administrative Officer and Senior Vice 124 None 3100 West Beaver Road President, Kmart Holding Corporation since Troy, MI 48084-3163 September, 2003 (formerly Executive Vice President-Corporate Development and Administration, General Counsel and Secretary, Kellogg Company (food manufacturer), from September, 1999 to August, 2003; Senior Vice President, Secretary and General Counsel, Sara Lee Corporation (branded, packaged, consumer-products manufacturer) from January, 1995 to September, 1999). Richard W. Lowry (age 67) Trustee 1995 Private Investor since August, 1987 (formerly 126(3) None 10701 Charleston Drive Chairman and Chief Executive Officer, U.S. Vero Beach, FL 32963 Plywood Corporation (building products manufacturer)). Charles R. Nelson (age 61) Trustee 1981 Professor of Economics, University of 124 None Department of Economics Washington, since January, 1976; Ford and University of Washington Louisa Van Voorhis Professor of Political Economy, Seattle, WA 98195 University of Washington, since September, 1993; Director, Institute for Economic Research, University of Washington, since September, 2001; Adjunct Professor of Statistics, University of Washington, since September, 1980; Associate Editor, Journal of Money Credit and Banking, since September, 1993; consultant on econometric and statistical matters. John J. Neuhauser (age 60) Trustee 1985 Academic Vice President and Dean of Faculties 127(3,4) Saucony, Inc. 84 College Road since August, 1999, Boston College (formerly (athletic footwear); Chestnut Hill, MA 02467-3838 Dean, Boston College School of Management SkillSoft Corp from September, 1977 to September, 1999). (e-learning) Patrick J. Simpson (age 58) Trustee 2000 Partner, Perkins Coie L.L.P. (formerly Partner, 124 None 1211 S.W. 5th Avenue Stoel Rives Boley Jones & Grey). Suite 1500 Portland, OR 97204 Thomas E. Stitzel (age 67) Trustee 1998 Business Consultant since 1999 (formerly 124 None 2208 Tawny Woods Place Professor of Finance from 1975 to 1999 and Boise, ID 83706 Dean from 1977 to 1991, College of Business, Boise State University); Chartered Financial Analyst. 46 TRUSTEES (CONTINUED) Number of Year first portfolios in elected or Columbia Funds Other Position appointed Principal occupation(s) complex overseen directorships Name, address and age with Funds to office1 during past five years by Trustee/Director held ---------------------------------------------------------------------------------------------------------------------------------- DISINTERESTED TRUSTEES (CONTINUED) Thomas C. Theobald (age 66) Trustee 1996 Managing Director, William Blair Capital 124 Anixter 27 West Monroe Street, Partners (private equity investing) since International Suite 3500 September, 1994 (formerly Chief Executive (network support Chicago, IL 60606 Officer and Chairman of the Board of equipment Directors, Continental Bank distributor), Jones Corporation prior thereto). Lang LaSalle (real estate management services) and MONY Group (life insurance) Anne-Lee Verville (age 58) Trustee 1998 Author and speaker on educational systems needs 125(4) Chairman of the 359 Stickney Hill Road (formerly General Manager, Global Education Board of Directors, Hopkinton, NH 03229 Industry from 1994 to 1997, and President, Enesco Group, Inc. Applications Solutions Division from 1991 to (designer, importer 1994, IBM Corporation (global education and and distributor of global applications)). giftware and collectibles) Richard L. Woolworth (age 62) Trustee 1991 Chairman and Chief Executive Officer, The 124 NW Natural (natural 100 S.W. Market Street Regence Group (healthcare organization) gas maintenance #1500 (formerly Chairman and Chief Executive service provider) Portland, OR 97207 Officer, BlueCross BlueShield of Oregon; Certified Public Accountant, Arthur Young & Company). INTERESTED TRUSTEES William E. Mayer2 (age 63) Trustee 1994 Managing Partner, Park Avenue Equity Partners 126(3) Lee Enterprises 399 Park Avenue (private equity) since February, 1999 (formerly (print media), Suite 3204 Founding Partner, Development Capital LLC WR Hambrecht + Co. New York, NY 10022 from November 1996 to February, 1999; Dean and (financial service Professor, College of Business and Management, provider) and University of Maryland from October, 1992 to First Health November, 1996). (healthcare) Joseph R. Palombo2 (age 50) Trustee, 2000 Executive Vice President and Chief Operating 125(5) None One Financial Center Chairman Officer of Columbia Management Group, Inc. Boston, MA 02111 of the since December, 2001 and Director, Executive Vice Board and President and Chief Operating Officer of Columbia President Management Advisors, Inc. (Advisor) since April, 2003 (formerly Chief Operations Officer of Mutual Funds, Liberty Financial Companies, Inc. from August, 2000 to November, 2001; Executive Vice President of Stein Roe & Farnham Incorporated (Stein Roe) from April, 1999 to April, 2003; Director of Colonial Management Associates, Inc. (Colonial) from April, 1999 to April, 2003; Director of Stein Roe from September, 2000 to April, 2003) President of Columbia Funds and Galaxy Funds since February, 2003 (formerly Vice President from September 2002 to February 2003); Manager of Stein Roe Floating Rate Limited Liability Company since October, 2000; (formerly Vice President of the Columbia Funds from April, 1999 to August, 2000; Chief Operating Officer and Chief Compliance Officer, Putnam Mutual Funds from December, 1993 to March, 1999).
1 In December 2000, the boards of each of the former Liberty Funds and former Stein Roe Funds were combined into one board of trustees responsible for the oversight of both fund groups (collectively, the "Liberty Board"). In October 2003, the trustees on the Liberty Board were elected to the boards of the Columbia Funds (the "Columbia Board") and of the CMG Fund Trust (the "CMG Funds Board"); simultaneous with that election, Patrick J. Simpson and Richard L. Woolworth, who had been directors on the Columbia Board and trustees on the CMG Funds Board, were appointed to serve as trustees of the Liberty Board. The date shown is the earliest date on which a trustee/director was elected or appointed to the board of a Fund in the Columbia Funds Complex. 2 Mr. Mayer is an "interested person" (as defined in the Investment Company Act of 1940 (1940 Act)) by reason of his affiliation with WR Hambrecht + Co. Mr. Palombo is an interested person as an employee of the Advisor. 3 Messrs. Lowry, Neuhauser and Mayer each also serve as a director/trustee of the All-Star Funds, currently consisting of 2 funds, which are advised by an affiliate of the Advisor. 4 Mr. Neuhauser and Ms. Verville also serve as disinterested directors of Columbia Management Multi-Strategy Hedge Fund, LLC, which is advised by the Advisor. 5 Mr. Palombo also serves as an interested director of Columbia Management Multi-Strategy Hedge Fund, LLC, which is advised by the Advisor. 47 [THIS PAGE INTENTIONALLY LEFT BLANK]
Officers and Transfer Agent Year first elected or Position with appointed Name, address and age Columbia Funds to office Principal occupation(s) during past five years ----------------------------------------------------------------------------------------------------------------------------------- OFFICERS Vicki L. Benjamin (Age 42) Chief 2001 Controller of the Columbia Funds and of the Liberty All-Star One Financial Center Accounting Funds since May, 2002; Chief Accounting Officer of the Columbia Boston, MA 02111 Officer and Funds and Liberty All-Star Funds since June, 2001; Controller Controller and Chief Accounting Officer of Galaxy Funds since September, 2002 (formerly Vice President, Corporate Audit, State Street Bank and Trust Company from May, 1998 to April, 2001; Audit Manager from July, 1994 to June, 1997; Senior Audit Manager from July, 1997 to May, 1998, Coopers & Lybrand, LLP). J. Kevin Connaughton (Age 39) Treasurer 2000 Treasurer of the Columbia Funds and of the Liberty All-Star One Financial Center Funds since December, 2000; Vice President of the Advisor since Boston, MA 02111 April, 2003 (formerly Controller of the Liberty Funds and of the Liberty All-Star Funds from February, 1998 to October, 2000); Treasurer of the Galaxy Funds since September 2002; Treasurer, Columbia Management Multi-Strategy Hedge Fund, LLC since December, 2002 (formerly Vice President of Colonial from February, 1998 to October, 2000 and Senior Tax Manager, Coopers & Lybrand, LLP from April, 1996 to January, 1998). David A. Rozenson (Age 49) Secretary 2003 Secretary of the Columbia Funds and of the Liberty All-Star One Financial Center Funds since December, 2003; Senior Counsel, Fleet Boston Boston, MA 02111 Financial Corporation since January, 1996. Associate General Counsel, Columbia Management Group since November, 2002.
IMPORTANT INFORMATION ABOUT THIS REPORT The Transfer Agent for Columbia Tax-Managed Funds is: Columbia Funds Services, Inc. P.O. Box 8081 Boston, MA 02266-8081 PLEASE NOTE OUR NEW NAME AS OF OCTOBER 13, 2003. The fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Columbia Tax-Managed Funds. This report may also be used as sales literature when preceded or accompanied by the current prospectus, which provides details of sales charges, investment objectives and operating policies of the fund, and with the most recent copy of the Columbia Funds Performance Update. Annual Report: Columbia Tax-Managed Funds Columbia Tax-Managed Funds Annual Report, October 31, 2003 PRSRT STD U.S. Postage PAID Holliston, MA Permit NO. 20 logo: Columbia Funds Columbia Funds A Member of Columbia Management Group (C) 2003 Columbia Funds Distributor, Inc. One Financial Center, Boston, MA 02111-2621 800.426.3750 www.columbiafunds.com TM-02/238Q-1003 (12/03) 03/3665 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 Douglas A. Hacker, Thomas E. Stitzel and Anne-Lee Verville, each of whom are members of the registrant's Board of Trustees and Audit Committee, each qualify as an audit committee financial expert. Mr. Hacker, Mr. Stitzel and Ms. Verville are each independent trustees, as defined in paragraph (a)(2) of this item's instructions. Item 4. Principal Accountant Fees and Services. Not applicable at this time. 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 Funds Trust I ------------------------------------------------------------------ By (Signature and Title) /s/ Joseph R. Palombo ------------------------------------------------------ Joseph R. Palombo, President Date December 23, 2003 -------------------------------------------------------------------------- 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/ Joseph R. Palombo ------------------------------------------------------ Joseph R. Palombo, President Date December 23, 2003 -------------------------------------------------------------------------- By (Signature and Title) /s/ J. Kevin Connaughton ------------------------------------------------------ J. Kevin Connaughton, Treasurer Date December 23, 2003 --------------------------------------------------------------------------