N-CSRS 1 dncsrs.txt FUNDS TRUST I N-CSRS 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: 05/31/2004 ---------- Date of reporting period: 11/30/2003 ---------- 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 of Stockholders [GRAPHIC] Columbia Strategic Income Fund Semiannual Report November 30, 2003 We are Columbia Funds! INSIDE -- Management's discussion of the changes effective October 13, 2003 PRESIDENT'S MESSAGE ----- Columbia Strategic Income Fund [PHOTO] Joseph R. Palombo Dear Shareholder: As you know, your fund has long been part of a larger investment management organization. In the 1990s, 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. For example, Liberty Strategic Income Fund was changed to Columbia Strategic Income Fund. We have also modified certain fund names that existed under both the Liberty and Columbia brands. 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, portfolio manager Laura Ostrander discusses 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 investing in Columbia funds. We look forward to continuing to serve your investment needs in the years ahead. Sincerely, /s/ Joseph R. Palombo Joseph R. Palombo President Table of Contents Fund Profile.............. 1 Performance Information... 2 Economic Update........... 3 Portfolio Manager's Report 4 Financial Statements...... 6 Investment Portfolio.... 7
Statement of Assets and Liabilities.. 33 Statement of Operations.............. 34 Statement of Changes in Net Assets... 35 Notes to Financial Statements........ 37 Financial Highlights................. 43 Important Information About This Report...................... 47 Columbia Funds......................... 48
Economic and market conditions change frequently. There is no assurance that the trends described in this report will continue or commence. [LOGO] Not FDIC Insured May Lose Value No Bank Guarantee FUND PROFILE ------------------------------ Columbia Strategic Income Fund
The information below gives you a snapshot of your fund at the end of the reporting period. Because your fund is actively managed, there is no guarantee that these breakdowns and percentages will be maintained in the future. Quality breakdown as of 11/30/03 (%) AAA 41.5 -------------------------------------------------- AA 2.2 -------------------------------------------------- A 3.0 -------------------------------------------------- BBB 2.7 -------------------------------------------------- BB 12.0 -------------------------------------------------- B 25.7 -------------------------------------------------- CCC 8.2 -------------------------------------------------- CC 2.3 -------------------------------------------------- D 0.2 -------------------------------------------------- Non-rated 2.2 --------------------------------------------------
Top 5 countries as of 11/30/03 (%) USA 64.9 -------------------------------------------------- Canada 4.0 -------------------------------------------------- United Kingdom 3.2 -------------------------------------------------- Brazil 2.8 -------------------------------------------------- Australia 2.8 --------------------------------------------------
Portfolio structure as of 11/30/03 (%)
Corporate fixed income bonds and notes 40.0 -------------------------------------------------- Foreign governments obligations 33.3 -------------------------------------------------- US government obligations 18.0 -------------------------------------------------- US government agencies 5.9 -------------------------------------------------- Short-term obligation 3.8 -------------------------------------------------- Preferred stocks 1.0 -------------------------------------------------- Convertible bonds 0.5 -------------------------------------------------- Common stocks 0.3 -------------------------------------------------- Warrants 0.1 --------------------------------------------------
Qualitybreakdown is calculated as a percentage of total investments. Ratings shown in the quality breakdown represent the highest rating assigned to a particular bond by one of the following nationally-recognized rating agencies: Standard & Poor's Corporation, Moody's Investors Service, Inc. or Fitch Investors Service, Inc. Countrybreakdown and portfolio structure are calculated as a percentage of net assets. (C) 2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box/TM/ reveals a fund's investment strategy. For equity funds the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend or growth). For fixed-income funds the vertical axis shows the average credit quality of the bonds owned, and the horizontal axis shows interest rate sensitivity as measured by a bond's duration (short, intermediate or long). All of these numbers are drawn from the data most recently provided by the fund and entered into Morningstar's database as of month-end. Although the data are gathered from reliable sources, Morningstar cannot guarantee completeness and accuracy. As of 11/30/2003. Summary . For the six-month period ended November 30, 2003, the fund's class A shares (without sales charge) returned 4.63%. . The fund's return was better than both its benchmark and the average return of its peer group, the Lipper Multi-Sector Income Funds Category. . Our emphasis on high-yield and foreign bonds aided performance. These bonds were strong performers as economic conditions strengthened in the US and around the world. Objective Seeks high current income consistent with prudent risk. The fund also seeks maximum total return Total Net Assets $1,346.1 million [GRAPHIC] Lehman Brothers Government/Credit Class A shares Bond Index -------------- ----------------- 4.63% 1.9% [GRAPHIC] 1 Performance of a $10,000 investment 12/01/93 - 11/30/03 ($)
sales charge without with --------------------------- Class A 19,268 18,353 --------------------------- Class B 17,852 17,852 --------------------------- Class C 18,544 18,544 --------------------------- Class J 18,892 18,326 --------------------------- Class Z 19,354 n/a
Past performance does not guarantee future investment results. Current performance may be lower or higher than the performance data shown. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. Value of a $10,000 investment 12/01/93 - 11/30/03 [CHART] Columbia Strategic Columbia Strategic Income Fund - Income Fund - Lehman Brothers Class A shares Class A shares Government/Credit Without Sales Charge With Sales Charge Bond Index -------------------- -------------------- ----------------- 11/30/1993 $10,000 $ 9,525 $10,000 12/31/1993 10,164 9,681 10,044 01/31/1994 10,385 9,891 10,195 02/28/1994 10,218 9,733 9,972 03/31/1994 9,898 9,427 9,728 04/30/1994 9,800 9,334 9,647 05/31/1994 9,799 9,333 9,630 06/30/1994 9,768 9,304 9,608 07/31/1994 9,810 9,344 9,800 08/31/1994 9,823 9,356 9,804 09/30/1994 9,793 9,327 9,656 10/31/1994 9,836 9,368 9,645 11/30/1994 9,745 9,282 9,628 12/31/1994 9,789 9,324 9,691 01/31/1995 9,893 9,423 9,878 02/28/1995 10,133 9,652 10,107 03/31/1995 10,330 9,839 10,174 04/30/1995 10,558 10,056 10,317 05/31/1995 10,865 10,349 10,749 06/30/1995 10,893 10,376 10,835 07/31/1995 11,015 10,492 10,793 08/31/1995 11,060 10,534 10,931 09/30/1995 11,263 10,728 11,042 10/31/1995 11,420 10,877 11,205 11/30/1995 11,545 10,997 11,390 12/31/1995 11,769 11,210 11,557 01/31/1996 11,961 11,393 11,629 02/29/1996 11,859 11,296 11,382 03/31/1996 11,823 11,261 11,287 04/30/1996 11,903 11,338 11,209 05/31/1996 11,933 11,366 11,190 06/30/1996 11,997 11,427 11,339 07/31/1996 12,062 11,489 11,365 08/31/1996 12,230 11,649 11,336 09/30/1996 12,485 11,892 11,538 10/31/1996 12,655 12,054 11,807 11/30/1996 12,949 12,334 12,024 12/31/1996 12,976 12,359 11,891 01/31/1997 12,972 12,356 11,905 02/28/1997 13,076 12,455 11,930 03/31/1997 12,819 12,210 11,788 04/30/1997 12,960 12,345 11,960 05/31/1997 13,194 12,567 12,071 06/30/1997 13,373 12,738 12,216 07/31/1997 13,702 13,051 12,590 08/31/1997 13,643 12,995 12,449 09/30/1997 13,939 13,277 12,644 10/31/1997 13,897 13,237 12,847 11/30/1997 13,970 13,306 12,915 12/31/1997 14,094 13,425 13,050 01/31/1998 14,321 13,641 13,234 02/28/1998 14,375 13,693 13,208 03/31/1998 14,489 13,801 13,249 04/30/1998 14,563 13,871 13,315 05/31/1998 14,618 13,924 13,458 06/30/1998 14,614 13,920 13,595 07/31/1998 14,744 14,044 13,606 08/31/1998 14,133 13,462 13,871 09/30/1998 14,420 13,735 14,268 10/31/1998 14,396 13,712 14,166 11/30/1998 14,825 14,121 14,251 12/31/1998 14,820 14,116 14,287 01/31/1999 14,921 14,212 14,388 02/28/1999 14,727 14,028 14,046 03/31/1999 14,935 14,225 14,116 04/30/1999 15,144 14,425 14,152 05/31/1999 14,818 14,114 14,006 06/30/1999 14,814 14,110 13,962 07/31/1999 14,808 14,105 13,923 08/31/1999 14,738 14,038 13,912 09/30/1999 14,778 14,076 14,037 10/31/1999 14,774 14,072 14,074 11/30/1999 14,904 14,196 14,065 12/31/1999 15,011 14,298 13,980 01/31/2000 14,847 14,142 13,975 02/29/2000 15,072 14,356 14,150 03/31/2000 14,996 14,284 14,355 04/30/2000 14,852 14,147 14,285 05/31/2000 14,684 13,987 14,272 06/30/2000 14,986 14,274 14,563 07/31/2000 15,099 14,382 14,718 08/31/2000 15,216 14,493 14,925 09/30/2000 15,042 14,328 14,982 10/31/2000 14,722 14,023 15,076 11/30/2000 14,448 13,762 15,334 12/31/2000 14,912 14,203 15,636 01/31/2001 15,528 14,790 15,899 02/28/2001 15,548 14,809 16,063 03/31/2001 15,189 14,467 16,136 04/30/2001 15,026 14,312 16,015 05/31/2001 15,118 14,400 16,108 06/30/2001 14,927 14,218 16,186 07/31/2001 15,021 14,308 16,589 08/31/2001 15,274 14,548 16,801 09/30/2001 14,773 14,071 16,956 10/31/2001 15,203 14,480 17,386 11/30/2001 15,393 14,662 17,101 12/31/2001 15,368 14,638 16,966 01/31/2002 15,397 14,666 17,090 02/28/2002 15,426 14,694 17,235 03/31/2002 15,476 14,741 16,885 04/30/2002 15,776 15,027 17,213 05/31/2002 15,855 15,102 17,371 06/30/2002 15,595 14,854 17,519 07/31/2002 15,411 14,679 17,729 08/31/2002 15,657 14,914 18,126 09/30/2002 15,733 14,985 18,516 10/31/2002 15,766 15,017 18,338 11/30/2002 16,119 15,353 18,349 12/31/2002 16,591 15,803 18,835 01/31/2003 16,830 16,031 18,835 02/28/2003 17,130 16,316 19,171 03/31/2003 17,284 16,463 19,146 04/30/2003 17,947 17,095 19,351 05/31/2003 18,432 17,557 19,900 06/30/2003 18,587 17,704 19,821 07/31/2003 18,132 17,270 18,990 08/31/2003 18,228 17,362 19,115 09/30/2003 18,846 17,950 19,721 10/31/2003 18,942 18,042 19,471 11/30/2003 19,268 18,353 19,528 All results shown assume reinvestment of distributions. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The above illustration assumes a $10,000 investment made on December 1, 1993 and reinvestment of all income and capital gains. The Lehman Brothers Government/Credit Bond Index is an unmanaged group of fixed-income securities that differs from the composition of the fund. 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. Average annual total return as of 11/30/03 (%)
Share class A B C J Z ------------------------------------------------------------------------------------ Inception 4/21/77 5/15/92 7/1/97 11/2/98 1/29/99 ------------------------------------------------------------------------------------ Sales charge without with without with without with without with without ------------------------------------------------------------------------------------ 6-month (cumulative) 4.63 -0.34 4.07 -0.93 4.32 3.32 4.31 1.18 4.62 ------------------------------------------------------------------------------------ 1-year 19.66 13.97 18.57 13.57 18.94 17.94 18.90 15.33 19.46 ------------------------------------------------------------------------------------ 5-year 5.39 4.37 4.57 4.28 4.76 4.76 4.98 4.35 5.49 ------------------------------------------------------------------------------------ 10-year 6.78 6.26 5.97 5.97 6.37 6.37 6.57 6.24 6.83 ------------------------------------------------------------------------------------
Average annual total return as of 09/30/03 (%)
Share class A B C J Z ------------------------------------------------------------------------------------ Sales charge without with without with without with without with without ------------------------------------------------------------------------------------ 6-month (cumulative) 9.04 3.86 8.82 3.82 8.72 7.72 8.88 5.62 9.24 ------------------------------------------------------------------------------------ 1-year 19.79 14.10 18.90 13.90 19.08 18.08 19.21 15.64 19.78 ------------------------------------------------------------------------------------ 5-year 5.49 4.47 4.66 4.37 4.81 4.81 5.12 4.48 5.60 ------------------------------------------------------------------------------------ 10-year 6.71 6.20 5.92 5.92 6.32 6.32 6.53 6.20 6.77 ------------------------------------------------------------------------------------
All results shown reinvestment of distributions. The "with sales charge" returns include the maximum 4.75% charge for class A shares, and 3% for class J shares, the appropriate class B contingent deferred sales charge for the holding period after purchase as follows: through first year--5%, second year--4%, third year--3%, fourth year--3%, fifth year--2%, sixth year--1%, thereafter--0%, and the class C contingent deferred sales charge of 1% for the first year only. Performance for different share classes will vary based on differences in sales charges and the fees associated with each class. Performance reflects any voluntary waivers or reimbursements of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance would have been lower. The share performance information for classes C, J, Z (newer class shares) includes returns of the fund's class A shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. These class A share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class A shares and the newer class shares. Had the expense differential been reflected, the returns for periods prior to the inception of class C and J shares would have been lower, and the returns for the class Z shares would have been higher. 2 PERFORMANCE INFORMATION --- Columbia Strategic Income Fund ECONOMIC UPDATE ------- Columbia Strategic Income Fund After struggling for two years to maintain solid, forward movement, the US economy steamed ahead during the six-month period that ended November 30, 2003. The Fed's efforts to stimulate the economy through low short-term interest rates were finally rewarded, but the significant upswing in growth was the result of a combination of factors. A sizeable tax package gave disposable income a boost. Income taxes fell across all tax brackets, and many tax-payers received rebate checks during the summer months. Corporate profits rose sharply, and orders for durable goods exceeded expectations late in the period. Consumer confidence continued to climb, although not without an occasional setback. Generally speaking, consumer spending increased and the outlook for holiday spending was strong. Economists began to grow optimistic that growth for the third quarter of 2003 would reflect this renewed vigor, but no one seemed prepared for how extraordinary that growth might be. When gross domestic product (GDP) for the third quarter was reported at 7.2%, then revised upward to 8.2%, it was clear that the economy was firing on all cylinders. The business sector had finally kicked into gear. Industrial production rose in the second half of 2003 and business spending--especially on technology-related items--showed strength. Even the jobs picture brightened by the end of November. After unemployment peaked at 6.4% earlier in the year, it declined to 5.9%. The US stock market, which had come to life at the end of March, headed sharply higher in the second half of the year. The S&P 500 Index returned 10.80% for the six-month period as all major sectors of the market benefited from renewed investor enthusiasm and rising corporate profits. Technology and consumer stocks were the strongest sectors, but telecommunications and health care picked up in the last month of the period. The US bond market experienced extraordinary volatility as interest rates fell early in the period, rose sharply as the economy improved, then came back down in the final months of the reporting period. High yield bonds continued to lead the fixed income markets. The CSFB High Yield Index returned 9.70% for the six-month period compared to a negative 1.90% return for the Lehman Government/Credit Bond Index. Treasury and mortgage bonds suffered from the shift in interest rates. Municipal bonds, however, held onto modest gains. The Lehman Brothers Municipal Bond Index returned 0.19% for the six-month period. Investment grade municipal bonds outperformed high yield municipal bonds. Money market fund yields fell below 1%, reflecting historically low short-term interest rates. The Investment Company Institute, which tracks assets in and out of mutual funds, reported that money continued to flow out of money market funds during the year as investors sought alternatives to the low yields offered by short-term cash equivalents. Net new cash flow to money market funds turned negative in 2002 for the first time since 1993. 3 PORTFOLIO MANAGER'S REPORT -- Columbia Strategic Income Fund Net asset value per share as of 11/30/03 (%) Class A 6.18 ------------ Class B 6.17 ------------ Class C 6.18 ------------ Class J 6.16 ------------ Class Z 6.13
Distributions declared per share 06/01/03 - 11/30/03 ($) Class A 0.19 ------------ Class B 0.16 ------------ Class C 0.17 ------------ Class J 0.18 ------------ Class Z 0.19
SEC yield on 11/30/03 (%) Class A 5.05 ------------ Class B 4.57 ------------ Class C 4.71 ------------ Class J 4.73 ------------ Class Z 5.56
The 30-day SEC yield reflects the portfolio's earning power net of expenses, expressed as an annualized percentage of the public offering price per share. For the six-month period ended November 30, 2003, class A shares of Columbia Strategic Income Fund returned 4.63% without sales charge. Fund performance was better than the Lehman Brothers Government/Credit Bond Index, which returned negative 1.90% for the period. The fund also outperformed its peers, as indicated by the average return of 3.57% for the Lipper Multi-Sector Income Funds Category./1/ The fund was aided by especially strong performances from high-yield and foreign bonds. High-yield bonds lead the market As the economy rebounded during the second half of 2003, investors continued to favor securities that were linked to positive economic performance in the United States and abroad over US Treasury securities--a trend that has been in place for a year. The fund benefited from this trend favoring lower-quality bonds because it had 40% of its assets invested in the high-yield sector during the six-month reporting period. Just prior to the beginning of the period, we sold Treasuries and invested the proceeds in formerly down-and-out industries such as cable and telecom. The CCC-rated bonds of cable provider Charter Communications (0.7% of net assets) rallied strongly./2/ Electric utility holdings such as AES and Calpine (0.4% and 0.3% of net assets, respectively) also performed well during the period. Foreign securities outperform US Treasuries The fund benefited from its exposure to a wide range of foreign markets. During a time when the lowest quality securities posted the highest returns, our overweight position in emerging markets such as Brazil and Russia was especially helpful. Brazil's new government had been perceived as a threat to the financial markets, but investor views turned positive when Brazil's new president put pro-market, pro-reform policies in place. While the countries continue to carry a high level of debt, inflation has come down and financial markets have responded well to this and other signs of positive economic momentum. Russia, meanwhile, has benefited from high oil prices, prudent fiscal policy and improving global economic prospects. In October, Moody's upgraded Russian securities to investment grade, noting the country's strong reserves and its ability and willingness to pay back debt. A weak US dollar during the period also enhanced returns from established foreign markets. The fund had significant exposure to bonds denominated in currencies such as the euro and the Canadian, Australian and New Zealand dollars, each of which outperformed the US dollar on world currency markets during the past year. The fund also had a small amount of exposure to bonds denominated in the South African rand, which soared versus the dollar as the South African government succeeded in getting inflation under control. /1/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. /2/Holdings are disclosed as of November 30, 2003, and are subject to change. 4 -------------- Columbia Strategic Income Fund During the period, we had approximately 24% of the fund's assets invested in US Treasury and mortgage-backed securities, the weakest performing sector in the bond market. Our above-minimum allocation to the US Government sector was a drag on performance. Interest rates expected to hold steady in 2004 We anticipate that the US economy will continue to drive global growth in 2004. The growing fiscal and current account deficits in the US are likely to continue to put downward pressure on the dollar. The Federal Reserve should be able to keep interest rates low for some time to come, because the unemployment rate remains around 6%, job growth remains tentative and core inflation remains low. It is not likely that the high-yield market will repeat its recent strong performance because the yield advantage of low-rated securities came down considerably over the past year. However, the overall economic environment still appears favorable enough for us to maintain the fund's current allocation to high-yield. We believe that low US interest rates and an economic recovery should allow for continued improvement in credit quality. [PHOTO] Laura A. Ostrander has managed or co-managed Columbia Strategic Income Fund L. Ostrander since September 2000. /s/
Investing in high-yield securities offers the potential for high current income and attractive total return, but involves certain risks. Lower-rated bond risks include default of the issuer, rising interest rates and risk associated with investing in securities of foreign and emerging markets, including currency exchange rate fluctuations and economic and political change. Bond investing also involves interest rate risk, which means that bond prices may change as interest rates increase or decrease. Foreign investments involve market, political, accounting and currency risks not associated with other investments. It is not likely that the high-yield market will repeat its recent strong performance of the past year. However, the economic environment appears favorable enough for us to maintain the fund's current allocation to high-yield. 5 FINANCIAL STATEMENTS ------------------------------ November 30, 2003 (Unaudited) Columbia Strategic Income Fund
A guide to understanding your fund's financial statements --------------------------------------------------------------------------- Investment Portfolio A list of all of the fund's holdings and their market value as of the last day of the reporting period. To show areas of concentration and diversification, portfolio holdings are organized by type of asset, industry and country or geographic region (if applicable). --------------------------------------------------------------------------- Statement of Assets and Liabilities This statement shows the fund's net assets and share price for each share class. Net assets are calculated by subtracting all the fund's liabilities (including any unpaid expenses) from the total of the fund's investment and non-investment assets. The share price for each class is calculated by dividing net assets for that class by the number of outstanding shares in that class. --------------------------------------------------------------------------- Statement of Operations This statement details both the type of income earned by the fund and the operating and non-operating expenses charged to the fund. The Statement of Operations also shows any net gain or loss the fund realized on the sales of its holdings during the period, as well as any unrealized gains or losses over the reporting period. The total of these results represents the fund's net increase or decrease in net assets from operations. --------------------------------------------------------------------------- Statement of Changes in Net Assets This statement shows how the fund's net assets were affected by its operations results, distributions to shareholders and changes in the number of fund shares. The Statement of Changes in Net Assets also reconciles changes in the number of shares outstanding. --------------------------------------------------------------------------- Financial Highlights The financial highlights provide an overview of the fund's investment results, including per-share analytics, such as net investment income or loss from operations and distributions; ratios of expenses and net investment income to average net assets. The financial highlights also detail the fund's portfolio turnover rate, which is a measure of trading activity. A separate table is provided for each share class. --------------------------------------------------------------------------- Notes to Financial Statements These notes disclose information regarding certain fund background information, significant accounting policies of the fund, including security valuation and income accruals and related party transactions.
6 INVESTMENT PORTFOLIO ------------------------------ November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - 97.7% CORPORATE FIXED INCOME BONDS & NOTES - 40.0% AGRICULTURE - 0.3% Agriculture Production - 0.3% Par Value (S) -------------------------------------------- ------------------------------- --- --------- ---------- Hines Nurseries, Inc., 10.250% 10/01/11(a) USD 870,000 941,775 Seminis Vegetable Seeds, Inc., 10.250% 10/01/13(a) 2,502,000 2,652,120 --------- ---------- Agriculture Production Total 3,593,895 AGRICULTURE TOTAL 3,593,895 CONSTRUCTION - 1.4% Building Construction - 1.4% -------------------------------------------- ------------------------------- --- --------- ---------- Associated Materials, Inc., 9.750% 04/15/12 1,995,000 2,154,600 Atrium Companies, Inc., 10.500% 05/01/09 1,445,000 1,537,119 Congoleum Corp., 8.625% 08/01/08(m) 1,305,000 783,000 D.R. Horton, Inc., 9.750% 09/15/10 4,355,000 5,138,900 K. Hovnanian Enterprises, Inc.: 8.875% 04/01/12 1,270,000 1,387,475 10.500% 10/01/07 1,470,000 1,725,412 Nortek Holdings, Inc., (b) 05/15/11(a) (10.000% 11/15/07) 2,800,000 1,988,000 Standard Pacific Corp., 9.250% 04/15/12 2,470,000 2,741,700 William Lyon Homes, Inc., 10.750% 04/01/13 1,245,000 1,394,400 ------------------------------- --- --------- ---------- Building Construction Total 18,850,606 ---------- CONSTRUCTION TOTAL 18,850,606 CONSUMER STAPLES - 0.2% Household Products - 0.2% -------------------------------------------- ------------------------------- --- --------- ---------- Playtex Products, Inc., 9.375% 06/01/11 2,960,000 2,937,800 Scotts Co., 6.625% 11/15/13(a) 240,000 241,800 ------------------------------- --- --------- ---------- Household Products Total 3,179,600 ---------- CONSUMER STAPLES TOTAL 3,179,600 FINANCE, INSURANCE & REAL ESTATE - 1.1% Depository Institutions - 0.2% Dollar Financial Group, 9.750% 11/15/11(a) 1,835,000 1,890,050 Western Financial Bank, 9.625% 05/15/12 360,000 403,200 ------------------------------- --- --------- ---------- Depository Institutions Total 2,293,250
See notes to investment portfolio. 7 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) FINANCE, INSURANCE & REAL ESTATE - (continued) Financial Services - 0.7% Par Value (S) ---------------------------------------------- -------------------------------- --- --------- ---------- Finova Group, Inc., 7.500% 11/15/09 USD 3,300,000 1,831,500 LaBranche & Co., 12.000% 03/02/07 1,820,000 1,729,000 MDP Acquisitions PLC, 9.625% 10/01/12 3,300,000 3,663,000 Orion Power Holdings, Inc., 12.000% 05/01/10 860,000 1,006,200 Trump Holdings & Funding, 11.625% 03/15/10 1,440,000 1,288,800 -------------------------------- --- --------- ---------- Financial Services Total 9,518,500 Real Estate - 0.2% ---------------------------------------------- -------------------------------- --- --------- ---------- Forest City Enterprises, Inc., 7.625% 06/01/15 1,020,000 1,065,900 Thornburg Mortgage, Inc., 8.000% 05/15/13 1,545,000 1,622,250 -------------------------------- --- --------- ---------- Real Estate Total 2,688,150 --------- ---------- FINANCE, INSURANCE & REAL ESTATE TOTAL 14,499,900 INDUSTRIALS - 0.1% Construction & Farm Machinery - 0.1% ---------------------------------------------- -------------------------------- --- --------- ---------- Case New Holland, Inc., 9.250% 08/01/11(a) 1,460,000 1,635,200 -------------------------------- --- --------- ---------- Construction & Farm Machinery Total 1,635,200 --------- ---------- INDUSTRIALS TOTAL 1,635,200 MANUFACTURING - 11.1% Apparel - 0.5% ---------------------------------------------- -------------------------------- --- --------- ---------- Broder Brothers Co., 11.250% 10/15/10(a) 1,660,000 1,676,600 Levi Strauss & Co., 12.250% 12/15/12 3,135,000 2,257,200 Perry Ellis International, Inc., 8.875% 09/15/13(a) 235,000 244,400 Phillips Van-Heusen, 8.125% 05/01/13(a) 850,000 896,750 Warnaco, Inc., 8.875% 06/15/13(a) 610,000 620,675 William Carter Co., 10.875% 08/15/11 604,000 686,295 -------------------------------- --- --------- ---------- Apparel Total 6,381,920
See notes to investment portfolio. 8 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) MANUFACTURING - (continued) Auto Parts & Equipment - 0.4% Par Value ($) ---------------------------------- ------------------------------- --- ---------- ---------- Delco Remy International, Inc., 10.625% 08/01/06 USD 685,000 671,300 Goodyear Tire & Rubber Co., 7.857% 08/15/11 2,255,000 1,928,025 Metaldyne Corp., 10.000% 11/01/13(a) 930,000 902,100 Rexnord Corp., 10.125% 12/15/12 850,000 926,500 TRW Automotive, Inc.: 9.375% 02/15/13(a) 465,000 525,450 11.000% 02/15/13(a) 380,000 446,500 ------------------------------- --- ---------- ---------- Auto Parts & Equipment Total 5,399,875 Chemicals & Allied Products - 2.0% ---------------------------------- ------------------------------- --- ---------- ---------- Avecia Group PLC, 11.000% 07/01/09 2,565,000 2,205,900 Equistar Chemicals Funding LP: 10.125% 09/01/08 1,285,000 1,362,100 10.625% 05/01/11(a) 1,125,000 1,186,875 FMC Corp., 10.250% 11/01/09 895,000 1,047,150 Huntsman ICI Holdings LLC, (c) 12/31/09 19,980,000 8,691,300 IMC Global, Inc., 10.875% 08/01/13(a) 1,410,000 1,487,550 Lyondell Chemical Co., 9.625% 05/01/07 2,450,000 2,517,375 MacDermid, Inc., 9.125% 07/15/11 1,250,000 1,396,875 Phibro Animal Health Corp., 13.000% 12/01/07(a) 1,770,000 1,823,100 Polyone Corp., 10.625% 05/15/10 495,000 475,200 Terra Capital, Inc., 12.875% 10/15/08 2,990,000 3,475,875 Westlake Chemical Corp., 8.750% 07/15/11(a) 1,180,000 1,271,450 ------------------------------- --- ---------- ---------- Chemical & Allied Products Total 26,940,750
See notes to investment portfolio. 9 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) MANUFACTURING - (continued) Electronic & Electrical Equipment - 0.5% Par Value ($) ---------------------------------------- -------------------------------- --- --------- ---------- Amkor Technology, Inc.: 9.250% 02/15/08 USD 1,800,000 2,016,000 10.500% 05/01/09 1,700,000 1,819,000 Condor Systems, Inc., 11.875% 05/01/09(d) 4,000,000 920,000 General Cable Corp., 9.500% 11/15/10(a) 450,000 474,750 TransDigm, Inc., 8.375% 07/15/11(a) 1,175,000 1,239,625 Xerox Corp., 7.125% 06/15/10 960,000 988,800 -------------------------------- --- --------- ---------- Electronic & Electrical Equipment Total 7,458,175 Fabricated Metal - 0.2% ---------------------------------------- -------------------------------- --- --------- ---------- Earle M. Jorgensen & Co., 9.750% 06/01/12 2,800,000 3,052,000 -------------------------------- --- --------- ---------- Fabricated Metal Total 3,052,000 Food & Kindred Products - 1.8% ---------------------------------------- -------------------------------- --- --------- ---------- Bavaria SA, 8.875% 11/01/10(a) 2,360,000 2,337,132 Constellation Brands, Inc., 8.125% 01/15/12 1,175,000 1,286,625 Del Monte Corp., 9.250% 05/15/11 1,600,000 1,756,000 Dole Food Co., Inc., 8.625% 05/01/09 1,485,000 1,600,087 Merisant Co., 9.500% 07/15/13(a) 1,205,000 1,235,125 Michael Foods, Inc., 8.000% 11/15/13 1,000,000 1,025,000 Pinnacle Foods Holdings, 8.250% 12/01/13(a) 2,190,000 2,255,700 Premier International Foods PLC, 12.000% 09/01/09 4,600,000 5,014,000 Roundy's, Inc., 8.875% 06/15/12 2,615,000 2,771,900 Smithfield Foods, Inc., 8.000% 10/15/09 2,835,000 3,118,500 Tabletop Holdings, Inc., (b) 05/15/14 (12.250% 11/15/08)(a) 2,930,000 1,582,200 -------------------------------- --- --------- ---------- Food & Kindred Products Total 23,982,269
See notes to investment portfolio. 10 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) MANUFACTURING - (continued) Forest Products - 0.1% Par Value ($) ---------------------------------------- -------------------------------------- ---- --------- --------- Millar Western Forest, 7.750% 11/15/13(a) USD 1,260,000 1,266,439 -------------------------------------- ---- --------- --------- Forest Products Total 1,266,439 Furniture & Fixtures - 0.3% ---------------------------------------- -------------------------------------- ---- --------- --------- Juno Lighting, Inc., 11.875% 07/01/09 1,920,000 2,088,000 Norcraft Companies, 9.000% 11/01/11(a) 835,000 878,838 Tempur-Pedic, Inc., 10.250% 08/15/10(a) 1,575,000 1,760,062 -------------------------------------- ---- --------- --------- Furniture & Fixtures Total 4,726,900 Machinery & Computer Equipment - 0.2% ---------------------------------------- -------------------------------------- ---- --------- --------- Cummins, Inc., 9.500% 12/01/10(a) 1,785,000 2,052,750 -------------------------------------- ---- --------- --------- Machinery & Computer Equipment Total 2,052,750 Measuring & Analyzing Instruments - 0.1% ---------------------------------------- -------------------------------------- ---- --------- --------- Fisher Scientific International, Inc., 8.125% 05/01/12 869,000 932,003 -------------------------------------- ---- --------- --------- Measuring & Analyzing Instruments Total 932,003 Miscellaneous Manufacturing - 2.0% ---------------------------------------- -------------------------------------- ---- --------- --------- Agco Corp., 9.500% 05/01/08 2,430,000 2,654,775 Amscan Holdings, Inc., 9.875% 12/15/07 2,750,000 2,750,000 Applied Extrusion Technologies, Inc., 10.750% 07/01/11 2,325,000 1,801,875 Crown European Holdings SA, 10.875% 03/01/13 1,800,000 2,079,000 Flowserve Corp., 12.250% 08/15/10 1,889,000 2,191,240 Hexcel Corp., 9.750% 01/15/09 1,305,000 1,360,462 Kinetic Concepts, Inc., 7.375% 05/15/13(a) 705,000 726,150 Koppers Industries, Inc., 9.875% 10/15/13(a) 2,180,000 2,365,300 Newcor, Inc., 6.000% 01/31/13(f) 847,510 367,997
See notes to investment portfolio. 11 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) MANUFACTURING - (continued) Miscellaneous Manufacturing - (continued) Par Value ($) ----------------------------------------- --------------------------------- ---- --------- ---------- Owens-Illinois, Inc.: 7.150% 05/15/05 USD 460,000 470,350 7.350% 05/15/08 1,950,000 1,954,875 7.500% 05/15/10 440,000 440,000 8.100% 05/15/07 1,000,000 1,035,000 SPX Corp., 7.500% 01/01/13 1,575,000 1,685,250 Tekni-Plex, Inc., 12.750% 06/15/10 2,715,000 2,877,900 Terex Corp., Series 2001 B, 10.375% 04/01/11 2,000,000 2,240,000 --------------------------------- ---- --------- ---------- Miscellaneous Manufacturing Total 27,000,174 Paper Products - 0.7% ----------------------------------------- --------------------------------- ---- --------- ---------- Berry Plastics Corp., 10.750% 07/15/12(a) 1,400,000 1,589,000 Buckeye Technologies, Inc., 8.500% 10/01/13(a) 390,000 414,375 Caraustar Industries, Inc., 9.875% 04/01/11 1,605,000 1,701,300 Georgia-Pacific Corp., 8.875% 02/01/10 1,900,000 2,142,250 Norske Skog Canada Ltd., 8.625% 06/15/11 850,000 867,000 Smurfit-Stone Container Corp., 8.250% 10/01/12 1,600,000 1,708,000 Tembec Industries, Inc., 8.500% 02/01/11 1,400,000 1,358,000 --------------------------------- ---- --------- ---------- Paper Products Total 9,779,925 Pollution Control - 0.0% ----------------------------------------- --------------------------------- ---- --------- ---------- EnviroSource, Inc., 14.000% 12/15/08(f) 526,803 508,976 --------------------------------- ---- --------- ---------- Pollution Control Total 508,976 Primary Metal - 0.6% ----------------------------------------- --------------------------------- ---- --------- ---------- Bayou Steel Corp., 9.500% 05/15/08(d) 3,000,000 570,000 Kaiser Aluminum & Chemical Corp., 10.875% 10/15/06(d) 4,715,000 4,078,475 Metallurg, Inc., 11.000% 12/01/07 2,200,000 1,144,000
See notes to investment portfolio. 12 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) MANUFACTURING - (continued) Primary Metal - (continued) Par Value ($) ------------------------------------ -------------------------------------- ---- --------- ----------- Oregon Steel Mills, Inc., 10.000% 07/15/09 USD 1,350,000 1,080,000 Steel Dynamics, Inc.: 9.500% 03/15/09(a) 480,000 524,400 9.500% 03/15/09 460,000 502,550 -------------------------------------- ---- --------- ----------- Primary Metal Total 7,899,425 Printing & Publishing - 1.4% ------------------------------------ -------------------------------------- ---- --------- ----------- Dex Media, Inc., 8.000% 11/15/13(a) 1,800,000 1,822,500 Dex Media East LLC, 12.125% 11/15/12 3,080,000 3,696,000 Dex Media West LLC, 9.875% 08/15/13(a) 1,660,000 1,884,100 Hollinger, Inc., 11.875% 03/01/11(a) 1,780,000 1,940,200 Primedia, Inc., 8.875% 05/15/11 2,650,000 2,749,375 Von Hoffman Corp.: 10.250% 03/15/09(a) 550,000 577,500 10.250% 03/15/09 3,200,000 3,360,000 Yell Finance BV, 10.750% 08/01/11 1,860,000 2,185,500 -------------------------------------- ---- --------- ----------- Printing & Publishing Total 18,215,175 Stone, Clay, Glass & Concrete - 0.0% ------------------------------------ -------------------------------------- ---- --------- ----------- Owens-Brockway Glass Container, 8.250% 05/15/13(a) 340,000 355,300 -------------------------------------- ---- --------- ----------- Stone, Clay, Glass & Concrete Total 355,300 Textile Mill Products - 0.1% ------------------------------------ -------------------------------------- ---- --------- ----------- Collins & Aikman Floor Covering, Inc., 9.750% 02/15/10 1,400,000 1,501,500 -------------------------------------- ---- --------- ----------- Textile Mill Products Total 1,501,500 Transportation Equipment - 0.2% ------------------------------------ -------------------------------------- ---- --------- ----------- Sequa Corp., 8.875% 04/01/08 1,160,000 1,261,500 Teekay Shipping Corp., 8.875% 07/15/11 700,000 794,500 -------------------------------------- ---- --------- ----------- Transportation Equipment Total 2,056,000 ----------- MANUFACTURING TOTAL 149,509,556
See notes to investment portfolio. 13 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) MINING & ENERGY - 4.2% Metal Mining - 0.3% Par Value($) --------------------------- ------------------------------ --- ----------- --------- TriMas Corp., 9.875% 06/15/12 USD 3,905,000 3,973,337 ------------------------------ --- ----------- --------- Metal Mining Total 3,973,337 Oil & Gas Extraction - 3.6% --------------------------- ------------------------------ --- ----------- --------- Benton Oil & Gas Co., 9.375% 11/01/07 2,445,000 2,420,550 Chesapeake Energy Corp.: 7.750% 01/15/15 1,000,000 1,075,000 8.125% 04/01/11 770,000 839,300 Coastal Corp., 7.750% 06/15/10 3,550,000 3,124,000 Compton Petroleum Corp., 9.900% 05/15/09 2,200,000 2,398,000 Denbury Resources, Inc., 7.500% 04/01/13(a) 1,000,000 1,037,500 Dynegy Holdings Inc.: 8.750% 02/15/12 1,895,000 1,828,675 9.875% 07/15/10(a) 960,000 1,046,400 10.125% 07/15/13(a) 240,000 264,000 El Paso Corp., 8.500% 06/01/10 625,000 684,375 Encore Acquisition Co., 8.375% 06/15/12 1,885,000 1,998,100 Energy Partners Ltd., 8.750% 08/01/10 700,000 739,375 Forest Oil Corp., 8.000% 06/15/08 2,405,000 2,585,375 Gazprom, 9.625% 03/01/13 1,850,000 1,998,000 Gulfterra Energy Partners, 8.500% 06/01/10 1,050,000 1,149,750 Houston Exploration Co., 7.000% 06/15/13(a) 485,000 491,063 Magnum Hunter Resources, Inc., 9.600% 03/15/12 2,100,000 2,362,500 Northwest Pipeline Corp., 8.125% 03/01/10 760,000 843,600 PDVSA Finance Ltd.: 6.250% 02/15/06 EUR 3,367,700 3,959,590 6.650% 02/15/06 USD 2,550,000 2,530,875
See notes to investment portfolio. 14 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) MINING & ENERGY - (continued) Oil & Gas Extraction - (continued) Par Value ($) ---------------------------------- -------------------------- ---- --------- ---------- Petroleos Mexicanos, 6.500% 02/01/05 USD 1,215,000 1,272,712 Pogo Producing Co., 8.250% 04/15/11 1,200,000 1,329,000 Premcor Refining Group, 7.500% 06/15/15 1,430,000 1,465,750 Sonat, Inc., 7.625% 07/15/11 2,585,000 2,223,100 Southern Natural Gas Co., 8.875% 03/15/10 1,335,000 1,485,187 Stone Energy Corp., 8.250% 12/15/11 1,475,000 1,581,938 Tom Brown, Inc., 7.250% 09/15/13 1,040,000 1,086,800 TransTexas Gas Corp., 15.000% 03/15/05(f)(g) 465,296 31,128 Williams Companies, Inc., 8.125% 03/15/12 4,925,000 5,319,000 -------------------------- ---- --------- ---------- Oil & Gas Extraction Total 49,170,643 Oil & Gas Field Services - 0.3% ---------------------------------- -------------------------- ---- --------- ---------- J. Ray McDermott SA, 11.000% 12/15/13(a)(h) 1,580,000 1,587,900 Newpark Resources, Inc., 8.625% 12/15/07 1,860,000 1,915,800 -------------------------- ---- --------- ---------- Oil & Gas Field Services Total 3,503,700 -------------------------- ---- --------- ---------- MINING & ENERGY TOTAL 56,647,680 RETAIL TRADE - 1.2% Food Stores - 0.2% ---------------------------------- -------------------------- ---- --------- ---------- Delhaize America, Inc., 8.125% 04/15/11 1,550,000 1,755,887 Winn-Dixie Stores, Inc., 8.875% 04/01/08 1,250,000 1,234,375 -------------------------- ---- --------- ---------- Food Stores Total 2,990,262 Miscellaneous Retail - 0.9% ---------------------------------- -------------------------- ---- --------- ---------- Gap, Inc., 8.800% 12/15/08 475,000 580,688 General Nutrition Centers, 8.500% 12/01/10(a)(h) 670,000 683,400
See notes to investment portfolio. 15 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) RETAIL TRADE - (continued) Miscellaneous Retail - (continued) Par Value($) ---------------------------------- ---------------------------------------------- ---- --------- ---------- JC Penney Co., Inc., 8.000% 03/01/10 USD 2,580,000 2,967,000 Rite Aid Corp., 9.250% 06/01/13(a) 3,555,000 3,812,738 Saks, Inc., 8.250% 11/15/08 670,000 762,125 Steinway Musical Instruments, Inc., 8.750% 04/15/11 2,600,000 2,730,000 ---------- Miscellaneous Retail Total 11,535,951 Restaurants - 0.1% ---------------------------------- ---------------------------------------------- ---- --------- ---------- Dominos, Inc., 8.250% 07/01/11(a) 520,000 547,950 Yum! Brands, Inc., 7.700% 07/01/12 625,000 715,625 ---------------------------------------------- ---- --------- ---------- Restaurants Total 1,263,575 ---------- RETAIL TRADE TOTAL 15,789,788 SERVICES - 6.9% Amusement & Recreation - 2.6% ---------------------------------- ---------------------------------------------- ---- --------- ---------- Ameristar Casinos, Inc., 10.750% 02/15/09 1,750,000 2,003,750 Boyd Gaming Corp., 8.750% 04/15/12 780,000 846,300 Circus & Eldorado/Silver Legacy Capital Corp., 10.125% 03/01/12 1,495,000 1,521,163 Corus Entertainment, Inc., 8.750% 03/01/12 1,275,000 1,402,500 Hollywood Casino Shreveport, 13.000% 08/01/06(g) 4,230,000 3,024,450 Hollywood Entertainment Corp., 9.625% 03/15/11 2,225,000 2,391,875 Inn of the Mountain Gods Resort, 12.000% 11/15/10(a) 1,135,000 1,194,588 Mohegan Tribal Gaming Authority: 8.000% 04/01/12 1,575,000 1,701,000 8.375% 07/01/11 1,285,000 1,397,438 Park Place Entertainment Corp., 9.375% 02/15/07 690,000 771,075
See notes to investment portfolio. 16 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) SERVICES - (continued) Amusement & Recreation - (continued) Par Value ($) --------------------------------------- ---------------------------------- ---- --------- ---------- Pinnacle Entertainment, Inc., 9.250% 02/15/07(a) USD 5,575,000 5,742,250 Poster Financial Group, Inc., 8.750% 12/01/11(a)(h) 335,000 343,375 Regal Cinemas, Inc., 9.375% 02/01/12 880,000 998,800 River Rock Entertainment, 9.750% 11/01/11(a) 1,630,000 1,735,950 Six Flags, Inc., 9.500% 02/01/09 5,045,000 5,108,062 Town Sports International, Inc., 9.625% 04/15/11(a) 1,075,000 1,150,250 Venetian Casino Resort LLC, 11.000% 06/15/10(a) 1,975,000 2,286,062 Wynn Las Vegas LLC, 12.000% 11/01/10 1,190,000 1,374,450 ---------------------------------- ---- --------- ---------- Amusement & Recreation Total 34,993,338 Auto Equipment & Rental Services - 1.0% --------------------------------------- ---------------------------------- ---- --------- ---------- Accuride Corp., 9.250% 02/01/08 675,000 681,750 Dana Corp.: 9.000% 08/15/11 1,375,000 1,564,062 10.125% 03/15/10 1,190,000 1,362,550 Dura Operating Corp.: 8.625% 04/15/12 2,125,000 2,156,875 9.000% 05/01/09 1,780,000 1,646,500 NationsRent, Inc., 9.500% 10/15/10(a) 2,475,000 2,567,813 United Rentals, Inc., 10.750% 04/15/08 1,640,000 1,828,600 Williams Scotsman, Inc., 9.875% 06/01/07 1,130,000 1,113,050 ---------------------------------- ---- --------- ---------- Auto Equipment & Rental Services Total 12,921,200 Business Services - 0.5% --------------------------------------- ---------------------------------- ---- --------- ---------- IMCO Recycling, Inc., 10.375% 10/15/10(a) 1,210,000 1,137,400 Iron Mountain, Inc., 6.625% 01/01/16 1,940,000 1,891,500 Moore North America Finance, Inc., 7.875% 01/15/11 995,000 1,129,325
See notes to investment portfolio. 17 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) SERVICES - (continued) Business Services - (continued) Par Value ($) ------------------------------- --------------------------------------------- ---- --------- ---------- Stratus Technologies, Inc., 10.375% 12/01/08(a) USD 1,800,000 1,840,500 Wackenhut Corrections, 8.250% 07/15/13(a) 940,000 991,700 --------------------------------------------- ---- --------- ---------- Business Services Total 6,990,425 Funeral Services - 0.4% ------------------------------- --------------------------------------------- ---- --------- ---------- Service Corp. International, 7.700% 04/15/09 2,910,000 3,019,125 Stewart Enterprises, Inc., 10.750% 07/01/08 1,895,000 2,131,875 --------------------------------------------- ---- --------- ---------- Funeral Services Total 5,151,000 Health Services - 1.9% ------------------------------- --------------------------------------------- ---- --------- ---------- AmerisourceBergen Corp., 8.125% 09/01/08 1,080,000 1,196,100 Bio-Rad Laboratories, Inc., 7.500% 08/15/13 2,020,000 2,171,500 Coventry Health Care, Inc., 8.125% 02/15/12 2,550,000 2,811,375 HCA, Inc., 8.750% 09/01/10 1,815,000 2,099,048 IASIS Healthcare Corp., 13.000% 10/15/09 1,655,000 1,857,738 Insight Health Services Corp., 9.875% 11/01/11 2,160,000 2,270,700 Magellan Health Services, Inc., 9.375% 11/15/07(a)(d) 1,100,000 1,215,500 MedQuest, Inc., 11.875% 08/15/12(a) 3,000,000 3,288,750 Pacificare Health Systems, Inc., 10.750% 06/01/09 3,140,000 3,611,000 Tenet Healthcare Corp., 6.375% 12/01/11 2,880,000 2,664,000 United Surgical Partners International, Inc., 10.000% 12/15/11 2,235,000 2,519,962 --------------------------------------------- ---- --------- ---------- Health Services Total 25,705,673
See notes to investment portfolio. 18 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) SERVICES - (continued) Hotels, Camps & Lodging - 0.5% Par Value ($) ------------------------------ ------------------------------------------ ---- --------- ---------- Hard Rock Hotel, Inc., 8.875% 06/01/13(a) USD 865,000 908,250 Host Marriott LP, 9.500% 01/15/07 2,100,000 2,296,875 Royal Caribbean Cruises Ltd., 8.000% 05/15/10 1,330,000 1,434,737 Starwood Hotels & Resorts Worldwide, Inc., 7.875% 05/01/12(a) 2,050,000 2,278,063 ------------------------------------------ ---- --------- ---------- Hotels, Camps & Lodging Total 6,917,925 ---------- SERVICES TOTAL 92,679,561 TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 13.5% Aerospace - 0.2% ------------------------------ ------------------------------------------ ---- --------- ---------- BE Aerospace, Inc., 8.875% 05/01/11 2,095,000 1,906,450 Vought Aircraft Industries, Inc., 8.000% 07/15/11(a) 965,000 977,062 ------------------------------------------ ---- --------- ---------- Aerospace Total 2,883,512 Air Transportation - 0.8% ------------------------------ ------------------------------------------ ---- --------- ---------- Delta Airlines, Inc., 7.900% 12/15/09 2,680,000 2,144,000 Northwest Airlines, Inc., 9.875% 03/15/07 2,485,000 2,211,650 Petroleum Helicopters, Inc., 9.375% 05/01/09 2,710,000 2,920,025 U.S. Airways, Inc., 10.375% 03/01/13 (i) 8,883,564 3,064,830 ------------------------------------------ ---- --------- ---------- Air Transportation Total 10,340,505 Broadcasting - 1.8% ------------------------------ ------------------------------------------ ---- --------- ---------- Advanstar Communications, Inc., 12.000% 02/15/11 3,395,000 3,479,875 Canwest Media, Inc., 10.625% 05/15/11 3,690,000 4,188,150 Emmis Communications Corp., (b) 03/15/11 (12.500% 03/15/06) 2,613,000 2,384,363 Quebecor Media, Inc., 11.125% 07/15/11 4,000,000 4,590,000 Sinclair Broadcast Group, Inc., 8.750% 12/15/11 960,000 1,051,200
See notes to investment portfolio. 19 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued) Broadcasting - (continued) Par Value ($) --------------------------- ------------------------------------------- --- ---------- ---------- Spanish Broadcasting System, 9.625% 11/01/09 USD 450,000 472,500 TV Azteca SA de CV, 10.500% 02/15/07 3,755,000 3,848,875 Videotron Ltee, 6.875% 01/15/14(a) 1,390,000 1,431,700 XM Satellite Radio, Inc., (b) 12/31/09 (14.000% 12/31/05) 2,843,285 2,473,658 ------------------------------------------- --- ---------- ---------- Broadcasting Total 23,920,321 Cable - 2.2% --------------------------- ------------------------------------------- --- ---------- ---------- Charter Communications Holding LLC: (b) 04/01/11 (9.920% 04/01/04) 10,185,000 7,791,525 10.000% 04/01/09 795,000 659,850 10.250% 09/15/10(a) 1,130,000 1,151,188 Comcast UK Cable Partners Ltd., 11.200% 11/15/07 5,140,000 5,165,700 CSC Holdings, Inc., 7.625% 04/01/11 1,885,000 1,903,850 DirecTV Holdings LLC, 8.375% 03/15/13 1,800,000 2,036,250 EchoStar DBS Corp., 6.375% 10/01/11(a) 3,560,000 3,560,000 Insight Communications, Inc., (b) 02/15/11 (12.250% 02/15/06) 2,485,000 1,969,362 Northland Cable Television, Inc., 10.250% 11/15/07 2,835,000 2,806,650 Rogers Cable, Inc., 6.250% 06/15/13 30,000 30,094 Shaw Communications, Inc., 7.500% 11/20/13 CAD 2,250,000 1,718,551 ------------------------------------------- --- ---------- ---------- Cable Total 28,793,020
See notes to investment portfolio. 20 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued) Communication Services - 0.7% Par Value ($) ---------------------------------------- ----------------------------------- --- --------- --------- Colt Telecom Group PLC, 12.000% 12/15/06 USD 1,370,000 1,366,575 Crown Castle International Corp., 10.750% 08/01/11 1,200,000 1,332,000 Fairpoint Communications, 11.875% 03/01/10 1,670,000 1,962,250 Lucent Technologies, Inc., 6.450% 03/15/29 2,100,000 1,590,750 SBA Communications Corp., 10.250% 02/01/09 3,245,000 2,977,287 ----------------------------------- --- --------- --------- Communication Services Total 9,228,862 Electric, Gas & Sanitary Services - 0.4% ---------------------------------------- ----------------------------------- --- --------- --------- Allied Waste North America, Inc.: 6.500% 11/15/10(a) 1,855,000 1,855,000 Series 2001 B, 8.500% 12/01/08 3,600,000 3,942,000 ----------------------------------- --- --------- --------- Electric, Gas & Sanitary Services Total 5,797,000 Electric Services - 2.5% ---------------------------------------- ----------------------------------- --- --------- --------- AES Corp.: 9.000% 05/15/15(a) 2,685,000 2,926,650 9.500% 06/01/09 1,861,000 2,000,575 Beaver Valley Funding Corp., 9.000% 06/01/17 2,260,000 2,581,485 Caithness Coso Funding Corp., 9.050% 12/15/09 2,897,648 3,143,948 Calpine Corp.: 8.500% 07/15/10(a) 1,880,000 1,739,000 8.500% 02/15/11 2,405,000 1,743,625 8.625% 08/15/10 1,520,000 1,102,000 CMS Energy Corp., 8.900% 07/15/08 2,360,000 2,504,550 Edison Mission Energy, 9.875% 04/15/11 2,290,000 2,301,450 Illinova Power Co., 11.500% 12/15/10 850,000 1,003,000 MSW Energy Holdings Finance: 7.375% 09/01/10(a) 800,000 812,000 8.500% 09/01/10(a) 2,250,000 2,413,125
See notes to investment portfolio. 21 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued) Electric Services - (continued) Par Value ($) --------------------------------------- ------------------------------------------- --- --------- ---------- Nevada Power Co.: 9.000% 08/15/13(a) USD 1,060,000 1,156,725 10.875% 10/15/09 2,025,000 2,288,250 PSE&G Energy Holdings, Inc., 8.625% 02/15/08 2,495,000 2,650,938 Tiers-Mir-2001-14, Fixed Rate Certificates, 7.200% 06/15/04(a)(d) 2,430,000 1,190,700 UCAR Finance, Inc., 10.250% 02/15/12 2,200,000 2,431,000 ------------------------------------------- --- --------- ---------- Electric Services Total 33,989,021 Marine Services - 0.2% --------------------------------------- ------------------------------------------- --- --------- ---------- Stena AB: 7.500% 11/01/13(a)(h) 900,000 902,835 9.625% 12/01/12(a) 1,650,000 1,835,625 Trico Marine Services, Inc., 8.875% 05/15/12 510,000 331,500 ------------------------------------------- --- --------- ---------- Marine Services Total 3,069,960 Motor Freight & Warehousing - 0.6% --------------------------------------- ------------------------------------------- --- --------- ---------- Allied Holdings, Inc., 8.625% 10/01/07 1,410,000 1,353,600 QDI Capital Corp., 9.000% 11/15/10(a) 2,060,000 2,137,250 QDI LLC.: 12.000% 06/15/09 PIK(a)(f) 972,769 1,045,727 12.500% 06/15/08(a)(f) 3,978,000 4,060,742 ------------------------------------------- --- --------- ---------- Motor Freight & Warehousing Total 8,597,319 Radio & Telephone Communications - 2.1% --------------------------------------- ------------------------------------------- --- --------- ---------- ACC Escrow Corp., 10.000% 08/01/11(a) 1,430,000 1,565,850 AirGate PCS, Inc., (b) 10/01/09 (13.500% 10/01/04) 680,000 442,000 Avaya, Inc., 11.125% 04/01/09 1,395,000 1,639,125 Cincinnati Bell, Inc., 8.375% 01/15/14(a) 1,815,000 1,905,750 Dobson Communications Corp., 8.875% 10/01/13(a) 2,580,000 2,596,125 Horizon PCS, Inc., 13.750% 06/15/11(d) 2,975,000 669,375
See notes to investment portfolio. 22 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued) Radio & Telephone Communications - (continued) Par Value ($) ---------------------------------------------- ------------------------------ --- --------- ---------- MCI Communications Corp.: 7.125% 06/15/27(d) USD 710,000 575,100 7.500% 08/20/04(d) 2,745,000 2,223,450 Nextel Communications, Inc.: 9.375% 11/15/09 4,695,000 5,105,812 9.750% 10/31/07 Nextel Partners, Inc., 11.000% 03/15/10 2,425,000 2,679,625 Rogers Cantel, Inc., 9.750% 06/01/16 4,025,000 4,749,500 US Unwired, Inc., (b) 11/01/09 (13.375% 11/01/04) 4,535,000 3,015,775 Western Wireless Corp., 9.250% 07/15/13 1,175,000 1,216,125 ------------------------------ --- --------- ---------- Radio & Telephone Communications Total 28,383,612 Railroad - 0.3% ---------------------------------------------- ------------------------------ --- --------- ---------- Kansas City Southern, 7.500% 06/15/09 1,410,000 1,441,725 TFM SA de CV, 12.500% 06/15/12(a) 2,210,000 2,447,575 ------------------------------ --- --------- ---------- Railroad Total 3,889,300 Telecommunication Services - 1.7% ---------------------------------------------- ------------------------------ --- --------- ---------- American Towers, Inc., 7.250% 12/01/11(a) 1,150,000 1,152,875 Carrier1 International SA, 13.250% 02/15/09(d) 6,000,000 540,000 Innova S. de R.L., 9.375% 09/19/13(a) 590,000 604,013 Insight Midwest, 9.750% 10/01/09(a) 2,080,000 2,199,600 Level 3 Communications, (b) 12/01/08 (10.500% 12/01/03) 2,370,000 2,215,950 Qwest Capital Funding: 7.250% 02/15/11 3,300,000 3,143,250 7.750% 02/15/31 2,315,000 2,037,200 Qwest Services Corp., 13.500% 12/15/10(a) 3,730,000 4,382,750 Spectrasite, Inc., 8.250% 05/15/10(a) 1,245,000 1,319,700
See notes to investment portfolio. 23 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) CORPORATE FIXED INCOME BONDS & NOTES - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued) Telecommunication Services - (continued) Par Value ($) Time Warner Telecom LLC: 9.750% 07/15/08 USD 3,300,000 3,366,000 10.125% 02/01/11 850,000 879,750 Triton PCS, Inc., 8.750% 11/15/11 780,000 748,800 ---------------------------------------------- --- ---------- ----------- Telecommunication Services Total 22,589,888 ---------- ----------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SERVICES TOTAL 181,482,320 Total Corporate Fixed Income Bonds & Notes (cost of $512,437,236) 537,868,106 U.S. GOVERNMENT AGENCIES & OBLIGATIONS - 23.9% Federal Home Loan Mortgage Corp.: 5.000% 08/25/10 8,600,000 8,741,805 7.500% 03/01/16 17,683 18,582 8.000% 04/01/06 - 05/01/16 133,457 140,505 8.500% 02/01/07 - 07/01/10 121,254 129,428 8.750% 05/01/05 - 07/01/08 19,105 20,483 9.000% 09/01/04 - 01/01/22 146,258 160,375 9.250% 08/01/08 - 09/01/16 104,504 115,187 9.500% 11/01/08 - 08/01/16 96,482 105,103 9.750% 12/01/08 - 09/01/16 19,214 21,014 10.000% 07/01/09 - 11/01/19 178,990 196,091 10.500% 11/01/11 - 10/01/24 107,673 120,961 10.750% 05/01/10 - 09/01/13 222,820 247,057 11.250% 10/01/10 - 11/01/15 176,352 197,953 ---------------------------------------------- --- ---------- ----------- Federal Home Loan Mortgage Corp. Total 10,214,544 Federal National Mortgage Association: 7.500% 11/01/03 - 11/01/11 69,691 72,292 8.000% 07/01/08 - 07/01/09 77,230 80,782 8.250% 11/01/07 36,753 38,348 8.500% 05/01/08 - 09/01/21 242,923 260,326 9.000% 11/01/08 - 08/01/21 619,314 679,114 9.250% 05/01/16 99,955 111,178 10.000% 11/01/13 - 03/01/16 322,148 362,176 10.500% 09/01/07 - 03/01/16 303,044 338,692 To Be Announced, 6.500% 11/04/33(j) 60,590,000 63,165,075 ---------- ----------- Federal National Mortgage Association Total 65,107,983 Government National Mortgage Association: 8.500% 02/15/06 4,860 5,179 9.000% 08/15/08 - 12/15/17 1,898,497 2,103,118 9.500% 06/15/09 - 11/15/17 918,889 1,009,538 10.000% 06/15/04 - 09/15/21 225,441 251,253 10.500% 12/15/10 - 04/15/21 63,173 70,986 11.000% 12/15/09 - 12/15/15 357,049 402,695 11.750% 08/15/13 9,326 10,590 12.000% 05/15/14 788 903 ---------- ----------- Government National Mortgage Association Total 3,854,262
See notes to investment portfolio. 24 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) U.S. GOVERNMENT AGENCIES & OBLIGATIONS - (continued) Par Value ($) U.S. Treasury Notes/Bonds: 7.500% 11/15/24 USD 12,000,000 15,527,808 8.875% 02/15/19 9,000,000 12,781,053 10.375% 11/15/12 52,000,000 66,188,304 10.625% 08/15/15 29,415,000 45,601,280 11.625% 11/15/04 23,600,000 25,871,500 12.000% 08/15/13 55,248,000 76,220,638 --------------------------------- ---------- ----------- ----------- U.S. Treasury Notes/Bonds Total 242,190,583 TOTAL U.S. GOVERNMENT AGENCIES & OBLIGATIONS (cost of $334,916,001) 321,367,372 FOREIGN GOVERNMENT OBLIGATIONS - 33.3% European Investment Bank, 7.625% 12/07/07 GBP 5,110,000 9,590,884 Government of Australia, 8.750% 08/15/08 AUD 27,555,000 22,223,741 Government of Canada: 5.500% 06/01/10 CAD 9,245,000 7,518,364 10.000% 06/01/08 24,110,000 23,095,048 Government of New Zealand: 6.000% 11/15/11 NZD 28,800,000 18,148,573 6.500% 04/15/13 27,600,000 17,926,309 Government of Sweden: 5.000% 01/28/09 SEK 153,580,000 20,838,203 5.500% 10/08/12 54,300,000 7,502,854 6.750% 05/05/14 35,625,000 5,380,805 Kingdom of Norway, 6.000% 05/16/11 NOK 129,800,000 20,370,671 Ministry Finance Russia, 12.750% 06/24/28 USD 4,410,000 6,923,700 Poland Government Bond, 8.500% 05/12/07 PLN 29,915,000 7,891,101 Republic of Brazil: 9.250% 10/22/10 USD 4,180,000 4,313,760 9.500% 01/24/11 EUR 3,750,000 4,645,282 11.000% 01/11/12 USD 2,000,000 2,230,000 11.000% 08/17/40 5,270,000 5,391,210 11.500% 04/02/09 EUR 4,250,000 5,629,227 12.750% 01/15/20 USD 4,650,000 5,661,375 14.500% 10/15/09 8,200,000 10,356,600 Republic of Bulgaria: 1.000% 07/28/24(e) 1,485,000 1,461,834 7.500% 01/15/13 EUR 7,770,000 10,389,433
See notes to investment portfolio. 25 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) FOREIGN GOVERNMENT OBLIGATIONS - (continued) Par Value ($) Republic of Colombia: 9.750% 04/09/11 USD 7,230,510 8,043,942 10.000% 01/23/12 5,523,000 5,840,573 11.500% 05/31/11 EUR 3,010,000 4,028,346 Republic of France: 5.000% 10/25/16 8,060,000 9,995,148 5.500% 10/25/10 3,465,000 4,501,128 Republic of Germany: 5.375% 01/04/10 8,110,000 10,441,486 6.000% 07/04/07 10,280,000 13,336,310 Republic of Greece: 5.350% 05/18/11 GRD 10,000,000 12,759,245 8.600% 03/26/08 3,492,296 4,995,634 Republic of Italy, 5.250% 08/01/11 EUR 22,800,000 29,068,566 Republic of Peru, 9.875% 02/06/15 USD 6,100,000 7,060,750 Republic of Philippines, 8.250% 01/15/14 3,325,000 3,108,875 Republic of South Africa: 5.250% 05/16/13 EUR 7,230,000 8,296,865 13.000% 08/31/10 ZAR 73,960,000 13,888,265 Republic of Venezuela: 9.250% 09/15/27 USD 13,945,000 11,574,350 10.750% 09/19/13(a) 2,510,000 2,466,075 Russian Federation: 5.000% 03/31/30 13,210,000 12,376,449 11.000% 07/24/18 5,752,000 7,617,949 Treasury of Corp. Victoria, 7.500% 08/15/08 AUD 19,860,000 15,226,960 United Kingdom Treasury: 5.000% 03/07/12 GBP 4,840,000 8,306,026 7.500% 12/07/06 2,810,000 5,204,600 9.000% 07/12/11 4,750,000 10,223,147 United Mexican States: 7.500% 03/08/10 EUR 5,040,000 6,663,507 11.375% 09/15/16 USD 8,920,000 12,510,300 11.500% 05/15/26 2,685,000 3,846,263 ------------------------------------ --- ---------- ----------- Total Foreign Government Obligations (cost of $397,986,643) 448,869,733 ------------------------------------ --- ---------- -----------
See notes to investment portfolio. 26 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued) Convertible Bonds - 0.5% TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 0.5% Par Value ($) Communication Services - 0.2% --------------------------------------- ---------------------------- --- --------- ------------- Colt Telecom Group PLC 2.000% 03/29/06(a) EUR 1,615,000 2,053,852 2.000% 12/16/06(a) 750,000 954,287 Communication Services Total 3,008,139 Radio & Telephone Communications - 0.3% --------------------------------------- ---------------------------- --- --------- ------------- Nortel Networks Corp., 4.250% 09/01/08 4,180,000 3,959,505 ---------------------------- --- --------- ------------- Radio & Telephone Communications Total 3,959,505 --------- ------------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES TOTAL 6,967,644 Total Convertible Bonds (cost of $5,518,650) 6,967,644 Total Bonds & Notes (cost of $1,250,858,530) 1,315,072,855 ---------------------------- --- --------- -------------
Preferred Stocks - 1.0% FINANCE, INSURANCE & REAL ESTATE - 0.3% Real Estate - 0.3% Shares Value ($) --------------------------------------- ---------------------------------- - ------ --------- iStar Financial: 7.800% 76,000 1,907,129 7.875% 65,180 1,670,237 ---------------------------------- - ------ --------- Real Estate Total 3,577,366 ------ --------- FINANCE, INSURANCE & REAL ESTATE TOTAL 3,577,366 MANUFACTURING - 0.1% Food & Kindred Products - 0.0% --------------------------------------- ---------------------------------- - ------ --------- Constellation Brands, Inc., 5.750% 14,950 482,138 ------ --------- Food & Kindred Products Total 482,138 Printing & Publishing - 0.1% --------------------------------------- ---------------------------------- - ------ --------- Primedia, Inc.: 8.625% 165 14,932 9.200% 9,560 884,300 ------ --------- Printing & Publishing Total 899,232 ---------------------------------- - ------ --------- MANUFACTURING TOTAL 1,381,370
See notes to investment portfolio. 27 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 0.6% Broadcasting - 0.2% Shares Value($) --------------------------------- --------------------------------------- - ------- ---------- Spanish Broadcasting System, 10.750%(a) 2,390 2,401,950 --------------------------------------- - ------- ---------- Broadcasting Total 2,401,950 Cable - 0.4% --------------------------------- --------------------------------------- - ------- ---------- CSC Holdings Ltd., PIK: 11.125% 30,244 3,198,303 11.750% 23,529 2,476,427 --------------------------------------- - ------- ---------- Cable Total 5,674,730 Pollution Control - 0.0% --------------------------------- --------------------------------------- - ------- ---------- EnviroSource, Inc., 7.250%(f) 1,787 205,505 --------------------------------------- - ------- ---------- Pollution Control Total 205,505 Telecommunication Services - 0.0% --------------------------------- --------------------------------------- - ------- ---------- NTL Europe, Inc., Series A, 10.000% 52 268 Telecommunication Services Total 268 ------- ---------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES TOTAL 8,282,453 Total Preferred Stocks (cost of $13,512,969) 13,241,189 Common Stocks - 0.3% MINING & ENERGY - 0.0% Oil & Gas Extraction - 0.0% --------------------------------- --------------------------------------- - ------- ---------- Forest Oil Corp. 8,215 205,786 Orion Refining Corp.(a)(f)(k)(l) 10 -- --------------------------------------- - ------- ---------- Oil & Gas Extraction Total 205,786 ------- ---------- MINING & ENERGY TOTAL 205,786 SERVICES - 0.0% Health Services - 0.0% --------------------------------- --------------------------------------- - ------- ---------- Kuala Healthcare Affiliates, Inc.(k) 176,666 177 --------------------------------------- - ------- ---------- Health Services Total 177 ------- ---------- SERVICES TOTAL 177
See notes to investment portfolio. 28 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Common Stock - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES- 0.3% Communication Services - 0.2% Shares Value ($) ----------------------------- -------------------------------------- - ------ --------- NTL Europe, Inc., 31,451 2,049,347 Ono Finance PLC(a)(k) 8,000 8 Telus Corp. 1 18 -------------------------------------- - ------ --------- Communication Services Total 2,049,373 Pollution Control - 0.1% ----------------------------- -------------------------------------- - ------ --------- EnviroSource, Inc.(f)(k) 15,400 1,108,800 Fairlane Management Corp. (f)(k)(l) 15,400 -- -------------------------------------- - ------ --------- Pollution Control Total 1,108,800
Telecommunication Services - 0.0% --------------------------------------- --------------------------------------------- ------ --------- Adelphia Business Solutions, Inc., Class B(k) 19,695 158 Nextel Communications, Inc., Class A(k) 18,590 470,885 --------------------------------------------- ------ --------- Telecommunication Services Total 471,043 --------------------------------------------- ------ --------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES TOTAL 3,629,216 Total Common Stocks (cost of $6,934,753) 3,835,179 Warrants (k) - 0.1% Units FINANCE, INSURANCE & REAL ESTATE - 0.0% Depository Institutions - 0.0% --------------------------------------- --------------------------------------------- ------ --------- KMC Telecom Holdings, Inc., expires 01/31/08(a) 2,000 20 --------- Depository Institutions Total 20 --------------------------------------------- ------ --------- FINANCE, INSURANCE & REAL ESTATE TOTAL 20 RETAIL TRADE - 0.0% Food Stores - 0.0% --------------------------------------- --------------------------------------------- ------ --------- Pathmark Stores, Inc., expires 09/19/10 32,317 31,671 --------- Food Stores Total 31,671 --------------------------------------------- ------ --------- RETAIL TRADE TOTAL 31,671
See notes to investment portfolio. 29 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Warrants (k) - (continued) Units Value ($) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 0.1% Cable - 0.0% ---------------------------------- --------------------------------------- ------ --------- Cable Satisfaction International, Inc., expires 03/01/05 6,080 61 Ono Finance PLC, expires 02/15/11(a) 2,050 21 --------- Cable Total 82 --------- Communications - 0.1% ---------------------------------- --------------------------------------- ------ --------- Splitrock Services, Inc., expires 07/15/08 2,000 28,000 UbiquiTel, Inc., expires 04/15/10(a) 4,300 43 XM Satellite Radio Holdings, Inc.: expires 12/31/09 545 981,000 expires 03/15/10(a) 2,000 41,500 --------- Communications Total 1,050,543 --------- Communication Services - 0.0% ---------------------------------- --------------------------------------- ------ --------- iPCS, Inc., expires 07/15/10(a) 2,500 25 --------- Communication Services Total 25 Motor Freight & Warehousing - 0.0% ---------------------------------- --------------------------------------- ------ --------- QDI LLC, expires 01/15/07(a)(f) 11,840 181,507 --------- Motor Freight & Warehousing Total 181,507 Telecommunications - 0.0% ---------------------------------- --------------------------------------- ------ --------- Carrier1 International SA, expires 02/15/09(a)(d) 2,780 28 Horizon PCS, Inc., expires 10/01/10(a) 3,875 4 Jazztel PLC, expires 07/15/10(a)(l) 1,250 -- AT&T Canada, expires 08/15/07(a)(f)(l) 1,250 -- --------- Telecommunications Total 32 --------------------------------------- ------ --------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES TOTAL 1,232,189 Total Warrants (cost of $3,417,820) 1,263,880
See notes to investment portfolio. 30 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Short-Term Obligation - 3.8% Par Value ($) ---------------------------- --------------------------------------------- --------------- ------------- Repurchase agreement with State Street Bank & Trust Co., dated 11/28/03, due 12/01/03 at 0.950%, collateralized by U.S. Treasury Bonds with various maturities to 02/15/29, market value $52,708,209 (repurchase proceeds $51,674,091) (cost of $51,670,000) USD 51,670,000 51,670,000 --------------------------------------------- --------------- ------------- Total Investments - 102.9% (cost of $1,326,394,072)(n) 1,385,083,103 Other Assets & Liabilities, Net - (2.9)% (38,999,522) Net Assets - 100.0% 1,346,083,581
Notesto Investment Portfolio: (a)This security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At November 30, 2003, the value of these securities amounted to $139,332,130, which represents 10.4% of net assets. (b)Stepped coupon bond. Currently accruing at zero. Shown parenthetically is the next interest rate to be paid and the date the Fund will begin accruing this rate. (c)Zero coupon bond. (d)As of November 30, 2003, the Fund held certain securities that have filed for bankruptcy protection under Chapter 11, representing 0.9% of net assets. Income is not being accrued. (e)Interest rates on variable rate securities change periodically. The rate listed is as of November 30, 2003. (f)Represents fair value as determined in good faith under procedures approved by the Board of Trustees. (g)This issuer is in default of certain debt covenants. Income is not being accrued. (h)This security has been purchased on a delayed delivery basis. (i)Income is not being accrued on this security. (j)This security, or a portion thereof, has been purchased on a delayed delivery basis whereby the terms that are fixed are the purchase price, interest rate and settlement date. The exact quantity purchased may be slightly more or less than the amount shown. (k)Non-income producing. (l)Security has no value. (m)As of November 30, 2003, the Fund held certain securities that have filed for bankruptcy protection under Chapter 11, representing 0.1% of net assets. Income is being accrued. (n)Cost for federal income tax purposes is $1,349,764,154. See notes to financial statements. 31 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
As of November 30, 2003, the Fund had entered into the following forward foreign currency contracts:
Net Unrealized Settlement Depreciation Contracts to Deliver In Exchange For Date as of 11/30/03 CAD 2,250,000 USD 1,722,620 12/15/03 $ (10,369) EUR 1,731,700 USD 1,986,528 12/08/03 (92,463) EUR 13,480,000 USD 15,677,240 12/15/03 (487,234) EUR 8,742,000 USD 10,420,464 12/24/03 (59,665) EUR 4,462,500 USD 5,319,300 12/24/03 (30,457) EUR 4,135,000 USD 4,928,920 12/24/03 (28,222) EUR 16,898,000 USD 20,142,416 12/24/03 (115,331) EUR 3,751,000 USD 4,471,192 12/24/03 (25,601) GBP 3,530,000 USD 5,906,396 12/15/03 (165,040) GBP 1,569,000 USD 2,668,241 12/24/03 (28,546) GBP 518,000 USD 881,636 12/24/03 (8,699) GBP 1,363,000 USD 2,318,463 12/24/03 (24,253) NOK 24,888,000 USD 3,622,707 12/29/03 (22,022) NOK 22,403,000 USD 3,265,267 12/29/03 (15,546) ----------- $(1,113,448) -----------
Acronym Name AUD Australian Dollar CAD Canadian Dollar EUR Euro GBP Great British Pound GRD Greek Drachma ITL Italian Lire NOK Norwegian Krone NZD New Zealand Dollar PIK Payment-In-Kind PLN Polish Zloty SEK Swedish Krona USD United States Dollar ZAR South African Rand
See notes to investment portfolio. 32 STATEMENT OF ASSETS AND LIABILITIES ------------------------------ November 30, 2003 (unaudited) Columbia Strategic Income Fund
($) -------------------------- ----------------------------------------------------------------- - ------------- Assets: Investments, at cost 1,326,394,072 Investments, at value 1,385,083,103 Cash 1,482,802 Foreign currency (cost of $463,185) 472,134 Receivable for: Investments sold 3,638,738 Investments sold on a delayed delivery basis 236,900 Fund shares sold 826,757 Interest 27,793,344 Dividends 70,285 Deferred Trustees' compensation plan 35,231 Other assets 392,706 ------------- Total Assets 1,420,032,000 ----------------------------------------------------------------- - ------------- Liabilities: Net unrealized depreciation on foreign forward currency contracts 1,113,448 Payable for: Investments purchased 2,959,313 Investments purchased on a delayed delivery basis 66,627,155 Fund shares repurchased 1,232,277 Investment advisory fee 703,333 Transfer agent fee 488,288 Pricing and bookkeeping fees 52,521 Trustees' fees 281 Custody fee 98,407 Distribution and service fees 638,165 Deferred Trustees' fees 35,231 ------------- Total Liabilities 73,948,419 Net Assets 1,346,083,581 ----------------------------------------------------------------- - ------------- Composition of Net Assets: Paid-in capital 1,650,580,350 Overdistributed net investment income (12,456,208) Accumulated net realized loss (350,107,099) Net unrealized appreciation (depreciation) on: Investments 58,689,031 Foreign currency translations (622,493) Net Assets 1,346,083,581 ----------------------------------------------------------------- - ------------- Class A: Net assets 592,443,083 Shares outstanding 95,940,220 Net asset value per share 6.18(a) Maximum offering price per share ($6.18/0.9525) 6.49(b) ----------------------------------------------------------------- - ------------- Class B: Net assets 460,096,033 Shares outstanding 74,553,005 Net asset value and offering price per share 6.17(a) ----------------------------------------------------------------- - ------------- Class C: Net assets 43,749,199 Shares outstanding 7,084,237 Net asset value and offering price per share 6.18(a) ----------------------------------------------------------------- - ------------- Class J: Net assets 249,082,727 Shares outstanding 40,407,589 Net asset value and redemption price per share 6.16(a) Maximum offering price per share ($6.16/0.9700) 6.35(b) ----------------------------------------------------------------- - ------------- Class Z: Net assets 712,539 Shares outstanding 116,252 Net asset value, offering and redemption price per share 6.13
(a)Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. (b)On sales of $50,000 or more the offering price is reduced. See notes to financial statements. 33 STATEMENT OF OPERATIONS ------------------------------ November 30, 2003 (unaudited) Columbia Strategic Income Fund
($) ------------------------------------------ ------------------------------------------------------------------- ---------- Investment Income: Dividends 296,974 Interest 48,150,877 Dollar roll fee income 312,225 ---------- Total Investment Income (net of foreign taxes withheld of $20,039) 48,760,076 ------------------------------------------------------------------- ---------- Expenses: Investment advisory fee 4,303,447 Distribution fee: Class B 1,756,589 Class C 164,899 Class J 438,317 Service fee: Class A 700,370 Class B 558,265 Class C 52,367 Class J 298,953 Transfer agent fee 1,823,599 Pricing and bookkeeping fees 218,580 Trustees' fees 21,685 Custody fee 164,264 Other expenses 125,526 ---------- Total Expenses 10,626,861 Fees waived by Distributor - Class C (32,961) Custody earnings credit (3,181) ---------- Net Expenses 10,590,719 ---------- Net Investment Income 38,169,357 ------------------------------------------------------------------- ---------- Net Realized and Unrealized Gain (Loss) on Net realized gain (loss) on: Investments and Foreign Currency: Investments 17,111,236 Foreign currency transactions (8,286,568) ---------- Net realized gain 8,824,668 Net change in unrealized appreciation/depreciation on: Investments 4,419,616 Foreign currency translations 5,910,219 Net change in unrealized appreciation/depreciation 10,329,835 ---------- Net Gain 19,154,503 ---------- Net Increase in Net Assets from Operations 57,323,860
See notes to financial statements. 34 STATEMENTS OF CHANGES IN NET ASSETS ------------------------------ Columbia Strategic Income Fund
(unaudited) Six Months Ended Period Ended November 30, 2003 May 31, Increase (Decrease) in Net Assets: ($) 2003 (a) ($) --------------------------------------- --------------------------------------------- ----------------- ------------- Operations: Net investment income 38,169,357 34,240,196 Net realized gain (loss) on investments and foreign currency transactions 8,824,668 13,443,603 Net change in unrealized appreciation/ depreciation on investments and foreign currency translations 10,329,835 92,604,312 ----------------- ------------- Net Increase from Operations 57,323,860 140,288,111 --------------------------------------------- ----------------- ------------- Distributions Declared to Shareholders: From net investment income: Class A (18,007,227) (15,184,183) Class B (12,542,043) (10,942,373) Class C (1,210,813) (1,015,241) Class J (7,284,782) (6,687,799) Class Z (22,247) (12,062) Return of capital: Class A -- -- Class B -- -- Class C -- -- Class J -- -- Class Z -- -- ----------------- ------------- Total Distributions Declared to Shareholders (39,067,112) (33,841,658) --------------------------------------------- ----------------- ------------- Share Transactions: Class A: Subscriptions 32,661,700 28,881,303 Distributions reinvested 9,361,276 7,792,998 Redemptions (52,886,922) (39,518,059) ----------------- ------------- Net Decrease (10,863,946) (2,843,758) --------------------------------------------- ----------------- ------------- Class B: Subscriptions 25,146,569 32,599,690 Distributions reinvested 6,808,839 5,920,067 Redemptions (62,595,898) (47,619,346) ----------------- ------------- Net Decrease (30,640,490) (9,099,589) --------------------------------------------- ----------------- ------------- Class C: Subscriptions 4,685,282 6,567,113 Distributions reinvested 644,176 547,933 Redemptions (7,750,622) (3,831,655) ----------------- ------------- Net Increase (Decrease) (2,421,164) 3,283,391 --------------------------------------------- ----------------- ------------- Class J: Subscriptions 2,020,961 4,260,615 Redemptions (14,370,252) (38,576,078) ----------------- ------------- Net Decrease (12,349,291) (34,315,463) --------------------------------------------- ----------------- ------------- Class Z: Subscriptions 308,159 1,247,878 Distributions reinvested 19,342 11,438 Redemptions (806,114) (108,415) ----------------- ------------- Net Increase (Decrease) (478,613) 1,150,901 --------------------------------------------- ----------------- ------------- Net Decrease from Share Transactions (56,753,504) (41,824,518) ----------------- ------------- Total Increase (Decrease) in Net Assets (38,496,756) 64,621,935 ----------------- ------------- Net Assets: Beginning of period 1,384,580,337 1,319,958,402 ----------------- ------------- End of period (overdistributed net investment income of $(12,456,208), $(11,558,453) and $(25,578,478), respectively) 1,346,083,581 1,384,580,337 ----------------- -------------
Year Ended December 31, 2002 ($) --------------------------------------------- ------------- Net investment income 87,534,488 Net realized gain (loss) on investments and foreign currency transactions (102,998,317) Net change in unrealized appreciation/ depreciation on investments and foreign currency translations 113,060,240 ------------- Net Increase from Operations 97,596,411 --------------------------------------------- ------------- From net investment income: Class A (42,003,370) Class B (32,234,724) Class C (2,719,136) Class J (20,199,908) Class Z (44,973) Return of capital: Class A (2,370,220) Class B (1,818,983) Class C (153,439) Class J (1,139,866) Class Z (2,538) ------------- Total Distributions Declared to Shareholders (102,687,157) --------------------------------------------- ------------- Class A: Subscriptions 76,999,338 Distributions reinvested 22,577,921 Redemptions (120,669,061) ------------- Net Decrease (21,091,802) --------------------------------------------- ------------- Class B: Subscriptions 66,402,147 Distributions reinvested 18,557,348 Redemptions (159,845,033) ------------- Net Decrease (74,885,538) --------------------------------------------- ------------- Class C: Subscriptions 10,711,255 Distributions reinvested 1,596,012 Redemptions (16,138,332) ------------- Net Increase (Decrease) (3,831,065) --------------------------------------------- ------------- Class J: Subscriptions 7,970,201 Redemptions (59,088,986) ------------- Net Decrease (51,118,785) --------------------------------------------- ------------- Class Z: Subscriptions 31,748 Distributions reinvested 47,503 Redemptions (1,932,379) ------------- Net Increase (Decrease) (1,853,128) --------------------------------------------- ------------- Net Decrease from Share Transactions (152,780,318) ------------- Total Increase (Decrease) in Net Assets (157,871,064) ------------- Beginning of period 1,477,829,466 ------------- End of period (overdistributed net investment income of $(12,456,208), $(11,558,453) and $(25,578,478), respectively) 1,319,958,402 -------------
(a)The Fund has changed its fiscal year end from December 31 to May 31. See notes to financial statements. 35 -------------------------------------------------------------------------------- Columbia Strategic Income Fund
(unaudited) Period Ended Year Ended Increase (Decrease) in Net Assets: Six Months Ended May 31, December 31, (continued) November 30, 2003 2003 (a) 2002 ---------------------------------- ------------------------------------ ----------------- ------------ ------------ Changes in Shares: Class A: Subscriptions 5,381,023 4,991,280 13,798,283 Issued for distributions reinvested 1,545,107 1,347,649 4,075,545 Redemptions (8,737,223) (6,828,570) (21,765,079) ----------------- ------------ ------------ Net Decrease (1,811,093) (489,641) (3,891,251) ------------------------------------ ----------------- ------------ ------------ Class B: Subscriptions 4,149,073 5,624,733 11,996,584 Issued for distributions reinvested 1,124,959 1,023,970 3,358,728 Redemptions (10,343,438) (8,229,830) (28,815,674) ----------------- ------------ ------------ Net Decrease (5,069,406) (1,581,127) (13,460,362) ------------------------------------ ----------------- ------------ ------------ Class C: Subscriptions 774,346 1,130,031 1,930,151 Issued for distributions reinvested 106,330 94,722 287,824 Redemptions (1,280,266) (658,217) (2,910,443) ----------------- ------------ ------------ Net Increase (Decrease) (399,590) 566,536 (692,468) ------------------------------------ ----------------- ------------ ------------ Class J: Subscriptions 331,541 724,787 1,438,451 Redemptions (2,370,080) (6,646,170) (10,581,690) ----------------- ------------ ------------ Net Decrease (2,038,539) (5,921,383) (9,143,239) ------------------------------------ ----------------- ------------ ------------ Class Z: Subscriptions 50,753 212,751 5,811 Issued for distributions reinvested 3,207 1,948 8,620 Redemptions (134,107) (18,781) (344,889) ----------------- ------------ ------------ Net Increase (Decrease) (80,147) 195,918 (330,458) ------------------------------------ ----------------- ------------ ------------
(a)The Fund has changed its fiscal year end from December 31 to May 31. See notes to financial statements. 36 NOTES TO FINANCIAL STATEMENTS ------------------------------ November 30, 2003 (unaudited) Columbia Strategic Income Fund
Note 1. Organization Columbia Strategic Income Fund (the "Fund"), a series of Columbia Funds Trust I (the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Investment Goal The Fund seeks high current income consistent with prudent risk. The Fund also seeks maximum total return. Fund Shares The Fund may issue an unlimited number of shares, and offers five classes of shares: Class A, Class B, Class C, Class J 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 4.75% based on the amount of initial investment. Class A shares purchased without an initial sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on shares sold within eighteen months on an original purchase of $1 million to $25 million. 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 J shares are subject to a 3% front-end sales charge and are available for purchase only by residents or citizens of Japan. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in the Fund's prospectus. Effective October 13, 2003, the Fund changed its name from Liberty Strategic Income Fund to Columbia Strategic Income Fund. 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 policies consistently followed by the Fund in the preparation of its financial statements. Security Valuation Debt securities generally are valued by a pricing service approved by the Trust's Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Certain securities, which tend to be more thinly traded and of lesser quality, are priced based on fundamental analysis of the financial condition of the issuer and the estimated value of any collateral. Valuations developed through pricing techniques may vary from the actual amounts realized upon sale of the securities, and the potential variation may be greater for those securities valued using fundamental analysis. Debt securities for which quotations are readily available are valued at an over-the-counter or exchange bid quotation. 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. Forward currency exchange contracts are valued at the prevailing forward exchange rate of the underlying currencies. Restricted securities and investments for which market quotations are not readily available, which tend to be more thinly traded and of lesser quality 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. Foreign markets close each day at various times prior to the close of the New York Stock Exchange ("NYSE"). Foreign 37 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
currency exchange rates are generally determined prior to the close of the NYSE at 12:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the value of a foreign security may occur subsequent to the close of the exchange or market which would not be reflected in the computation of the Fund's net asset value. In such an event, the foreign security will be valued at the fair value. Security Transactions Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. Forward Foreign Currency Exchange Contracts Forward foreign currency exchange contracts are agreements to exchange one currency for another at a future date at a specified price. These contracts are used to minimize the exposure to foreign exchange rate fluctuations during the period between trade and settlement date of the contracts. The Fund may utilize forward foreign currency exchange contracts in connection with the settlement of purchases and sales of securities. The Fund may also enter into these contracts to hedge certain other foreign currency denominated assets. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge the Fund's investments against currency fluctuations. Forward currency contracts are valued daily at the current exchange rate of the underlying currency, resulting in unrealized gains (losses) which become realized at the time the foreign currency contracts are closed or mature. Realized and unrealized gains (losses) arising from such transactions are included in net realized and unrealized gains (losses) on foreign currency transactions. The use of forward currency contracts does not eliminate fluctuations in the prices of the Fund's portfolio securities. While the maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened, exposure is typically limited to the change in value of the contract (in U.S. dollars) over the period it remains open. A fund could also be exposed to risk if the counterparties of the contracts are unable to fulfill the terms of the contracts. The Fund's custodian will set aside cash or liquid portfolio securities equal to the amount of the forward currency contract commitment in a separate account. Repurchase Agreements The Fund may engage in repurchase agreement transactions with institutions that the Fund's investment advisor has determined are creditworthy. The Fund, through its custodian, receives 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 received.) A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty, including possible delays or restrictions upon the 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 Fund seeks to assert its rights. Restricted Securities Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale at the issuer's expense either upon demand by the Fund or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees. The Fund will not incur any registration costs upon such resale. Mortgage Dollar Roll Transactions The Fund may enter into mortgage dollar roll transactions. A mortgage dollar roll transaction involves a sale by the Fund of securities that it holds with an agreement by the Fund to repurchase substantially similar securities at an agreed upon price and date. During the period between the sale and repurchase, the Fund will not be entitled to accrue interest and receive principal payment on the securities sold. Mortgage dollar roll transactions involve the risk that the market value of the securities sold by the Fund may decline below the repurchase price of those securities. In the event the buyer of the securities under a mortgage dollar roll transaction files for bankruptcy or becomes insolvent, the Fund's use of proceeds of the transaction may be restricted pending a determination by or with respect to the other party. The Fund maintains U.S. 38 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Government securities or other liquid high grade debt obligations as collateral with respect to mortgage dollar roll transactions. Delayed Delivery Securities The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a "when-issued" basis. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. The Fund's custodian will set aside cash or liquid portfolio securities equal to the amount of the delayed delivery commitment in a separate account. Income Recognition Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities. The value of additional securities received as an income payment is recorded as income and as the cost basis of such securities. Foreign Currency Transactions The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day's exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions includes gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes. The Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments. Determination of Class Net Asset Values All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class. Federal Income Tax Status The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and will distribute 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, the Fund will not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded. Distributions to Shareholders Dividends from net investment income are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income and capital gains dividends are determined in accordance with income tax regulations and 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 the 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. Unrealized appreciation (depreciation) at November 30, 2003, based on cost of investments for federal income tax purposes was: Unrealized appreciation $ 97,634,763 Unrealized depreciation (62,315,814) ------------ Net unrealized appreciation $ 35,318,949 -----------------------------------------
The following capital loss carryforwards are available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
Year of Capital Loss Expiration Carryforward ----------------------- 2007 $ 21,541,689 ----------------------- 2008 63,518,542 ----------------------- 2009 136,912,288 ----------------------- 2010 135,415,014 ----------------------- 2011 318,608 ------------ $357,706,141 -----------------------
39 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
Expired capital loss carryforwards are recorded as a reduction of paid-in capital. Note 4. Fees and Compensation Paid to Affiliates On April 1, 2003, Colonial Management Associates, Inc., the previous investment advisor to the Fund, 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 Fund's investment advisor. The merger did not change the way the Fund is managed, the investment personnel assigned to manage the Fund or the fees paid by the Fund. Investment Advisory Fee Columbia is the investment advisor to the Fund and provides administrative and other services. Columbia receives a monthly fee based on the Fund's average daily net assets at the following annual rates:
Average Daily Net Assets Fee Rate --------------------------------- First $1 billion 0.65% --------------------------------- Next $1 billion 0.60% --------------------------------- Over $2 billion 0.55% ---------------------------------
For the six months ended November 30, 2003, the Fund's annualized effective investment advisory fee rate was 0.64%. Pricing and Bookkeeping Fees Columbia is responsible for providing pricing and bookkeeping services to the 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 Fund, Columbia receives from the Fund an annual flat fee of $10,000 paid monthly, and in any month that the 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 the Fund for that month. The Fund also pays additional fees for pricing services. For the six months ended November 30, 2003, the annualized effective pricing and bookkeeping fee rate was 0.03%. Columbia pays the total fees collected to State Street under the Outsourcing Agreement. Transfer Agent Fee Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia, provides shareholder services for an annual fee of $34.00 per open account for transfer agent fees. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly transfer agent fee at the annual rate of 0.06% of the Fund's average daily net assets plus flat-rate charges based on the number of shareholder accounts and transactions, in addition to reimbursement for certain out-of-pocket expenses. For the six months ended November 30, 2003, the annualized effective transfer agent fee rate, exclusive of out-of-pocket expenses, was 0.19%. Effective October 13, 2003, Liberty Funds Services, Inc. changed it name to Columbia Funds Services, Inc. Underwriting Discounts, Service and Distribution Fees Effective October 13, 2003, Liberty Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia and the Fund's principal underwriter, changed its name to Columbia Funds Distributor, Inc. For the six months ended November 30, 2003, the Distributor retained net underwriting discounts of $26,432 on sales of the Fund's Class A shares and received CDSC of $36, $484,791 and $8,499 on Class A, Class B and Class C share redemptions, respectively. The Fund has adopted a 12b-1 plan (the "Plan") which requires the payment of a monthly service fee to the Distributor. The service fee is equal to 0.15% annually of the average daily net assets attributable to outstanding Class A and Class B shares issued prior to January 1, 1993 and 0.25% annually of the average daily net assets attributable to outstanding Class A, Class B, Class C and Class J shares issued thereafter. This arrangement results in a service fee between the 0.15% and 0.25% annual rates. For the six months ended November 30, 2003, the Fund's effective annualized service fee rate was 0.24%. 40 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
The Plan also requires the payment of a monthly distribution fee to the Distributor equal to 0.75% annually of the average daily net assets attributable to Class B and Class C shares and 0.35% annually of the average daily net assets attributable to Class J shares. The Distributor has voluntarily agreed to waive a portion of the Class C share distribution fee so that it will not exceed 0.60% annually. 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. Custody Credits The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement. Fees Paid to Officers and Trustees The Fund pays no compensation to its officers, all of whom are employees of Columbia or its affiliates. The Fund's Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Fund's assets. Note 5. Portfolio Information Purchases and Sales of Securities For the six months ended November 30, 2003, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were $356,482,110 and $424,428,573, respectively of which $8,591,938 and $91,156,932, respectively, were U.S. Government securities. Note 6. Line of Credit The Fund 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 the Fund based on its borrowings. In addition, the 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 Statement of Operations. For the six months ended November 30, 2003, the Fund did not borrow under these arrangements. Note 7. Disclosure of Significant Risks and Contingencies Industry focus The Fund may focus its investments in certain industries, subjecting it to greater risk than a fund that is more diversified. Foreign securities There are certain additional risks involved when investing in foreign securities that are not inherent with investments in domestic securities. These risks may involve foreign currency exchange rate fluctuations, adverse political and economic developments and the possible prevention of currency exchange or other foreign governmental laws or restrictions. In addition, the liquidity of foreign securities may be more limited than that of domestic securities. High-yield securities Investing in high-yield securities may involve greater credit risk and considerations not typically associated with investing in U.S. Government bonds and other higher quality fixed income securities. These securities are non-investment grade securities, often referred to as "junk bonds." Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high yield securities may be less liquid due to the extent that there is no established retail secondary market and because of a decline in the value of such securities. Legal Proceedings Columbia, the Distributor and certain of their affiliates (collectively, "the Columbia Group") have received information requests and subpoenas from various regulatory authorities, including the Securities and Exchange Commission ("SEC") and the New York Attorney General, in connection with their investigations of late trading and market timing in mutual funds. The Columbia Group has not uncovered any instances where Columbia or the Distributor was knowingly involved in late trading of mutual fund shares. The Columbia Group 41 has identified a limited number of investors who had informal arrangements for trading certain Columbia Fund shares between 1998 and 2003. A substantial majority of the trading had ended by October 2002. None of these arrangements exists today. Information relating to those trading arrangements has been supplied to various regulatory authorities. To the extent that any Columbia Fund, whose shares were involved in those trading activities, was harmed by them, the Columbia Group has undertaken to reimburse such Fund. The SEC staff has issued notices to the effect that it has made a preliminary determination to recommend that the SEC bring civil enforcement actions, including injunctive proceedings, against Columbia and the Distributor, alleging that they have violated certain provisions of the federal securities laws. The Columbia Group believes that those allegations are based principally on the trading arrangements referred to above. Columbia and the Distributor are engaged in discussions with the SEC staff in an effort to reach a satisfactory resolution of these matters. However, there can be no assurance that such a resolution will be reached. Any potential resolution of these matters may include, but not be limited to, sanctions, financial penalties, damages or injunctions regarding Columbia or the Distributor, and structural changes in the conduct of their business. Although the Columbia Group does not believe that these regulatory developments or their resolution will have a material adverse effect on the Columbia Funds, or on the ability of Columbia and the Distributor to provide services to the Columbia Funds, there can be no assurance that these matters or any adverse publicity or other developments resulting from them will not result in increased redemptions or reduced sales of Columbia Fund shares, which could increase transactions costs or operating expenses, or other consequences for the Columbia Funds. Note 8. Comparability of Financial Statements The Fund has changed its fiscal year end from December 31 to May 31. 42 -------------------------------------------------------------------------------- November 30, 2003 (unaudited) Columbia Strategic Income Fund
FINANCIAL HIGHLIGHTS ------------------------------ Columbia Strategic Income Fund
Selected data for a share outstanding throughout each period is as follows:
(unaudited) Six Months Period Ended Ended November 30, May 31, Year Ended December 31, Class A Shares 2003 2003 (a) 2002 2001 2000 -------------------------------- ----- ------------------------------------------------------- Net Asset Value, Beginning of Period $ 6.09 $ 5.63 $ 5.64 $ 6.00 $ 6.62 ------------------------------ ------------ - -------- - -------- - -------- - -------- - Income from Investment Operations: Net investment income 0.18 (b) 0.16 (b) 0.38 (b) 0.48(b)(c) 0.58 (d) Net realized and unrealized gain (loss) on investments and foreign currency 0.10 0.46 0.05 (0.30)(c) (0.62) ------------ -------- -------- -------- -------- Total from Investment Operations 0.28 0.62 0.43 0.18 (0.04) ------------------------------ ------------ - -------- - -------- - -------- - -------- - Less Distributions Declared to Shareholders: From net investment income (0.19) (0.16) (0.42) (0.50) (0.53) Return of capital -- -- (0.02) (0.04) (0.05) ------------ -------- -------- -------- -------- Total Distributions Declared to Shareholders (0.19) (0.16) (0.44) (0.54) (0.58) ------------------------------ ------------ - -------- - -------- - -------- - -------- - Net Asset Value, End of Period $ 6.18 $ 6.09 $ 5.63 $ 5.64 $ 6.00 Total return (f) 4.63%(g) 11.10%(g) 7.97% 3.07% (0.68)% ------------------------------ ------------ - -------- - -------- - -------- - -------- - Ratios to Average Net Assets/Supplemental Data: Expenses (h) 1.22%(i) 1.27%(i) 1.23% 1.21% 1.17% Net investment income (h) 5.98%(i) 6.52%(i) 6.75% 8.22%(c) 9.12% Portfolio turnover rate 26%(g) 59%(g) 62% 106% 35% Net assets, end of period (000's) $592,443 $595,223 $552,737 $575,791 $536,481 ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Class A Shares 1999 1998 ------------------------------------------------------------ Net Asset Value, Beginning of Period $ 7.11 $ 7.32 ------------------------------ -------- - -------- Income from Investment Operations: Net investment income 0.57 (d) 0.56 Net realized and unrealized gain (loss) on investments and foreign currency (0.48) (0.19) -------- -------- Total from Investment Operations 0.09 0.37 ------------------------------ -------- - -------- Less Distributions Declared to Shareholders: From net investment income (0.58)(e) (0.58)(e) Return of capital -- -- -------- -------- Total Distributions Declared to Shareholders (0.58) (0.58) ------------------------------ -------- - -------- Net Asset Value, End of Period $ 6.62 $ 7.11 Total return (f) 1.28% 5.17% ------------------------------ -------- - -------- Ratios to Average Net Assets/Supplemental Data: Expenses (h) 1.19% 1.15% Net investment income (h) 8.30% 7.88% Portfolio turnover rate 44% 64% Net assets, end of period (000's) $669,795 $787,461 ------------------------------ -------- - --------
(a)The Fund has changed its fiscal year end from December 31 to May 31. (b)Per share data was calculated using average shares outstanding during the period. (c)Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001 was to decrease the net investment income per share by $0.02, increase the net realized and unrealized loss per share by $0.02 and decrease the ratio of net investment income to average net assets from 8.60% to 8.22%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (d)The per share net investment income amount does not reflect the period's reclassification of differences between book and tax basis net investment income. (e)Distributions from income include currency gains and gains on securities treated as ordinary income for tax purposes. (f)Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (g)Not annualized. (h)The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i)Annualized. 43 -------------------------------------------------------------------------------- Columbia Strategic Income Fund Selected data for a share outstanding throughout each period is as follows:
(unaudited) Six Months Period Ended Ended November 30, May 31, Year Ended December 31, Class B Shares 2003 2003(a) 2002 2001 2000 ---------------------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 6.09 $ 5.62 $ 5.63 $ 6.00 $ 6.62 ------------------------------ ------------ - -------- - -------- - -------- - -------- - Income from Investment Operations: Net investment income 0.16 (b) 0.14 (b) 0.34 (b) 0.44(b)(c) 0.53 (d) Net realized and unrealized gain (loss) on investments and foreign currency 0.08 0.47 0.04 (0.32)(c) (0.62) ------------ -------- -------- -------- -------- Total from Investment Operations 0.24 0.61 0.38 0.12 (0.09) ------------------------------ ------------ - -------- - -------- - -------- - -------- - Less Distributions Declared to Shareholders: From net investment income (0.16) (0.14) (0.37) (0.45) (0.48) Return of capital -- -- (0.02) (0.04) (0.05) ------------ -------- -------- -------- -------- Total Distributions Declared to Shareholders (0.16) (0.14) (0.39) (0.49) (0.53) ------------------------------ ------------ - -------- - -------- - -------- - -------- - Net Asset Value, End of Period $ 6.17 $ 6.09 $ 5.62 $ 5.63 $ 6.00 Total return (f) 4.07%(g) 10.95%(g) 7.17% 2.12% (1.41)% ------------------------------ ------------ - -------- - -------- - -------- - -------- - Ratios to Average Net Assets/Supplemental Data: Expenses (h) 1.97%(i) 2.02%(i) 1.98% 1.96% 1.92% Net investment income (h) 5.23%(i) 5.77%(i) 6.00% 7.47%(c) 8.37% Portfolio turnover rate 26%(g) 59%(g) 62% 106% 35% Net assets, end of period (000's) $460,096 $484,540 $456,563 $533,406 $693,733 ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Class B Shares 1999 1998 ------------------------------------------------------------ Net Asset Value, Beginning of Period $ 7.11 $ 7.32 ------------------------------ -------- - -------- Income from Investment Operations: Net investment income 0.51 (d) 0.51 Net realized and unrealized gain (loss) on investments and foreign currency (0.48) (0.20) -------- -------- Total from Investment Operations 0.03 0.31 ------------------------------ -------- - -------- Less Distributions Declared to Shareholders: From net investment income (0.52)(e) (0.52)(e) Return of capital -- -- -------- -------- Total Distributions Declared to Shareholders (0.52) (0.52) ------------------------------ -------- - -------- Net Asset Value, End of Period $ 6.62 $ 7.11 Total return (f) 0.52% 4.38% ------------------------------ -------- - -------- Ratios to Average Net Assets/Supplemental Data: Expenses (h) 1.94% 1.90% Net investment income (h) 7.55% 7.13% Portfolio turnover rate 44% 64% Net assets, end of period (000's) $914,145 $919,740 ------------------------------ -------- - --------
(a)The Fund has changed its fiscal year end from December 31 to May 31. (b)Per share data was calculated using average shares outstanding during the period. (c)Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001 was to decrease the net investment income per share by $0.02, increase the net realized and unrealized loss per share by $0.02 and decrease the ratio of net investment income to average net assets from 7.85% to 7.47%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (d)The per share net investment income amount does not reflect the period's reclassification of differences between book and tax basis net investment income. (e)Distributions from income include currency gains and gains on securities treated as ordinary income for tax purposes. (f)Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (g)Not annualized. (h)The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i)Annualized. 44 -------------------------------------------------------------------------------- Columbia Strategic Income Fund Selected data for a share outstanding throughout each period is as follows:
(unaudited) Six Months Period Ended Ended November 30, May 31, Year Ended December 31, Class C Shares 2003 2003(a) 2002 2001 2000 -------------------------------- ----- -------------------------------------------------------- Net Asset Value, Beginning of Period $ 6.09 $ 5.63 $ 5.64 $ 6.00 $ 6.62 ------------------------------ ------------ - ------- - ------- - ------- - ------- - Income from Investment Operations: Net investment income 0.16(b) 0.14(b) 0.35(b) 0.45(b)(c) 0.54(d)(e) Net realized and unrealized gain (loss) on investments and foreign currency 0.10 0.46 0.04 (0.31)(c) (0.62) ------------ ------- ------- ------- ------- Total from Investment Operations 0.26 0.60 0.39 0.14 (0.08) ------------------------------ ------------ - ------- - ------- - ------- - ------- - Less Distributions Declared to Shareholders: From net investment income (0.17) (0.14) (0.38) (0.46) (0.49) Return of capital -- -- (0.02) (0.04) (0.05) ------------ ------- ------- ------- ------- Total Distributions Declared to Shareholders (0.17) (0.14) (0.40) (0.50) (0.54) ------------------------------ ------------ - ------- - ------- - ------- - ------- - Net Asset Value, End of Period $ 6.18 $ 6.09 $ 5.63 $ 5.64 $ 6.00 Total return (g) 4.32%(h)(i) 10.82%(h)(i) 7.32%(h) 2.45% (1.26)%(h) ------------------------------ ------------ - ------- - ------- - ------- - ------- - Ratios to Average Net Assets/Supplemental Data: Expenses (j) 1.82%(k) 1.87%(k) 1.83% 1.81% 1.77%(d) Net investment income (j) 5.38%(k) 5.92%(k) 6.15% 7.62%(c) 8.52%(d) Waiver/reimbursement 0.15%(k) 0.15%(k) 0.15% -- 0.15% Portfolio turnover rate 26%(i) 59%(i) 62% 106% 35% Net assets, end of period (000's) $43,749 $45,572 $38,923 $42,906 $43,538
Class C Shares 1999 1998 ------------------------------------------------------------ Net Asset Value, Beginning of Period $ 7.11 $ 7.32 ------------------------------ ------- - ------- Income from Investment Operations: Net investment income 0.52(d)(e) 0.52(d) Net realized and unrealized gain (loss) on investments and foreign currency (0.48) (0.20) ------- ------- Total from Investment Operations 0.04 0.32 ------------------------------ ------- - ------- Less Distributions Declared to Shareholders: From net investment income (0.53)(f) (0.53)(f) Return of capital -- -- ------- ------- Total Distributions Declared to Shareholders (0.53) (0.53) ------------------------------ ------- - ------- Net Asset Value, End of Period $ 6.62 $ 7.11 Total return (g) 0.67%(h) 4.54%(h) ------------------------------ ------- - ------- Ratios to Average Net Assets/Supplemental Data: Expenses (j) 1.79%(d) 1.75%(d) Net investment income (j) 7.70%(d) 7.28%(d) Waiver/reimbursement 0.15% 0.15% Portfolio turnover rate 44% 64% Net assets, end of period (000's) $57,246 $36,918
(a)The Fund has changed its fiscal year end from December 31 to May 31. (b)Per share data was calculated using average shares outstanding during the period. (c)Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001 was to decrease the net investment income per share by $0.02, increase the net realized and unrealized loss per share by $0.02 and decrease the ratio of net investment income to average net assets from 8.00% to 7.62%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (d)Net of fees waived by the Distributor which amounted to $0.02, $0.01 and $0.01 per share and 0.15%, 0.15% and 0.15% for the periods ended December 31, 2000, 1999 and 1998, respectively. (e)The per share net investment income amount does not reflect the period's reclassification of differences between book and tax basis net investment income. (f)Distributions from income include currency gains and gains on securities treated as ordinary income for tax purposes. (g)Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (h)Had the Distributor not waived a portion of expenses, total return would have been reduced. (i)Not annualized. (j)The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (k)Annualized. 45 -------------------------------------------------------------------------------- Columbia Strategic Income Fund Selected data for a share outstanding throughout each period is as follows:
(unaudited) Six Months Period Ended Ended November 30, May 31, Year Ended December 31, Class J Shares 2003 2003(a) 2002 2001 2000 -------------------------------- - - - --------------------------------------------------- Net Asset Value, Beginning of Period $ 6.08 $ 5.62 $ 5.63 $ 6.00 $ 6.62 ------------------------------ ------------ - -------- - -------- - -------- - -------- - Income from Investment Operations: Net investment income 0.17 (c) 0.15 (c) 0.36 (c) 0.46(c)(d) 0.55 (e) Net realized and unrealized gain (loss) on investments and foreign currency 0.09 0.46 0.05 (0.31)(d) (0.62) ------------ -------- -------- -------- -------- Total from Investment Operations 0.26 0.61 0.41 0.15 (0.07) ------------------------------ ------------ - -------- - -------- - -------- - -------- - Less Distributions Declared to Shareholders: From net investment income (0.18) (0.15) (0.40) (0.48) (0.50) Return of capital -- -- (0.02) (0.04) (0.05) ------------ -------- -------- -------- -------- Total Distributions Declared to Shareholders (0.18) (0.15) (0.42) (0.52) (0.55) ------------------------------ ------------ - -------- - -------- - -------- - -------- - Net Asset Value, End of Period $ 6.16 $ 6.08 $ 5.62 $ 5.63 $ 6.00 Total return(h) 4.31%(i) 10.97%(i) 7.61% 2.56% (1.02)% ------------------------------ ------------ - -------- - -------- - -------- - -------- - Ratios to Average Net Assets/Supplemental Data: Expenses (j) 1.57%(k) 1.62%(k) 1.58% 1.56% 1.52% Net investment income (j) 5.63%(k) 6.17%(k) 6.40% 7.87%(d) 8.77% Portfolio turnover rate 26%(i) 59%(i) 62% 106% 35% Net assets, end of period (000's) $249,083 $258,057 $271,733 $323,866 $508,079 ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Class J Shares 1999 1998(b) ------------------------------------------------------------ Net Asset Value, Beginning of Period $ 7.10 $ 7.00 ------------------------------ -------- - -------- Income from Investment Operations: Net investment income 0.54 (e) 0.08 Net realized and unrealized gain (loss) on investments and foreign currency (0.47) 0.11 (f) -------- -------- Total from Investment Operations 0.07 0.19 ------------------------------ -------- - -------- Less Distributions Declared to Shareholders: From net investment income (0.55)(g) (0.09)(g) Return of capital -- -- -------- -------- Total Distributions Declared to Shareholders (0.55) (0.09) ------------------------------ -------- - -------- Net Asset Value, End of Period $ 6.62 $ 7.10 Total return(h) 1.07% 2.74%(i) ------------------------------ -------- - -------- Ratios to Average Net Assets/Supplemental Data: Expenses (j) 1.54% 1.49%(k) Net investment income (j) 7.95% 7.76%(k) Portfolio turnover rate 44% 64% Net assets, end of period (000's) $568,311 $ 49,143 ------------------------------ -------- - --------
(a)The Fund has changed its fiscal year end from December 31 to May 31. (b)Class J shares were initially offered on November 2, 1998. Per share data and total return reflect activity from that date. (c)Per share data was calculated using average shares outstanding during the period. (d)Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001 was to decrease the net investment income per share by $0.02, increase the net realized and unrealized loss per share by $0.02 and decrease the ratio of net investment income to average net assets from 8.25% to 7.87%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (e)The per share net investment income amount does not reflect the period's reclassification of differences between book and tax basis net investment income. (f)The amount shown for a share outstanding does not correspond with the aggregate net gain on investments for the period due to the timing of sales and repurchases of Fund shares in relation to fluctuating market values of the investments of the Fund. (g)Distributions from income include currency gains and gains on securities treated as ordinary income for tax purposes. (h)Total return at net asset value assuming all distributions reinvested and no initial sales charge. (i)Not annualized. (j)The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (k)Annualized. 46 -------------------------------------------------------------------------------- Columbia Strategic Income Fund Selected data for a share outstanding throughout each period is as follows:
(unaudited) Six Months Period Ended Ended November 30, May 31, Year Ended December 31, Class Z Shares 2003 2003(a) 2002 2001 2000 --------------------------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 6.05 $ 5.59 $ 5.62 $ 5.99 $ 6.62 ------------------------------------ ------------ - -------- - -------- - -------- - -------- - Income from Investment Operations: Net investment income 0.19(c) 0.17(c) 0.39(c) 0.49(c)(d) 0.59(e) Net realized and unrealized gain (loss) on investments and foreign currency 0.08 0.45 0.03 (0.31)(d) (0.63) ------------ -------- -------- -------- -------- Total from Investment Operations 0.27 0.62 0.42 0.18 (0.04) ------------------------------------ ------------ - -------- - -------- - -------- - -------- - Less Distributions Declared to Shareholders: From net investment income (0.19) (0.16) (0.43) (0.51) (0.54) Return of capital -- -- (0.02) (0.04) (0.05) ------------ -------- -------- -------- -------- Total Distributions Declared to Shareholders (0.19) (0.16) (0.45) (0.55) (0.59) ------------------------------------ ------------ - -------- - -------- - -------- - -------- - Net Asset Value, End of Period $ 6.13 $ 6.05 $ 5.59 $ 5.62 $ 5.99 Total return (g) 4.62%(h) 11.29%(h) 7.87% 3.14% (0.59)% ------------------------------------ ------------ - -------- - -------- - -------- - -------- - Ratios to Average Net Assets/Supplemental Data: Expenses (i) 0.98%(j) 1.03%(j) 0.99% 0.98% 0.93% Net investment income (i) 6.23%(j) 6.76%(j) 6.99% 8.45%(d) 9.36% Portfolio turnover rate 26%(h) 59%(h) 62% 106% 35% Net assets, end of period (000's) $ 713 $ 1,188 $ 3 $ 1,860 $ 1 ------------------------------------ ------------ - -------- - -------- - -------- - -------- -
Class Z Shares 1999(b) ------------------------------------------------- Net Asset Value, Beginning of Period $ 7.10 ------------------------------------ -------- Income from Investment Operations: Net investment income 0.53(e) Net realized and unrealized gain (loss) on investments and foreign currency (0.47) -------- Total from Investment Operations 0.06 ------------------------------------ -------- Less Distributions Declared to Shareholders: From net investment income (0.54)(f) Return of capital -- -------- Total Distributions Declared to Shareholders (0.54) ------------------------------------ -------- Net Asset Value, End of Period $ 6.62 Total return (g) 1.50%(h) ------------------------------------ -------- Ratios to Average Net Assets/Supplemental Data: Expenses (i) 0.95%(j) Net investment income (i) 8.54%(j) Portfolio turnover rate 44% Net assets, end of period (000's) $ 4,928 ------------------------------------ --------
(a)The Fund has changed its fiscal year end from December 31 to May 31. (b)Class Z shares were initially offered on January 29, 1999. Per share data and total return reflect activity from that date. (c)Per share data was calculated using average shares outstanding during the period. (d)Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001 was to decrease the net investment income per share by $0.02, increase the net realized and unrealized loss per share by $0.02 and decrease the ratio of net investment income to average net assets from 8.84% to 8.45%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (e)The per share net investment income amount does not reflect the period's reclassification of differences between book and tax basis net investment income. (f)Distributions from income include currency gains and gains on securities treated as ordinary income for tax purposes. (g)Total return at net asset value assuming all distributions reinvested. (h)Not annualized. (i)The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j)Annualized. 47 IMPORTANT INFORMATION ABOUT THIS REPORT ------------------------------ Columbia Strategic Income Fund
Transfer Agent Columbia Funds Services, Inc. P.O. Box 8081 Boston MA 02266-8081 800.345.6611 Distributor Columbia Funds Distributor, Inc. One Financial Center Boston MA 02111 Investment Advisor Columbia Management Advisors, Inc 100 Federal Street Boston MA 02111 Auditor PricewaterhouseCoopers LLP 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 Strategic Income Fund. This report may also be used as sales literature when preceded or accompanied by the current prospectus which provides details of sales charges, investment objectives and operating policies of the fund and with the most recent copy of the Columbia Funds Performance update. A description of the policies and procedures that the fund uses to determine how to vote proxies relating to its portfolio securities is available (i) without charge, upon request, by calling 800-345-6611 and (ii) on the Securities and Exchange Commission's website at http://www.sec.gov. 48 COLUMBIA FUNDS ------------------------------ Columbia Strategic Income Fund
--------------------- --------------------------------------------------------------------------- Large Growth Columbia Common Stock Columbia Growth Columbia Growth Stock Columbia Large Cap Growth Columbia Tax-Managed Growth Columbia Tax-Managed Growth II Columbia Young Investor --------------------------------------------------------------------------- Large Value Columbia Disciplined Value Columbia Growth & Income Columbia Large Cap Core Columbia Tax-Managed Value --------------------------------------------------------------------------- Midcap Growth Columbia Acorn Select Columbia Mid Cap Growth Columbia Tax-Managed Aggressive Growth --------------------------------------------------------------------------- Midcap Value Columbia Dividend Income Columbia Mid Cap Columbia Strategic Investor --------------------------------------------------------------------------- Small Growth Columbia Acorn Columbia Acorn USA Columbia Small Company Equity --------------------------------------------------------------------------- Small Value Columbia Small Cap Columbia Small-Cap Value --------------------------------------------------------------------------- Balanced Columbia Asset Allocation Columbia Balanced Columbia Liberty Fund --------------------------------------------------------------------------- Specialty Columbia Real Estate Equity Columbia Technology Columbia Utilities --------------------------------------------------------------------------- Taxable Fixed-Income Columbia Contrarian Income Columbia Corporate Bond Columbia Federal Securities Columbia Fixed Income Securities Columbia High Yield Columbia High Yield Opportunities Columbia Income Columbia Intermediate Bond Columbia Intermediate Government Income Columbia Quality Plus Bond Columbia Short Term Bond Columbia Strategic Income --------------------------------------------------------------------------- Floating Rate Columbia Floating Rate Columbia Floating Rate Advantage --------------------------------------------------------------------------- Tax Exempt Columbia High Yield Municipal Columbia Intermediate Tax-Exempt Bond Columbia Managed Municipals Columbia National Municipal Bond Columbia Tax-Exempt Columbia Tax-Exempt Insured
49 -------------------------------------------------------------------------------- Columbia Strategic Income Fund ------------------------ --------------------------------------------------------------------------- Single State Tax Exempt Columbia California Tax-ExemptColumbia Connecticut Intermediate Municipal Bond Columbia Connecticut Tax-Exempt Columbia Florida Intermediate Municipal Bond Columbia Massachusetts Intermediate Municipal Bond Columbia Massachusetts Tax-Exempt Columbia New Jersey Intermediate Municipal Bond Columbia New York Intermediate Municipal Bond Columbia New York Tax-Exempt Columbia Oregon Municipal Bond Columbia Pennsylvania Intermediate Municipal Bond Columbia Rhode Island Intermediate Municipal Bond --------------------------------------------------------------------------- Money Market Columbia Money Market Columbia Municipal Money Market --------------------------------------------------------------------------- International/Global Columbia Acorn International Columbia Acorn International Select Columbia Europe Columbia Global Equity Columbia International Stock Columbia Newport Asia Pacific Columbia Newport Greater China Columbia Newport Japan Opportunities* Columbia Newport Tiger --------------------------------------------------------------------------- Index Funds Columbia Large Company Index Columbia Small Company Index Columbia U.S. Treasury Index
Columbia funds are offered only by prospectus. Please see your financial advisor for a prospectus, which describes in detail fund objectives, investment policies, risks, sales charges, fees, liquidity and other matters of interest. Please read the prospectus carefully before you invest or send money. *Asof October 17, 2003, this fund is closed to new investors. It is scheduled for liquidation on December 5, 2003. For complete product information on any Columbia fund, visit our website at www.columbiafunds.com. Columbia Management Group and Columbia Management refer collectively to the various investment advisory subsidiaries of Columbia Management Group, including Columbia Management Advisors, Inc., the registered investment advisor, and to Columbia Funds Distributor, Inc. 50 [LOGO] eDelivery Help your fund reduce printing and postage costs! Elect to get your shareholder reports by electronic delivery. With Columbia's eDelivery program, you receive an e-mail message when your shareholder report becomes available online. If your fund account is registered with Columbia Funds, you can sign up quickly and easily on our website at www.columbiafunds.com. Please note -- if you own your fund shares through a financial institution, contact the institution to see if it offers electronic delivery. If you own your fund shares through a retirement plan, electronic delivery may not be available to you. Columbia Strategic Income Fund Semiannual Report, November 30, 2003 [LOGO] (R) ColumbiaFunds [US POSTAGE STAMP] A Member of Columbia Management Group (c)2003 Columbia Funds Distributor, Inc. One Financial Center, Boston, MA 02111-2621 800.345.6611 WWW.columbiafunds.com [photo of woman in park] COLUMBIA HIGH YIELD OPPORTUNITY FUND Semiannual Report November 30, 2003 WE ARE COLUMBIA FUNDS! INSIDE - Management's discussion of the changes effective October 13, 2003 PRESIDENT'S MESSAGE Columbia High Yield Opportunity Fund [photo of Joseph R. Palombo] DEAR SHAREHOLDER: As you know, your fund has long been part of a larger investment management organization. In the 1990s, 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 and modifying certain fund names that existed under both the Liberty and Columbia brands. For example, Liberty High Yield Securities Fund was changed to Columbia High Yield Opportunity 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, portfolio managers Thomas A. LaPointe and Kevin L. Cronk 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 investing in Columbia funds, and we look forward to continuing to serve your investment needs in the years ahead. Sincerely, /s/ Joseph R. Palombo Joseph R. Palombo President Table of Contents Fund Profile ..................................................................1 Performance Information .......................................................2 Economic Update ...............................................................3 Portfolio Managers' Report ....................................................4 Financial Statements ..........................................................6 Investment Portfolio .......................................................7 Statement of Assets and Liabilities .......................................26 Statement of Operations ...................................................27 Statements of Changes in Net Assets .......................................28 Notes to Financial Statements .............................................30 Financial Highlights ......................................................35 Trustees .....................................................................39 Officers .....................................................................42 Important Information About This Report ......................................43 Columbia Funds ...............................................................44 Economic and market conditions change frequently. There is no assurance that the trends described in this report will continue or commence. NOT FDIC INSURED MAY LOSS VALUE NO BANK GUARANTEE FUND PROFILE Columbia High Yield Opportunity Fund The information below gives you a snapshot of your fund at the end of the reporting period. Because your fund is actively managed, there is no guarantee that these breakdowns and percentages will be maintained in the future. Quality breakdown as of 11/30/03 (%) AAA 0.5 -------------------------------------- BBB 0.3 -------------------------------------- BB 16.2 -------------------------------------- B 55.6 -------------------------------------- CCC 17.0 -------------------------------------- CC 5.4 -------------------------------------- D 0.6 -------------------------------------- Non-rated 4.4 -------------------------------------- Portfolio structure as of 11/30/03 (%) Corporate bonds 93.0 -------------------------------------- Preferred stocks 2.3 -------------------------------------- Common stocks 1.4 -------------------------------------- Convertible bonds 1.2 -------------------------------------- Repurchase agreement 0.5 -------------------------------------- Warrants 0.2 -------------------------------------- Top 10 issuers as of 11/30/03 (%) Charter Communications 1.5 -------------------------------------- Huntsman ICI Holdings 1.5 -------------------------------------- CSC Holdings 1.2 -------------------------------------- Nextel Communications 1.2 -------------------------------------- Qwest Capital Funding 1.2 -------------------------------------- Williams Companies 1.0 -------------------------------------- Pinnacle Entertainment 0.9 -------------------------------------- Amscan Holdings 0.9 -------------------------------------- Allied Waste North America 0.9 -------------------------------------- AES 0.9 -------------------------------------- Maturity breakdown as of 11/30/03 (%) [bar chart data] 0-3 years 2.5 3-5 years 16.1 5-7 years 31.4 7-10 years 44.5 10-15 years 4.2 20-30 years 0.8 Repurchase agreement 0.5 Quality breakdown is calculated as a percentage of total investments. Ratings shown in the quality breakdown represent the highest rating assigned to a particular bond by one of the following nationally recognized rating agencies: Standard & Poor's Corporation, Moody's Investors Service, Inc. or Fitch Investors Service, Inc. Maturity breakdown is based on each security's effective maturity, which reflects pre-refundings, mandatory puts and other conditions that affect a bond's maturity. Maturity breakdown is calculated as a percentage of investments. Portfolio structure and top 10 issuers are calculated as a percentage of net assets. (C) 2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity funds the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend or growth). For fixed-income funds the vertical axis shows the average credit quality of the bonds owned, and the horizontal axis shows interest rate sensitivity as measured by a bond's duration (short, intermediate or long). All of these numbers are drawn from the data most recently provided by the fund and entered into Morningstar's database as of month-end. Although the data are gathered from reliable sources, Morningstar cannot guarantee completeness and accuracy. As of 11/30/2003. SUMMARY . FOR THE SIX-MONTH PERIOD ENDED NOVEMBER 30, 2003, THE FUND'S CLASS A SHARES (WITHOUT SALES CHARGE) RETURNED 10.43%. . THE FUND'S RETURN WAS BETTER THAN BOTH ITS BENCHMARKS AND THE AVERAGE RETURN OF ITS PEER GROUP, THE LIPPER HIGH CURRENT YIELD FUNDS CATEGORY. . OUR DECISION TO ADD TO LOWER-RATED HIGH-YIELD BONDS BENEFITED PERFORMANCE, BECAUSE THESE SECURITIES EARNED THE STRONGEST RETURNS WITHIN THE HIGH-YIELD SECTOR DURING THE PERIOD. OBJECTIVE Seeks high current income and total return TOTAL NET ASSETS $776.7 million CS First Boston Class A shares High Yield Index 10.43% 9.70% [Maturity/Quality chart :: Intermediate Maturity/Low Quality] 1 PERFORMANCE INFORMATION Columbia High Yield Opportunity Fund Value of a $10,000 investment 12/01/93 - 11/30/03 [mountain chart data] JP Morgan CS First Class A Class A Global High Boston High shares with shares without Yield Index Yield Index sales charge sales charge 12/1993 $ 10000.00 $ 10000.00 $ 10000.00 $ 9525.00 10120.00 10126.00 10123.00 9642.00 10327.50 10306.00 10378.00 9885.00 10292.40 10322.00 10381.00 9888.00 9939.32 10018.00 10148.00 9666.00 9829.99 9884.00 9986.00 9512.00 9887.00 9940.00 10034.00 9558.00 9848.44 9874.00 10082.00 9603.00 9863.21 9920.00 10085.00 9606.00 9902.67 9992.00 10088.00 9609.00 9901.68 10032.00 10107.00 9627.00 9916.53 10039.00 10094.00 9615.00 9825.30 9922.00 10004.00 9528.00 10120.10 10027.00 10087.00 9608.00 10249.60 10133.00 10185.00 9702.00 10614.50 10382.00 10447.00 9951.00 10721.70 10499.00 10515.00 10016.00 10998.30 10732.00 10764.00 10253.00 11311.80 11035.00 10999.00 10477.00 11357.00 11108.00 11052.00 10527.00 11534.20 11280.00 11239.00 10705.00 11579.10 11311.00 11258.00 10723.00 11717.00 11442.00 11430.00 10887.00 11825.90 11569.00 11569.00 11020.00 11902.80 11623.00 11640.00 11087.00 12095.60 11771.00 11867.00 11303.00 12325.40 11994.00 12078.00 11504.00 12399.40 12058.00 12184.00 11606.00 12358.50 12025.00 12077.00 11504.00 12435.10 12090.00 12150.00 11573.00 12529.60 12188.00 12241.00 11659.00 12583.50 12215.00 12241.00 11659.00 12667.80 12325.00 12314.00 11729.00 12855.30 12459.00 12536.00 11940.00 13159.90 12673.00 12872.00 12260.00 13281.00 12780.00 12872.00 12260.00 13525.40 12979.00 13118.00 12495.00 13670.10 13232.00 13318.00 12686.00 13778.10 13329.00 13434.00 12796.00 14015.10 13580.00 13725.00 13073.00 13786.60 13427.00 13451.00 12812.00 13916.20 13547.00 13589.00 12943.00 14237.70 13819.00 13926.00 13264.00 14425.60 14007.00 14146.00 13474.00 14809.30 14304.00 14487.00 13798.00 14818.20 14381.00 14527.00 13837.00 15113.10 14666.00 14873.00 14166.00 15092.00 14665.00 14873.00 14166.00 15227.80 14769.00 14996.00 14284.00 15364.80 14903.00 15166.00 14445.00 15603.00 15157.00 15480.00 14744.00 15723.10 15275.00 15565.00 14825.00 15881.90 15351.00 15756.00 15008.00 15961.30 15466.00 15799.00 15048.00 15983.70 15513.00 15821.00 15069.00 16017.20 15545.00 15886.00 15131.00 16151.80 15654.00 16078.00 15314.00 15105.20 14591.00 15018.00 14305.00 15090.00 14590.00 14889.00 14182.00 14765.60 14299.00 14630.00 13935.00 15579.20 15024.00 15591.00 14851.00 15515.30 14990.00 15493.00 14757.00 15701.50 15131.00 15750.00 15002.00 15621.40 15099.00 15769.00 15020.00 15813.60 15236.00 16082.00 15318.00 16215.20 15573.00 16361.00 15584.00 13361.40 15405.00 16055.00 15293.00 15984.20 15413.00 16149.00 15381.00 15989.00 15420.00 16199.00 15429.00 15829.10 15283.00 16126.00 15360.00 15715.10 15165.00 16050.00 15288.00 15628.70 15091.00 16077.00 15314.00 15883.40 15296.00 16347.00 15571.00 16039.10 15481.00 16450.00 15669.00 15978.10 15419.00 16268.00 15495.00 16042.10 15515.00 16515.00 15730.00 15769.40 15282.00 16264.00 15491.00 15766.20 15259.00 16158.00 15391.00 15542.30 15015.00 15850.00 15097.00 15848.50 15352.00 15978.00 15219.00 15988.00 15496.00 16139.00 15373.00 16111.10 15600.00 16299.00 15525.00 15900.00 15456.00 16027.00 15266.00 15434.10 14975.00 15327.00 14599.00 14844.60 14385.00 14447.00 13761.00 15105.80 14675.00 14755.00 14054.00 16021.20 15555.00 15919.00 15163.00 16207.10 15712.00 15965.00 15206.00 15889.40 15399.00 15350.00 14621.00 15722.60 15239.00 14991.00 14279.00 16030.80 15544.00 15129.00 14410.00 15753.40 15303.00 14475.00 13788.00 15912.50 15467.00 14464.00 13777.00 16119.40 15683.00 14571.00 13879.00 15055.50 14695.00 13402.00 12766.00 15430.40 15030.00 13886.00 13226.00 15955.00 15516.00 14375.00 13692.00 15934.30 15525.00 14345.00 13663.00 16050.60 15670.00 14494.00 13805.00 15930.20 15558.00 14237.00 13561.00 16290.20 15915.00 14484.00 13796.00 16537.90 16168.00 14605.00 13911.00 16481.60 16111.00 14407.00 13722.00 15888.30 15550.00 13688.00 13038.00 15446.60 15106.00 13309.00 12676.00 15588.70 15302.00 13355.00 12721.00 15406.30 15114.00 13235.00 12606.00 15295.40 15022.00 13097.00 12475.00 16087.70 15816.00 13634.00 12987.00 16274.30 16009.00 13732.00 13080.00 16697.50 16445.00 14003.00 13338.00 16941.20 16688.00 14172.00 13499.00 17349.50 17115.00 14447.00 13761.00 18210.00 17990.00 15178.00 14457.00 18463.20 18251.00 15245.00 14521.00 19002.30 18784.00 15667.00 14923.00 18882.60 18632.00 15556.00 14817.00 19069.50 18840.00 15696.00 14951.00 19597.70 19355.00 16162.00 15395.00 19962.30 19749.00 16486.00 15703.00 11/2003 20233.00 20018.00 16828.00 16028.00 The above illustration assumes a $10,000 investment made on December 1, 1993, and reinvestment of income and capital gains distributions. The CS First Boston High Yield Index is a broad-based, unmanaged index that tracks the performance of high-yield bonds. The JP Morgan Global High Yield Index is designed to mirror the investable universe of the US dollar global high-yield corporate debt market, including domestic and international issues. 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. Average annual total return as of 11/30/03 (%) Share class A B C Z ----------------------------------------------------------------------------- Inception 10/21/71 6/8/92 1/15/96 1/8/99 ----------------------------------------------------------------------------- Sales charge without with without with without with without ----------------------------------------------------------------------------- 6-month (cumulative) 10.43 5.18 10.02 5.02 10.11 9.11 10.56 ----------------------------------------------------------------------------- 1-year 23.47 17.61 22.57 17.57 22.75 21.75 23.77 ----------------------------------------------------------------------------- 5-year 1.54 0.56 0.80 0.54 0.95 0.95 1.79 ----------------------------------------------------------------------------- 10-year 5.34 4.83 4.55 4.55 4.82 4.82 5.47 ----------------------------------------------------------------------------- Average annual total return as of 09/30/03 (%) Share class A B C Z ----------------------------------------------------------------------------- Sales charge without with without with without with without ----------------------------------------------------------------------------- 6-month (cumulative) 11.88 6.56 11.47 6.47 11.55 10.55 12.02 ----------------------------------------------------------------------------- 1-year 22.12 16.32 21.23 16.23 21.40 20.40 22.42 ----------------------------------------------------------------------------- 5-year 1.65 0.67 0.89 0.63 1.04 1.04 1.89 ----------------------------------------------------------------------------- 10-year 5.31 4.80 4.52 4.52 4.80 4.80 5.44 ----------------------------------------------------------------------------- All results shown assume reinvestment of distributions. The graph and table 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 4.75% charge for class A shares, the appropriate class B contingent deferred sales charge for the holding period after purchase as follows: through first year - 5%, second year - 4%, third year - 3%, fourth year - 3%, fifth year - 2%, sixth year - 1%, thereafter - 0%, and the class C contingent deferred sales charge of 1% for the first year only. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Performance for different share classes will vary based on differences in sales charges and fees associated with each class. Classes C and Z share (newer class shares) performance information includes returns of the fund's class A shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The class A share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class A shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of class C shares would have been lower, and class Z shares would have been higher. Performance of a $10,000 investment 12/01/93 - 11/30/03 ($) sales charge without with Class A 16,828 16,028 Class B 15,610 15,610 Class C 16,015 16,015 Class Z 17,034 n/a Past performance does not guarantee future investment results. Current performance may be lower or higher than the performance data shown. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. 2 ECONOMIC UPDATE Columbia High Yield Opportunity Fund After struggling for two years to maintain solid, forward movement, the US economy steamed ahead during the six-month period that ended November 30, 2003. The Fed's efforts to stimulate the economy through low short-term interest rates were finally rewarded, but the significant upswing in growth was the result of a combination of factors. A sizable tax package gave disposable income a boost. Income taxes fell across all tax brackets, and many taxpayers received rebate checks during the summer months. Corporate profits rose sharply, and orders for durable goods exceeded expectations late in the period. Consumer confidence continued to climb, although not without an occasional setback. Generally speaking, consumer spending increased and the outlook for holiday spending was strong. Economists began to grow optimistic that growth for the third quarter of 2003 would reflect this renewed vigor, but no one seemed prepared for how extraordinary that growth might be. When gross domestic product (GDP) for the third quarter was reported at 7.2%, then revised upward to 8.2%, it was clear that the economy was firing on all cylinders. The business sector had finally kicked into gear. Industrial production rose in the second half of 2003 and business spending--especially on technology-related items--showed strength. Even the jobs picture brightened by the end of November. After unemployment peaked at 6.4% earlier in the year, it declined to 5.9%. The US stock market, which had come to life at the end of March, headed sharply higher in the second half of the year. The S&P 500 Index returned 10.80% for the six-month period as all major sectors of the market benefited from renewed investor enthusiasm and rising corporate profits. Technology and consumer stocks were the strongest sectors, but telecommunications and health care picked up in the last month of the period. The US bond market experienced extraordinary volatility as interest rates fell early in the period, rose sharply as the economy improved, then came back down in the final months of the reporting period. High yield bonds continued to lead the fixed income markets. The CSFB High Yield Index returned 9.70% for the six-month period compared to a negative 1.90% return for the Lehman Brothers Government/Credit Bond Index. Treasury and mortgage bonds suffered from the shift in interest rates. Municipal bonds, however, held onto modest gains. The Lehman Brothers Municipal Bond Index returned 0.19% for the six-month period. Investment grade municipal bonds outperformed high yield municipal bonds. Money market fund yields fell below 1%, reflecting historically low short-term interest rates. The Investment Company Institute, which tracks assets in and out of mutual funds, reported that money continued to flow out of money market funds during the year as investors sought alternatives to the low yields offered by short-term cash equivalents. Net new cash flow to money market funds turned negative in 2002 for the first time since 1993. 3 PORTFOLIO MANAGERS' REPORT Columbia High Yield Opportunity Fund Net asset value per share as of 11/30/03 ($) Class A 4.57 ----------------------------------- Class B 4.57 ----------------------------------- Class C 4.57 ----------------------------------- Class Z 4.57 ----------------------------------- Distributions per share 06/01/03 - 11/30/03 ($) Class A 0.17 ----------------------------------- Class B 0.15 ----------------------------------- Class C 0.16 ----------------------------------- Class Z 0.18 ----------------------------------- SEC yields as of 11/30/03 (%) Class A 7.20 ----------------------------------- Class B 6.81 ----------------------------------- Class C 6.96 ----------------------------------- Class Z 7.82 ----------------------------------- The 30-day SEC yields reflect the portfolio's earning power net of expenses, expressed as an annualized percentage of the public offering price per share. If the advisor or its affiliates had not waived certain fund expenses, the SEC yields would have been lower. -------------------------------------------------------------------------------- For the six-month period ended November 30, 2003, class A shares of Columbia High Yield Opportunity Fund returned 10.43% without sales charge. The fund outperformed both its benchmarks, the CS First Boston High Yield Index and the JP Morgan Global High Yield Index, which returned 9.70% and 9.62%, respectively, for the period. The Lipper High Current Yield Funds Category average return was 8.57% for the same period.1 HIGH-YIELD BONDS CONTINUED TO RISE High-yield issues added to their gains over the past six months, extending a trend that began last year. Returns were driven by the US economic recovery, relatively stable interest rates and shrinking default figures. Recent data show defaults at 3.1%, down from 4.6% six months ago and the lowest level since November of 2000. Encouraged by these factors, investors have poured money into higher-yielding, lower quality securities. As a result, the yield advantage over Treasuries contracted during the period to around five percentage points at the end of November 2003. LOWER-QUALITY ISSUES DROVE FUND RESULTS We were able to deliver returns that exceeded our benchmark over the period by steadily increasing exposure to bonds rated B or lower. Bonds in the lower half of the credit spectrum have been the strongest performers. Many issuers have benefited from improved business conditions and have strengthened their balance sheets by refinancing high-cost debt. We also added to the fund's return by selling our positions and taking profits in American Greetings and AT&T Wireless when their prices rose and yields fell. ECONOMIC RECOVERY BOOSTED SEVERAL SECTORS To capitalize on their potential in a recovering economy, we added to telecommunications, utilities and cable holdings. We purchased bonds of energy provider Dynegy, telecom operator Qwest and cable company Charter Communications (0.5%, 1.8% and 1.5% of net assets, respectively) when these issuers came under financial stress early this year.2 As their liquidity improved through debt refinancing and asset sales, the bonds recovered. Better economic news has also been good for the travel business, with airlines among the period's best-performing sectors. We added Delta Airlines to the portfolio and boosted our position in Northwest (0.5% and 0.4% of net assets, respectively), two moves that benefited performance. We purchased bonds of Goodyear (0.4% of net assets) when our analysis convinced us that pessimism over the company's labor and other issues was an overreaction. The bonds rose during the period. Bonds of Dex 1 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. 2 Holdings are disclosed as of November 30, 2003. 4 Columbia High Yield Opportunity Fund Media (1.3% of net assets), the official directory publisher for Qwest Communications International, also appeared undervalued when the company was spun off from its telecommunications parent. This opportunistic purchase has been rewarded with good income and price appreciation. However, we did not participate in the resurgence of the financial sector because we were uncomfortable owning the kinds of distressed issues that led the sector. Bonds of clothing-maker Levi Strauss (0.4% of net assets) were also disappointing performers. The company has lost market share and has recently moved its manufacturing operations offshore in an effort to contain costs. A FAVORABLE OUTLOOK Business conditions for high-yield issuers have improved along with the economy. The market for debt refinancing has opened up considerably. As a result, many issuers have cut interest costs by issuing new bonds at lower coupons, reflecting lower market yields. Despite these lower yields, we believe that high-yield bonds have the potential to continue to outpace higher-grade sectors, even if it is unlikely that recent strong results can be duplicated. Yet we are wary of possible interest rate hikes, which would be a negative for bonds in general. To try to insulate the fund against that possibility, we have become highly selective in our choice of lower-coupon, longer-maturity investments. As credit-driven, bottom-up investors, we are conscious of portfolio weightings. However, we will continue to seek out undervalued opportunities, which have the potential to add to the fund's return. [photo of Thomas A. LaPointe] /s/ Thomas A. LaPointe [photo of Kevin L. Cronk] /s/ Kevin L. Cronk Thomas A. LaPointe, CFA, and Kevin L. Cronk, CFA, have co-managed Columbia High Yield Opportunity Fund since February 2003. Investing in high-yield bonds involves greater credit risk and other risks not associated with investing in higher-quality bonds. Bond investing also involves interest rate risk, which means that bond prices may change as interest rates increase or decrease. Foreign investments involve market, political, accounting and currency risks not associated with domestic investments. We believe that high-yield bonds have the potential to continue to outpace higher-grade sectors, even if it is unlikely that recent strong results can be duplicated. 5 FINANCIAL STATEMENTS November 30, 2003 Columbia High Yield Opportunity Fund A guide to understanding your fund's financial statements -------------------------------------------------------------------------------- Investment Portfolio A list of all of the fund's holdings and their market value as of the last day of the reporting period. To show areas of concentration and diversification, portfolio holdings are organized by type of asset, industry and country or geographic region (if applicable). Statement of Assets and Liabilities This statement shows the fund's net assets and share price for each share class. Net assets are calculated by subtracting all the fund's liabilities (including any unpaid expenses) from the total of the fund's investment and non-investment assets. The share price for each class is calculated by dividing net assets for that class by the number of outstanding shares in that class. Statement of Operations This statement details both the type of income earned by the fund and the operating and non-operating expenses charged to the fund. The Statement of Operations also shows any net gain or loss the fund realized on the sales of its holdings during the period, as well as any unrealized gains or losses over the reporting period. The total of these results represents the fund's net increase or decrease in net assets from operations. Statement of Changes in Net Assets This statement shows how the fund's net assets were affected by its operations results, distributions to shareholders and changes in the number of fund shares. The Statement of Changes in Net Assets also reconciles changes in the number of shares outstanding. Financial Highlights The financial highlights provide an overview of the fund's investment results, including per-share analytics, such as net investment income or loss from operations and distributions; ratios of expenses and net investment income to average net assets. The financial highlights also detail the fund's portfolio turnover rate, which is a measure of trading activity. A separate table is provided for each share class. Notes to Financial Statements These notes disclose information regarding certain fund background information, significant accounting policies of the fund, including security valuation and income accruals and related party transactions. 6 INVESTMENT PORTFOLIO November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - 93.0% AGRICULTURE - 0.7% Agriculture Production - 0.7% Par ($) Value ($) ------------------------------------------------------------------------------ Hines Nurseries, Inc., 10.250% 10/01/11 (a) 1,085,000 1,174,512 Seminis Vegetable Seeds, 10.250% 10/01/13 (a) 4,227,000 4,480,620 ------------------------------------------------------------------------------ Agriculture Production Total 5,655,132 ------------- AGRICULTURE TOTAL 5,655,132 CONSTRUCTION - 3.3% Building Construction - 3.3% ------------------------------------------------------------------------------ Associated Materials, Inc., 9.750% 04/15/12 2,585,000 2,791,800 Atrium Companies, Inc., 10.500% 05/01/09 1,655,000 1,760,506 D.R. Horton, Inc., 9.750% 09/15/10 5,400,000 6,372,000 J. Ray McDermott SA, 11.000% 12/15/13 (a)(b) 2,140,000 2,150,700 K. Hovnanian Enterprises, Inc.: 8.875% 04/01/12 1,435,000 1,567,737 10.500% 10/01/07 1,930,000 2,265,337 Nortek Holdings, Inc., (c) 05/15/11 (a) (10.000% 11/15/07) 3,790,000 2,690,900 Standard Pacific Corp., 9.250% 04/15/12 3,425,000 3,801,750 William Lyon Homes, 10.750% 04/01/13 1,730,000 1,937,600 ------------------------------------------------------------------------------ Building Construction Total 25,338,330 ------------- CONSTRUCTION TOTAL 25,338,330 CONSUMER STAPLES - 0.7% Household Products - 0.7% ------------------------------------------------------------------------------ Norcraft Companies, 9.000% 11/01/11 (a) 1,095,000 1,152,487 Playtex Products, Inc., 9.375% 06/01/11 3,965,000 3,935,263 Scotts Co., 6.625% 11/15/13 (a) 310,000 312,325 ------------------------------------------------------------------------------ Household Products Total 5,400,075 ------------- CONSUMER STAPLES TOTAL 5,400,075 FINANCE, INSURANCE & REAL ESTATE - 2.7% Depository Institutions - 0.4% ------------------------------------------------------------------------------ Dollar Financial Group, 9.750% 11/15/11 (a) 2,660,000 2,739,800 Western Financial Bank, 9.625% 05/15/12 570,000 638,400 ------------------------------------------------------------------------------ Depository Institutions Total 3,378,200 See notes to investment portfolio. 7 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) FINANCE, INSURANCE & REAL ESTATE - (continued) Financial Services - 1.5% Par ($) Value ($) ------------------------------------------------------------------------------ Finova Group, Inc., 7.500% 11/15/09 4,470,000 2,480,850 LaBranche & Co., 12.000% 03/02/07 2,355,000 2,237,250 MDP Acquisitions PLC, 9.625% 10/01/12 4,600,000 5,106,000 Poster Financial Group, Inc., 8.750% 12/01/11 (a)(b) 460,000 471,500 Tiers-Mir-2001-14, Fixed Rate Certificates, 7.200% 06/15/04 (a)(e) 3,290,000 1,612,100 ------------------------------------------------------------------------------ Financial Services Total 11,907,700 Real Estate - 0.8% ------------------------------------------------------------------------------ Forest City Enterprises, Inc., 7.625% 06/01/15 1,390,000 1,452,550 Thornburg Mortgage, Inc., 8.000% 05/15/13 2,085,000 2,189,250 Trump Holdings & Funding, 11.625% 03/15/10 1,985,000 1,776,575 ------------------------------------------------------------------------------ Real Estate Total 5,418,375 ------------- FINANCE, INSURANCE & REAL ESTATE TOTAL 20,704,275 INDUSTRIALS - 0.9% Construction & Farm Machinery - 0.6% ------------------------------------------------------------------------------ Case New Holland, Inc., 9.250% 08/01/11 (a) 1,825,000 2,044,000 Cummins, Inc., 9.500% 12/01/10 (a) 2,410,000 2,771,500 ------------------------------------------------------------------------------ Construction & Farm Machinery Total 4,815,500 Industrial Conglomerate - 0.3% ------------------------------------------------------------------------------ SPX Corp., 7.500% 01/01/13 2,285,000 2,444,950 ------------------------------------------------------------------------------ Industrial Conglomerate Total 2,444,950 ------------- INDUSTRIALS TOTAL 7,260,450 MANUFACTURING - 27.6% Apparel - 1.2% ------------------------------------------------------------------------------ Broder Brothers Co., 11.250% 10/15/10 (a) 2,120,000 2,141,200 Levi Strauss & Co., 12.250% 12/15/12 4,535,000 3,265,200 Perry Ellis International, Inc., 8.875% 09/15/13 (a) 325,000 338,000 Phillips Van-Heusen, 8.125% 05/01/13 (a) 1,000,000 1,055,000 Warnaco, Inc., 8.875% 06/15/13 (a) 825,000 839,438 William Carter Co., 10.875% 08/15/11 1,534,000 1,743,007 ------------------------------------------------------------------------------ Apparel Total 9,381,845 See notes to investment portfolio. 8 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) MANUFACTURING - (continued) Auto Parts & Equipment - 1.2% Par ($) Value ($) ------------------------------------------------------------------------------ Accuride Corp., Series 1998 B, 9.250% 02/01/08 1,075,000 1,085,750 Delco Remy International, Inc., 10.625% 08/01/06 1,420,000 1,391,600 Goodyear Tire & Rubber Co., 7.875% 08/15/11 3,400,000 2,907,000 Metaldyne Corp., 10.000% 11/01/13 (a) 1,250,000 1,212,500 Rexnord Corp., 10.125% 12/15/12 1,105,000 1,204,450 TRW Automotive, Inc.: 9.375% 02/15/13 (a) 630,000 711,900 11.000% 02/15/13 (a) 485,000 569,875 ------------------------------------------------------------------------------ Auto Parts & Equipment Total 9,083,075 Chemicals & Allied Products - 5.3% ------------------------------------------------------------------------------ Avecia Group PLC, 11.000% 07/01/09 3,255,000 2,799,300 Equistar Chemical Funding LP: 10.125% 09/01/08 1,985,000 2,104,100 10.625% 05/01/11 (a) 1,530,000 1,614,150 FMC Corp., 10.250% 11/01/09 1,715,000 2,006,550 Huntsman ICI Chemicals, 10.125% 07/01/09 2,550,000 2,530,875 Huntsman ICI Holdings LLC, (d) 12/31/09 26,695,000 11,612,325 IMC Global, Inc., 10.875% 08/01/13 (a) 1,880,000 1,983,400 Koppers Industries, Inc., 9.875% 10/15/13 (a) 2,795,000 3,032,575 Lyondell Chemical Co., 9.625% 05/01/07 3,115,000 3,200,662 MacDermid, Inc., 9.125% 07/15/11 1,645,000 1,838,287 Phibro Animal Health Corp., 13.000% 12/01/07 (a) 2,350,000 2,420,500 Polyone Corp., 10.625% 05/15/10 665,000 638,400 Terra Capital, Inc., 12.875% 10/15/08 3,220,000 3,743,250 Westlake Chemical Corp., 8.750% 07/15/11 (a) 1,560,000 1,680,900 ------------------------------------------------------------------------------ Chemicals & Allied Products Total 41,205,274 Electronic & Electrical Equipment - 1.0% ------------------------------------------------------------------------------ Amkor Technology, Inc.: 9.250% 02/15/08 3,260,000 3,651,200 10.500% 05/01/09 2,230,000 2,386,100 General Cable Corp., 9.500% 11/15/10 (a) 615,000 648,825 Xerox Corp., 7.125% 06/15/10 1,300,000 1,339,000 ------------------------------------------------------------------------------ Electronic & Electrical Equipment Total 8,025,125 See notes to investment portfolio. 9 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) MANUFACTURING - (continued) Fabricated Metal - 0.5% Par ($) Value ($) ------------------------------------------------------------------------------ Earle M. Jorgensen Co., 9.750% 06/01/12 3,400,000 3,706,000 ------------------------------------------------------------------------------ Fabricated Metal Total 3,706,000 Food & Kindred Products - 3.7% ------------------------------------------------------------------------------ Bavaria SA, 8.875% 11/01/10 (a) 3,110,000 3,079,864 Constellation Brands, Inc., 8.125% 01/15/12 2,000,000 2,190,000 Del Monte Corp., 9.250% 05/15/11 1,925,000 2,112,687 Dole Food Co., Inc., 8.625% 05/01/09 2,530,000 2,726,075 Merisant Co., 9.500% 07/15/13 (a) 1,605,000 1,645,125 Pinnacle Foods Holdings, 8.250% 12/01/13 (a) 2,985,000 3,074,550 Premier International Foods PLC, 12.000% 09/01/09 5,750,000 6,267,500 Roundy's, Inc., 8.875% 06/15/12 3,475,000 3,683,500 Smithfield Foods, Inc., 8.000% 10/15/09 3,665,000 4,031,500 ------------------------------------------------------------------------------ Food & Kindred Products Total 28,810,801 Furniture & Fixtures - 0.8% ------------------------------------------------------------------------------ Congloleum Corp., 8.625% 08/01/08 (k) 1,755,000 1,053,000 Juno Lighting, Inc., 11.875% 07/01/09 2,340,000 2,544,750 Tempur-Pedic, Inc., 10.250% 08/15/10 (a) 2,045,000 2,285,288 ------------------------------------------------------------------------------ Furniture & Fixtures Total 5,883,038 Lumber & Wood Products - 0.4% ------------------------------------------------------------------------------ Georgia Pacific Corp., 8.875% 02/01/10 3,080,000 3,472,700 ------------------------------------------------------------------------------ Lumber & Wood Products Total 3,472,700 Machinery & Computer Equipment - 0.3% ------------------------------------------------------------------------------ United Rentals, Inc., 10.750% 04/15/08 2,150,000 2,397,250 ------------------------------------------------------------------------------ Machinery & Computer Equipment Total 2,397,250 Measuring & Analyzing Instruments - 0.4% ------------------------------------------------------------------------------ Fisher Scientific International, Inc., 8.125% 05/01/12 2,627,000 2,817,458 ------------------------------------------------------------------------------ Measuring & Analyzing Instruments Total 2,817,458 See notes to investment portfolio. 10 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) MANUFACTURING - (continued) Miscellaneous Manufacturing - 4.0% Par ($) Value ($) ------------------------------------------------------------------------------ Agco Corp., 9.500% 05/01/08 3,100,000 3,386,750 Amscan Holdings, Inc., 9.875% 12/15/07 7,000,000 7,000,000 Applied Extrusion Technologies, Inc., 10.750% 07/01/11 2,545,000 1,972,375 Flowserve Corp., 12.250% 08/15/10 2,759,000 3,200,440 Hexcel Corp., 9.750% 01/15/09 1,800,000 1,876,500 Kinetic Concepts, Inc., 7.375% 05/15/13 (a) 935,000 963,050 Owens-Illinois, Inc.: 7.150% 05/15/05 625,000 639,062 7.350% 05/15/08 3,050,000 3,057,625 7.500% 05/15/10 620,000 620,000 8.100% 05/15/07 1,000,000 1,035,000 Tekni Plex, Inc., 12.750% 06/15/10 4,000,000 4,240,000 Terex Corp., Series 2001 B, 10.375% 04/01/11 2,815,000 3,152,800 ------------------------------------------------------------------------------ Miscellaneous Manufacturing Total 31,143,602 Paper Products - 1.6% ------------------------------------------------------------------------------ Berry Plastics Corp., 10.750% 07/15/12 (a) 1,910,000 2,167,850 Buckeye Technologies, Inc.: 8.500% 10/01/13 (a) 480,000 510,000 9.250% 09/15/08 1,980,000 1,999,800 Caraustar Industries, Inc., 9.875% 04/01/11 2,015,000 2,135,900 Norske Skog Canada Ltd., 8.625% 06/15/11 1,200,000 1,224,000 Smurfit-Stone Container Corp., 8.250% 10/01/12 2,175,000 2,321,813 Tembec Industries, Inc., 8.500% 02/01/11 1,860,000 1,804,200 ------------------------------------------------------------------------------ Paper Products Total 12,163,563 Primary Metal - 1.1% ------------------------------------------------------------------------------ Kaiser Aluminum & Chemical Corp., 10.875% 10/15/06 (e) 5,400,000 4,671,000 Oregon Steel Mills, Inc., 10.000% 07/15/09 3,000,000 2,400,000 Steel Dynamics, Inc.: 9.500% 03/15/09 (a) 635,000 693,738 9.500% 03/15/09 650,000 710,125 ------------------------------------------------------------------------------ Primary Metal Total 8,474,863 See notes to investment portfolio. 11 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) MANUFACTURING - (continued) Printing & Publishing - 4.1% Par ($) Value ($) ------------------------------------------------------------------------------ Dex Media, Inc., 8.000% 11/15/13 (a) 2,450,000 2,480,625 Dex Media East LLC, 12.125% 11/15/12 4,435,000 5,322,000 Dex Media West LLC, 9.875% 08/15/13 (a) 2,075,000 2,355,125 Hollinger, Inc., 11.875% 03/01/11 (a) 2,445,000 2,665,050 Moore North America Finance, Inc., 7.875% 01/15/11 1,385,000 1,571,975 PriMedia, Inc., 8.875% 05/15/11 3,665,000 3,802,438 Quebecor Media, Inc., 11.125% 07/15/11 5,360,000 6,150,600 Von Hoffman Corp.: 10.250% 03/15/09 (a) 975,000 1,023,750 10.250% 03/15/09 3,750,000 3,937,500 Yell Finance BV, 10.750% 08/01/11 2,165,000 2,543,875 ------------------------------------------------------------------------------ Printing & Publishing Total 31,852,938 Stone, Clay, Glass & Concrete - 0.5% ------------------------------------------------------------------------------ Crown European Holdings SA, 10.875% 03/01/13 2,550,000 2,945,250 Owens-Brockway Glass Container, 8.250% 05/15/13 1,045,000 1,092,025 ------------------------------------------------------------------------------ Stone, Clay, Glass & Concrete Total 4,037,275 Transportation Equipment - 1.5% ------------------------------------------------------------------------------ Allied Holdings, Inc., Series 1997 B, 8.625% 10/01/07 1,835,000 1,761,600 Collins & Aikman Products Co., 9.750% 02/15/10 1,600,000 1,716,000 Dana Corp.: 9.000% 08/15/11 1,860,000 2,115,750 10.125% 03/15/10 1,075,000 1,230,875 Dura Operating Corp.: 8.625% 04/15/12 2,875,000 2,918,125 9.000% 05/01/09 2,000,000 1,850,000 Newcor, Inc., 8.500% 01/31/13 (f) 847,510 367,997 ------------------------------------------------------------------------------ Transportation Equipment Total 11,960,347 ------------- MANUFACTURING TOTAL 214,415,154 MINING & ENERGY - 5.1% Metals & Mining - 1.1% ------------------------------------------------------------------------------ Metallurg, Inc., 11.000% 12/01/07 6,700,000 3,484,000 TriMas Corp., 9.875% 06/15/12 4,880,000 4,965,400 ------------------------------------------------------------------------------ Metals & Mining Total 8,449,400 See notes to investment portfolio. 12 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) MINING & ENERGY - (continued) Oil & Gas Extraction - 3.4% Par ($) Value ($) ------------------------------------------------------------------------------ Benton Oil & Gas Co., 9.375% 11/01/07 2,565,000 2,539,350 Chesapeake Energy Corp. : 7.750% 01/15/15 2,455,000 2,639,125 8.125% 04/01/11 915,000 997,350 Citgo Petroleum Corp., 11.375% 02/01/11 1,000,000 1,155,000 Compton Petroleum Corp., 9.900% 05/15/09 2,575,000 2,806,750 Denbury Resources, Inc., 7.500% 04/01/13 1,410,000 1,462,875 Encore Acquisition Co., 8.375% 06/15/12 2,870,000 3,042,200 Energy Partners Ltd., 8.750% 08/01/10 950,000 1,003,437 Forest Oil Corp., 8.000% 06/15/08 3,160,000 3,397,000 Houston Exploration Co., 7.000% 06/15/13 (a) 650,000 658,125 Magnum Hunter Resources, Inc., 9.600% 03/15/12 2,135,000 2,401,875 Pogo Producing Co., Series B, 8.250% 04/15/11 1,000,000 1,107,500 Stone Energy Corp., 8.250% 12/15/11 1,690,000 1,812,525 Tom Brown, Inc., 7.250% 09/15/13 1,360,000 1,421,200 TransTexas Gas Corp., 15.000% 03/15/05 (g) 475,296 31,797 Trico Marine Services, Inc., 8.875% 05/15/12 690,000 448,500 ------------------------------------------------------------------------------ Oil & Gas Extraction Total 26,924,609 Oil & Gas Field Services - 0.6% ------------------------------------------------------------------------------ Newpark Resources, Inc., 8.625% 12/15/07 2,450,000 2,523,500 Premcor Refining Group, 7.500% 06/15/15 2,015,000 2,065,375 ------------------------------------------------------------------------------ Oil & Gas Field Services Total 4,588,875 ------------- MINING & ENERGY TOTAL 39,962,884 RETAIL TRADE - 2.8% Apparel & Accessory Stores - 0.2% ------------------------------------------------------------------------------ Gap, Inc., 8.800% 12/15/08 330,000 403,425 Saks, Inc., 8.250% 11/15/08 870,000 989,625 ------------------------------------------------------------------------------ Apparel & Accessory Stores Total 1,393,050 See notes to investment portfolio. 13 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) RETAIL TRADE - (continued) Food Stores - 0.6% Par ($) Value ($) ------------------------------------------------------------------------------ Delhaize America, Inc., 8.125% 04/15/11 2,000,000 2,265,660 Michael Foods, Inc., 8.000% 11/15/13 (a) 1,000,000 1,025,000 Winn Dixie Stores, Inc., 8.875% 04/01/08 1,645,000 1,624,438 ------------------------------------------------------------------------------ Food Stores Total 4,915,098 Miscellaneous Retail - 1.8% ------------------------------------------------------------------------------ General Nutrition Center, 8.500% 12/01/10 (a)(b) 910,000 928,200 JC Penney Co., Inc., 8.000% 03/01/10 3,435,000 3,950,250 Rite Aid Corp., 9.250% 06/01/13 4,905,000 5,260,613 Steinway Musical Instruments, Inc., 8.750% 04/15/11 3,400,000 3,570,000 ------------------------------------------------------------------------------ Miscellaneous Retail Total 13,709,063 Restaurants - 0.2% ------------------------------------------------------------------------------ Domino's, Inc., 8.250% 07/01/11 (a) 715,000 753,431 Yum! Brands, Inc., 7.700% 07/01/12 775,000 887,375 ------------------------------------------------------------------------------ Restaurants Total 1,640,806 ------------- RETAIL TRADE TOTAL 21,658,017 SERVICES - 15.7% Amusement & Recreation - 5.4% ------------------------------------------------------------------------------ Ameristar Casinos, Inc., 10.750% 02/15/09 2,185,000 2,501,825 Boyd Gaming Corp., 8.750% 04/15/12 1,090,000 1,182,650 Circus & Eldorado/Silver Legacy Capital Corp., 10.125% 03/01/12 1,990,000 2,024,825 Hollywood Casino Shreveport, 13.000% 08/01/06 (g) 5,130,000 3,667,950 Hollywood Entertainment Corp., 9.625% 03/15/11 2,925,000 3,144,375 Inn of the Mountain Gods Resort, 12.000% 11/15/10 (a) 1,540,000 1,620,850 Mohegan Tribal Gaming Authority: 8.000% 04/01/12 2,325,000 2,511,000 8.375% 07/01/11 1,450,000 1,576,875 Park Place Entertainment Corp., 9.375% 02/15/07 1,290,000 1,441,575 Pinnacle Entertainment, Inc.: 8.750% 10/01/13 225,000 226,125 9.250% 02/15/07 (a) 6,750,000 6,952,500 Regal Cinemas, Inc., 9.375% 02/01/12 1,000,000 1,135,000 See notes to investment portfolio. 14 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) SERVICES - (continued) Amusement & Recreation - (continued) Par ($) Value ($) ------------------------------------------------------------------------------ Six Flags, Inc., 9.500% 02/01/09 6,185,000 6,262,313 Town Sports International, 9.625% 04/15/11 2,400,000 2,568,000 Venetian Casino Resort LLC, 11.000% 06/15/10 2,660,000 3,078,950 Wynn Las Vegas LLC, 12.000% 11/01/10 1,500,000 1,732,500 ------------------------------------------------------------------------------ Amusement & Recreation Total 41,627,313 Business Services - 0.3% ------------------------------------------------------------------------------ Iron Mountain, Inc., 6.625% 01/01/16 2,120,000 2,067,000 ------------------------------------------------------------------------------ Business Services Total 2,067,000 Funeral Services - 0.9% ------------------------------------------------------------------------------ Service Corp. International, 7.700% 04/15/09 4,010,000 4,160,375 Stewart Enterprises, Inc., 10.750% 07/01/08 2,575,000 2,896,875 ------------------------------------------------------------------------------ Funeral Services Total 7,057,250 Health Services - 4.4% ------------------------------------------------------------------------------ AmerisourceBergen Corp., 8.125% 09/01/08 1,355,000 1,500,663 Bio-Rad Laboratories, Inc., 7.500% 08/15/13 2,515,000 2,703,625 Coventry Health Care, Inc., 8.125% 02/15/12 3,190,000 3,516,975 HCA, Inc., 8.750% 09/01/10 2,120,000 2,451,780 IASIS Healthcare Corp., 13.000% 10/15/09 2,665,000 2,991,462 InSight Health Services Corp., 9.875% 11/01/11 2,900,000 3,048,625 Magellan Health Services, Inc., 9.375% 11/15/07 (a)(e) 2,080,000 2,298,400 MedQuest, Inc., 11.875% 08/15/12 4,200,000 4,604,250 PacifiCare Health Systems, Inc., 10.750% 06/01/09 4,395,000 5,054,250 Tenet Healthcare Corp., 6.375% 12/01/11 3,625,000 3,353,125 United Surgical Partners International, Inc., 10.000% 12/15/11 2,600,000 2,931,500 ------------------------------------------------------------------------------ Health Services Total 34,454,655 Hotels, Camps & Lodging - 1.3% ------------------------------------------------------------------------------ Hard Rock Hotel, Inc., 8.875% 06/01/13 (a) 2,260,000 2,373,000 Host Marriott LP, 9.500% 01/15/07 2,750,000 3,007,812 See notes to investment portfolio. 15 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) SERVICES - (continued) Hotels, Camps & Lodging - (continued) Par ($) Value ($) ------------------------------------------------------------------------------ Royal Caribbean Cruises, 8.000% 05/15/10 1,800,000 1,941,750 Starwood Hotels & Resorts Worldwide, Inc., 7.875% 05/01/12 2,750,000 3,055,938 ------------------------------------------------------------------------------ Hotels, Camps & Lodging Total 10,378,500 Other Services - 3.4% ------------------------------------------------------------------------------ Advanstar Communications, Inc., 12.000% 02/15/11 4,050,000 4,151,250 Corrections Corp., 9.875% 05/01/09 2,340,000 2,620,800 IMCO Recycling, Inc., 10.375% 08/01/13 (a) 1,540,000 1,447,600 Millar Western Forest, 7.750% 11/15/13 (a) 1,695,000 1,703,661 Nationsrent, Inc., 9.500% 10/15/10 (a) 3,260,000 3,382,250 QDI Capital Corp., 9.000% 11/15/10 (a) 2,810,000 2,915,375 River Rock Entertainment, 9.750% 11/01/11 (a) 2,210,000 2,353,650 Stratus Technologies, Inc., 10.375% 12/01/08 (a) 2,470,000 2,525,575 Tabletop Holdings, Inc., (c) 05/15/14 (12.250% 11/15/08) (a) 3,995,000 2,157,300 Wackenhut Corrections, 8.250% 07/15/13 (a) 1,260,000 1,329,300 Williams Scotsman, Inc., 9.876% 06/01/07 1,415,000 1,393,775 ------------------------------------------------------------------------------ Other Services Total 25,980,536 ------------- SERVICES TOTAL 121,565,254 TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 33.5% Aerospace - 1.1% ------------------------------------------------------------------------------ BE Aerospace, Inc., 8.875% 05/01/11 3,080,000 2,802,800 Condor Systems, Inc., 11.875% 05/01/09 (e) 4,000,000 920,000 Sequa Corp., 8.875% 04/01/08 1,670,000 1,816,125 TransDigm, Inc., 8.375% 07/15/11 (a) 1,560,000 1,645,800 Vought Aircraft Industries, Inc., 8.000% 07/15/11 (a) 1,295,000 1,311,188 ------------------------------------------------------------------------------ Aerospace Total 8,495,913 Air Transportation - 1.4% ------------------------------------------------------------------------------ Delta Airlines, Inc., 7.900% 12/15/09 4,480,000 3,584,000 See notes to investment portfolio. 16 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued) Air Transportation - (continued) Par ($) Value ($) ------------------------------------------------------------------------------ Northwest Airlines Corp., 9.875% 03/15/07 3,850,000 3,426,500 U.S. Airways, Inc., 10.375% 03/01/13 (h) 10,427,792 3,597,588 ------------------------------------------------------------------------------ Air Transportation Total 10,608,088 Broadcasting - 2.6% ------------------------------------------------------------------------------ CanWest Media, Inc., 10.625% 05/15/11 4,775,000 5,419,625 Corus Entertainment, Inc., 8.750% 03/01/12 1,465,000 1,611,500 Emmis Communications Corp., (c) 03/15/11 (12.500% 03/15/06) 3,425,000 3,125,312 Sinclair Broadcast Group, Inc., 8.750% 12/15/11 1,000,000 1,095,000 Spanish Broadcasting System, 9.625% 11/01/09 560,000 588,000 TV Azteca SA de CV, 10.500% 02/15/07 5,070,000 5,196,750 XM Satellite Radio Holdings, Inc., (c) 12/31/09 (14.000% 12/31/05) 3,958,930 3,444,269 ------------------------------------------------------------------------------ Broadcasting Total 20,480,456 Cable - 5.4% ------------------------------------------------------------------------------ Charter Communications Holdings LLC: (c) 04/01/11 (9.920% 04/01/04) 13,710,000 10,488,150 10.000% 04/01/09 765,000 634,950 10.250% 09/15/10 (a) 750,000 764,062 Comcast UK Cable Partners Ltd., 11.200% 11/15/07 6,800,000 6,834,000 CSC Holdings, Inc., 7.625% 04/01/11 2,405,000 2,429,050 DirecTV Holdings Finance, 8.375% 03/15/13 2,495,000 2,822,469 EchoStar DBS Corp., 6.375% 10/01/11 (a) 4,525,000 4,525,000 Insight Communications Co., (c) 02/15/11 (12.250% 02/15/06) 3,295,000 2,611,287 Insight Midwest, 9.750% 10/01/09 2,955,000 3,124,912 Northland Cable Television, Inc., 10.250% 11/15/07 3,650,000 3,613,500 Rogers Cable, Inc., 6.250% 06/15/13 295,000 295,920 Shaw Communications, Inc., 7.500% 11/20/13 CAD 3,060,000 2,337,229 Videotron Ltee, 6.875% 01/15/14 (a) USD 1,775,000 1,828,250 ------------------------------------------------------------------------------ Cable Total 42,308,779 See notes to investment portfolio. 17 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued) Communication Services - 0.8% Par ($) Value ($) ------------------------------------------------------------------------------ Crown Castle International Corp., 10.750% 08/01/11 2,510,000 2,786,100 SBA Communications, Inc., 10.250% 02/01/09 4,045,000 3,711,288 ------------------------------------------------------------------------------ Communication Services Total 6,497,388 Electric, Gas & Sanitary Services - 1.2% ------------------------------------------------------------------------------ Allied Waste North America, Inc.: 6.500% 11/15/10 (a) 1,510,000 1,510,000 Series 2001 B, 8.500% 12/01/08 5,000,000 5,475,000 Illinova Power Corp., 11.500% 12/15/10 1,875,000 2,212,500 ------------------------------------------------------------------------------ Electric, Gas & Sanitary Services Total 9,197,500 Electric Services - 5.5% ------------------------------------------------------------------------------ AES Corp.: 9.000% 05/15/15 (a) 4,115,000 4,485,350 9.500% 06/01/09 2,253,000 2,421,975 Beaver Valley Funding Corp., 9.000% 06/01/17 2,210,000 2,524,373 Caithness Coso Funding Corp., Series 1999 B, 9.050% 12/15/09 3,789,232 4,111,317 Calpine Corp.: 8.500% 07/15/10 (a) 2,485,000 2,298,625 8.500% 02/15/11 3,470,000 2,515,750 8.625% 08/15/10 1,710,000 1,239,750 CMS Energy Corp., 8.900% 07/15/08 2,990,000 3,173,137 Edison Mission Energy, 9.875% 04/15/11 3,090,000 3,105,450 MSW Energy Holdings Finance: 7.375% 09/01/10 (a) 910,000 923,650 8.500% 09/01/10 (a) 3,260,000 3,496,350 Nevada Power Co.: 9.000% 08/15/13 (a) 985,000 1,074,881 10.875% 10/15/09 2,765,000 3,124,450 Orion Power Holdings, Inc., 12.000% 05/01/10 1,650,000 1,930,500 PSE&G Energy Holdings, Inc., 8.625% 02/15/08 2,955,000 3,139,687 UCAR Finance, Inc., 10.250% 02/15/12 2,890,000 3,193,450 ------------------------------------------------------------------------------ Electric Services Total 42,758,695 Marine Transportation - 0.2% ------------------------------------------------------------------------------ Teekay Shipping Corp., 8.875% 07/15/11 1,435,000 1,628,725 ------------------------------------------------------------------------------ Marine Transportation Total 1,628,725 See notes to investment portfolio. 18 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued) Motor Freight & Warehousing - 0.6% Par ($) Value ($) ------------------------------------------------------------------------------ QDI LLC: 12.000% 06/15/09 PIK (a)(f) 838,594 901,489 12.500% 06/15/08 PIK 3,429,000 3,500,323 ------------------------------------------------------------------------------ Motor Freight & Warehousing Total 4,401,812 Pipelines - 3.5% ------------------------------------------------------------------------------ Coastal Corp., 7.750% 06/15/10 5,240,000 4,611,200 Dynegy Holdings, Inc.: 8.750% 02/15/12 2,475,000 2,388,375 9.875% 07/15/10 (a) 1,230,000 1,340,700 10.125% 07/15/13 (a) 310,000 341,000 El Paso Partners, Series B, 8.500% 06/01/11 675,000 739,125 Gulfterra Energy Partners, 8.500% 06/01/10 1,580,000 1,730,100 Northwest Pipeline Corp., 8.125% 03/01/10 1,040,000 1,154,400 Sonat, Inc., 7.625% 07/15/11 5,610,000 4,824,600 Southern Natural Gas, 8.875% 03/15/10 2,030,000 2,258,375 Williams Companies, Inc., 8.125% 03/15/12 6,980,000 7,538,400 ------------------------------------------------------------------------------ Pipelines Total 26,926,275 Pollution Control - 0.2% ------------------------------------------------------------------------------ Envirosource, Inc., 14.000% 12/15/08 (f) 1,710,534 1,652,650 ------------------------------------------------------------------------------ Pollution Control Total 1,652,650 Radio & Telephone Communications - 4.7% ------------------------------------------------------------------------------ ACC Escrow Corp., 10.000% 08/01/11 (a) 1,955,000 2,140,725 AirGate PCS, Inc., (c) 10/01/09 (13.500% 10/01/04) 1,020,000 663,000 Cincinnati Bell, Inc., 8.375% 01/15/14 (a) 2,455,000 2,577,750 Dobson Communications Corp., 8.875% 10/01/13 (a) 3,230,000 3,250,187 Horizon PCS, Inc., 13.750% 06/15/11 (e) 3,300,000 742,500 MCI Communications Corp.: 7.125% 06/15/27 (e) 905,000 733,050 7.500% 08/20/04 (e) 3,530,000 2,859,300 Nextel Communications, Inc., 9.375% 11/15/09 6,520,000 7,090,500 See notes to investment portfolio. 19 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued) Radio & Telephone Communications - (continued) Par ($) Value ($) ------------------------------------------------------------------------------ Nextel Partners, Inc., 11.000% 03/15/10 3,250,000 3,591,250 Rogers Cantel, Inc., 9.750% 06/01/16 5,715,000 6,743,700 Triton PCS, Inc., 8.750% 11/15/11 1,055,000 1,012,800 US Unwired, Inc., (c) 11/01/09 (13.375% 11/01/04) 5,130,000 3,411,450 Western Wireless Corp., 9.250% 07/15/13 1,550,000 1,604,250 ------------------------------------------------------------------------------ Radio & Telephone Communications Total 36,420,462 Railroad - 0.7% ------------------------------------------------------------------------------ Kansas City Southern, 7.500% 06/15/09 1,620,000 1,656,450 Railworks Corp., 11.500% 04/15/09 (g) 600,000 30,000 TFM SA de CV, 12.500% 06/15/12 3,830,000 3,355,725 ------------------------------------------------------------------------------ Railroad Total 5,042,175 Telecommunication Services - 4.6% ------------------------------------------------------------------------------ American Towers, Inc., 7.250% 12/01/11 (a) 1,560,000 1,563,900 Avaya, Inc., 11.125% 04/01/09 1,880,000 2,209,000 Carrier1 International SA, 13.250% 02/15/09 (e) 6,000,000 540,000 Colt Telecom Group PLC: 12.000% 12/15/06 1,795,000 1,790,512 Fairpoint Communications, 11.875% 03/01/10 2,150,000 2,526,250 Innova S De R.L., 9.375% 09/19/13 (a) 750,000 767,813 Level 3 Communications, Inc., (c) 12/01/08 (10.500% 12/01/03) 3,020,000 2,823,700 Lucent Technologies, Inc., 6.450% 03/15/29 2,890,000 2,189,175 Qwest Capital Funding: 7.250% 02/15/11 6,575,000 6,262,688 7.750% 02/15/31 3,035,000 2,670,800 Qwest Services Corp., 13.500% 12/15/10 (a) 4,095,000 4,811,625 Spectrasite, Inc., 8.250% 05/15/10 (a) 1,690,000 1,791,400 Time Warner Telecom, Inc.: 9.750% 07/15/08 3,460,000 3,529,200 10.125% 02/01/11 1,760,000 1,821,600 ------------------------------------------------------------------------------ Telecommunication Services Total 35,297,663 See notes to investment portfolio. 20 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Corporate Fixed-Income Bonds & Notes - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued) Transportation Services - 1.0% Par ($) Value ($) ------------------------------------------------------------------------------ Petroleum Helicopters, Inc., 9.375% 05/01/09 4,125,000 4,444,688 Stena AB: 7.500% 11/01/13 (a)(b) 1,220,000 1,223,843 9.625% 12/01/12 2,055,000 2,286,188 ------------------------------------------------------------------------------ Transportation Services Total 7,954,719 ------------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES TOTAL 259,671,300 Total Corporate Fixed-Income Bonds & Notes (cost of $718,992,817) 721,630,871 Convertible Bonds - 1.2% TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 1.2% Communication Services - 0.6% ------------------------------------------------------------------------------ Colt Telecom Group PLC 2.000% 08/06/05 1,400,000 931,789 2.000% 03/29/06 (a) EUR 2,190,000 2,785,100 2.000% 12/16/06 (a) USD 980,000 1,246,935 ------------------------------------------------------------------------------ Communication Services Total 4,963,824 Telecommunication Services - 0.6% ------------------------------------------------------------------------------ Nortel Networks Ltd; 4.250% 09/01/08 5,290,000 5,010,953 ------------------------------------------------------------------------------ Telecommunication Services Total 5,010,953 ------------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES TOTAL 9,974,777 Total Convertible Bonds (cost of $8,077,195) 9,974,777 Preferred Stocks - 2.3% FINANCE, INSURANCE & REAL ESTATE - 0.6% Real Estate - 0.6% Shares ------------------------------------------------------------------------------ iStar Financial: Series E, 7.875% 86,769 2,223,456 Series F, 7.800% 97,000 2,434,099 ------------------------------------------------------------------------------ Real Estate Total 4,657,555 ------------- FINANCE, INSURANCE & REAL ESTATE TOTAL 4,657,555 MANUFACTURING - 0.3% Food & Kindred Products - 0.1% ------------------------------------------------------------------------------ Constellation Brands, Inc., Series A, 5.750% 19,825 639,356 ------------------------------------------------------------------------------ Food & Kindred Products Total 639,356 See notes to investment portfolio. 21 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Preferred Stocks - (continued) MANUFACTURING - (continued) Printing & Publishing - 0.2% Shares Value ($) ------------------------------------------------------------------------------ PriMedia, Inc.: Series F, 9.200% 14,590 1,349,575 Series H, 8.625% 220 19,910 ------------------------------------------------------------------------------ Printing & Publishing Total 1,369,485 ------------- MANUFACTURING TOTAL 2,008,841 TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 1.4% Broadcasting - 0.4% ------------------------------------------------------------------------------ Spanish Broadcasting System, Inc., 10.750% (a) 3,210 3,226,050 ------------------------------------------------------------------------------ Broadcasting Total 3,226,050 Cable - 0.9% ------------------------------------------------------------------------------ CSC Holdings Ltd., PIK: 11.125% 9,180 970,785 11.750% 59,441 6,256,165 NTL Europe, Inc., Series A, 10.000% 23 118 ------------------------------------------------------------------------------ Cable Total 7,227,068 Pollution Control - 0.1% ------------------------------------------------------------------------------ EnviroSource, Inc., 7.250% (f) 5,804 667,460 ------------------------------------------------------------------------------ Pollution Control Total 667,460 ------------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES TOTAL 11,120,578 Total Preferred Stocks (cost of $18,794,027) 17,786,974 Common Stocks (i) - 1.4% MANUFACTURING - 0.2% Communications Equipment - 0.2% ------------------------------------------------------------------------------ EchoStar Communications Corp., Class A 50,000 1,724,000 ------------------------------------------------------------------------------ Communications Equipment Total 1,724,000 ------------- MANUFACTURING TOTAL 1,724,000 MINING & ENERGY - 0.0% Crude Petroleum & Natural Gas - 0.0% ------------------------------------------------------------------------------ Coho Energy, Inc. (j) 750 -- Horizon Natural Resources Co. (f) 16,000 16 ------------------------------------------------------------------------------ Crude Petroleum & Natural Gas Total 16 Oil & Gas Extraction - 0.0% ------------------------------------------------------------------------------ Orion Refining Corp. (f)(j) 10 -- ------------------------------------------------------------------------------ Oil & Gas Extraction Total -- ------------- MINING & ENERGY TOTAL 16 See notes to investment portfolio. 22 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Common Stocks (i) - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 1.2% Cable - 0.4% Shares Value ($) ------------------------------------------------------------------------------ NTL, Inc. 46,154 3,007,395 Ono Finance PLC (a) 5,700 6 ------------------------------------------------------------------------------ Cable Total 3,007,401 Electric Services - 0.0% ------------------------------------------------------------------------------ BayCorp Holdings Ltd. 3 39 ------------------------------------------------------------------------------ Electric Services Total 39 Pollution Control - 0.5% ------------------------------------------------------------------------------ EnviroSource, Inc. (f) 50,004 3,600,288 Fairlane Management Corp. (f)(j) 50,004 -- ------------------------------------------------------------------------------ Pollution Control Total 3,600,288 Radio & Telephone Communications - 0.3% ------------------------------------------------------------------------------ Nextel Communications, Inc., Class A 100,000 2,533,000 ------------------------------------------------------------------------------ Radio & Telephone Communications Total 2,533,000 ------------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES TOTAL 9,140,728 Total Common Stocks (cost of $8,734,526) 10,864,744 Warrants (i) - 0.2% RETAIL STORES - 0.0% Food Stores - 0.0% Units ------------------------------------------------------------------------------ Pathmark Stores, Inc., expires 09/19/10 58,758 57,583 ------------------------------------------------------------------------------ Food Stores Total 57,583 ------------- RETAIL STORES TOTAL 57,583 TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 0.2% Aerospace - 0.0% ------------------------------------------------------------------------------ Loral Space & Communications Ltd., expires 01/15/07 12,000 120 ------------------------------------------------------------------------------ Aerospace Total 120 Cable - 0.0% ------------------------------------------------------------------------------ Cable Satisfaction International, Inc., expires 03/01/05 7,550 76 Ono Finance PLC, expires 02/15/11 (a) 1,200 12 ------------------------------------------------------------------------------ Cable Total 88 See notes to investment portfolio. 23 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Warrants (i) - (continued) TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued) Communications - 0.2% Units Value ($) ------------------------------------------------------------------------------ UbiquiTel, Inc., expires 04/15/10 (a) 5,250 53 XM Satellite Radio Holdings, Inc.: expires 12/31/09 675 1,215,000 expires 03/15/10 (a) 2,435 50,526 ------------------------------------------------------------------------------ Communications Total 1,265,579 Communication Services - 0.0% ------------------------------------------------------------------------------ iPCS, Inc., expires 07/15/10 (a) 2,500 25 ------------------------------------------------------------------------------ Communication Services Total 25 Motor Freight & Warehousing - 0.0% ------------------------------------------------------------------------------ QDI LLC, expires 01/15/07 (a)(f) 10,207 156,473 ------------------------------------------------------------------------------ Motor Freight & Warehousing Total 156,473 Telecommunications - 0.0% ------------------------------------------------------------------------------ Carrier1 International SA, expires 02/19/09 (a)(e) 2,780 28 Horizon PCS, Inc., expires 10/01/10 (a) 4,705 5 Jazztel PLC, expires 07/15/10 (a)(j) 1,435 -- MetroNet Communications Corp., expires 08/15/07 (a)(f)(j) 1,250 -- ------------------------------------------------------------------------------ Telecommunications Total 33 ------------- TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES TOTAL 1,422,318 Total Warrants (cost of $8,218,447) 1,479,901 See notes to investment portfolio. 24 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Short-Term Obligation - 0.5% ------------------------------------------------------------------------------ Par ($) Value ($) Repurchase agreement with State Street Bank & Trust Co., dated 11/28/03, due 12/01/03 at 0.950%, collateralized by a U.S. Treasury Bond maturing 02/15/29, market value $3,938,855 (repurchase proceeds $3,861,306) (cost of $3,861,000) 3,861,000 3,861,000 Total Investments - 98.6% (cost of $766,678,012) (l) 765,598,267 Other Assets & Liabilities, Net - 1.4% 11,096,182 Net Assets - 100.0% $ 776,694,449 Notes to Investment Portfolio: (a) These securities are exempt from registration under Rule 144A of the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At November 30, 2003, the value of these securities amounted to $149,255,740 which represents 19.2% of net assets. (b) This security has been purchased on a delayed delivery basis. (c) Stepped coupon bond. Currently accruing at zero. Shown parenthetically is the next interest rate to be paid and the date the Fund will begin accruing this rate. (d) Zero coupon bond. (e) As of November 30, 2003, the Fund held securities of certain issuers that have filed for bankruptcy protection under Chapter 11, representing 1.9% of net assets. These issuers are in default of certain debt covenants. Income is not being accrued. (f) Represents fair value as determined in good faith under the direction of the Board of Trustees. (g) This issuer is in default of certain debt covenants. Income is not being accrued. (h) Income is not being accrued on this security. (i) Non-income producing. (j) Security has no value. (k) As of November 30, 2003, the fund held securities of certain issuers that have filed for bankruptcy protection under Chapter 11, representing 0.1% of net assets. Income is being accrued. (l) Cost for federal income tax purposes is $766,139,794. Forward foreign currency contracts outstanding at November 30, 2003 are as follows: SETTLEMENT NET UNREALIZED CONTRACTS TO DELIVER IN EXCHANGE FOR DATE DEPRECIATION -------------------- --------------- ---------- -------------- CAD 3,060,000 USD 2,342,763 12/15/03 $ (14,101) EUR 3,979,000 USD 4,559,934 12/08/03 (212,455) -------------- $ (226,556) ============== ACRONYM NAME ------- -------------------- CAD Canadian Dollar EUR Euro PIK Payment-In-Kind USD United States Dollar See notes to financial statements. 25 STATEMENT OF ASSETS AND LIABILITIES November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund ($) ------------------------------------------------------------------------- Assets Investments, at cost 766,678,012 Investments, at value 765,598,267 Cash 2,876,734 Receivable for: Investments sold 5,108,842 Investments sold on a delayed delivery basis 319,300 Fund shares sold 1,010,812 Interest 16,070,988 Dividends 91,983 Deferred Trustees' compensation plan 25,825 ------------- Total Assets 791,102,751 ------------------------------------------------------------------------- Liabilities Net unrealized depreciation on foreign forward currency contracts 226,556 Expense reimbursement due to Advisor 17 Payable for: Investments purchased 5,249,671 Investments purchased on a delayed delivery basis 4,977,170 Fund shares repurchased 913,871 Distributions 1,861,198 Investment advisory fee 380,092 Transfer agent fee 347,503 Pricing and bookkeeping fees 30,307 Trustees' fees 803 Custody fee 4,048 Distribution and service fees 371,150 Deferred Trustees' fees 25,825 Other liabilities 20,091 ------------- Total Liabilities 14,408,302 Net Assets 776,694,449 ------------------------------------------------------------------------- Composition of Net Assets Paid-in capital 1,194,242,488 Overdistributed net investment income (2,795,900) Accumulated net realized loss (413,449,591) Net unrealized depreciation on: Investments (1,079,745) Foreign currency translations (222,803) Net Assets 776,694,449 ------------------------------------------------------------------------- Class A Net assets 381,432,479 Shares outstanding 83,544,068 Net asset value per share 4.57(a) Maximum offering price per share ($4.57/0.9525) 4.80(b) ------------------------------------------------------------------------- Class B Net assets 307,236,590 Shares outstanding 67,292,176 Net asset value and offering price per share 4.57(a) ------------------------------------------------------------------------- Class C Net assets 57,727,588 Shares outstanding 12,643,857 Net asset value and offering price per share 4.57(a) ------------------------------------------------------------------------- Class Z Net assets 30,297,792 Shares outstanding 6,636,010 Net asset value, offering and redemption price per share 4.57 (a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. (b) On sales of $50,000 or more the offering price is reduced. See notes to financial statements. 26 STATEMENT OF OPERATIONS For the Six Months Ended November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund ($) ------------------------------------------------------------------------- Investment Income Dividends 399,892 Interest 32,934,169 Total Investment Income (net of foreign taxes withheld of $757) 33,334,061 ------------------------------------------------------------------------- Expenses Investment advisory fee 2,283,659 Distribution fee: Class B 1,141,562 Class C 207,016 Service fee: Class A 467,985 Class B 380,520 Class C 68,933 Transfer agent fee 1,285,397 Pricing and bookkeeping fees 123,961 Trustees' fees 13,737 Custody fee 18,169 Other expenses 102,528 ---------- Total Expenses 6,093,467 Fees and expenses waived or reimbursed by Advisor (37,548) Fees waived by Distributor - Class C (41,576) Custody earnings credit (5,306) ---------- Net Expenses 6,009,037 ---------- Net Investment Income 27,325,024 ------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Net realized loss on: Investments (2,955,250) Foreign currency transactions (152,973) ---------- Net realized loss (3,108,223) Net change in unrealized appreciation/depreciation on: Investments 50,039,385 Foreign currency translations (116,820) ---------- Net change in unrealized appreciation/depreciation 49,922,565 ---------- Net Gain 46,814,342 ---------- Net Increase in Net Assets from Operations 74,139,366 See notes to financial statements. 27 STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------------- Columbia High Yield Opportunity Fund (unaudited) Six Months Ended Period Ended Year Ended November 30, May 31, December 31, Increase (Decrease) in Net Assets: 2003($) 2003(a)($) 2002($) ------------------------------------------------------------------------------------------------------- Operations: Net investment income 27,325,024 24,767,811 55,441,396 Net realized loss on investments and foreign currency transactions (3,108,223) (17,632,755) (148,093,490) Net change in unrealized appreciation/ depreciation on investments and foreign currency translations 49,922,565 72,727,890 60,419,314 Net Increase (Decrease) from Operations 74,139,366 79,862,946 (32,232,780) ------------------------------------------------------------------------------------------------------- Distributions Declared to Shareholders: From net investment income: Class A (14,446,064) (13,142,914) (32,236,809) Class B (10,601,473) (9,273,542) (25,717,885) Class C (1,962,064) (1,580,199) (4,204,933) Class Z (1,075,527) (1,396,747) (1,529,375) Return of capital: Class A -- -- (2,748,971) Class B -- -- (2,193,075) Class C -- -- (358,573) Class Z -- -- (130,416) Total Distributions Declared to Shareholders (28,085,128) (25,393,402) (69,120,037) ------------------------------------------------------------------------------------------------------- Share Transactions: Class A: Subscriptions 132,287,691 123,761,289 235,835,725 Proceeds received in connection with merger -- -- 175,784 Distributions reinvested 7,485,686 6,982,957 17,448,294 Redemptions (158,482,043) (143,095,138) (211,467,498) -------------------------------------------- Net Increase (Decrease) (18,708,666) (12,350,892) 41,992,305 Class B: Subscriptions 29,641,965 31,442,432 88,840,756 Distributions reinvested 4,863,503 4,268,763 12,563,965 Redemptions (50,018,506) (31,579,170) (127,327,785) -------------------------------------------- Net Increase (Decrease) (15,513,038) 4,132,025 (25,923,064) Class C: Subscriptions 16,600,595 9,708,920 22,531,723 Distributions reinvested 1,231,706 984,268 2,835,915 Redemptions (14,875,138) (9,260,789) (23,747,996) -------------------------------------------- Net Increase 2,957,163 1,432,399 1,619,642 Class Z: Subscriptions 27,851,544 18,835,360 20,514,243 Proceeds received in connection with merger -- -- 36,830,189 Distributions reinvested 835,037 1,244,797 1,500,998 Redemptions (46,022,027) (12,632,407) (24,679,597) -------------------------------------------- Net Increase (Decrease) (17,335,446) 7,447,750 34,165,833 Net Increase (Decrease) from Share Transactions (48,599,987) 661,282 51,854,716 Total Increase (Decrease) in Net Assets (2,545,749) 55,130,826 (49,498,101) ------------------------------------------------------------------------------------------------------- See notes to financial statements.
28 STATEMENTS OF CHANGES IN NET ASSETS (continued)
------------------------------------------------------------------------------------------------------- Columbia High Yield Opportunity Fund (unaudited) Six Months Ended Period Ended Year Ended November 30, May 31, December 31, Increase (Decrease) in Net Assets: 2003($) 2003(a)($) 2002($) ------------------------------------------------------------------------------------------------------- Net Assets: Beginning of period 779,240,198 724,109,372 773,607,473 End of period (including overdistributed net investment income of $(2,795,900), $(2,035,796) and (1,587,777), respectively) 776,694,449 779,240,198 724,109,372 ------------------------------------------------------------------------------------------------------- Changes in Shares: Class A: Subscriptions 30,483,620 30,064,102 56,148,431 Issued in connection with merger -- -- 43,511 Issued for distributions reinvested 1,691,132 1,670,630 4,119,471 Redemptions (36,196,064) (34,371,342) (49,928,762) -------------------------------------------- Net Increase (Decrease) (4,021,312) (2,636,610) 10,382,651 Class B: Subscriptions 6,733,777 7,579,882 20,864,519 Issued for distributions reinvested 1,099,723 1,022,266 2,954,382 Redemptions (11,394,786) (7,619,970) (29,746,409) -------------------------------------------- Net Increase (Decrease) (3,561,286) 982,178 (5,927,508) Class C: Subscriptions 3,802,587 2,356,861 5,278,283 Issued for distributions reinvested 278,177 235,678 668,879 Redemptions (3,393,014) (2,247,443) (5,607,906) -------------------------------------------- Net Increase 687,750 345,096 339,256 Class Z: Subscriptions 6,334,092 4,570,300 5,020,578 Issued in connection with merger -- -- 9,116,388 Issued for distributions reinvested 188,447 297,518 374,230 Redemptions (10,532,660) (3,077,369) (6,084,044) -------------------------------------------- Net Increase (Decrease) (4,010,121) 1,790,449 8,427,152 (a) The Fund has changed its fiscal year end from December 31 to May 31. See notes to financial statements.
29 NOTES TO FINANCIAL STATEMENTS November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund NOTE 1. ORGANIZATION Columbia High Yield Opportunity Fund (the "Fund"), a series of Columbia Funds Trust I (the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. INVESTMENT GOAL The Fund seeks high current income and total return. FUND SHARES The Fund may issue an unlimited number of shares, and offers four classes of shares: Class A, Class B, Class C 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 4.75% based on the amount of initial investment. Class A shares purchased without an initial sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on shares sold within eighteen months on an original purchase of $1 million to $25 million. 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 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, the Fund changed its name from Liberty High Yield Securities Fund to Columbia High Yield Opportunity Fund. 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 policies consistently followed by the Fund in the preparation of its financial statements. SECURITY VALUATION: Debt securities generally are valued by a pricing service approved by the Trust's Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Certain securities, which tend to be more thinly traded and of lesser quality, are priced based on fundamental analysis of the financial condition of the issuer and the estimated value of any collateral. Valuations developed through pricing techniques may vary from the actual amounts realized upon sale of the securities, and the potential variation may be greater for those securities valued using fundamental analysis. Debt securities for which quotations are readily available are valued at an over-the-counter or exchange bid quotation. 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. Forward currency exchange contracts are valued at the prevailing forward exchange rate of the underlying currencies. Restricted securities and investments for which market quotations are not readily available, which tend to be more thinly traded and of lesser quality, 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. Foreign markets close each day at various times prior to the close of the New York Stock Exchange ("NYSE"). Foreign currency exchange rates are generally 30 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund determined prior to the close of the NYSE at 12:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the value of a foreign security may occur subsequent to the close of the exchange or market which would not be reflected in the computation of the Fund's net asset value. In such an event, the foreign security will be valued at the fair value. SECURITY TRANSACTIONS Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS Forward foreign currency exchange contracts are agreements to exchange one currency for another at a future date at a specified price. These contracts are used to minimize the exposure to foreign exchange rate fluctuations during the period between trade and settlement date of the contracts. The Fund may utilize forward foreign currency exchange contracts in connection with the settlement of purchases and sales of securities. The Fund may also enter into these contracts to hedge certain other foreign currency denominated assets. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge a Fund's investments against currency fluctuations. Forward currency contracts are valued daily at the current exchange rate of the underlying currency, resulting in unrealized gains (losses) which become realized at the time the foreign currency contracts are closed or mature. Realized and unrealized gains (losses) arising from such transactions are included in net realized and unrealized gains (losses) on foreign currency transactions. The use of forward currency contracts does not eliminate fluctuations in the prices of the Fund's portfolio securities. While the maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened, exposure is typically limited to the change in value of the contract (in U.S. dollars) over the period it remains open. A fund could also be exposed to risk if the counterparties of the contracts are unable to fulfill the terms of the contracts. The Fund sets aside cash or liquid portfolio securities equal to the amount of the forward currency contract. REPURCHASE AGREEMENTS The Fund may engage in repurchase agreement transactions with institutions that the Fund's investment advisor has determined are creditworthy. The Fund, through its custodian, receives 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 received.) A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty, including possible delays or restrictions upon a 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 Fund seeks to assert its rights. DELAYED DELIVERY SECURITIES The Fund may trade securities on other than normal settlement terms, including securities purchased or sold on a "when-issued" basis. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. The Fund identifies cash or liquid portfolio securities as segregated with the custodian in an amount equal to the delayed delivery commitment. INCOME RECOGNITION Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities. Corporate actions and dividend income are recorded on the ex-date. The value of additional securities received as an income payment is recorded as income and as the cost basis of such securities. FOREIGN CURRENCY TRANSACTIONS The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day's exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes. 31 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund The Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments. DETERMINATION OF CLASS NET ASSET VALUES All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class. FEDERAL INCOME TAX STATUS The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and will distribute 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, the Fund will not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded. DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income and capital gains dividends are determined in accordance with income tax regulations and 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 the 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. Unrealized appreciation (depreciation) at November 30, 2003, based on cost of investments for federal income tax purposes was: Unrealized appreciation $ 53,949,163 Unrealized depreciation (54,490,690) ------------------------------------------------------- Net unrealized depreciation $ (541,527) ------------------------------------------------------- The following capital loss carryforwards are available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code: Year of Capital Loss Expiration Carryforward ------------------------------------- 2005 $ 757,799 ------------------------------------- 2006 738,934 ------------------------------------- 2007 13,268,889 ------------------------------------- 2008 44,818,986 ------------------------------------- 2009 161,087,717 ------------------------------------- 2010 171,019,187 ------------------------------------- 2011 18,463,873 ------------------------------------- $ 410,155,385 ------------------------------------- Expired capital loss carryfowards are recorded as a reduction of paid-in capital. NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES On April 1, 2003, Colonial Management Associates, Inc., the previous investment advisor to the Fund, 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 Fund's investment advisor. The merger did not change the way the Fund is managed, the investment personnel assigned to manage the Fund or the fees paid by the Fund. INVESTMENT ADVISORY FEE Columbia is the investment advisor to the Fund and provides administrative and other services. Columbia receives a monthly fee based on the Fund's average daily net assets at the following annual rates: Average Daily Net Assets Fee Rate ------------------------------------------ First $1 billion 0.60% ------------------------------------------ Next $1 billion 0.55% ------------------------------------------ Over $2 billion 0.50% ------------------------------------------ 32 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund Prior to November 1, 2003, Columbia was entitled to receive a monthly investment advisory fee based on the Fund's average daily net assets at the following annual rates: Average Daily Net Assets Fee Rate ------------------------------------------ First $1.5 billion 0.60% ------------------------------------------ Over $1.5 billion 0.55% ------------------------------------------ For the six months ended November 30, 2003, the Fund's annualized effective investment advisory fee rate was 0.60%. PRICING AND BOOKKEEPING FEES Columbia is responsible for providing pricing and bookkeeping services to the 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 Fund, Columbia receives from the Fund an annual flat fee of $10,000 paid monthly, and in any month that the 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 the Fund for that month. The Fund also pays additional fees for pricing services. For the six months ended November 30, 2003, the annualized effective pricing and bookkeeping fee rate was 0.033%. Columbia pays the total fees collected to State Street under the Outsourcing Agreement. TRANSFER AGENT FEE Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia, provides shareholder services for an annual fee of $34.00 per open account for transfer agent fees. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly transfer agent fee at the annual rate of 0.06% of the Fund's average daily net assets plus flat-rate charges based on the number of shareholder accounts and transactions, in addition to reimbursement for certain out-of-pocket expenses. For the six months ended November 30, 2003, the annualized effective transfer agent fee rate, exclusive of out-of-pocket expenses, was 0.23%. Effective October 13, 2003 Liberty Funds Services, Inc. changed its name to Columbia Funds Services, Inc. UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES: Effective October 13, 2003 Liberty Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia and the Fund's principal underwriter, changed its name to Columbia Funds Distributor, Inc. For the six months ended November 30, 2003, the Distributor retained net underwriting discounts of $19,898 on sales of the Fund's Class A shares and received CDSC of $83,090, $418,711 and $8,509 on Class A, Class B and Class C share redemptions, respectively. The Fund has adopted a 12b-1 plan (the "Plan") which requires the payment of a monthly service fee to the Distributor equal to 0.25% annually of the average daily net assets attributable to Class A, Class B and Class C shares. The Plan also requires the payment of a monthly distribution fee to the Distributor equal to 0.75% annually of the average daily net assets attributable to Class B and Class C shares only. The Distributor has voluntarily agreed to waive a portion of the Class C share distribution fee so that it will not exceed 0.60% annually. 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. EXPENSE LIMITS AND FEE WAIVERS: Columbia has voluntarily agreed to waive a portion of the transfer agent fee so that the transfer agent fee will not exceed 0.23% annually of the Fund's average daily net assets. Columbia, at its discretion, may revise or discontinue this arrangement any time. CUSTODY CREDITS The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement. FEES PAID TO OFFICERS AND TRUSTEES The Fund pays no compensation to its officers, all of whom are employees of Columbia or its affiliates. 33 November 30, 2003 (unaudited) Columbia High Yield Opportunity Fund The Fund's Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Fund's assets. NOTE 5. PORTFOLIO INFORMATION PURCHASES AND SALES OF SECURITIES For the six months ended November 30, 2003, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were $321,274,210 and $350,414,808, respectively. NOTE 6. LINE OF CREDIT The Fund 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 the Fund based on its borrowings. In addition, the 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 Statement of Operations. For the six months ended November 30, 2003, the Fund did not borrow under these arrangements. NOTE 7. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES HIGH-YIELD SECURITIES Investing in high-yield securities may involve greater credit risk and considerations not typically associated with investing in U.S. Government bonds and other higher quality fixed income securities. These securities are non-investment grade securities, often referred to as "junk bonds." Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high yield securities may be less liquid due to the extent that there is no established retail secondary market and because of a decline in the value of such securities. LEGAL PROCEEDINGS Columbia, the Distributor and certain of their affiliates (collectively, "the Columbia Group") have received information requests and subpoenas from various regulatory authorities, including the Securities and Exchange Commission ("SEC") and the New York Attorney General, in connection with their investigations of late trading and market timing in mutual funds. The Columbia Group has not uncovered any instances where Columbia or the Distributor was knowingly involved in late trading of mutual fund shares. The Columbia Group has identified a limited number of investors who had informal arrangements for trading certain Columbia Fund shares between 1998 and 2003. A substantial majority of the trading had ended by October 2002. None of these arrangements exists today. Information relating to those trading arrangements has been supplied to various regulatory authorities. To the extent that any Columbia Fund, whose shares were involved in those trading activities, was harmed by them, the Columbia Group has undertaken to reimburse such Fund. The SEC staff has issued notices to the effect that it has made a preliminary determination to recommend that the SEC bring civil enforcement actions, including injunctive proceedings, against Columbia and the Distributor, alleging that they have violated certain provisions of the federal securities laws. The Columbia Group believes that those allegations are based principally on the trading arrangements referred to above. Columbia and the Distributor are engaged in discussions with the SEC staff in an effort to reach a satisfactory resolution of these matters. However, there can be no assurance that such a resolution will be reached. Any potential resolution of these matters may include, but not be limited to, sanctions, financial penalties, damages or injunctions regarding Columbia or the Distributor, and structural changes in the conduct of their business. Although the Columbia Group does not believe that these regulatory developments or their resolution will have a material adverse effect on the Columbia Funds, or on the ability of Columbia and the Distributor to provide services to the Columbia Funds, there can be no assurance that these matters or any adverse publicity or other developments resulting from them will not result in increased redemptions or reduced sales of Columbia Fund shares, which could increase transactions costs or operating expenses, or other consequences for the Columbia Funds. NOTE 8. COMPARABILITY OF FINANCIAL STATEMENTS The Fund has changed its fiscal year end from December 31 to May 31. 34 FINANCIAL HIGHLIGHTS Columbia High Yield Opportunity Fund Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Period Ended Ended Year Ended December 31, November May 31, ---------------------------------------------------------------- Class A Shares 30, 2003 2003 (a) 2002 2001 2000 1999 1998 ----------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76 $ 7.23 Income from Investment Operations: Net investment income 0.17(b) 0.14(b) 0.34(b) 0.52(b)(c) 0.61(d) 0.60(d) 0.63 Net realized and unrealized gain (loss) on investments and foreign currency 0.27 0.30 (0.53) (0.65)(c) (1.24) (0.20) (0.48) ----------- --------- --------- --------- --------- --------- --------- Total from Investment Operations 0.44 0.44 (0.19) (0.13) (0.63) 0.40 0.15 ----------------------------------------------------------------------------------------------------------------------------------- Less Distributions Declared to Shareholders: From net investment income (0.17) (0.15) (0.39) (0.51) (0.62) (0.61) (0.62) From net realized gains -- -- (0.03) (0.04) -- -- -- ----------- --------- --------- --------- --------- --------- --------- Total Distributions Declared to Shareholders (0.17) (0.15) (0.42) (0.55) (0.62) (0.61) (0.62) ----------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $ 4.57 $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76 Total return (e) 10.43%(f)(g) 11.01%(f) (4.27)% (2.78)% (10.28)% 6.17% 2.12% ----------------------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets/Supplemental Data: Expenses (h) 1.24%(i) 1.29%(i) 1.31% 1.22% 1.16% 1.21% 1.21% Net investment income (h) 7.49%(i) 8.24%(i) 7.92% 10.34%(c) 10.00% 9.02% 8.81% Waiver/reimbursement 0.01%(i) --(i)(j) -- -- -- -- -- Portfolio turnover rate 44%(f) 45%(f) 63% 62% 28% 42% 97% Net assets, end of period (000's) $ 381,432 $ 376,944 $ 361,780 $ 369,043 $ 390,917 $ 540,201 $ 568,125 -----------------------------------------------------------------------------------------------------------------------------------
(a) The Fund has changed its fiscal year end from December 31 to May 31. (b) Per share data was calculated using average shares outstanding during the period. (c) Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001, was to increase net investment income per share by $0.05, decrease net realized and unrealized loss per share by $0.05 and increase the ratio of net investment income to average net assets from 9.76% to 10.34%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (d) The per share net investment income amounts do not reflect the period's reclassification of differences between book and tax basis net investment income. (e) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (f) Not annualized. (g) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 35 Columbia High Yield Opportunity Fund Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Period Ended Ended Year Ended December 31, November May 31, ---------------------------------------------------------------- Class B Shares 30, 2003 2003 (a) 2002 2001 2000 1999 1998 ----------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76 $ 7.23 ----------------------------------------------------------------------------------------------------------------------------------- Income From Investment Operations: Net investment income 0.15(b) 0.13(b) 0.31(b) 0.48(b)(c) 0.56(d) 0.55(d) 0.58 Net realized and unrealized gain (loss) on investments and foreign currency 0.27 0.29 (0.54) (0.65)(c) (1.24) (0.20) (0.48) ----------- --------- --------- --------- --------- --------- --------- Total from Investment Operations 0.42 0.42 (0.23) (0.17) (0.68) 0.35 0.10 ------------------------------------------------------------------------------------------------------------------------------------ Less Distributions Declared to Shareholders: From net investment income (0.15) (0.13) (0.35) (0.47) (0.57) (0.56) (0.57) Return of capital -- -- (0.03) (0.04) -- -- -- ----------- --------- --------- --------- --------- --------- --------- Total Distributions Declared to Shareholders (0.15) (0.13) (0.38) (0.51) (0.57) (0.56) (0.57) ----------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $ 4.57 $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76 Total return (e) 10.02%(f)(g) 10.67%(f) (4.99)% (3.51)% (10.96)% 5.38% 1.36% ----------------------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets/Supplemental Data: Expenses (h) 1.99%(i) 2.04%(i) 2.06% 1.97% 1.91% 1.96% 1.96% Net investment income (h) 6.75%(i) 7.49%(i) 7.17% 9.59%(c) 9.25% 8.27% 8.06% Waiver/reimbursement 0.01%(i) --(i)(j) -- -- -- -- -- Portfolio turnover rate 44%(f) 45%(f) 63% 62% 28% 42% 97% Net assets, end of period (000's) $ 307,237 $ 305,021 $ 280,220 $ 350,464 $ 433,949 $ 627,057 $ 573,626 -----------------------------------------------------------------------------------------------------------------------------------
(a) The Fund has changed its fiscal year end from December 31 to May 31. (b) Per share data was calculated using average shares outstanding during the period. (c) Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001, was to increase net investment income per share by $0.05, decrease net realized and unrealized loss per share by $0.05 and increase the ratio of net investment income to average net assets from 9.02% to 9.59%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (d) The per share net investment income amounts do not reflect the period's reclassification of differences between book and tax basis net investment income. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Not annualized. (g) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. (j) Rounds to less than 0.01%. 36 Columbia High Yield Opportunity Fund Selected data for a share outstanding throughout each period is as follows:
(Unaudited) Six Months Period Ended Ended Year Ended December 31, November May 31, ---------------------------------------------------------------- Class C Shares 30, 2003 2003 (a) 2002 2001 2000 1999 1998 ----------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76 $ 7.23 ------------------------------ --------------------------------------------------------------------------------------------------- Income From Investment Operations: Net investment income 0.15(b) 0.13(b) 0.31(b) 0.49(b)(c) 0.57(d) 0.56(d) 0.58 Net realized and unrealized gain (loss) on investments and foreign currency 0.28 0.29 (0.53) (0.65)(c) (1.24) (0.20) (0.47) ----------- --------- --------- --------- --------- --------- --------- Total from Investment Operations 0.43 0.42 (0.22) (0.16) (0.67) 0.36 0.11 ------------------------------ --------------------------------------------------------------------------------------------------- Less Distributions Declared to Shareholders: From net investment income (0.16) (0.13) (0.36) (0.48) (0.58) (0.57) (0.58) Return of capital -- -- (0.03) (0.04) -- -- -- ----------- --------- --------- --------- --------- --------- --------- Total Distributions Declared to Shareholders (0.16) (0.13) (0.39) (0.52) (0.58) (0.57) (0.58) ------------------------------ --------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $ 4.57 $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76 Total return (e)(f) 10.11%(g) 10.74%(g) (4.85)% (3.37)% (10.78)% 5.54% 1.51% ------------------------------ --------------------------------------------------------------------------------------------------- Ratios to Average Net Assets/Supplemental Data: Expenses (h) 1.84%(i) 1.89%(i) 1.91% 1.82% 1.76% 1.81% 1.81% Net investment income (h) 6.89%(i) 7.64%(i) 7.32% 9.74%(c) 9.40% 8.42% 8.21% Waiver/reimbursement 0.16%(i) 0.15%(i) 0.15% 0.15% 0.15% 0.15% 0.15% Portfolio turnover rate 44%(g) 45%(g) 63% 62% 28% 42% 97% Net assets, end of period (000's) $ 57,728 $ 51,471 $ 46,568 $ 52,122 $ 48,904 $ 56,068 $ 34,302 -----------------------------------------------------------------------------------------------------------------------------------
(a) The Fund has changed its fiscal year end from December 31 to May 31. (b) Per share data was calculated using average shares outstanding during the period. (c) Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001, was to increase net investment income per share by $0.05, decrease net realized and unrealized loss per share by $0.05 and increase the ratio of net investment income to average net assets from 9.16% to 9.74%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (d) The per share net investment income amounts do not reflect the period's reclassification of differences between book and tax basis net investment income. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Had the Investment Advisor/Distributor not waived a portion of expenses, total return would have been reduced. (g) Not annualized. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. 37 Columbia High Yield Opportunity Fund Selected data for a share outstanding throughout each period is as follows:
(unaudited) Six Months Period Ended Ended Year Ended December 31, November May 31, ------------------------------------------------------------------ Class Z Shares 30, 2003 2003 (a) 2002 2001 2000 1999 1998 (b) -------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.79 -------------------------------------------------------------------------------------------------------------------------------- Income from Investment Operations: Net investment income 0.17(c) 0.15(c) 0.33(c) 0.53(c)(d) 0.62(e) 0.60(e) Net realized and unrealized gain (loss) on investments and foreign currency 0.28 0.29 (0.51) (0.65)(d) (1.24) (0.23) --------- --------- --------- -------- --------- --------- Total from Investment Operations 0.45 0.44 (0.18) (0.12) (0.62) 0.37 -------------------------------------------------------------------------------------------------------------------------------- Less Distributions Declared to Shareholders: From net investment income (0.18) (0.15) (0.40) (0.52) (0.63) (0.61) Return of capital -- -- (0.03) (0.04) -- -- --------- --------- --------- -------- --------- --------- Total Distributions Declared to Shareholders (0.18) (0.15) (0.43) (0.56) (0.63) (0.61) -------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $ 4.57 $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 Total return (f) 10.56%(g)(h) 11.12%(g) (4.03)% (2.53)% (10.06)% 5.83%(g) -------------------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets/Supplemental Data: Expenses (i) 0.99%(j) 1.04%(j) 1.06% 0.97% 0.91% 0.95%(j) Net investment income (i) 7.79%(j) 8.49%(j) 8.17% 10.59%(d) 10.25% 9.22%(j) Waiver/reimbursement 0.01%(j) --(j)(k) -- -- -- -- Portfolio turnover rate 44%(g) 45%(g) 63% 62% 28% 42% Net assets, end of period (000's) $ 30,298 $ 45,803 $ 35,541 $ 1,978 $ 566 $ 418 --------------------------------------------------------------------------------------------------------------------------------
(a) The Fund has changed its fiscal year end from December 31 to May 31. (b) Class Z shares were initially offered on January 8, 1999. Per share data and total returns reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001, was to increase net investment income per share by $0.05, decrease net realized and unrealized loss per share by $0.05 and increase the ratio of net investment income to average net assets from 10.01% to 10.59%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (e) The per share net investment income amounts do not reflect the period's reclassification of differences between book and tax basis net investment income. (f) Total return at net asset value assuming all distributions reinvested. (g) Not annualized. (h) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. (k) Rounds to less than 0.01%. 38 Important Information About This Report Columbia High Yield Opportunity Fund 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 High Yield Opportunity Fund. This report may also be used as sales literature when preceded or accompanied by the current prospectus which provides details of sales charges, investment objectives and operating policies of the fund and with the most recent copy of the Columbia Funds Performance Update. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities is available (i) without charge, upon request, by calling 800-345-6611 and (ii) on the Securities and Exchange Commissionwebsite at http://www.sec.gov. TRANSFER AGENT Columbia Funds Services, Inc. P.O. Box 8081 Boston MA 02266-8081 800.345.6611 DISTRIBUTOR Columbia Funds Distributor, Inc. One Financial Center Boston MA 02111 INVESTMENT ADVISOR Columbia Management Advisors, Inc. 100 Federal Street Boston MA 02111 39 Columbia Funds Columbia High Yield Opportunity Fund -------------------------------------------------------------------------------- Large Growth Columbia Common Stock Columbia Growth Columbia Growth Stock Columbia Large Cap Growth Columbia Tax-Managed Growth Columbia Tax-Managed Growth II Columbia Young Investor -------------------------------------------------------------------------------- Large Value Columbia Disciplined Value Columbia Growth & Income Columbia Large Cap Core Columbia Tax-Managed Value -------------------------------------------------------------------------------- Midcap Growth Columbia Acorn Select Columbia Mid Cap Growth Columbia Tax-Managed Aggressive Growth -------------------------------------------------------------------------------- Midcap Value Columbia Dividend Income Columbia Mid Cap Columbia Strategic Investor -------------------------------------------------------------------------------- Small Growth Columbia Acorn Columbia Acorn USA Columbia Small Company Equity -------------------------------------------------------------------------------- Small Value Columbia Small Cap Columbia Small-Cap Value -------------------------------------------------------------------------------- Balanced Columbia Asset Allocation Columbia Balanced Columbia Liberty Fund -------------------------------------------------------------------------------- Specialty Columbia Real Estate Equity Columbia Technology Columbia Utilities -------------------------------------------------------------------------------- Taxable Fixed-Income Columbia Contrarian Income Columbia Corporate Bond Columbia Federal Securities Columbia Fixed Income Securities Columbia High Yield Columbia High Yield Opportunities Columbia Income Columbia Intermediate Bond Columbia Intermediate Government Income Columbia Quality Plus Bond Columbia Short Term Bond Columbia Strategic Income -------------------------------------------------------------------------------- Floating Rate Columbia Floating Rate Columbia Floating Rate Advantage -------------------------------------------------------------------------------- Tax Exempt Columbia High Yield Municipal Columbia Intermediate Tax-Exempt Bond Columbia Managed Municipals Columbia National Municipal Bond Columbia Tax-Exempt Columbia Tax-Exempt Insured 40 Columbia High Yield Opportunity Fund -------------------------------------------------------------------------------- Single State Tax Exempt Columbia California Tax-Exempt Columbia Connecticut Intermediate Municipal Bond Columbia Connecticut Tax-Exempt Columbia Florida Intermediate Municipal Bond Columbia Massachusetts Intermediate Municipal Bond Columbia Massachusetts Tax-Exempt Columbia New Jersey Intermediate Municipal Bond Columbia New York Intermediate Municipal Bond Columbia New York Tax-Exempt Columbia Oregon Municipal Bond Columbia Pennsylvania Intermediate Municipal Bond Columbia Rhode Island Intermediate Municipal Bond -------------------------------------------------------------------------------- Money Market Columbia Money Market Columbia Municipal Money Market -------------------------------------------------------------------------------- International/Global Columbia Acorn International Columbia Acorn International Select Columbia Europe Columbia Global Equity Columbia International Stock Columbia Newport Asia Pacific Columbia Newport Greater China Columbia Newport Japan Opportunities* Columbia Newport Tiger -------------------------------------------------------------------------------- Index Funds Columbia Large Company Index Columbia Small Company Index Columbia U.S. Treasury Index Columbia funds are offered only by prospectus. Please see your financial advisor for a prospectus, which describes in detail fund objectives, investment policies, risks, sales charges, fees, liquidity and other matters of interest. Please read the prospectus carefully before you invest or send money. * As of October 17, 2003, this fund is closed to new investors. It is scheduled for liquidation on December 5, 2003. For complete product information on any Columbia fund, visit our website at www.columbiafunds.com. Columbia Management Group and Columbia Management refer collectively to the various investment advisory subsidiaries of Columbia Management Group, including Columbia Management Advisors, Inc., the registered investment advisor, and to Columbia Funds Distributor, Inc. 41 eDelivery [photo of keyboard] Help your fund reduce printing and postage costs! Elect to get your shareholder reports by electronic delivery. With Columbia's eDelivery program, you receive an e-mail message when your shareholder report becomes available online. If your fund account is registered with Columbia Funds, you can sign up quickly and easily on our website at www.columbiafunds.com. Please note -- if you own your fund shares through a financial institution, contact the institution to see if it offers electronic delivery. If you own your fund shares through a retirement plan, electronic delivery may not be available to you. Columbia High Yield Opportunity Fund SEMIANNUAL REPORT, NOVEMBER 30, 2003 PRSRT STD U.S. POSTAGE PAID HOLLISTON, MA PERMIT NO. 20 [LOGO]: COLUMBIA FUNDS A MEMBER OF COLUMBIA MANAGEMENT GROUP (C)2004 Columbia Funds Distributor, Inc. One Financial Center, Boston, MA 02111-2621 800.345.6611 www.columbiafunds.com Item 2. Code of Ethics. Not applicable at this time. Item 3. Audit Committee Financial Expert. Not applicable at this time. 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: Not applicable at this time. (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 February 4, 2004 ---------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title) /s/ Joseph R. Palombo -------------------------- Joseph R. Palombo, President Date February 4, 2004 ---------------------------------------------- By (Signature and Title) /s/ J. Kevin Connaughton -------------------------- J. Kevin Connaughton, Treasurer Date February 4, 2004 ----------------------------------------------