-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TT1qS1a1GDSssmjDcMbnVjJJSo3dsRhSzrfl5OvQFg8S7P7JiqtJfPAzALzG4iZd /p82tQItrWa4sC+PzHHTsg== 0000950123-10-091929.txt : 20101007 0000950123-10-091929.hdr.sgml : 20101007 20101007083126 ACCESSION NUMBER: 0000950123-10-091929 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20100731 FILED AS OF DATE: 20101007 DATE AS OF CHANGE: 20101007 EFFECTIVENESS DATE: 20101007 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RIVERSOURCE LARGE CAP SERIES, INC. CENTRAL INDEX KEY: 0000049702 IRS NUMBER: 410962638 STATE OF INCORPORATION: MN FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-02111 FILM NUMBER: 101112916 BUSINESS ADDRESS: STREET 1: 50606 AMERIPRISE FINANCIAL CENTER STREET 2: H27/5228 CITY: MINNEAPOLIS STATE: MN ZIP: 55474 BUSINESS PHONE: 612-671-4321 MAIL ADDRESS: STREET 1: 50606 AMERIPRISE FINANCIAL CENTER STREET 2: H27/5228 CITY: MINNEAPOLIS STATE: MN ZIP: 55474 FORMER COMPANY: FORMER CONFORMED NAME: AXP GROWTH SERIES INC/MN DATE OF NAME CHANGE: 20001011 FORMER COMPANY: FORMER CONFORMED NAME: AXP GROWTH FUND INC DATE OF NAME CHANGE: 20000829 FORMER COMPANY: FORMER CONFORMED NAME: IDS GROWTH FUND INC DATE OF NAME CHANGE: 19920703 0000049702 S000003287 RiverSource Disciplined Equity Fund C000008741 RiverSource Disciplined Equity Fund Class B AQEBX C000008742 RiverSource Disciplined Equity Fund Class C RDCEX C000008744 RiverSource Disciplined Equity Fund Class A AQEAX C000008745 RiverSource Disciplined Equity Fund Class I ALEIX C000042888 RiverSource Disciplined Equity Fund Class R2 C000042889 RiverSource Disciplined Equity Fund Class R3 RSDEX C000042890 RiverSource Disciplined Equity Fund Class R4 RQEYX C000042891 RiverSource Disciplined Equity Fund Class R5 RSIPX C000042892 RiverSource Disciplined Equity Fund Class W RDEWX N-CSR 1 c59944nvcsr.txt N-CSR UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act File Number 811-2111 RIVERSOURCE LARGE CAP SERIES, INC. (Exact name of registrant as specified in charter) 50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474 (Address of principal executive offices) (Zip code) Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474 (Name and address of agent for service) Registrant's telephone number, including area code: (612) 671-1947 Date of fiscal year end: July 31 Date of reporting period: July 31, 2010 ITEM 1. REPORTS TO STOCKHOLDERS. Annual Report and Prospectus (COLUMBIA MANAGEMENT LOGO) COLUMBIA LARGE CORE QUANTITATIVE FUND (FORMERLY KNOWN AS RIVERSOURCE DISCIPLINED EQUITY FUND) - -------------------------------------------------------------------------------- ANNUAL REPORT FOR THE PERIOD ENDED JULY 31, 2010 (Prospectus also enclosed) COLUMBIA LARGE CORE QUANTITATIVE FUND SEEKS TO PROVIDE SHAREHOLDERS WITH LONG-TERM CAPITAL GROWTH. This annual report includes a prospectus that describes in detail the Fund's objective, investment strategy, risks, sales charges, fees and other matters of interest. Please read the prospectus carefully before you invest or send money. NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE TABLE OF CONTENTS -------------------------------------------------------------- Your Fund at a Glance.............. 3 Manager Commentary................. 6 The Fund's Long-term Performance... 12 Fund Expenses Example.............. 14 Portfolio of Investments........... 17 Statement of Assets and Liabilities...................... 31 Statement of Operations............ 33 Statements of Changes in Net Assets........................... 35 Financial Highlights............... 37 Notes to Financial Statements...... 46 Report of Independent Registered Public Accounting Firm........... 66 Federal Income Tax Information..... 68 Board Members and Officers......... 69 Approval of Investment Management Services Agreement............... 75 Proxy Voting....................... 78
Note: Effective September 27, 2010, the Fund has been renamed. While this report covers the fiscal period ended July 31, 2010, which is prior to the name change, the Fund's new name has been reflected throughout. SEE THE FUND'S PROSPECTUS FOR RISKS ASSOCIATED WITH INVESTING IN THE FUND. - -------------------------------------------------------------------------------- 2 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT YOUR FUND AT A GLANCE ---------------------------------------------------------- FUND SUMMARY - -------------------------------------------------------------------------------- > Columbia Large Core Quantitative Fund (the Fund) Class A shares gained 14.03% (excluding sales charge) for the 12 months ended July 31, 2010. > The Fund outperformed the unmanaged Standard & Poor's 500 Index (S&P 500 Index), which rose 13.84% for the same time frame. > The Fund also outperformed the Lipper Large-Cap Core Funds Index, representing the Fund's peer group, which advanced 11.44%, for the same period. ANNUALIZED TOTAL RETURNS (for period ended July 31, 2010) - --------------------------------------------------------------------------------
SINCE INCEPTION 1 YEAR 3 YEARS 5 YEARS 4/24/03 - ---------------------------------------------------------------------- Columbia Large Core Quantitative Fund Class A (excluding sales charge) +14.03% -8.80% -1.35% +3.89% - ---------------------------------------------------------------------- S&P 500 Index (unmanaged) +13.84% -6.78% -0.17% +4.71% - ---------------------------------------------------------------------- Lipper Large-Cap Core Funds Index (unmanaged) +11.44% -6.66% -0.17% +3.98% - ----------------------------------------------------------------------
(See "The Fund's Long-term Performance" for Index descriptions) The performance information shown represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary, visiting columbiamanagement.com or calling 800.345.6611. The 5.75% sales charge applicable to Class A shares of the Fund is not reflected in the table above. If reflected, returns would be lower than those shown. The performance of other classes may vary from that shown because of differences in fees and expenses. The Fund's returns reflect the effect of fee waivers/expense reimbursements, if any. Without such waivers/reimbursements, the Fund's returns would be lower. See the Average Annual Total Returns table for performance of other share classes of the Fund. The indices do not reflect the effects of sales charges, expenses (excluding Lipper) and taxes. It is not possible to invest directly in an index. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 3 YOUR FUND AT A GLANCE (continued) ---------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS - --------------------------------------------------------------------------------
AT JULY 31, 2010 SINCE Without sales charge 1 YEAR 3 YEARS 5 YEARS INCEPTION Class A (inception 4/24/03) +14.03% -8.80% -1.35% +3.89% - ---------------------------------------------------------------------- Class B (inception 4/24/03) +13.03% -9.49% -2.08% +3.09% - ---------------------------------------------------------------------- Class C (inception 4/24/03) +12.97% -9.52% -2.09% +3.09% - ---------------------------------------------------------------------- Class I (inception 7/15/04) +14.38% -8.45% -0.97% +1.62% - ---------------------------------------------------------------------- Class R2(*) (inception 12/11/06) +13.43% -9.05% N/A -6.68% - ---------------------------------------------------------------------- Class R3(**) (inception 12/11/06) +13.92% -8.77% N/A -6.42% - ---------------------------------------------------------------------- Class R4 (inception 4/24/03) +14.14% -8.67% -1.18% +4.06% - ---------------------------------------------------------------------- Class R5 (inception 12/11/06) +14.41% -8.48% N/A -6.10% - ---------------------------------------------------------------------- Class W (inception 12/1/06) +13.93% -8.88% N/A -6.09% - ---------------------------------------------------------------------- With sales charge Class A (inception 4/24/03) +7.48% -10.58% -2.51% +3.05% - ---------------------------------------------------------------------- Class B (inception 4/24/03) +8.03% -10.31% -2.39% +3.09% - ---------------------------------------------------------------------- Class C (inception 4/24/03) +11.97% -9.52% -2.09% +3.09% - ----------------------------------------------------------------------
Class A share performance reflects the maximum initial sales charge of 5.75%. Class B share performance reflects a contingent deferred sales charge (CDSC) applied as follows: first year 5%; second year 4%; third and fourth years 3%; fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to a 1% CDSC if shares are sold within one year after purchase. Sales charges do not apply to Class I, Class R2, Class R3, Class R4, Class R5 and Class W shares. Class I, Class R2, Class R3, Class R4 and Class R5 are available to qualifying institutional investors only. Class W shares are offered through qualifying discretionary accounts. * Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares. ** Effective July 23, 2010, the Fund no longer offers Class R3 shares. - -------------------------------------------------------------------------------- 4 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- MORNINGSTAR STYLE BOX(TM) - --------------------------------------------------------------------------------
Equity Style Value Blend Growth X Large Medium Size Small
The Morningstar Style Box(TM) is based on the fund's portfolio holdings as of period end. 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). Information shown is based on the most recent data provided by Morningstar. (C)2010 Morningstar, Inc. All rights reserved. The information contained herein is proprietary to Morningstar and/or its content providers, may not be copied or distributed and 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. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 5 MANAGER COMMENTARY ------------------------------------------------------------- Effective May 1, 2010, Brian Condon joined Gina Mourtzinou as co-portfolio manager of the Fund. Effective July 3, 2010, Mr. Condon became sole portfolio manager of the Fund. Dear Shareholder, Columbia Large Core Quantitative Fund (the Fund) Class A shares gained 14.03% (excluding sales charge) for the 12 months ended July 31, 2010. The Fund outperformed the Standard & Poor's 500 Index (S&P 500 Index), which rose 13.84%, as well as the Lipper Large-Cap Core Funds Index, representing the Fund's peer group, which advanced 11.44%, for the same period. SIGNIFICANT PERFORMANCE FACTORS Against a strengthening economic backdrop supported by generally positive data, the equity market rally that had begun in mid-March 2009 continued with little interruption until May 2010. As investor risk aversion had abated significantly, lower quality stocks led the way during these months. The rally then stalled in May and June of 2010 as worries SECTOR BREAKDOWN(1) (at July 31, 2010) - ---------------------------------------------------------------------
Consumer Discretionary 9.8% - ------------------------------------------------ Consumer Staples 11.5% - ------------------------------------------------ Energy 11.2% - ------------------------------------------------ Financials 16.1% - ------------------------------------------------ Health Care 11.6% - ------------------------------------------------ Industrials 10.3% - ------------------------------------------------ Information Technology 18.9% - ------------------------------------------------ Materials 3.3% - ------------------------------------------------ Telecommunication Services 3.3% - ------------------------------------------------ Utilities 3.3% - ------------------------------------------------ Other(2) 0.7% - ------------------------------------------------
(1) Sectors can be comprised of several industries. Please refer to the section entitled "Portfolio of Investments" for a complete listing. No single industry exceeded 25% of portfolio assets. Percentages indicated are based upon total investments (excluding Investments of Cash Collateral Received for Securities on Loan). The Fund's composition is subject to change. (2) Cash & Cash Equivalents. The sectors identified above are based on the Global Industry Classification Standard (GICS), which was developed by, and is the exclusive property of, Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. - -------------------------------------------------------------------------------- 6 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- heightened about the sovereign debt crisis in Europe and about the trajectory of the nascent global economic recovery. Investors questioned whether the recovery could be sustained without the tremendous fiscal and monetary stimulus injected into the economy since the 2008 credit crisis, as several government and Federal Reserve programs expired in March and April 2010. Further, unemployment and housing data indicated persistent weakness. Investors also were uncertain about how much of the first quarter 2010 rebound in corporate earnings was attributable merely to rebuilding of inventories. The potential of a "double- dip" recession or even deflation became of heightened concern. Equity market volatility rose. That said, by the end of the annual period, a strong start to the second quarter 2010 earnings reporting season buoyed the equity market as did an overall improvement in risk sentiment. The release of the results of the European bank stress tests on July 23 also had a positive impact on equity markets broadly. The Fund's performance was primarily driven by the three quantitative-based investment themes we employed in selecting stocks for the Fund's portfolio -- momentum, valuation and quality. During the 12-month period, the valuation and momentum themes outperformed the S&P 500 TOP TEN HOLDINGS(1) (at July 31, 2010) - ---------------------------------------------------------------------
Apple, Inc. 4.3% - ------------------------------------------------ Microsoft Corp. 3.8% - ------------------------------------------------ Chevron Corp. 3.6% - ------------------------------------------------ IBM Corp. 3.3% - ------------------------------------------------ Wal-Mart Stores, Inc. 2.7% - ------------------------------------------------ ConocoPhillips 2.6% - ------------------------------------------------ Citigroup, Inc. 2.4% - ------------------------------------------------ General Electric Co. 2.3% - ------------------------------------------------ AT&T, Inc. 2.1% - ------------------------------------------------ Merck & Co., Inc. 2.0% - ------------------------------------------------
(1) Percentages indicated are based upon total investments (excluding Investments of Cash Collateral Received for Securities on Loan and Cash & Cash Equivalents). For further detail about these holdings, please refer to the section entitled "Portfolio of Investments." Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 7 MANAGER COMMENTARY (continued) ------------------------------------------------- Index, more than offsetting the trailing performance of the quality theme. The valuation theme, which favors cheaper price-to-earnings ratio (P/E) stocks, benefited from exposure to consumer discretionary and financials stocks. Indeed, having increased the Fund's emphasis on the valuation theme in the last months of the prior fiscal year, the Fund was well positioned during this annual period for the rebound in value-oriented stocks that occurred in 2009 and into 2010. The momentum theme, designed in part to capture investor sentiment over the near to mid term, was aided mainly by information technology stocks. The quality theme, which was intended to serve in part as a defensive measure during equity market corrections when investor risk aversion increases, trailed due to exposure to more defensive sectors such as health care. It is important to remember that the themes we used take turns in leading performance over time, demonstrating the advantages of employing style diversification. Such variance in performance supports our research indicating that the style diversification provided by the three very different quantitative-based themes is a significant investment advantage over the long term, even though the Fund may experience underperformance in the short term. At the same time, we are continuously looking for ways to improve our investment process and to enhance the efficacy of the quantitative-based themes we use in the Fund. Following a specific, disciplined process, we do not make sector or industry bets based on economic or equity market outlooks. That said, the Fund's quantitative-based themes led to a modest bias toward higher quality stocks due to market volatility. This bias hurt performance, particularly in the beginning of the annual period when lower quality stocks led. However, this same bias helped in the last months of the annual period when market volatility heightened. The Fund's themes also positioned the Fund toward mega-cap, or the largest cap, stocks. This positioning had minimal impact on Fund performance during the annual period. The Fund's quantitative-based themes led to various sector weightings that, together, detracted from results. Having only a modest position in industrials, which was the top performing sector of the S&P 500 Index during the period, and a more sizable weighting in health care, which lagged, hurt most. Partially offsetting these negatives was the positive - -------------------------------------------------------------------------------- 8 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- effect of a significant allocation to the relatively stronger performing telecommunication services sector and having only a modest exposure to the weaker utilities sector. Because we use a bottom-up approach, it is not surprising that stock selection was the primary driver of the Fund's results. Specifically, the Fund benefited from strong stock selection in information technology, energy and financials. This more than offset the combined effect of stock selection in consumer staples and health care, which detracted. Among individual holdings, information technology leaders APPLE and MICROSOFT, each selected by the momentum theme, contributed significantly to the Fund's returns. Other top contributors during the annual period included energy companies CHEVRON and CONOCOPHILLIPS, each a valuation and quality pick, and financials companies PNC FINANCIAL and AMERICAN EXPRESS, each selected by the valuation theme. Stocks that detracted most from the Fund's returns included financials company GOLDMAN SACHS, selected by the valuation theme, energy giant EXXON MOBIL, a quality theme pick, health benefits provider WELLPOINT, selected by the quality theme, and integrated utilities company EXELON, a quality and valuation theme pick. At the end of July, the Fund's largest individual stock holdings were Apple, Microsoft, Chevron, information technology company IBM, selected by the momentum and quality themes, and WAL-MART STORES. During the 12-month period, the valuation and momentum themes outperformed the S&P 500 Index, more than offsetting the trailing performance of the quality theme. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 9 MANAGER COMMENTARY (continued) ------------------------------------------------- CHANGES TO THE FUND'S PORTFOLIO As a result of quantitative-based theme-driven stock selection during the annual period, the Fund's sector allocations changed somewhat. For example, the Fund's allocation to information technology increased, although this remained a more modest weighting than in the S&P 500 Index. The Fund's already modest exposure to consumer staples compared to the S&P 500 Index became an even greater underweighting. Our risk models limit the size of individual holdings, as well as sector and industry allocations, relative to the S&P 500 Index. For instance, the portfolio's weightings by sector and industry are limited to no more than 6% overweighted or underweighted relative to the S&P 500 Index. We also apply additional risk measures that impose constraints on market capitalization, price, quality, turnover, transaction costs and other variables. Perhaps the biggest change made was that a new portfolio management team was put in place toward the end of the annual period. The Fund's principal investment strategies remained based on quantitative analysis, using similar investment themes. However, while we continue to use computer-based models to analyze stocks within sectors, the new team's models are somewhat different from those previously used. We seek to maintain sector weighting neutrality overall relative to the benchmark index, and the models drive stock selection by focusing on factors within three themes -- quality, valuation and catalyst. Quality-theme factors include profitability as well as strength and sustainability measures, such as return on assets, return on equity, receivables, reserve management and cash flow accruals. Valuation-theme factors measure profitability-at-a-reasonable-price and growth-at-a-reasonable-price and include cash flow, operating income, sales, earnings, book value and risk- adjusted return. Catalyst-theme factors include long-term and short-term momentum measures and estimate revisions. OUR FUTURE STRATEGY We hold a cautious view regarding prospects for the financial markets over the remainder of 2010. After a solid run over the 12 months ended July 31, 2010, we believe stocks appeared to be closer to fair value than they had been one year prior. At the same time, however, we expect volatility to remain somewhat heightened. We believe the U.S. economy - -------------------------------------------------------------------------------- 10 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- will continue to recover, albeit at a relatively slow pace, and that inflation should remain under control. Given this view, we intend to use our quantitative-based themes, as described above, in our stock selection process, seeking to position the Fund's portfolio to take advantage of a shift in underlying market dynamics. At the same time, consistent with our disciplined approach, we remain focused on the long term and maintain the Fund's diversification across sectors and securities. We intend to continue seeking optimal returns for the Fund through the style diversification offered by the various themes within our well-tested quantitative investment models. We are convinced of the merit of our multifaceted, disciplined approach to managing risk in the portfolio and believe this combination of style diversification and rigorous risk management will allow us to maintain the high quality of the Fund's portfolio in whatever market conditions lie ahead. Brian Condon, CFA(R) Portfolio Manager Any specific securities mentioned are for illustrative purposes only and are not a complete list of securities that have increased or decreased in value. The views expressed in this statement reflect those of the portfolio manager(s) only through the end of the period of the report as stated on the cover and do not necessarily represent the views of Columbia Management Investment Advisers, LLC* (the Investment Manager) or any subadviser to the Fund or any other person in the Investment Manager or subadviser organizations. Any such views are subject to change at any time based upon market or other conditions and the Investment Manager disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for the Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of the Fund. * Effective May 1, 2010, RiverSource Investments, LLC became known as Columbia Management Investment Advisers, LLC. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 11 THE FUND'S LONG-TERM PERFORMANCE ----------------------------------------------- The chart on the facing page illustrates the total value of an assumed $10,000 investment in Columbia Large Core Quantitative Fund Class A shares (from 4/24/03 to 7/31/10) as compared to the performance of the Standard & Poor's 500 Index (S&P 500 Index) and the Lipper Large-Cap Core Funds Index. In comparing the Fund's Class A shares to these indices, you should take into account the fact that the Fund's performance reflects the maximum initial sales charge of 5.75%, while such charges are not reflected in the performance of the indices. Returns for the Fund include the reinvestment of any distributions paid during each period. The performance information shown represents past performance and is not a guarantee of future results. The table below and the chart on the facing page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The investment return and principal value of your investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by contacting your financial intermediary or visiting columbiamanagement.com. Also see "Past Performance" in the Fund's current prospectus. COMPARATIVE RESULTS - --------------------------------------------------------------------------------
Results at July 31, 2010 SINCE INCEPTION 1 YEAR 3 YEARS 5 YEARS 4/24/03 COLUMBIA LARGE CORE QUANTITATIVE FUND (INCLUDES SALES CHARGE) Class A Cumulative value of $10,000 $10,748 $7,150 $8,806 $12,442 - ------------------------------------------------------------------------------------------- Average annual total return +7.48% -10.58% -2.51% +3.05% - ------------------------------------------------------------------------------------------- S&P 500 INDEX(1) Cumulative value of $10,000 $11,384 $8,101 $9,915 $13,969 - ------------------------------------------------------------------------------------------- Average annual total return +13.84% -6.78% -0.17% +4.71% - ------------------------------------------------------------------------------------------- LIPPER LARGE-CAP CORE FUNDS INDEX(2) Cumulative value of $10,000 $11,144 $8,132 $9,915 $13,278 - ------------------------------------------------------------------------------------------- Average annual total return +11.44% -6.66% -0.17% +3.98% - -------------------------------------------------------------------------------------------
Results for other share classes can be found on page 4. - -------------------------------------------------------------------------------- 12 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- (VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN COLUMBIA LARGE CORE QUANTITATIVE FUND LINE GRAPH)
COLUMBIA LARGE CORE QUANTITATIVE FUND CLASS A (INCLUDES LIPPER LARGE-CAP SALES CHARGE) S&P 500 CORE FUNDS ($12,442) INDEX(1) ($13,969) INDEX(2) ($13,278) ----------------- ------------------ ------------------ 4/24/03 $ 9,425 $10,000 $10,000 4/03 9,482 10,063 10,054 7/03 10,255 10,917 10,813 10/03 10,934 11,634 11,412 1/04 11,890 12,579 12,231 4/04 11,581 12,364 11,992 7/04 11,485 12,354 11,894 10/04 11,851 12,730 12,201 1/05 12,521 13,361 12,765 4/05 12,342 13,146 12,480 7/05 13,316 14,089 13,387 10/05 13,216 13,838 13,257 1/06 14,255 14,747 14,192 4/06 14,506 15,172 14,533 7/06 14,149 14,846 14,056 10/06 15,367 16,099 15,199 1/07 16,152 16,886 15,907 4/07 16,674 17,482 16,446 7/07 16,402 17,239 16,328 10/07 17,470 18,441 17,482 1/08 15,604 16,495 15,713 4/08 15,846 16,665 15,850 7/08 14,203 15,328 14,677 10/08 11,063 11,786 11,206 1/09 9,083 10,125 9,690 4/09 9,565 10,781 10,457 7/09 10,910 12,270 11,914 10/09 11,509 12,942 12,491 1/10 11,943 13,480 12,993 4/10 13,387 14,970 14,299 7/10 12,442 13,969 13,278
(1) The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of common stocks, is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in market prices. (2) The Lipper Large-Cap Core Funds Index includes the 30 largest large-cap core funds tracked by Lipper Inc. The index's returns include net reinvested dividends. The Fund's performance is currently measured against this index for purposes of determining the performance incentive adjustment. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 13 FUND EXPENSES EXAMPLE ---------------------------------------------------------- (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (i) transaction costs, including sales charges (loads) on purchase payments; and (ii) ongoing costs, which may include management fees; distribution and service (Rule 12b-1) fees; and other Fund fees and expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. In addition to the ongoing expenses which the Fund bears directly, the Fund's shareholders indirectly bear the ongoing expenses of any funds in which the Fund invests (also referred to as "acquired funds"), including affiliated and non- affiliated pooled investment vehicles (including mutual funds and exchange traded funds). The Fund's indirect expense from investing in the acquired funds is based on the Fund's pro rata portion of the ongoing expenses charged by acquired funds using the expense ratio of each of the acquired funds as of the acquired fund's most recent shareholder report. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six months ended July 31, 2010. ACTUAL EXPENSES The first line of the table provides information about actual account values and actual expenses for each class. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading titled "Expenses paid during the period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the table provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for each class and an assumed rate of return of 5% per year before expenses, which is not the actual return for the class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - -------------------------------------------------------------------------------- 14 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED FEB. 1, 2010 JULY 31, 2010 THE PERIOD(a) EXPENSE RATIO - ------------------------------------------------------------------------------------------ Class A - ------------------------------------------------------------------------------------------ Actual(b) $1,000 $1,041.80 $5.29(c) 1.04% - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,019.75 $5.24(c) 1.04% - ------------------------------------------------------------------------------------------ Class B - ------------------------------------------------------------------------------------------ Actual(b) $1,000 $1,037.40 $9.24(c) 1.82% - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,015.86 $9.15(c) 1.82% - ------------------------------------------------------------------------------------------ Class C - ------------------------------------------------------------------------------------------ Actual(b) $1,000 $1,037.90 $9.15(c) 1.80% - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,015.96 $9.05(c) 1.80% - ------------------------------------------------------------------------------------------ Class I - ------------------------------------------------------------------------------------------ Actual(b) $1,000 $1,043.80 $3.01(c) .59% - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,021.99 $2.97(c) .59% - ------------------------------------------------------------------------------------------ Class R2 - ------------------------------------------------------------------------------------------ Actual(b) $1,000 $1,039.60 $7.07(c) 1.39% - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,018.00 $6.99(c) 1.39% - ------------------------------------------------------------------------------------------ Class R3 - ------------------------------------------------------------------------------------------ Actual(b) $1,000 $1,041.80 $5.80(c) 1.14% - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,019.25 $5.74(c) 1.14% - ------------------------------------------------------------------------------------------ Class R4 - ------------------------------------------------------------------------------------------ Actual(b) $1,000 $1,041.60 $4.53(c) .89% - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,020.49 $4.48(c) .89% - ------------------------------------------------------------------------------------------ Class R5 - ------------------------------------------------------------------------------------------ Actual(b) $1,000 $1,044.00 $3.26(c) .64% - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,021.74 $3.23(c) .64% - ------------------------------------------------------------------------------------------ Class W - ------------------------------------------------------------------------------------------ Actual(b) $1,000 $1,041.80 $5.29(c) 1.04% - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,019.75 $5.24(c) 1.04% - ------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 15 FUND EXPENSES EXAMPLE (continued) ---------------------------------------------- (a) Expenses are equal to the annualized expense ratio for each class as indicated above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). (b) Based on the actual return for the six months ended July 31, 2010: +4.18% for Class A, +3.74% for Class B, +3.79% for Class C, +4.38% for Class I, +3.96% for Class R2, +4.18% for Class R3, +4.16% for Class R4, +4.40% for Class R5 and +4.18% for Class W. (c) Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC) (the Investment Manager) and its affiliates have contractually agreed to waive certain fees and to absorb certain expenses until Sept. 30, 2011, unless sooner terminated at the sole discretion of the Fund's Board, such that net expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment, will not exceed 1.07% for Class A, 1.82% for Class B, 1.82% for Class C, 0.64% for Class I, 1.32% for Class R2, 1.17% for Class R3, 0.94% for Class R4, 0.69% for Class R5 and 1.07% for Class W. Any amounts waived will not be reimbursed by the Fund. This change is effective Oct. 1, 2010. Had this change been in place for the entire six month period ended July 31, 2010, the actual expenses paid would have been $5.55 for Class A, $9.35 for Class B, $9.35 for Class C, $3.31 for Class I, $6.81 for Class R2, $6.06 for Class R3, $4.89 for Class R4, $3.62 for Class R5 and $5.55 for Class W; the hypothetical expenses paid would have been $5.49 for Class A, $9.25 for Class B, $9.25 for Class C, $3.28 for Class I, $6.74 for Class R2, $5.99 for Class R3, $4.84 for Class R4, $3.58 for Class R5 and $5.49 for Class W. - -------------------------------------------------------------------------------- 16 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT PORTFOLIO OF INVESTMENTS ------------------------------------------------------- JULY 31, 2010 (Percentages represent value of investments compared to net assets) INVESTMENTS IN SECURITIES
COMMON STOCKS (98.6%) ISSUER SHARES VALUE(a) AEROSPACE & DEFENSE (3.7%) General Dynamics Corp. 287,791 $17,627,199 ITT Corp. 54,267 2,557,061 L-3 Communications Holdings, Inc. 28,851 2,107,277 Lockheed Martin Corp. 450,090(e) 33,824,264 Northrop Grumman Corp. 79,437(e) 4,658,186 Raytheon Co. 799,584 36,996,751 Rockwell Collins, Inc. 78,432 4,483,173 United Technologies Corp. 501,091 35,627,570 --------------- Total 137,881,481 - ------------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS (0.1%) CH Robinson Worldwide, Inc. 61,293(e) 3,996,304 - ------------------------------------------------------------------------------------- AUTOMOBILES (0.4%) Ford Motor Co. 501,862(b,e) 6,408,778 Harley-Davidson, Inc. 312,011(e) 8,496,059 --------------- Total 14,904,837 - ------------------------------------------------------------------------------------- BEVERAGES (2.2%) Brown-Forman Corp., Class B 166,341(e) 10,514,415 The Coca-Cola Co. 1,275,454 70,290,270 --------------- Total 80,804,685 - ------------------------------------------------------------------------------------- BIOTECHNOLOGY (0.9%) Amgen, Inc. 545,673(b) 29,755,549 Cephalon, Inc. 86,619(b,e) 4,915,628 --------------- Total 34,671,177 - ------------------------------------------------------------------------------------- CAPITAL MARKETS (0.8%) Franklin Resources, Inc. 101,411(e) 10,199,918 T Rowe Price Group, Inc. 28,175(e) 1,358,880 The Goldman Sachs Group, Inc. 122,049 18,407,431 --------------- Total 29,966,229 - ------------------------------------------------------------------------------------- CHEMICALS (1.4%) CF Industries Holdings, Inc. 55,426 4,500,037 Eastman Chemical Co. 365,780(e) 22,912,459 EI du Pont de Nemours & Co. 29,239 1,189,150 International Flavors & Fragrances, Inc. 118,635 5,383,656 PPG Industries, Inc. 148,760 10,334,357 Sigma-Aldrich Corp. 56,009(e) 3,142,105 The Sherwin-Williams Co. 61,958(e) 4,284,396 --------------- Total 51,746,160 - ------------------------------------------------------------------------------------- COMMERCIAL BANKS (3.6%) Comerica, Inc. 65,095(e) 2,497,044 Fifth Third Bancorp 443,135 5,632,246 First Horizon National Corp. 516,395(b,e) 5,923,051 Huntington Bancshares, Inc. 363,386 2,202,119 KeyCorp 155,310(e) 1,313,923 M&T Bank Corp. 49,520(e) 4,325,077 Marshall & Ilsley Corp. 194,803 1,369,465 PNC Financial Services Group, Inc. 940,736 55,870,310 SunTrust Banks, Inc. 350,473(e) 9,094,774 US Bancorp 119,355 2,852,585 Wells Fargo & Co. 1,634,708 45,330,453 --------------- Total 136,411,047 - ------------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (0.5%) Avery Dennison Corp. 30,266 1,085,036 Pitney Bowes, Inc. 192,737(e) 4,704,710 RR Donnelley & Sons Co. 727,673(e) 12,275,844 Waste Management, Inc. 2,000(e) 67,900 --------------- Total 18,133,490 - -------------------------------------------------------------------------------------
See accompanying Notes to Portfolio of Investments. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 17 PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) COMMUNICATIONS EQUIPMENT (0.6%) Cisco Systems, Inc. 846,316(b) $19,524,510 Harris Corp. 47,990 2,136,995 --------------- Total 21,661,505 - ------------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS (6.5%) Apple, Inc. 611,034(b) 157,188,496 Dell, Inc. 999,141(b) 13,228,627 Hewlett-Packard Co. 603,306 27,776,208 Lexmark International, Inc., Class A 290,029(b,e) 10,658,566 NetApp, Inc. 528,967(b,e) 22,375,304 QLogic Corp. 15,253(b,e) 242,828 Teradata Corp. 441,300(b) 14,033,340 Western Digital Corp. 84,639(b,e) 2,233,623 --------------- Total 247,736,992 - ------------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (0.2%) Fluor Corp. 131,438(e) 6,347,141 - ------------------------------------------------------------------------------------- CONSUMER FINANCE (1.6%) American Express Co. 950,177 42,415,902 Discover Financial Services 728,468 11,123,706 SLM Corp. 458,905(b,e) 5,506,860 --------------- Total 59,046,468 - ------------------------------------------------------------------------------------- DISTRIBUTORS (0.1%) Genuine Parts Co. 49,347 2,113,532 - ------------------------------------------------------------------------------------- DIVERSIFIED CONSUMER SERVICES (0.2%) Apollo Group, Inc., Class A 95,703(b) 4,414,779 H&R Block, Inc. 168,338 2,639,540 --------------- Total 7,054,319 - ------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (2.8%) Bank of America Corp. 1,131,725 15,889,419 Citigroup, Inc. 21,816,614(b) 89,448,117 --------------- Total 105,337,536 - ------------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES (3.3%) AT&T, Inc. 2,956,600 76,694,204 Verizon Communications, Inc. 1,584,174(e) 46,036,096 --------------- Total 122,730,300 - ------------------------------------------------------------------------------------- ELECTRIC UTILITIES (1.4%) Edison International 188,613 6,252,521 Entergy Corp. 192,400 14,912,924 Exelon Corp. 465,965 19,491,316 FirstEnergy Corp. 218,737(e) 8,246,385 Pepco Holdings, Inc. 165,723(e) 2,802,376 --------------- Total 51,705,522 - ------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (0.6%) Emerson Electric Co. 375,370(e) 18,595,829 Rockwell Automation, Inc. 52,710(e) 2,854,247 --------------- Total 21,450,076 - ------------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (0.4%) Corning, Inc. 292,938 5,308,037 Jabil Circuit, Inc. 195,377 2,834,920 Tyco Electronics Ltd. 215,570(c) 5,820,390 --------------- Total 13,963,347 - ------------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (0.6%) Diamond Offshore Drilling, Inc. 59,023(e) 3,511,278 FMC Technologies, Inc. 96,878(b) 6,130,441 Halliburton Co. 95,165 2,843,530 Nabors Industries Ltd. 181,396(b,c) 3,339,500 National Oilwell Varco, Inc. 150,182 5,881,127 Rowan Companies, Inc. 84,835(b,e) 2,142,932 --------------- Total 23,848,808 - ------------------------------------------------------------------------------------- FOOD & STAPLES RETAILING (3.0%) Safeway, Inc. 143,586(e) 2,949,256 Walgreen Co. 342,190 9,769,525 Wal-Mart Stores, Inc. 1,936,692 99,139,263 --------------- Total 111,858,044 - ------------------------------------------------------------------------------------- FOOD PRODUCTS (2.5%) Campbell Soup Co. 325,000(e) 11,667,500 ConAgra Foods, Inc. 164,577(e) 3,864,268 General Mills, Inc. 158,261 5,412,526 Hormel Foods Corp. 177,604(e) 7,622,764 Kellogg Co. 94,200(e) 4,714,710 Sara Lee Corp. 1,297,554(e) 19,190,824 The Hershey Co. 888,484(e) 41,758,748 --------------- Total 94,231,340 - -------------------------------------------------------------------------------------
See accompanying Notes to Portfolio of Investments. - -------------------------------------------------------------------------------- 18 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - --------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) GAS UTILITIES (0.2%) Oneok, Inc. 125,944(e) $5,860,174 - ------------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (1.3%) Becton Dickinson and Co. 86,231 5,932,693 CareFusion Corp. 224,544(b) 4,731,142 CR Bard, Inc. 28,179(e) 2,212,897 Intuitive Surgical, Inc. 50,134(b,e) 16,462,502 Medtronic, Inc. 466,186 17,234,896 St Jude Medical, Inc. 41,861(b) 1,539,229 Varian Medical Systems, Inc. 27,347(b,e) 1,509,554 --------------- Total 49,622,913 - ------------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES (3.5%) Aetna, Inc. 156,945 4,370,918 AmerisourceBergen Corp. 210,461(e) 6,307,516 Cardinal Health, Inc. 133,752 4,316,177 CIGNA Corp. 379,453 11,671,974 Coventry Health Care, Inc. 136,744(b) 2,711,634 Humana, Inc. 69,243(b) 3,255,806 Laboratory Corp. of America Holdings 17,800(b) 1,299,044 McKesson Corp. 63,704 4,001,885 Tenet Healthcare Corp. 567,964(b,e) 2,612,634 UnitedHealth Group, Inc. 2,270,340(e) 69,131,853 WellPoint, Inc. 387,787(b) 19,668,557 --------------- Total 129,347,998 - ------------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (0.2%) Starwood Hotels & Resorts Worldwide, Inc. 93,370(e) 4,523,776 Wyndham Worldwide Corp. 133,379(e) 3,405,166 --------------- Total 7,928,942 - ------------------------------------------------------------------------------------- HOUSEHOLD DURABLES (0.1%) Newell Rubbermaid, Inc. 181,026(e) 2,805,903 Whirlpool Corp. 27,747(e) 2,311,325 --------------- Total 5,117,228 - ------------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS (0.7%) Clorox Co. 75,994(e) 4,930,491 Colgate-Palmolive Co. 159,741 12,616,344 Kimberly-Clark Corp. 152,900 9,803,948 --------------- Total 27,350,783 - ------------------------------------------------------------------------------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.4%) Constellation Energy Group, Inc. 193,735 6,122,026 NRG Energy, Inc. 192,389(b) 4,363,383 The AES Corp. 311,929(b) 3,215,988 --------------- Total 13,701,397 - ------------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES (3.1%) 3M Co. 354,512 30,324,956 General Electric Co. 5,324,607 85,832,665 --------------- Total 116,157,621 - ------------------------------------------------------------------------------------- INSURANCE (5.6%) Aflac, Inc. 473,999 23,316,011 AON Corp. 568,235 21,405,412 Assurant, Inc. 166,592 6,212,216 Chubb Corp. 571,260 30,065,414 Hartford Financial Services Group, Inc. 425,943 9,971,326 Lincoln National Corp. 397,673(e) 10,355,405 Principal Financial Group, Inc. 461,247(e) 11,812,536 The Allstate Corp. 1,241,185 35,051,064 The Travelers Companies, Inc. 981,605 49,521,971 Torchmark Corp. 151,338(e) 8,031,508 Unum Group 120,100(e) 2,740,682 --------------- Total 208,483,545 - ------------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL (0.4%) priceline.com, Inc. 69,608(b,e) 15,620,035 - ------------------------------------------------------------------------------------- IT SERVICES (4.3%) Automatic Data Processing, Inc. 122,233(e) 5,044,556 Cognizant Technology Solutions Corp., Class A 463,149(b) 25,269,409 Computer Sciences Corp. 36,444 1,652,007 IBM Corp. 938,920(d) 120,557,328 Mastercard, Inc., Class A 24,090(e) 5,059,864 SAIC, Inc. 133,045(b,e) 2,212,538 Total System Services, Inc. 17,806(e) 265,487 --------------- Total 160,061,189 - ------------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS (--%) Mattel, Inc. 97,031 2,053,176 - -------------------------------------------------------------------------------------
See accompanying Notes to Portfolio of Investments. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 19 PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) MACHINERY (1.0%) Caterpillar, Inc. 231,873(e) $16,173,142 Eaton Corp. 61,874(e) 4,854,634 Flowserve Corp. 13,127 1,301,673 Illinois Tool Works, Inc. 187,816 8,169,996 Ingersoll-Rand PLC 144,336(c) 5,406,827 --------------- Total 35,906,272 - ------------------------------------------------------------------------------------- MEDIA (3.2%) CBS Corp., Class B 1,048,916(e) 15,502,978 Gannett Co., Inc. 534,121(e) 7,039,715 News Corp., Class A 1,221,901 15,945,808 The New York Times Co., Class A 195,273(b) 1,706,686 The Walt Disney Co. 1,423,951(e) 47,972,910 Time Warner Cable, Inc. 130,802 7,477,950 Time Warner, Inc. 435,186 13,690,952 Viacom, Inc., Class B 315,058 10,409,516 --------------- Total 119,746,515 - ------------------------------------------------------------------------------------- METALS & MINING (1.8%) Alcoa, Inc. 377,187(e) 4,213,179 Freeport-McMoRan Copper & Gold, Inc. 433,365 31,002,932 Newmont Mining Corp. 588,555 32,900,224 --------------- Total 68,116,335 - ------------------------------------------------------------------------------------- MULTILINE RETAIL (0.9%) Family Dollar Stores, Inc. 490,049(e) 20,263,526 Macy's, Inc. 320,682 5,980,719 Nordstrom, Inc. 258,260(e) 8,780,840 Sears Holdings Corp. 7,112(b) 504,952 --------------- Total 35,530,037 - ------------------------------------------------------------------------------------- MULTI-UTILITIES (1.4%) Ameren Corp. 82,274 2,087,291 Dominion Resources, Inc. 149,792(e) 6,289,766 DTE Energy Co. 120,393(e) 5,557,341 Integrys Energy Group, Inc. 55,859(e) 2,644,924 PG&E Corp. 177,331(e) 7,873,496 Public Service Enterprise Group, Inc. 863,469 28,408,130 --------------- Total 52,860,948 - ------------------------------------------------------------------------------------- OFFICE ELECTRONICS (0.3%) Xerox Corp. 1,007,602 9,814,043 - ------------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (10.4%) Apache Corp. 539,396 51,555,470 Chevron Corp. 1,718,921 130,998,970 ConocoPhillips 1,750,864 96,682,710 Exxon Mobil Corp. 942,587 56,253,592 Hess Corp. 107,973 5,786,273 Marathon Oil Corp. 1,029,805(e) 34,446,977 Massey Energy Co. 144,062 4,405,416 Murphy Oil Corp. 71,994 3,941,672 Pioneer Natural Resources Co. 42,804(e) 2,479,208 Sunoco, Inc. 44,569(e) 1,589,776 Valero Energy Corp. 208,880 3,548,871 --------------- Total 391,688,935 - ------------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS (--%) International Paper Co. 16,822 407,092 MeadWestvaco Corp. 31,320 750,428 --------------- Total 1,157,520 - ------------------------------------------------------------------------------------- PERSONAL PRODUCTS (0.6%) The Estee Lauder Companies, Inc., Class A 336,622 20,954,720 - ------------------------------------------------------------------------------------- PHARMACEUTICALS (5.8%) Abbott Laboratories 1,020,912 50,106,361 Bristol-Myers Squibb Co. 125,424 3,125,566 Eli Lilly & Co. 376,773(e) 13,413,119 Forest Laboratories, Inc. 424,458(b) 11,778,710 Johnson & Johnson 1,018,887 59,187,146 King Pharmaceuticals, Inc. 356,719(b,e) 3,124,858 Merck & Co., Inc. 2,132,929 73,500,733 Mylan, Inc. 152,992(b,e) 2,662,061 --------------- Total 216,898,554 - ------------------------------------------------------------------------------------- PROFESSIONAL SERVICES (0.2%) Dun & Bradstreet Corp. 119,500(e) 8,169,020 - ------------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS (REITS) (1.5%) Equity Residential 269,098(e) 12,338,143 Simon Property Group, Inc. 276,830(e) 24,698,773 Ventas, Inc. 149,597(e) 7,587,560 Vornado Realty Trust 150,504(e) 12,458,721 --------------- Total 57,083,197 - -------------------------------------------------------------------------------------
See accompanying Notes to Portfolio of Investments. - -------------------------------------------------------------------------------- 20 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - --------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) ROAD & RAIL (0.9%) CSX Corp. 149,508(e) $7,882,062 Norfolk Southern Corp. 270,648 15,229,363 Ryder System, Inc. 210,082 9,174,281 --------------- Total 32,285,706 - ------------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (2.6%) Advanced Micro Devices, Inc. 1,651,100(b,e) 12,366,739 Intel Corp. 424,400 8,742,640 Micron Technology, Inc. 1,270,189(b,e) 9,246,976 Texas Instruments, Inc. 2,696,115(e) 66,567,079 --------------- Total 96,923,434 - ------------------------------------------------------------------------------------- SOFTWARE (4.1%) Intuit, Inc. 118,700(b) 4,718,325 Microsoft Corp. 5,467,718(e) 141,121,802 Oracle Corp. 314,499 7,434,756 --------------- Total 153,274,883 - ------------------------------------------------------------------------------------- SPECIALTY RETAIL (3.5%) AutoNation, Inc. 73,423(b) 1,793,724 Bed Bath & Beyond, Inc. 63,195(b) 2,393,827 Best Buy Co., Inc. 244,864(e) 8,486,986 GameStop Corp., Class A 765,223(b,e) 15,342,721 Home Depot, Inc. 620,699 17,696,128 Lowe's Companies, Inc. 44,630 925,626 Limited Brands, Inc. 2,125,019 54,485,487 Ross Stores, Inc. 258,076(e) 13,590,282 The Gap, Inc. 589,161(e) 10,669,706 Tiffany & Co. 66,409(e) 2,793,827 TJX Companies, Inc. 76,140(e) 3,161,333 --------------- Total 131,339,647 - ------------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS (0.6%) Coach, Inc. 112,739 4,167,961 NIKE, Inc., Class B 209,579(e) 15,433,397 Polo Ralph Lauren Corp. 21,958(e) 1,734,902 VF Corp. 14,845 1,177,654 --------------- Total 22,513,914 - ------------------------------------------------------------------------------------- TOBACCO (2.5%) Altria Group, Inc. 1,434,984 31,799,245 Lorillard, Inc. 89,000(e) 6,785,360 Philip Morris International, Inc. 1,075,119 54,874,074 --------------- Total 93,458,679 - ------------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS (0.1%) Fastenal Co. 52,695(e) 2,586,271 - ------------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $3,563,187,440) $3,689,213,971 - ------------------------------------------------------------------------------------- MONEY MARKET FUND (0.7%) SHARES VALUE(a) Columbia Short-Term Cash Fund, 0.279% 27,183,889(g) $27,183,889 - ------------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost: $27,183,889) $27,183,889 - -------------------------------------------------------------------------------------
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (17.9%) AMOUNT EFFECTIVE PAYABLE AT ISSUER YIELD MATURITY VALUE(a) ASSET-BACKED COMMERCIAL PAPER (4.1%) Amsterdam Funding Corp. 08-16-10 0.450% $4,996,500 $4,996,500 Antalis US Funding Corp. 08-04-10 0.320 9,999,378 9,999,378 08-17-10 0.380 4,998,470 4,998,470 Argento Variable Funding Company LLC 08-12-10 0.370 4,998,458 4,998,458 Cancara Asset Securitisation LLC 08-12-10 0.330 14,996,013 14,996,013 09-27-10 0.521 14,982,233 14,982,233 Ebbets Funding LLC 08-09-10 0.600 9,994,500 9,994,500 Grampian Funding LLC 08-06-10 0.370 19,993,628 19,993,628 Regency Markets No. 1 LLC 08-09-10 0.360 9,996,700 9,996,700
See accompanying Notes to Portfolio of Investments. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 21 PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (CONTINUED) AMOUNT EFFECTIVE PAYABLE AT ISSUER YIELD MATURITY VALUE(a) ASSET-BACKED COMMERCIAL PAPER (CONT.) Royal Park Investments Funding Corp. 09-22-10 0.601% $9,985,667 $9,985,667 10-06-10 0.551 1,997,250 1,997,250 Thames Asset Global Securities 09-20-10 0.551 4,992,819 4,992,819 10-13-10 0.511 9,986,825 9,986,825 Versailles Commercial Paper LLC 08-23-10 0.681 9,988,100 9,988,100 --------------- Total 131,906,541 - ------------------------------------------------------------------------------------- CERTIFICATES OF DEPOSIT (9.3%) Bank of Tokyo Securities 10-14-10 0.550 19,971,928 19,971,928 Banque et Caisse d'Epargne de l'Etat 08-16-10 0.400 4,998,223 4,998,223 Barclays Bank PLC 08-31-10 0.421 16,000,000 16,000,000 BNP Paribas 10-15-10 0.411 20,000,000 20,000,000 BRED Banque Populaire 08-13-10 0.620 9,989,677 9,989,677 09-08-10 0.600 4,994,839 4,994,839 Commerzbank AG 08-09-10 0.450 10,000,000 10,000,000 Credit Agricole 10-12-10 0.413 37,000,000 37,000,000 Credit Industrial et Commercial 08-02-10 0.460 20,000,000 20,000,000 10-20-10 0.540 5,000,000 5,000,000 Deutsche Bank AG 12-06-10 0.527 20,000,000 20,000,000 Dexia Credit Local 08-06-10 0.650 5,000,043 5,000,043 DZ Bank AG 08-09-10 0.470 20,000,000 20,000,000 08-12-10 0.450 10,000,000 10,000,000 Hong Kong Shanghai Bank Corp., Ltd. 08-05-10 0.300 25,000,000 25,000,000 KBC Bank NV 08-06-10 0.450 15,000,000 15,000,000 08-09-10 0.530 9,995,438 9,995,438 Landesbank Hessen Thuringen 08-10-10 0.440 9,995,968 9,995,968 Lloyds Bank PLC 10-14-10 0.520 5,000,000 5,000,000 N.V. Ban Nederlandse Gemeenten 09-13-10 0.380 10,000,000 10,000,000 Natixis 09-29-10 0.490 9,991,568 9,991,568 Norinchukin Bank 09-21-10 0.560 15,000,198 15,000,198 10-14-10 0.565 20,000,000 20,000,000 Pohjola Bank PLC 08-20-10 0.370 5,000,000 5,000,000 Rabobank Group 10-27-10 0.377 5,000,000 5,000,000 Royal Bank of Scotland 08-09-10 0.320 5,001,072 5,001,072 Societe Generale 09-01-10 0.655 18,000,000 18,000,000 Sumitomo Mitsui Banking Corp. 08-20-10 0.510 5,000,000 5,000,000 Union Bank of Switzerland 10-18-10 0.455 10,000,000 10,000,000 --------------- Total 370,938,954 - ------------------------------------------------------------------------------------- COMMERCIAL PAPER (0.8%) State Development Bank of NorthRhine-Westphalia 10-08-10 0.511 9,987,108 9,987,108 10-15-10 0.491 9,987,342 9,987,342 Toyota Motor Credit Corp. 08-19-10 0.531 9,986,308 9,986,308 --------------- Total 29,960,758 - ------------------------------------------------------------------------------------- EFFECTIVE PRINCIPAL ISSUER YIELD AMOUNT VALUE(a) REPURCHASE AGREEMENTS (3.7%)(f) Barclays Capital, Inc. dated 03-22-10, matures 08-30-10, repurchase price $20,007,922 0.460% $20,000,000 $20,000,000
See accompanying Notes to Portfolio of Investments. - -------------------------------------------------------------------------------- 22 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - --------------------------------------------------------------------------------
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (CONTINUED) EFFECTIVE PRINCIPAL ISSUER YIELD AMOUNT VALUE(a) REPURCHASE AGREEMENTS (CONT.) Mizuho Securities USA, Inc. dated 07-30-10, matures 08-02-10, repurchase price $13,281,271 0.240% $13,281,005 $13,281,005 Morgan Stanley dated 02-22-10, matures 08-23-10, repurchase price $25,008,465 0.530 25,000,000 25,000,000 Pershing LLC dated 07-30-10, matures 08-02-10, repurchase price $30,000,775 0.310 30,000,000 30,000,000 RBS Securities, Inc. dated 04-01-10, matures 09-03-10, repurchase price $25,011,180 0.460 25,000,000 25,000,000 UBS Securities LLC dated 07-30-10, matures 08-02-10, repurchase price $25,423,373 0.210 25,422,928 25,422,928 --------------- Total 138,703,933 - ------------------------------------------------------------------------------------- TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (Cost: $671,510,186) $671,510,186 - ------------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $4,261,881,515)(h) $4,387,908,046 =====================================================================================
The industries identified above are based on the Global Industry Classification Standard (GICS), which was developed by, and is the exclusive property of, Morgan Stanley Capital International Inc. and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. INVESTMENTS IN DERIVATIVES FUTURES CONTRACTS OUTSTANDING AT JULY 31, 2010
NUMBER OF UNREALIZED CONTRACTS NOTIONAL EXPIRATION APPRECIATION CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION) - ------------------------------------------------------------------------------------ S&P 500 Index 171 $46,952,325 Sept. 2010 $22,360
NOTES TO PORTFOLIO OF INVESTMENTS (a) Securities are valued by using policies described in Note 2 to the financial statements. (b) Non-income producing. (c) Foreign security values are stated in U.S. dollars. At July 31, 2010, the value of foreign securities, excluding short-term securities, represented 0.39% of net assets. (d) At July 31, 2010, investments in securities included securities valued at $9,938,160 that were partially pledged as collateral to cover initial margin deposits on open stock index futures contracts. (e) At July 31, 2010, security was partially or fully on loan. See Note 7 to the financial statements. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 23 PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------- NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED) (f) The table below represents securities received as collateral for repurchase agreements. This collateral, which is generally high quality short-term obligations, is deposited with the Fund's custodian and, pursuant to the terms of the repurchase agreement, must have an aggregate market value greater than or equal to the repurchase price plus accrued interest at all times. The market value of securities held as collateral for repurchase agreements is monitored on a daily basis to ensure the existence of the proper level of collateral.
BARCLAYS CAPITAL, INC. (0.460%) SECURITY DESCRIPTION VALUE(a) - ----------------------------------------------------------- Banc of America Commercial Mortgage Inc $2,581,438 Bear Stearns Commercial Mortgage Securities 1,410,308 Credit Suisse Mortgage Capital Certificates 2,163,109 Granite Master Issuer PLC 6,293,462 JP Morgan Chase Commercial Mortgage Securities Corp 1,078,205 LB Commercial Conduit Mortgage Trust 1,684,691 Merrill Lynch Mortgage Trust 1,059,169 Paragon Mortgages PLC 3,251,757 Wachovia Bank Commercial Mortgage Trust 1,477,861 - ----------------------------------------------------------- Total market value of collateral securities $21,000,000 - ----------------------------------------------------------- MIZUHO SECURITIES USA, INC. (0.240%) SECURITY DESCRIPTION VALUE(a) - ----------------------------------------------------------- Fannie Mae Pool $4,828,655 Fannie Mae REMICS 3,336,274 Freddie Mac Gold Pool 1,757,756 Freddie Mac Non Gold Pool 74,113 Freddie Mac REMICS 2,220,592 Ginnie Mae I Pool 1,328,004 Ginnie Mae II Pool 1,231 - ----------------------------------------------------------- Total market value of collateral securities $13,546,625 - ----------------------------------------------------------- MORGAN STANLEY (0.530%) SECURITY DESCRIPTION VALUE(a) - ----------------------------------------------------------- Banc of America Large Loan Inc $505,154 Bear Stearns Commercial Mortgage Securities 116,768 Citigroup Commercial Mortgage Trust 814,499 Citigroup/Deutsche Bank Commercial Mortgage Trust 906,397 Commercial Mortgage Pass Through Certificates 1,024,005 Credit Suisse Mortgage Capital Certificates 928,635 Credit Suisse/Morgan Stanley Commercial Mortgage Certificate 216,188 Federal National Mortgage Association 488,708 GE Capital Commercial Mortgage Corp 27,132 Ginnie Mae I Pool 1,282,793
- -------------------------------------------------------------------------------- 24 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
MORGAN STANLEY (0.530%) (CONTINUED) SECURITY DESCRIPTION VALUE(a) - ----------------------------------------------------------- Ginnie Mae II Pool $5,192,241 Greenwich Capital Commercial Funding Corp 47,487 GS Mortgage Securities Corp II 1,930,229 JP Morgan Chase Commercial Mortgage Securities Corp 938,821 LB-UBS Commercial Mortgage Trust 1,619,355 Merrill Lynch Floating Trust 273,997 Merrill Lynch Mortgage Trust 741,445 Morgan Stanley Capital I 1,363,447 Morgan Stanley Dean Witter Capital I 4,134 United States Treasury Note/Bond 2,776,738 Wachovia Bank Commercial Mortgage Trust 4,765,342 - ----------------------------------------------------------- Total market value of collateral securities $25,963,515 - ----------------------------------------------------------- PERSHING LLC (0.310%) SECURITY DESCRIPTION VALUE(a) - ----------------------------------------------------------- Fannie Mae Benchmark REMIC $77,880 Fannie Mae Pool 12,357,594 Fannie Mae REMICS 1,167,140 Federal Farm Credit Bank 105,197 Federal Home Loan Banks 318,992 Federal Home Loan Mortgage Corp 20,730 Federal National Mortgage Association 2,028 Freddie Mac Gold Pool 3,323,427 Freddie Mac Non Gold Pool 371,318 Freddie Mac REMICS 1,077,394 Ginnie Mae I Pool 673,186 Ginnie Mae II Pool 1,353,760 Government National Mortgage Association 350,705 United States Treasury Inflation Indexed Bonds 616,604 United States Treasury Note/Bond 6,383,549 United States Treasury Strip Coupon 875,206 United States Treasury Strip Principal 1,525,290 - ----------------------------------------------------------- Total market value of collateral securities $30,600,000 - ----------------------------------------------------------- RBS SECURITIES, INC. (0.460%) SECURITY DESCRIPTION VALUE(a) - ----------------------------------------------------------- 280 Funding Corp $1,070,243 AH Mortgage Advance Trust 386,829 American Home Mortgage Investment Trust 579,403 Banc of America Commercial Mortgage Inc 766,398 Banc of America Large Loan Inc 1,515,692
- -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 25 PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------- NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
RBS SECURITIES, INC. (0.460%) (CONTINUED) SECURITY DESCRIPTION VALUE(a) - ----------------------------------------------------------- Bear Stearns Commercial Mortgage Securities $544,704 Bella Vista Mortgage Trust 26,671 CC Mortgage Funding Corp 161,986 Commercial Mortgage Pass Through Certificates 28,753 Countrywide Home Loan Mortgage Pass Through Trust 70,322 Credit Suisse First Boston Mortgage Securities Corp 366,267 Credit Suisse Mortgage Capital Certificates 505,689 First Horizon Alternative Mortgage Securities 30,334 First Republic Mortgage Loan Trust 585,458 Ford Credit Floorplan Master Owner Trust 1,032,749 GE Dealer Floorplan Master Note Trust 100,155 Greenwich Capital Commercial Funding Corp 730,696 GS Mortgage Securities Corp II 1,093,756 Harborview Mortgage Loan Trust 110,200 Harley-Davidson Motorcycle Trust 68,123 JP Morgan Chase Commercial Mortgage Securities Corp 2,334,019 LB-UBS Commercial Mortgage Trust 2,181,533 Leafs CDO I Ltd 581,171 MLCC Mortgage Investors Inc 2,948 Morgan Stanley Capital I 1,078,906 MortgageIT Trust 51,294 Oak Hill Credit Partners 55,372 Sequoia Mortgage Trust 3,458 Wachovia Bank Commercial Mortgage Trust 9,211,486 WaMu Mortgage Pass Through Certificates 933,089 Wells Fargo Mortgage Backed Securities Trust 42,348 - ----------------------------------------------------------- Total market value of collateral securities $26,250,052 - ----------------------------------------------------------- UBS SECURITIES LLC (0.210%) SECURITY DESCRIPTION VALUE(a) - ----------------------------------------------------------- Fannie Mae Interest Strip $5,777,659 Fannie Mae Principal Strip 1,103,615 Federal Farm Credit Bank 3,061,434 Federal Home Loan Mortgage Corp 10,847,684 Freddie Mac Strips 5,141,064 - ----------------------------------------------------------- Total market value of collateral securities $25,931,456 - -----------------------------------------------------------
(g) Affiliated Money Market Fund -- See Note 8 to the financial statements. The rate shown is the seven-day current annualized yield at July 31, 2010. - -------------------------------------------------------------------------------- 26 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED) (h) At July 31, 2010, the cost of securities for federal income tax purposes was $4,304,621,757 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $272,769,102 Unrealized depreciation (189,482,813) ----------------------------------------------------------- Net unrealized appreciation $83,286,289 -----------------------------------------------------------
- -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 27 PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------- FAIR VALUE MEASUREMENTS Generally accepted accounting principles (GAAP) require disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category. The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund's assumptions about the information market participants would use in pricing an investment. An investment's level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset or liability's fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. Fair value inputs are summarized in the three broad levels listed below: - Level 1 -- Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. - Level 2 -- Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). - Level 3 -- Valuations based on significant unobservable inputs (including the Fund's own assumptions and judgment in determining the fair value of investments). Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Fund Administrator, along with any other relevant factors in the calculation of an investment's fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy. Non-U.S. equity securities actively traded in foreign markets may be reflected in Level 2 despite the availability of closing prices, because the Fund evaluates and determines whether those closing prices reflect fair value at the close of the New York Stock Exchange (NYSE) or require adjustment, as described in Note 2 to the financial statements -- Valuation of securities. Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as - -------------------------------------------------------------------------------- 28 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- FAIR VALUE MEASUREMENTS (CONTINUED) Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models rely on one or more significant unobservable inputs and/or significant assumptions by the Fund Administrator. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data. The following table is a summary of the inputs used to value the Fund's investments as of July 31, 2010:
FAIR VALUE AT JULY 31, 2010 --------------------------------------------------------------------- LEVEL 1 LEVEL 2 QUOTED PRICES OTHER LEVEL 3 IN ACTIVE SIGNIFICANT SIGNIFICANT MARKETS FOR OBSERVABLE UNOBSERVABLE DESCRIPTION(A) IDENTICAL ASSETS(B) INPUTS INPUTS TOTAL - ------------------------------------------------------------------------------------------------ Equity Securities Common Stocks $3,689,213,971 $-- $-- $3,689,213,971 - ------------------------------------------------------------------------------------------------ Total Equity Securities 3,689,213,971 -- -- 3,689,213,971 - ------------------------------------------------------------------------------------------------ Other Affiliated Money Market Fund(c) 27,183,889 -- -- 27,183,889 Investments of Cash Collateral Received for Securities on Loan -- 671,510,186 -- 671,510,186 - ------------------------------------------------------------------------------------------------ Total Other 27,183,889 671,510,186 -- 698,694,075 - ------------------------------------------------------------------------------------------------ Investments in Securities 3,716,397,860 671,510,186 -- 4,387,908,046 Other Financial Instruments(d) 22,360 -- -- 22,360 - ------------------------------------------------------------------------------------------------ Total $3,716,420,220 $671,510,186 $-- $4,387,930,406 - ------------------------------------------------------------------------------------------------
(a) See the Portfolio of Investments for all investment classifications not indicated in the table. (b) There were no significant transfers between Levels 1 and 2 during the period. (c) Money market fund that is a sweep investment for cash balances in the Fund at July 31, 2010. (d) Other Financial Instruments are derivative instruments, which are valued at the unrealized appreciation (depreciation) on the instrument. Derivative descriptions are located in the Investments in Derivatives section of the Portfolio of Investments. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 29 PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------- HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS (i) The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (Commission) for the first and third quarters of each fiscal year on Form N-Q; (ii) The Fund's Forms N-Q are available on the Commission's website at http://www.sec.gov; (iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC (information on the operations of the Public Reference Room may be obtained by calling 800.SEC.0330); and (iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q, can be obtained without charge, upon request, by calling 800.345.6611. - -------------------------------------------------------------------------------- 30 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT STATEMENT OF ASSETS AND LIABILITIES -------------------------------------------- JULY 31, 2010
ASSETS Investments in securities, at value Unaffiliated issuers* (identified cost $3,563,187,440) $ 3,689,213,971 Affiliated money market fund (identified cost $27,183,889) 27,183,889 Investments of cash collateral received for securities on loan (identified cost $671,510,186) 671,510,186 - ----------------------------------------------------------------------------------------- Total investments in securities (identified cost $4,261,881,515) 4,387,908,046 Cash 1,420,910 Receivable from Investment Manager 15,882 Capital shares receivable 50,977,976 Dividends and accrued interest receivable 6,107,368 Receivable for investment securities sold 194,924,457 Variation margin receivable on futures contracts 47,072 Other receivables (Note 11) 390,262 Other assets 22,506 - ----------------------------------------------------------------------------------------- Total assets 4,641,814,479 - ----------------------------------------------------------------------------------------- LIABILITIES Capital shares payable 53,716,966 Payable for investment securities purchased 174,146,735 Payable upon return of securities loaned 671,510,186 Accrued investment management services fees 57,933 Accrued distribution fees 26,843 Accrued transfer agency fees 28,495 Accrued administrative services fees 5,128 Accrued plan administration services fees 1,125 Other accrued expenses 425,220 - ----------------------------------------------------------------------------------------- Total liabilities 899,918,631 - ----------------------------------------------------------------------------------------- Net assets applicable to outstanding capital stock $ 3,741,895,848 - ----------------------------------------------------------------------------------------- REPRESENTED BY Capital stock -- $.01 par value $ 7,894,409 Additional paid-in capital 6,291,385,685 Excess of distributions over net investment income (366,709) Accumulated net realized gain (loss) (2,683,106,271) Unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 126,088,734 - ----------------------------------------------------------------------------------------- Total -- representing net assets applicable to outstanding capital stock $ 3,741,895,848 - ----------------------------------------------------------------------------------------- *Value of securities on loan $ 656,224,229 - -----------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 31 STATEMENT OF ASSETS AND LIABILITIES (continued) -------------------------------- JULY 31, 2010
NET ASSET VALUE PER SHARE NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE Class A $2,688,843,397 567,423,999 $4.74(1) Class B $ 153,325,657 32,554,969 $4.71 Class C $ 21,982,264 4,714,140 $4.66 Class I $ 314,250,741 65,856,337 $4.77 Class R2 $ 2,193,578 463,276 $4.73 Class R3 $ 6,033 1,273 $4.74 Class R4 $ 162,518,882 34,154,804 $4.76 Class R5 $ 24,848,139 5,229,982 $4.75 Class W $ 373,927,157 79,042,111 $4.73 - --------------------------------------------------------------------------------
(1) The maximum offering price per share for Class A is $5.03. The offering price is calculated by dividing the net asset value by 1.0 minus the maximum sales charge of 5.75%. The accompanying Notes to Financial Statements are an integral part of this statement. - -------------------------------------------------------------------------------- 32 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT STATEMENT OF OPERATIONS -------------------------------------------------------- YEAR ENDED JULY 31, 2010
INVESTMENT INCOME Income: Dividends $ 80,541,644 Interest 141,328 Income distributions from affiliated money market fund 52,082 Income from securities lending -- net 2,078,072 - --------------------------------------------------------------------------- Total income 82,813,126 - --------------------------------------------------------------------------- Expenses: Investment management services fees 21,017,705 Distribution fees Class A 6,447,567 Class B 1,947,821 Class C 209,143 Class R2 9,201 Class R3 14 Class W 1,372,152 Transfer agency fees Class A 7,430,055 Class B 612,484 Class C 63,914 Class R2 998 Class R3 3 Class R4 84,561 Class R5 11,896 Class W 1,113,980 Administrative services fees 1,911,088 Plan administration services fees Class R2 4,600 Class R3 14 Class R4 392,930 Compensation of board members 121,011 Custodian fees 40,205 Printing and postage 272,091 Registration fees 91,483 Professional fees 80,886 Other 174,511 - --------------------------------------------------------------------------- Total expenses 43,410,313 Expenses waived/reimbursed by the Investment Manager and its affiliates (4,892,494) - --------------------------------------------------------------------------- Total net expenses 38,517,819 - --------------------------------------------------------------------------- Investment income (loss) -- net 44,295,307 - ---------------------------------------------------------------------------
- -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 33 STATEMENT OF OPERATIONS (continued) -------------------------------------------- YEAR ENDED JULY 31, 2010
REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on: Security transactions $(143,597,040) Foreign currency transactions (12,934) Futures contracts 7,465,395 - --------------------------------------------------------------------------- Net realized gain (loss) on investments (136,144,579) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 518,165,657 - --------------------------------------------------------------------------- Net gain (loss) on investments and foreign currencies 382,021,078 - --------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 426,316,385 - ---------------------------------------------------------------------------
The accompanying Notes to Financial Statements are an integral part of this statement. - -------------------------------------------------------------------------------- 34 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
YEAR ENDED JULY 31, 2010 2009 OPERATIONS AND DISTRIBUTIONS Investment income (loss) -- net $ 44,295,307 $ 43,892,499 Net realized gain (loss) on investments (136,144,579) (711,417,634) Net change in unrealized appreciation (depreciation) on investments and on translation of assets and liabilities in foreign currencies 518,165,657 (44,531,092) - --------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 426,316,385 (712,056,227) - --------------------------------------------------------------------------------------------- Distributions to shareholders from: Net investment income Class A (46,395,739) (9,214,426) Class B (2,071,740) -- Class C (237,652) (7,117) Class I (13,083,100) (5,438,440) Class R2 (17,934) (33) Class R3 (128) (42) Class R4 (3,996,938) (1,326,570) Class R5 (279,981) (49) Class W (21,497,369) (10,297,303) Net realized gain Class A -- (24,419,810) Class B -- (803,415) Class C -- (70,547) Class I -- (10,144,769) Class R2 -- (97) Class R3 -- (96) Class R4 -- (2,985,348) Class R5 -- (96) Class W -- (30,699,663) - --------------------------------------------------------------------------------------------- Total distributions (87,580,581) (95,407,821) - ---------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 35 STATEMENTS OF CHANGES IN NET ASSETS (continued) --------------------------------
YEAR ENDED JULY 31, 2010 2009 CAPITAL SHARE TRANSACTIONS Proceeds from sales Class A shares $ 51,073,321 $ 28,702,122 Class B shares 10,668,758 2,141,651 Class C shares 2,714,874 553,812 Class I shares 49,322,036 101,166,985 Class R2 shares 808,574 -- Class R4 shares 19,843,167 11,162,166 Class R5 shares 3,187,831 -- Class W shares 80,620,665 333,646,211 Fund mergers (Note 10) Class A shares 2,145,265,006 N/A Class B shares 204,721,762 N/A Class C shares 20,969,821 N/A Class I shares 37,568,585 N/A Class R2 shares 1,877,697 N/A Class R3 shares 2,732 N/A Class R4 shares 71,155,805 N/A Class R5 shares 24,248,507 N/A Reinvestment of distributions at net asset value Class A shares 43,353,611 31,091,644 Class B shares 2,051,626 793,672 Class C shares 213,339 73,505 Class I shares 13,082,819 15,582,928 Class R2 shares 3,125 -- Class R4 shares 3,996,912 4,311,918 Class R5 shares 279,835 -- Class W shares 21,497,270 40,996,838 Conversions from Class B to Class A Class A shares 49,970,227 4,943,185 Class B shares (49,970,227) (4,943,185) Payments for redemptions Class A shares (499,521,241) (154,038,553) Class B shares (43,428,507) (8,152,830) Class C shares (5,468,056) (569,142) Class I shares (151,534,615) (70,748,251) Class R2 shares (607,266) -- Class R4 shares (35,727,247) (18,348,722) Class R5 shares (4,432,299) -- Class W shares (521,649,465) (632,276,771) - --------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 1,546,158,982 (313,910,817) - --------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 1,884,894,786 (1,121,374,865) Net assets at beginning of year 1,857,001,062 2,978,375,927 - --------------------------------------------------------------------------------------------- Net assets at end of year $3,741,895,848 $ 1,857,001,062 - --------------------------------------------------------------------------------------------- Undistributed (excess of distributions over) net investment income $ (366,709) $ 43,755,766 - ---------------------------------------------------------------------------------------------
The accompanying Notes to Financial Statements are an integral part of this statement. - -------------------------------------------------------------------------------- 36 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT FINANCIAL HIGHLIGHTS ----------------------------------------------------------- The following tables are intended to help you understand the Fund's financial performance. Certain information reflects financial results for a single share of a class held for the periods shown. For periods ended 2007 and after, per share net investment income (loss) amounts are calculated based on average shares outstanding during the period. Total returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
YEAR ENDED JULY 31, CLASS A -------------------------------------------------------- PER SHARE DATA 2010 2009 2008 2007 2006 Net asset value, beginning of period $4.30 $5.88 $7.22 $6.74 $6.70 - ----------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .05 .09 .09 .08 .06 Net gains (losses) (both realized and unrealized) .54 (1.47) (1.00) .97 .35 - ----------------------------------------------------------------------------------------------------------- Total from investment operations .59 (1.38) (.91) 1.05 .41 - ----------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.15) (.05) (.06) (.06) (.06) Distributions from realized gains -- (.15) (.37) (.51) (.31) - ----------------------------------------------------------------------------------------------------------- Total distributions (.15) (.20) (.43) (.57) (.37) - ----------------------------------------------------------------------------------------------------------- Net asset value, end of period $4.74 $4.30 $5.88 $7.22 $6.74 - ----------------------------------------------------------------------------------------------------------- TOTAL RETURN 14.03% (23.19%) (13.40%) 15.92% 6.25% - ----------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS(a) Gross expenses prior to expense waiver/reimbursement 1.15% .96% .96% 1.05% 1.05% - ----------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(b) 1.00% .95% .96% 1.03% 1.02% - ----------------------------------------------------------------------------------------------------------- Net investment income (loss) 1.10% 2.11% 1.35% 1.13% .95% - ----------------------------------------------------------------------------------------------------------- SUPPLEMENTAL DATA Net assets, end of period (in millions) $2,689 $692 $1,067 $1,410 $1,368 - ----------------------------------------------------------------------------------------------------------- Portfolio turnover rate 75% 61% 58% 62% 137% - -----------------------------------------------------------------------------------------------------------
See accompanying Notes to Financial Highlights. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 37 FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
YEAR ENDED JULY 31, CLASS B ------------------------------------------------------- PER SHARE DATA 2010 2009 2008 2007 2006 Net asset value, beginning of period $4.27 $5.80 $7.12 $6.65 $6.62 - ---------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .01 .06 .04 .03 .01 Net gains (losses) (both realized and unrealized) .54 (1.44) (.99) .96 .34 - ---------------------------------------------------------------------------------------------------------- Total from investment operations .55 (1.38) (.95) .99 .35 - ---------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.11) -- -- (.01) (.01) Distributions from realized gains -- (.15) (.37) (.51) (.31) - ---------------------------------------------------------------------------------------------------------- Total distributions (.11) (.15) (.37) (.52) (.32) - ---------------------------------------------------------------------------------------------------------- Net asset value, end of period $4.71 $4.27 $5.80 $7.12 $6.65 - ---------------------------------------------------------------------------------------------------------- TOTAL RETURN 13.03% (23.68%) (14.07%) 15.18% 5.42% - ---------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS(a) Gross expenses prior to expense waiver/reimbursement 1.93% 1.73% 1.72% 1.82% 1.85% - ---------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(b) 1.78% 1.71% 1.72% 1.79% 1.82% - ---------------------------------------------------------------------------------------------------------- Net investment income (loss) .29% 1.35% .59% .37% .20% - ---------------------------------------------------------------------------------------------------------- SUPPLEMENTAL DATA Net assets, end of period (in millions) $153 $16 $35 $62 $73 - ---------------------------------------------------------------------------------------------------------- Portfolio turnover rate 75% 61% 58% 62% 137% - ----------------------------------------------------------------------------------------------------------
See accompanying Notes to Financial Highlights. - -------------------------------------------------------------------------------- 38 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - --------------------------------------------------------------------------------
YEAR ENDED JULY 31, CLASS C ------------------------------------------------------- PER SHARE DATA 2010 2009 2008 2007 2006 Net asset value, beginning of period $4.24 $5.78 $7.11 $6.65 $6.62 - ---------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .01 .06 .04 .03 .01 Net gains (losses) (both realized and unrealized) .53 (1.44) (.99) .96 .35 - ---------------------------------------------------------------------------------------------------------- Total from investment operations .54 (1.38) (.95) .99 .36 - ---------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.12) (.01) (.01) (.02) (.02) Distributions from realized gains -- (.15) (.37) (.51) (.31) - ---------------------------------------------------------------------------------------------------------- Total distributions (.12) (.16) (.38) (.53) (.33) - ---------------------------------------------------------------------------------------------------------- Net asset value, end of period $4.66 $4.24 $5.78 $7.11 $6.65 - ---------------------------------------------------------------------------------------------------------- TOTAL RETURN 12.97% (23.66%) (14.11%) 15.14% 5.51% - ---------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS(a) Gross expenses prior to expense waiver/reimbursement 1.92% 1.72% 1.72% 1.81% 1.84% - ---------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(b) 1.77% 1.71% 1.72% 1.79% 1.81% - ---------------------------------------------------------------------------------------------------------- Net investment income (loss) .31% 1.35% .59% .36% .20% - ---------------------------------------------------------------------------------------------------------- SUPPLEMENTAL DATA Net assets, end of period (in millions) $22 $2 $3 $3 $3 - ---------------------------------------------------------------------------------------------------------- Portfolio turnover rate 75% 61% 58% 62% 137% - ----------------------------------------------------------------------------------------------------------
See accompanying Notes to Financial Highlights. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 39 FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
YEAR ENDED JULY 31, CLASS I ------------------------------------------------------- PER SHARE DATA 2010 2009 2008 2007 2006 Net asset value, beginning of period $4.33 $5.93 $7.27 $6.78 $6.73 - ---------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .08 .11 .11 .11 .08 Net gains (losses) (both realized and unrealized) .53 (1.49) (.99) .97 .36 - ---------------------------------------------------------------------------------------------------------- Total from investment operations .61 (1.38) (.88) 1.08 .44 - ---------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.17) (.07) (.09) (.08) (.08) Distributions from realized gains -- (.15) (.37) (.51) (.31) - ---------------------------------------------------------------------------------------------------------- Total distributions (.17) (.22) (.46) (.59) (.39) - ---------------------------------------------------------------------------------------------------------- Net asset value, end of period $4.77 $4.33 $5.93 $7.27 $6.78 - ---------------------------------------------------------------------------------------------------------- TOTAL RETURN 14.38% (22.90%) (12.98%) 16.29% 6.73% - ---------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS(a) Gross expenses prior to expense waiver/reimbursement .61% .56% .61% .70% .72% - ---------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(b) .54% .56% .61% .67% .70% - ---------------------------------------------------------------------------------------------------------- Net investment income (loss) 1.66% 2.51% 1.69% 1.47% 1.41% - ---------------------------------------------------------------------------------------------------------- SUPPLEMENTAL DATA Net assets, end of period (in millions) $314 $332 $391 $441 $252 - ---------------------------------------------------------------------------------------------------------- Portfolio turnover rate 75% 61% 58% 62% 137% - ----------------------------------------------------------------------------------------------------------
See accompanying Notes to Financial Highlights. - -------------------------------------------------------------------------------- 40 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - --------------------------------------------------------------------------------
YEAR ENDED JULY 31, CLASS R2 --------------------------------------------- PER SHARE DATA 2010 2009 2008 2007(c) Net asset value, beginning of period $4.30 $5.88 $7.21 $7.57 - ------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .03 .08 .08 .03 Net gains (losses) (both realized and unrealized) .54 (1.47) (1.00) .20 - ------------------------------------------------------------------------------------------------ Total from investment operations .57 (1.39) (.92) .23 - ------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS: Dividends from net investment income (.14) (.04) (.04) (.08) Distributions from realized gains -- (.15) (.37) (.51) - ------------------------------------------------------------------------------------------------ Total distributions (.14) (.19) (.41) (.59) - ------------------------------------------------------------------------------------------------ Net asset value, end of period $4.73 $4.30 $5.88 $7.21 - ------------------------------------------------------------------------------------------------ TOTAL RETURN 13.43% (23.30%) (13.51%) 3.31% - ------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS(a) Gross expenses prior to expense waiver/ reimbursement 1.43% 1.32% 1.41% 1.49%(d) - ------------------------------------------------------------------------------------------------ Net expenses after expense waiver/reimbursement(b) 1.36% 1.16% 1.16% 1.48%(d) - ------------------------------------------------------------------------------------------------ Net investment income (loss) .71% 1.92% 1.15% .55%(d) - ------------------------------------------------------------------------------------------------ SUPPLEMENTAL DATA Net assets, end of period (in millions) $2 $-- $-- $-- - ------------------------------------------------------------------------------------------------ Portfolio turnover rate 75% 61% 58% 62% - ------------------------------------------------------------------------------------------------
See accompanying Notes to Financial Highlights. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 41 FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
YEAR ENDED JULY 31, CLASS R3 --------------------------------------------- PER SHARE DATA 2010 2009 2008 2007(c) Net asset value, beginning of period $4.30 $5.89 $7.22 $7.57 - ------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .05 .09 .09 .04 Net gains (losses) (both realized and unrealized) .54 (1.47) (.99) .20 - ------------------------------------------------------------------------------------------------ Total from investment operations .59 (1.38) (.90) .24 - ------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS: Dividends from net investment income (.15) (.06) (.06) (.08) Distributions from realized gains -- (.15) (.37) (.51) - ------------------------------------------------------------------------------------------------ Total distributions (.15) (.21) (.43) (.59) - ------------------------------------------------------------------------------------------------ Net asset value, end of period $4.74 $4.30 $5.89 $7.22 - ------------------------------------------------------------------------------------------------ TOTAL RETURN 13.92% (23.17%) (13.26%) 3.46% - ------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS(a) Gross expenses prior to expense waiver/ reimbursement 1.15% 1.10% 1.15% 1.24%(d) - ------------------------------------------------------------------------------------------------ Net expenses after expense waiver/reimbursement(b) 1.10% .94% .90% 1.22%(d) - ------------------------------------------------------------------------------------------------ Net investment income (loss) 1.05% 2.11% 1.41% .81%(d) - ------------------------------------------------------------------------------------------------ SUPPLEMENTAL DATA Net assets, end of period (in millions) $-- $-- $-- $-- - ------------------------------------------------------------------------------------------------ Portfolio turnover rate 75% 61% 58% 62% - ------------------------------------------------------------------------------------------------
See accompanying Notes to Financial Highlights. - -------------------------------------------------------------------------------- 42 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - --------------------------------------------------------------------------------
YEAR ENDED JULY 31, CLASS R4 ------------------------------------------------------- PER SHARE DATA 2010 2009 2008 2007 2006 Net asset value, beginning of period $4.32 $5.91 $7.25 $6.76 $6.71 - ---------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .06 .10 .10 .09 .07 Net gains (losses) (both realized and unrealized) .54 (1.48) (1.00) .98 .36 - ---------------------------------------------------------------------------------------------------------- Total from investment operations .60 (1.38) (.90) 1.07 .43 - ---------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: Dividends from net investment income (.16) (.06) (.07) (.07) (.07) Distributions from realized gains -- (.15) (.37) (.51) (.31) - ---------------------------------------------------------------------------------------------------------- Total distributions (.16) (.21) (.44) (.58) (.38) - ---------------------------------------------------------------------------------------------------------- Net asset value, end of period $4.76 $4.32 $5.91 $7.25 $6.76 - ---------------------------------------------------------------------------------------------------------- TOTAL RETURN 14.14% (23.05%) (13.26%) 16.15% 6.48% - ---------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS(a) Gross expenses prior to expense waiver/reimbursement .92% .86% .91% .95% .87% - ---------------------------------------------------------------------------------------------------------- Net expenses after expense waiver/reimbursement(b) .85% .78% .84% .87% .84% - ---------------------------------------------------------------------------------------------------------- Net investment income (loss) 1.31% 2.28% 1.47% 1.29% 1.10% - ---------------------------------------------------------------------------------------------------------- SUPPLEMENTAL DATA Net assets, end of period (in millions) $163 $90 $126 $158 $224 - ---------------------------------------------------------------------------------------------------------- Portfolio turnover rate 75% 61% 58% 62% 137% - ----------------------------------------------------------------------------------------------------------
See accompanying Notes to Financial Highlights. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 43 FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
YEAR ENDED JULY 31, CLASS R5 --------------------------------------------- PER SHARE DATA 2010 2009 2008 2007(c) Net asset value, beginning of period $4.31 $5.90 $7.24 $7.57 - ------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .07 .11 .11 .06 Net gains (losses) (both realized and unrealized) .54 (1.48) (1.00) .20 - ------------------------------------------------------------------------------------------------ Total from investment operations .61 (1.37) (.89) .26 - ------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS: Dividends from net investment income (.17) (.07) (.08) (.08) Distributions from realized gains -- (.15) (.37) (.51) - ------------------------------------------------------------------------------------------------ Total distributions (.17) (.22) (.45) (.59) - ------------------------------------------------------------------------------------------------ Net asset value, end of period $4.75 $4.31 $5.90 $7.24 - ------------------------------------------------------------------------------------------------ TOTAL RETURN 14.41% (22.91%) (13.09%) 3.76% - ------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS(a) Gross expenses prior to expense waiver/ reimbursement .68% .58% .66% .75%(d) - ------------------------------------------------------------------------------------------------ Net expenses after expense waiver/reimbursement(b) .61% .58% .66% .74%(d) - ------------------------------------------------------------------------------------------------ Net investment income (loss) 1.46% 2.48% 1.66% 1.28%(d) - ------------------------------------------------------------------------------------------------ SUPPLEMENTAL DATA Net assets, end of period (in millions) $25 $-- $-- $-- - ------------------------------------------------------------------------------------------------ Portfolio turnover rate 75% 61% 58% 62% - ------------------------------------------------------------------------------------------------
See accompanying Notes to Financial Highlights. - -------------------------------------------------------------------------------- 44 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - --------------------------------------------------------------------------------
YEAR ENDED JULY 31, CLASS W --------------------------------------------- PER SHARE DATA 2010 2009 2008 2007(e) Net asset value, beginning of period $4.29 $5.86 $7.22 $7.46 - ------------------------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) .06 .09 .08 .03 Net gains (losses) (both realized and unrealized) .53 (1.47) (1.00) .32 - ------------------------------------------------------------------------------------------------ Total from investment operations .59 (1.38) (.92) .35 - ------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS: Dividends from net investment income (.15) (.04) (.07) (.08) Distributions from realized gains -- (.15) (.37) (.51) - ------------------------------------------------------------------------------------------------ Total distributions (.15) (.19) (.44) (.59) - ------------------------------------------------------------------------------------------------ Net asset value, end of period $4.73 $4.29 $5.86 $7.22 - ------------------------------------------------------------------------------------------------ TOTAL RETURN 13.93% (23.21%) (13.52%) 5.01% - ------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS(a) Gross expenses prior to expense waiver/ reimbursement 1.05% 1.01% 1.06% 1.18%(d) - ------------------------------------------------------------------------------------------------ Net expenses after expense waiver/reimbursement(b) .98% 1.01% 1.06% 1.13%(d) - ------------------------------------------------------------------------------------------------ Net investment income (loss) 1.27% 2.07% 1.22% .59%(d) - ------------------------------------------------------------------------------------------------ SUPPLEMENTAL DATA Net assets, end of period (in millions) $374 $726 $1,355 $745 - ------------------------------------------------------------------------------------------------ Portfolio turnover rate 75% 61% 58% 62% - ------------------------------------------------------------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTS (a) Includes the impact of a performance incentive adjustment, if any. In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the reported expense ratios. (b) The Investment Manager and its affiliates agreed to waive/reimburse certain fees and expenses (excluding fees and expenses of acquired funds), before giving effect to any performance incentive adjustment. (c) For the period from Dec. 11, 2006 (when shares became publicly available) to July 31, 2007. (d) Annualized. (e) For the period from Dec. 1, 2006 (when shares became publicly available) to July 31, 2007. The accompanying Notes to Financial Statements are an integral part of this statement. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 45 NOTES TO FINANCIAL STATEMENTS -------------------------------------------------- 1. ORGANIZATION Columbia Large Core Quantitative Fund (formerly known as RiverSource Disciplined Equity Fund) (the Fund) is a series of RiverSource Large Cap Series, Inc. (the Corporation) and is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, open-end management investment company. The Corporation has 10 billion authorized shares of capital stock that can be allocated among the separate series as designated by the Corporation's Board of Directors (the Board). The Fund invests primarily in equity securities of companies listed on U.S. exchanges with market capitalizations greater than $5 billion at the time of purchase. The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4, Class R5 and Class W shares. - - Class A shares are offered with a front-end sales charge, which may be waived under certain circumstances. - - Class B shares may be subject to a contingent deferred sales charge (CDSC) and automatically convert to Class A shares one month after the completion of the eighth year of ownership if originally purchased in a RiverSource fund on or after May 21, 2005 or originally purchased in a Seligman fund on or after June 13, 2009. Class B shares originally purchased in a RiverSource fund prior to May 21, 2005 will convert to Class A shares in the ninth calendar year of ownership. Class B shares originally purchased in a Seligman fund prior to June 13, 2009 will convert to Class A shares in the month prior to the ninth year of ownership. Effective Sept. 7, 2010, the Fund no longer accepts investments from new or existing investors in the Fund's Class B shares, except that (i) dividend and/or capital gain distributions may continue to be reinvested in Class B shares of the Fund and (ii) shareholders invested in Class B shares of the Fund may exchange those shares for Class B shares of other Columbia, Columbia Acorn, RiverSource, Seligman and Threadneedle funds offering such shares. - - Class C shares may be subject to a CDSC. - - Class I, Class R2, Class R3, Class R4 and Class R5 shares are offered without a front-end sales charge or CDSC to qualifying institutional investors. Effective July 23, 2010, the Fund no longer offers Class R3 shares. Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares. - - Class W shares are offered without a front-end sales charge or CDSC and are offered through qualifying discretionary accounts. At July 31, 2010, Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC) (the Investment Manager) and - -------------------------------------------------------------------------------- 46 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- affiliated funds-of-funds owned 100% of Class I shares, and the Investment Manager owned 100% of Class R3 shares. All classes of shares have identical voting, dividend and liquidation rights. Class specific expenses (e.g., distribution and service fees, transfer agency fees, plan administration services fees) differ among classes. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses on investments are allocated to each class of shares based upon its relative net assets. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES Preparing financial statements that conform to U.S. generally accepted accounting principles requires management to make estimates (e.g., on assets, liabilities and contingent assets and liabilities) that could differ from actual results. VALUATION OF SECURITIES All securities are valued at the close of business of the New York Stock Exchange (NYSE). Securities traded on national securities exchanges or included in national market systems are valued at the last quoted sales price from the primary exchange. Debt securities are generally traded in the over-the-counter market and are valued by an independent pricing service using an evaluated bid. When market quotes are not readily available, the pricing service, in determining fair values of debt securities, takes into consideration such factors as current quotations by broker/dealers, coupon, maturity, quality, type of issue, trading characteristics, and other yield and risk factors it deems relevant in determining valuations. Foreign securities are valued based on quotations from the principal market in which such securities are normally traded. The procedures adopted by the Board generally contemplate the use of fair valuation in the event that price quotations or valuations are not readily available, price quotations or valuations from other sources are not reflective of market value and thus deemed unreliable, or a significant event has occurred in relation to a security or class of securities (such as foreign securities) that is not reflected in price quotations or valuations from other sources. A fair value price is a good faith estimate of the value of a security at a given point in time. Many securities markets and exchanges outside the U.S. close prior to the close of the NYSE and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the NYSE, including significant movements in the U.S. market after foreign exchanges have closed. Accordingly, in those situations, Ameriprise Financial, Inc. (Ameriprise Financial), parent company of the Investment - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 47 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- Manager, as administrator to the Fund, will fair value foreign securities pursuant to procedures adopted by the Board, including utilizing a third party pricing service to determine these fair values. These procedures take into account multiple factors, including movements in the U.S. securities markets, to determine a good faith estimate that reasonably reflects the current market conditions as of the close of the NYSE. The fair value of a security is likely to be different from the quoted or published price, if available. Short-term securities maturing in more than 60 days from the valuation date are valued at the market price or approximate market value based on current interest rates. Typically, those maturing in 60 days or less that originally had maturities of more than 60 days at acquisition date are valued at amortized cost using the market value on the 61(st) day before maturity. Short-term securities maturing in 60 days or less at acquisition date are valued at amortized cost. Amortized cost is an approximation of market value. Investments in money market funds are valued at net asset value. FOREIGN CURRENCY TRANSLATIONS Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars. Foreign currency amounts related to the purchase or sale of securities and income and expenses are translated at the exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized security gains or losses is reflected as a component of such gains or losses. In the Statement of Operations, net realized gains or losses from foreign currency transactions, if any, may arise from sales of foreign currency, closed forward contracts, exchange gains or losses realized between the trade date and settlement date on securities transactions, and other translation gains or losses on dividends, interest income and foreign withholding taxes. REPURCHASE AGREEMENTS The Fund may enter into repurchase agreements. Generally, securities received as collateral subject to repurchase agreements are deposited with the Fund's custodian and, pursuant to the terms of the repurchase agreement, must have an aggregate market value greater than or equal to the repurchase price plus accrued interest at all times. The market value of securities held as collateral for repurchase agreements is monitored on a daily basis to ensure the existence of the proper level of collateral. GUARANTEES AND INDEMNIFICATIONS Under the Fund's organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, certain of the Fund's contracts with its service providers contain general indemnification clauses. The Fund's maximum - -------------------------------------------------------------------------------- 48 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund cannot be determined and the Fund has no historical basis for predicting the likelihood of any such claims. FEDERAL TAXES The Fund's policy is to comply with Subchapter M of the Internal Revenue Code that applies to regulated investment companies and to distribute substantially all of its taxable income (which includes net short-term capital gains) to shareholders. No provision for income or excise taxes is thus required. Management of the Fund has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Generally, the tax authorities can examine all tax returns filed for the last three years. FOREIGN CAPITAL GAINS TAXES Realized gains in certain countries may be subject to foreign taxes at the fund level, at rates ranging from approximately 10% to 15%. The Fund pays such foreign taxes on net realized gains at the appropriate rate for each jurisdiction. DIVIDENDS TO SHAREHOLDERS An annual dividend from net investment income, declared and paid at the end of the calendar year, when available, is reinvested in additional shares of the Fund at net asset value or payable in cash. Capital gains, when available, are normally distributed along with the income dividend. On Sept. 9, 2009, an additional dividend was paid before the mergers (see Note 10) to ensure that the current shareholders of Columbia Large Core Quantitative Fund would not experience a dilution in their shares of the Fund's income or capital gains. OTHER Security transactions are accounted for on the date securities are purchased or sold. Dividend income is recognized on the ex-dividend date and interest income, including amortization of premium, market discount and original issue discount using the effective interest method, is accrued daily. 3. INVESTMENTS IN DERIVATIVES The Fund may invest in certain derivative instruments, which are transactions whose values depend on or are derived from (in whole or in part) the value of one or more other assets, such as securities, currencies, commodities or indices. Such derivative instruments may be used to maintain cash reserves while maintaining exposure to certain other assets, to offset anticipated declines in values of investments, to facilitate trading, to reduce transaction costs, and to pursue higher investment returns. The Fund may also use derivative instruments to mitigate certain investment risks, such as foreign currency exchange rate risk, - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 49 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- interest rate risk, and credit risk. Investments in derivative instruments may expose the Fund to certain additional risks, including those detailed below. FORWARD FOREIGN CURRENCY CONTRACTS The Fund may enter into forward foreign currency contracts in connection with settling purchases or sales of securities, to hedge the currency exposure associated with some or all of the Fund's securities or as part of its investment strategy. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The market value of a forward foreign currency contract fluctuates with changes in foreign currency exchange rates. Forward foreign currency contracts are marked to market daily based upon foreign currency exchange rates from an independent pricing service and the change in value is recorded as unrealized appreciation or depreciation. The Fund will record a realized gain or loss when the forward foreign currency contract is closed. The risks of forward foreign currency contracts include movement in the values of the foreign currencies relative to the U.S. dollar (or other foreign currencies) and the possibility that the counterparty will not complete its contractual obligation, which may be in excess of the amount, if any, reflected in the Statement of Assets and Liabilities. At July 31, 2010, the Fund had no outstanding forward foreign currency contracts. FUTURES TRANSACTIONS The Fund may buy and sell financial futures contracts traded on any U.S. or foreign exchange to produce incremental earnings, hedge existing positions or protect against market changes in the value of equities, interest rates or foreign currencies. The Fund may also buy and write put and call options on these futures contracts. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date. Futures and options on futures are valued daily based upon the last sale price at the close of the market on the principal exchange on which they are traded. Upon entering into a futures contract, the Fund is required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Upon entering into futures contracts, the Fund bears the risk of interest rates, exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. Additional risks include counterparty credit risk, the possibility of an - -------------------------------------------------------------------------------- 50 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- illiquid market, and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS The following tables are intended to provide additional information about the effect of derivatives on the financial statements of the Fund including: the fair value of derivatives by risk category and the location of those fair values in the Statement of Assets and Liabilities; the impact of derivative transactions on the Fund's operations over the period including realized gains or losses and unrealized gains or losses. The derivative schedules following the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of the period, if any. FAIR VALUES OF DERIVATIVE INSTRUMENTS AT JULY 31, 2010
ASSET DERIVATIVES LIABILITY DERIVATIVES -------------------------------- ------------------------------- STATEMENT OF ASSETS STATEMENT OF ASSETS RISK EXPOSURE AND LIABILITIES AND LIABILITIES CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE - --------------------------------------------------------------------------------------------- Net assets -- unrealized appreciation on Equity contracts investments $22,360* N/A N/A - ---------------------------------------------------------------------------------------------
* Includes cumulative appreciation (depreciation) of futures contracts as reported in the Futures Contracts Outstanding table following the Portfolio of Investments. Only the current day's variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS FOR THE YEAR ENDED JULY 31, 2010
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME - -------------------------------------------------------------------------------- FORWARD FOREIGN RISK EXPOSURE CATEGORY CURRENCY CONTRACTS FUTURES TOTAL - -------------------------------------------------------------------------------- Equity contracts $ -- $7,465,395 $7,465,395 - -------------------------------------------------------------------------------- Foreign exchange contracts (1,114) -- $ (1,114) - -------------------------------------------------------------------------------- Total $(1,114) $7,465,395 $7,464,281 - --------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED IN INCOME - ------------------------------------------------------------------------------- FORWARD FOREIGN RISK EXPOSURE CATEGORY CURRENCY CONTRACTS FUTURES TOTAL - ------------------------------------------------------------------------------- Equity contracts $-- $(133,750) $(133,750) - ------------------------------------------------------------------------------- Foreign exchange contracts -- -- $ -- - ------------------------------------------------------------------------------- Total $-- $(133,750) $(133,750) - -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 51 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- VOLUME OF DERIVATIVE ACTIVITY FORWARD FOREIGN CURRENCY CONTRACTS At July 31, 2010, the Fund had no outstanding forward foreign currency contracts. The average gross notional amount of forward foreign currency contracts opened, and subsequently closed, was $73,000 for the year ended July 31, 2010. FUTURES The gross notional amount of long contracts outstanding was approximately $47 million at July 31, 2010. The monthly average gross notional amount for these contracts was $28.5 million for the year ended July 31, 2010. The fair value of such contracts at July 31, 2010 is set forth in the table above. 4. EXPENSES AND SALES CHARGES INVESTMENT MANAGEMENT SERVICES FEES Under an Investment Management Services Agreement, the Investment Manager determines which securities will be purchased, held or sold. The management fee is an annual fee that is equal to a percentage of the Fund's average daily net assets that declines from 0.60% to 0.375% as the Fund's net assets increase. The fee may be adjusted upward or downward by a performance incentive adjustment determined monthly by measuring the percentage difference over a rolling 12- month period between the annualized performance of one Class A share of the Fund and the annualized performance of the Lipper Large-Cap Core Funds Index. In certain circumstances, the Board may approve a change in the index. The maximum adjustment is 0.12% per year. If the performance difference is less than 0.50%, the adjustment will be zero. The adjustment decreased the management fee by $789,031 for the year ended July 31, 2010. The management fee for the year ended July 31, 2010 was 0.54% of the Fund's average daily net assets, including the adjustment under the terms of the performance incentive arrangement. ADMINISTRATIVE SERVICES FEES Under an Administrative Services Agreement, the Fund pays Ameriprise Financial an annual fee for administration and accounting services equal to a percentage of the Fund's average daily net assets that declines from 0.06% to 0.03% as the Fund's net assets increase. The fee for the year ended July 31, 2010 was 0.05% of the Fund's average daily net assets. OTHER FEES Other expenses are for, among other things, certain expenses of the Fund or the Board including: Fund boardroom and office expense, employee compensation, employee health and retirement benefits, and certain other expenses. Payment of these Fund and Board expenses is facilitated by a company providing limited - -------------------------------------------------------------------------------- 52 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- administrative services to the Fund and the Board. For the year ended July 31, 2010, there were no expenses incurred for these particular items. COMPENSATION OF BOARD MEMBERS Under a Deferred Compensation Plan (the Plan), the board members who are not "interested persons" of the Fund under the 1940 Act may defer receipt of their compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the Fund or certain other funds managed by the Investment Manager. The Fund's liability for these amounts is adjusted for market value changes and remains in the funds until distributed in accordance with the Plan. TRANSFER AGENCY FEES Under a Transfer Agency Agreement, Columbia Management Investment Services Corp. (formerly known as RiverSource Service Corporation) (the Transfer Agent) maintains Fund shareholder accounts and records and provides Fund shareholder services. The Fund paid the Transfer Agent an annual account-based fee at a rate equal to $19.50 for Class A, $20.50 for Class B and $20.00 for Class C for this service. The Transfer Agent also charged an annual fee of $3 per account serviced directly by the Fund or its designated agent for Class A, Class B and Class C shares. The Fund also paid the Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's average daily net assets attributable to Class R2, Class R3, Class R4 and Class R5 shares and an annual asset-based fee at a rate of 0.20% of the Fund's average daily net assets attributable to Class W shares. The Transfer Agent charged an annual fee of $5 per inactive account, charged on a pro rata basis for the 12 month period from the date the account becomes inactive. The Transfer Agent also received reimbursement for certain out-of-pocket expenses. These fees are included in the transfer agency fees in the Statement of Operations. The Fund and certain other associated investment companies (together, the Guarantors), have severally, but not jointly, guaranteed the performance and observance of all the terms and conditions of a lease entered into by Seligman Data Corp. (SDC), the former transfer agent of Seligman Common Stock Fund, which was acquired by the Fund on Sept. 11, 2009 (Note 10), including the payment of rent by SDC (the Guaranty). The lease and the Guaranty expire in January 2019. At July 31, 2010, the Fund's total potential future obligation over the life of the Guaranty is $132,673. The liability remaining at July 31, 2010 for Non- Recurring Charges amounted to $66,723 and is included within other accrued expenses in the Statement of Assets and Liabilities. SDC is owned by six associated investment companies, including the Fund. The Fund's ownership interest in SDC at July 31, 2010 is included in other assets in the Statement of Assets and Liabilities at cost of $22,506. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 53 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- PLAN ADMINISTRATION SERVICES FEES Under a Plan Administration Services Agreement with the Transfer Agent, the Fund paid an annual fee at a rate of 0.25% of the Fund's average daily net assets attributable to Class R2, Class R3 and Class R4 shares for the provision of various administrative, recordkeeping, communication and educational services. DISTRIBUTION FEES The Fund has an agreement with Columbia Management Investment Distributors, Inc. (formerly known as RiverSource Fund Distributors, Inc.) (the Distributor) for distribution and shareholder services. Under a Plan and Agreement of Distribution pursuant to Rule 12b-1, the Fund paid a fee at an annual rate of up to 0.25% of the Fund's average daily net assets attributable to Class A, Class R3 and Class W shares, a fee at an annual rate of up to 0.50% of the Fund's average daily net assets attributable to Class R2 shares and a fee at an annual rate of up to 1.00% of the Fund's average daily net assets attributable to Class B and Class C shares. For Class B and Class C shares, of the 1.00% fee, up to 0.75% is reimbursed for distribution expenses. The amount of distribution expenses incurred by the Distributor and not yet reimbursed (unreimbursed expense) was approximately $10,727,000 and $1,330,000 for Class B and Class C shares, respectively. These amounts are based on the most recent information available as of April 30, 2010, and may be recovered from future payments under the distribution plan or CDSC. To the extent the unreimbursed expense has been fully recovered, the distribution fee is reduced. SALES CHARGES Sales charges, including front-end and CDSCs, received by the Distributor for distributing Fund shares were $1,419,064 for Class A, $189,865 for Class B and $1,619 for Class C for the year ended July 31, 2010. EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES For the year ended July 31, 2010, the Investment Manager and its affiliates waived/reimbursed certain fees and expenses such that net expenses (excluding - -------------------------------------------------------------------------------- 54 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- fees and expenses of acquired funds*), including the adjustment under the terms of a performance incentive arrangement, were as follows: Class A.............................................. 1.00% Class B.............................................. 1.78 Class C.............................................. 1.77 Class I.............................................. 0.54 Class R2............................................. 1.36 Class R3............................................. 1.10 Class R4............................................. 0.85 Class R5............................................. 0.61 Class W.............................................. 0.98
The waived/reimbursed fees and expenses for the transfer agency fees at the class level were as follows: Class A.......................................... $2,272,002 Class B.......................................... 171,594 Class C.......................................... 19,994 Class R2......................................... 78 Class R4......................................... 5,975 Class R5......................................... 909 Class W.......................................... 16,258
The management fees waived/reimbursed at the Fund level were $2,405,684. Under an agreement which is effective until Sept. 30, 2010, the Investment Manager and its affiliates have contractually agreed to waive certain fees and reimburse certain expenses such that net expenses (excluding fees and expenses of acquired funds*), before giving effect to any performance incentive adjustment, will not exceed the following percentage of the class' average daily net assets: Class A.............................................. 1.02% Class B.............................................. 1.80 Class C.............................................. 1.78 Class I.............................................. 0.57 Class R2............................................. 1.37 Class R3............................................. 1.12 Class R4............................................. 0.87 Class R5............................................. 0.62 Class W.............................................. 1.02
Effective Oct. 1, 2010, the Investment Manager and its affiliates have contractually agreed to waive certain fees and reimburse certain expenses until Sept. 30, 2011, unless sooner terminated at the sole discretion of the Board, such that net expenses (excluding fees and expenses of acquired funds*), before giving - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 55 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- effect to any performance incentive adjustment, will not exceed the following percentage of the class' average daily net assets: Class A.............................................. 1.07% Class B.............................................. 1.82 Class C.............................................. 1.82 Class I.............................................. 0.64 Class R.............................................. 1.32 Class R4............................................. 0.94 Class R5............................................. 0.69 Class W.............................................. 1.07
* In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the funds in which it invests (also referred to as "acquired funds"), including affiliated and non-affiliated pooled investment vehicles (including mutual funds and exchange traded funds). Because the acquired funds have varied expense and fee levels and the Fund may own different proportions of acquired funds at different times, the amount of fees and expenses incurred indirectly by the Fund will vary. 5. SECURITIES TRANSACTIONS Cost of purchases (other than short-term obligations) aggregated $5,145,686,771 for the year ended July 31, 2010, including $2,341,695,402* from RiverSource Large Cap Equity Fund and Seligman Common Stock Fund that were acquired in the fund mergers as described in Note 10 and $25,611,418* of purchases done to realign the Fund's portfolio following the mergers. Proceeds from the sales of securities (other than short-term obligations) aggregated $3,818,605,403 for the year ended July 31, 2010, including $25,611,418* of sales to realign the Fund's portfolio following the mergers. Realized gains and losses are determined on an identified cost basis. * Amounts are excluded for purposes of calculating the Fund's portfolio turnover rate. 6. CAPITAL SHARE TRANSACTIONS Transactions in shares of capital stock for the periods indicated were as follows:
YEAR ENDED JULY 31, 2010 2009 - ------------------------------------------------------------------- CLASS A Sold 10,784,504 6,821,872 Fund mergers 481,393,025 N/A Converted from Class B* 10,543,095 1,149,578 Reinvested distributions 9,418,377 7,831,648 Redeemed (105,593,553) (36,445,132) - ------------------------------------------------------------------- Net increase (decrease) 406,545,448 (20,642,034) - -------------------------------------------------------------------
- -------------------------------------------------------------------------------- 56 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - --------------------------------------------------------------------------------
YEAR ENDED JULY 31, 2010 2009 - ------------------------------------------------------------------- CLASS B Sold 2,259,472 499,210 Fund mergers 46,018,619 N/A Reinvested distributions 439,252 200,930 Converted to Class A* (10,610,109) (1,160,372) Redeemed (9,206,091) (1,988,665) - ------------------------------------------------------------------- Net increase (decrease) 28,901,143 (2,448,897) - ------------------------------------------------------------------- CLASS C Sold 578,648 128,711 Fund mergers 4,760,196 N/A Reinvested distributions 46,332 18,704 Redeemed (1,167,803) (132,782) - ------------------------------------------------------------------- Net increase (decrease) 4,217,373 14,633 - ------------------------------------------------------------------- CLASS I Sold 10,321,219 23,916,807 Fund mergers 8,392,835 N/A Reinvested distributions 2,889,508 3,905,496 Redeemed (32,395,788) (17,233,065) - ------------------------------------------------------------------- Net increase (decrease) (10,792,226) 10,589,238 - ------------------------------------------------------------------- CLASS R2 Sold 169,630 -- Fund mergers 420,791 N/A Reinvested distributions 662 -- Redeemed (128,468) -- - ------------------------------------------------------------------- Net increase (decrease) 462,615 -- - ------------------------------------------------------------------- CLASS R3 Fund mergers 612 N/A - ------------------------------------------------------------------- Net increase (decrease) 612 N/A - ------------------------------------------------------------------- CLASS R4 Sold 4,153,046 2,764,051 Fund mergers 15,915,653 N/A Reinvested distributions 877,433 1,083,396 Redeemed (7,531,805) (4,474,270) - ------------------------------------------------------------------- Net increase (decrease) 13,414,327 (626,823) - ------------------------------------------------------------------- CLASS R5 Sold 663,718 -- Fund mergers 5,440,327 N/A Reinvested distributions 59,413 -- Redeemed (934,137) -- - ------------------------------------------------------------------- Net increase (decrease) 5,229,321 -- - -------------------------------------------------------------------
- -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 57 NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
YEAR ENDED JULY 31, 2010 2009 - ------------------------------------------------------------------- CLASS W Sold 17,173,271 79,709,796 Reinvested distributions 4,787,849 10,352,737 Redeemed (112,043,210) (152,063,288) - ------------------------------------------------------------------- Net increase (decrease) (90,082,090) (62,000,755) - -------------------------------------------------------------------
* Automatic conversion of Class B shares to Class A shares based on the original purchase date. 7. LENDING OF PORTFOLIO SECURITIES The Fund has entered into a Master Securities Lending Agreement (the Agreement) with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement authorizes JPMorgan as lending agent to lend securities to authorized borrowers in order to generate additional income on behalf of the Fund. Pursuant to the Agreement, the securities loaned are secured by cash or U.S. government securities equal to at least 100% of the market value of the loaned securities. Any additional collateral required to maintain those levels due to market fluctuations of the loaned securities is delivered the following business day. Cash collateral received is invested by the lending agent on behalf of the Fund into authorized investments pursuant to the Agreement. The investments made with the cash collateral are listed in the Portfolio of Investments. The values of such investments and any uninvested cash collateral are disclosed in the Statement of Assets and Liabilities along with the related obligation to return the collateral upon the return of the securities loaned. At July 31, 2010, securities valued at $656,224,229 were on loan, secured by cash collateral of $671,510,186 invested in short-term securities or in cash equivalents. Risks of delay in recovery of securities or even loss of rights in the securities may occur should the borrower of the securities fail financially. Risks may also arise to the extent that the value of the securities loaned increases above the value of the collateral received. JPMorgan will indemnify the Fund from losses resulting from a borrower's failure to return a loaned security when due. Such indemnification does not extend to losses associated with declines in the value of cash collateral investments. Loans are subject to termination by the Fund or the borrower at any time, and are, therefore, not considered to be illiquid investments. Pursuant to the Agreement, the Fund receives income for lending its securities either in the form of fees or by earning interest on invested cash collateral, net of negotiated rebates paid to borrowers and fees paid to the lending agent for services provided and any other securities lending expenses. Net income of $2,078,072 earned from securities lending for the year ended July 31, 2010 is - -------------------------------------------------------------------------------- 58 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- included in the Statement of Operations. The Fund also continues to earn interest and dividends on the securities loaned. 8. AFFILIATED MONEY MARKET FUND The Fund may invest its daily cash balance in Columbia Short-Term Cash Fund (formerly known as RiverSource Short-Term Cash Fund), a money market fund established for the exclusive use of certain funds managed by the Investment Manager and other institutional clients of the Investment Manager. The cost of the Fund's purchases and proceeds from sales of shares of Columbia Short-Term Cash Fund aggregated $818,135,862 and $790,951,973, respectively, for the year ended July 31, 2010. The income distributions received with respect to the Fund's investment in Columbia Short-Term Cash Fund can be found in the Statement of Operations and the Fund's invested balance in Columbia Short-Term Cash Fund at July 31, 2010, can be found in the Portfolio of Investments. 9. BANK BORROWINGS The Fund has entered into a revolving credit facility with a syndicate of banks led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund may borrow for the temporary funding of shareholder redemptions or for other temporary or emergency purposes. The credit facility became effective on Oct. 15, 2009, replacing a prior credit facility. The credit facility agreement, which is a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permits collective borrowings up to $300 million. The borrowers shall have the right, upon written notice to the Administrative Agent to request an increase of up to $200 million in the aggregate amount of the credit facility from new or existing lenders, provided that the aggregate amount of the credit facility shall at no time exceed $500 million. Participation in such increase by any existing lender shall be at such lender's sole discretion. Interest is charged to each Fund based on its borrowings at a rate equal to the sum of the federal funds rate plus (i) 1.25% per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the amount of such excess. Each borrowing under the credit facility matures no later than 60 days after the date of borrowing. The Fund also pays a commitment fee equal to its pro rata share of the amount of the credit facility at a rate of 0.10% per annum, in addition to an upfront fee equal to its pro rata share of 0.04% of the amount of the credit facility. Prior to Oct. 15, 2009, the credit facility agreement, which was a collective agreement between the Fund and certain other funds managed by the Investment Manager, severally and not jointly, permitted collective borrowings up to $475 million. Interest was charged to each Fund based on its borrowings at a rate equal to the federal funds rate plus 0.75%. The Fund also paid a commitment fee equal to its pro rata share of the amount of the - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 59 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- credit facility at a rate of 0.06% per annum, in addition to an upfront fee equal to its pro rata share of 0.02% of the amount of the credit facility. The Fund had no borrowings during the year ended July 31, 2010. 10. FUND MERGERS At the close of business on Sept. 11, 2009, Columbia Large Core Quantitative Fund acquired the assets and assumed the identified liabilities of RiverSource Large Cap Equity Fund and Seligman Common Stock Fund. The reorganizations were completed after shareholders approved the plans on June 2, 2009. The aggregate net assets of Columbia Large Core Quantitative Fund immediately before the acquisitions were $1,879,250,294 and the combined net assets immediately after the acquisitions were $4,385,060,209. The mergers were accomplished by tax-free exchanges of 729,934,986 shares of RiverSource Large Cap Equity Fund valued at $2,406,154,730 and 14,681,342 shares of Seligman Common Stock Fund valued at $99,655,185. In exchange for RiverSource Large Cap Equity Fund shares and net assets, Columbia Large Core Quantitative Fund issued the following number of shares:
SHARES - -------------------------------------------------------------- Class A.......................................... 461,367,825 Class B.......................................... 45,802,954 Class C.......................................... 3,041,958 Class I.......................................... 8,392,835 Class R2......................................... 613 Class R3......................................... 612 Class R4......................................... 15,915,653 Class R5......................................... 5,436,673
In exchange for Seligman Common Stock Fund shares and net assets, Columbia Large Core Quantitative Fund issued the following number of shares:
SHARES - ------------------------------------------------------------- Class A.......................................... 20,025,200 Class B.......................................... 215,665 Class C.......................................... 1,718,238 Class R2......................................... 420,178 Class R5......................................... 3,654
For financial reporting purposes, net assets received and shares issued by Columbia Large Core Quantitative Fund were recorded at fair value; however, cost of investments for RiverSource Large Cap Equity Fund and Seligman Common Stock Fund were carried forward to align ongoing reporting of - -------------------------------------------------------------------------------- 60 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- Columbia Large Core Quantitative Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. The components of net assets after adjustments for any permanent book-to-tax differences at the merger date for RiverSource Large Cap Equity Fund and Seligman Common Stock Fund were as follows:
RIVERSOURCE LARGE SELIGMAN COMMON CAP EQUITY FUND STOCK FUND - ------------------------------------------------------------------------ Total net assets $ 2,406,154,730 $ 99,655,185 Capital stock $ 4,210,331,804 $191,584,231 Undistributed (excess of distributions over) net investment income $ (735,495) $ 1,404 Accumulated net realized loss $(1,949,209,843) $(88,859,870) Unrealized appreciation (depreciation) $ 145,768,264 $ (3,070,580)
The financial statements reflect the operations of Columbia Large Core Quantitative Fund for the period prior to the mergers and the combined fund for the period subsequent to the mergers. Because the combined investment portfolios have been managed as a single integrated portfolio since the mergers were completed, it is not practicable to separate the amounts of revenue and earnings of RiverSource Large Cap Equity Fund and Seligman Common Stock Fund that have been included in the combined Fund's Statement of Operations since the mergers were completed. Assuming the mergers had been completed on Aug. 1, 2009, Columbia Large Core Quantitative Fund's pro-forma net investment income, net loss on investments, and net increase in net assets from operations for the year ended July 31, 2010 would have been $26.1 million, $(108.1) million and $586.7 million, respectively. 11. LEHMAN BROTHERS HOLDINGS INC. EQUITY-LINKED NOTES The Fund holds investments in two equity-linked notes (notes) for which Lehman Brothers Holdings Inc. (Lehman Brothers) is the counterparty. The notes (with an aggregate principal amount of $2.6 million) defaulted as of their respective maturity dates, Sept. 14, 2008 and Oct. 2, 2008. Lehman Brothers filed a Chapter 11 bankruptcy petition on Sept. 15, 2008, and as such, it is likely that the Fund will receive less than the maturity value of the notes, pending the outcome of the bankruptcy proceedings. Based on the bankruptcy proceedings, the Fund recorded receivables aggregating $246,717 based on the estimated amounts recoverable for the notes and recognized realized losses of $2.3 million. The estimates of the amounts recoverable for the notes are periodically adjusted by the Investment Manager based on the observable trading price of Lehman Brothers senior notes, which provide an indication of amounts recoverable through the bankruptcy proceedings. Any changes to the receivable balances resulting from such adjustments are recorded as a component of interest income - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 61 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- in the Statement of Operations. At July 31, 2010, the value of the receivable balances were $390,262, which represented 0.01% of the Fund's net assets. The receivable balances for the notes are reported as other receivables in the Statement of Assets and Liabilities 12. FEDERAL TAX INFORMATION Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of futures contracts, foreign currency transactions, re-characterization of real estate investment trust (REIT) distributions, investments in partnerships, post-October losses and losses deferred due to wash sales. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains were recorded by the Fund. In the Statement of Assets and Liabilities, as a result of permanent book-to-tax differences, excess of distributions over net investment income has been increased by $103,110 and accumulated net realized loss has been decreased by $207,141,702 resulting in a net reclassification adjustment to decrease paid-in capital by $207,038,592. The tax character of distributions paid for the years indicated was as follows:
YEAR ENDED JULY 31, 2010 2009 - ------------------------------------------------------------------ Ordinary income $87,580,581 $26,288,073 Long-term capital gain -- 69,119,748
At July 31, 2010, the components of distributable earnings on a tax basis were as follows: Undistributed ordinary income................ $ 441,871 Undistributed accumulated long-term gain..... $ -- Accumulated realized loss.................... $(2,641,007,182) Unrealized appreciation (depreciation)....... $ 83,181,065
For federal income tax purposes, the Fund had a capital loss carry-over of $2,425,729,564 at July 31, 2010, that if not offset by capital gains will expire as follows:
2016 2017 2018 $420,044,596 $1,377,208,066 $628,476,902
Columbia Large Core Quantitative Fund acquired $1,797,049,041 of capital loss carry-overs in connection with the RiverSource Large Cap Equity Fund and Seligman Common Stock Fund mergers (Note 10). The yearly utilization of the - -------------------------------------------------------------------------------- 62 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- acquired capital losses as well as the utilization of the acquired unrealized losses is limited by the Internal Revenue Code. For the year ended July 31, 2010, $125,339,009 of capital loss carry-over was utilized and/or expired unused. It is unlikely the Board will authorize a distribution of any net realized capital gains until the available capital loss carry-over has been offset or expires. There is no assurance that the Fund will be able to utilize all of its capital loss carry-over before it expires. Because the measurement periods for a regulated investment company's income are different for excise tax purposes versus income tax purposes, special rules are in place to protect the amount of earnings and profits needed to support excise tax distributions. As a result, the Fund is permitted to treat net capital losses realized between Nov. 1, 2009 and its fiscal year end (post-October loss) as occurring on the first day of the following tax year. At July 31, 2010, the Fund had a post-October loss of $215,277,618 that is treated for income tax purposes as occurring on Aug. 1, 2010. 13. SUBSEQUENT EVENTS Management has evaluated Fund related events and transactions that occurred during the period from the date of the Statement of Assets and Liabilities through the date of issuance of the Fund's financial statements. There were no events or transactions that occurred during the period that materially impacted the amounts or disclosures in the Fund's financial statements. 14. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS In June 2004, an action captioned John E. Gallus et al. v. American Express Financial Corp. and American Express Financial Advisors Inc. was filed in the United States District Court for the District of Arizona. The plaintiffs allege that they are investors in several American Express Company (now known as legacy RiverSource) mutual funds and they purport to bring the action derivatively on behalf of those funds under the Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid to the defendants by the funds for investment advisory and administrative services are excessive. The plaintiffs seek remedies including restitution and rescission of investment advisory and distribution agreements. The plaintiffs voluntarily agreed to transfer this case to the United States District Court for the District of Minnesota (the District Court). In response to defendants' motion to dismiss the complaint, the District Court dismissed one of plaintiffs' four claims and granted plaintiffs limited discovery. Defendants moved for summary judgment in April 2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a notice of - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 63 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit) on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary judgment and remanded to the District Court for further proceedings. On August 6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the Supreme Court), asking the Supreme Court to stay the District Court proceedings while the Supreme Court considers and rules in a case captioned Jones v. Harris Associates, which involves issues of law similar to those presented in the Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v. Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth Circuit's decision in the Gallus case and remanded the case to the Eighth Circuit for further consideration in light of the Supreme Court's decision in Jones v. Harris Associates. On June 4, 2010, the Eighth Circuit remanded the Gallus case to the District Court for further consideration in light of the Supreme Court's decision in Jones v. Harris Associates. In December 2005, without admitting or denying the allegations, American Express Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc. (Ameriprise Financial)), entered into settlement agreements with the Securities and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC) related to market timing activities. As a result, AEFC was censured and ordered to cease and desist from committing or causing any violations of certain provisions of the Investment Advisers Act of 1940, the Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million and civil money penalties of $7 million. AEFC also agreed to retain an independent distribution consultant to assist in developing a plan for distribution of all disgorgement and civil penalties ordered by the SEC in accordance with various undertakings detailed at http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its affiliates have cooperated with the SEC and the MDOC in these legal proceedings, and have made regular reports to the funds' Boards of Directors/Trustees. Ameriprise Financial and certain of its affiliates have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in connection with the conduct of their business activities. Ameriprise Financial believes that the Funds are not currently the subject of, and that neither Ameriprise Financial nor any of its affiliates are the subject of, any pending legal, arbitration or regulatory proceedings that are likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds. Ameriprise Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the Securities and Exchange Commission on legal and regulatory matters that relate to Ameriprise - -------------------------------------------------------------------------------- 64 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- Financial and its affiliates. Copies of these filings may be obtained by accessing the SEC website at www.sec.gov. There can be no assurance that these matters, or the adverse publicity associated with them, will not result in increased fund redemptions, reduced sale of fund shares or other adverse consequences to the Funds. Further, although we believe proceedings are not likely to have a material adverse effect on the Funds or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Funds, these proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of Ameriprise Financial. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 65 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------ TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF COLUMBIA LARGE CORE QUANTITATIVE FUND: We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Columbia Large Core Quantitative Fund (formerly RiverSource Disciplined Equity Fund) (the Fund) of the RiverSource Large Cap Series, Inc., as of July 31, 2010, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights of the Fund for the period ended July 31, 2006, were audited by other auditors whose report dated September 20, 2006, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2010, by correspondence with the custodian and brokers, or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion. - -------------------------------------------------------------------------------- 66 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- In our opinion, the financial statements and financial highlights audited by us as referred to above present fairly, in all material respects, the financial position of Columbia Large Core Quantitative Fund of the RiverSource Large Cap Series, Inc. at July 31, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended, in conformity with U.S. generally accepted accounting principles. /s/ Ernst & Young LLP Minneapolis, Minnesota September 20, 2010 - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 67 FEDERAL INCOME TAX INFORMATION ------------------------------------------------- (UNAUDITED) The Fund is required by the Internal Revenue Code of 1986 to tell its shareholders about the tax treatment of the dividends it pays during its fiscal year. The dividends listed below are reported to you on Form 1099-DIV, Dividends and Distributions. Shareholders should consult a tax advisor on how to report distributions for state and local tax purposes. Fiscal year ended July 31, 2010
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for distributions: Qualified Dividend Income for individuals........................ 100.00% Dividends Received Deduction for corporations.................... 100.00% U.S. Government Obligations...................................... 0.00%
The Fund designates as distributions of long-term gains, to the extent necessary to fully distribute such capital gains, earnings and profits distributed to shareholders on the redemption of shares. - -------------------------------------------------------------------------------- 68 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT BOARD MEMBERS AND OFFICERS ----------------------------------------------------- Shareholders elect a Board that oversees the Fund's operations. The Board appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following is a list of the Fund's Board members. Each Board member oversees 150 Columbia, RiverSource, Seligman and Threadneedle funds. Under current Board policy, members generally serve until the next regular shareholders' meeting, until he or she reaches the mandatory retirement age established by the Board, or the fifteenth anniversary of the first Board meeting they attended as members of the Board. INDEPENDENT BOARD MEMBERS*
OTHER PRESENT OR NAME, POSITION HELD PAST DIRECTORSHIPS ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5 AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS) - ------------------------------------------------------------------------------------------------------------------------------ Kathleen Blatz Board member since Chief Justice, Minnesota Supreme Court, 1998-2006; None 901 S. Marquette Ave. 1/11/06 Attorney Minneapolis, MN 55402 Age 56 - ------------------------------------------------------------------------------------------------------------------------------ Arne H. Carlson Board member since Chair, RiverSource and Threadneedle Funds, 1999-2006; None 901 S. Marquette Ave. 1/5/99 former Governor of Minnesota Minneapolis, MN 55402 Age 76 - ------------------------------------------------------------------------------------------------------------------------------ Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None 901 S. Marquette Ave. 7/11/07 Leadership (consulting company) Minneapolis, MN 55402 Age 55 - ------------------------------------------------------------------------------------------------------------------------------ Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None 901 S. Marquette Ave. 11/1/04 University; former Dean, McCallum Graduate School of Minneapolis, MN 55402 Business, Bentley University Age 59 - ------------------------------------------------------------------------------------------------------------------------------ Anne P. Jones Board member since Attorney and Consultant None 901 S. Marquette Ave. 3/1/85 Minneapolis, MN 55402 Age 75 - ------------------------------------------------------------------------------------------------------------------------------ Jeffrey Laikind, CFA Board member since Former Managing Director, Shikiar Asset Management American Progressive 901 S. Marquette Ave. 11/1/05 Insurance; Hapoalim Minneapolis, MN 55402 Securities USA, Inc. Age 74 - ------------------------------------------------------------------------------------------------------------------------------ Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries, 901 S. Marquette Ave. since 1/1/07, College Inc. (manufactures Minneapolis, MN 55402 Board member irrigation systems) Age 71 since 1/1/02 - ------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 69 BOARD MEMBERS AND OFFICERS (continued) ----------------------------------------- INDEPENDENT BOARD MEMBERS (CONTINUED)
OTHER PRESENT OR NAME, POSITION HELD PAST DIRECTORSHIPS ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5 AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS) - ------------------------------------------------------------------------------------------------------------------------------ John F. Maher Board member Retired President and Chief Executive Officer and None 901 S. Marquette Ave. since 12/10/08 former Director, Great Western Financial Corporation Minneapolis, MN 55402 (financial services), 1986-1997 Age 67 - ------------------------------------------------------------------------------------------------------------------------------ Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None 901 S. Marquette Ave. 11/1/04 real estate and asset management company) Minneapolis, MN 55402 Age 58 - ------------------------------------------------------------------------------------------------------------------------------ Leroy C. Richie Board member Counsel, Lewis & Munday, P.C. since 1987; Vice Digital Ally, Inc. 901 S. Marquette Ave. since 11/11/08 President and General Counsel, Automotive Legal (digital imaging); Minneapolis, MN 55402 Affairs, Chrysler Corporation, 1990-1997 Infinity, Inc. (oil Age 69 and gas exploration and production); OGE Energy Corp. (energy and energy services) - ------------------------------------------------------------------------------------------------------------------------------ Alison Taunton-Rigby Board member since Chief Executive Officer and Director, RiboNovix, Inc. Idera 901 S. Marquette Ave. 11/13/02 since 2003 (biotechnology); former President, Aquila Pharmaceuticals, Minneapolis, MN 55402 Biopharmaceuticals Inc. Age 66 (biotechnology); Healthways, Inc. (health management programs) - ------------------------------------------------------------------------------------------------------------------------------
* Mr. Laikind may be deemed, as a technical matter, an interested person of RiverSource International Managers Series, Inc. and RiverSource Variable Series Trust because he serves as an independent director of a broker-dealer that has executed transactions for subadvisers to certain of the funds. - -------------------------------------------------------------------------------- 70 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- BOARD MEMBER AFFILIATED WITH THE INVESTMENT MANAGER*
OTHER PRESENT OR NAME, POSITION HELD PAST DIRECTORSHIPS ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5 AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS) - ------------------------------------------------------------------------------------------------------------------------------ William F. Truscott Board member Chairman of the Board, Columbia Management Investment None 53600 Ameriprise since 11/7/01, Advisers, LLC (formerly RiverSource Investments, LLC) Financial Center Vice President since since May 2010 (previously President, Chairman of the Minneapolis, MN 55474 2002 Board and Chief Investment Officer, 2001-April 2010); Age 50 Senior Vice President, Atlantic Funds, Columbia Funds and Nations Funds since May 2010; Chief Executive Officer, U.S. Asset Management & President -- Annuities, Ameriprise Financial, Inc. since May 2010 (previously President -- U.S. Asset Management and Chief Investment Officer, 2005-April 2010 and Senior Vice President -- Chief Investment Officer, 2001-2005); Director, President and Chief Executive Officer, Ameriprise Certificate Company since 2006; Director, Columbia Management Investment Distributors, Inc. (formerly RiverSource Fund Distributors, Inc.) since May 2010 (previously Chairman of the Board and Chief Executive Officer, 2008-April 2010); Chairman of the Board and Chief Executive Officer, RiverSource Distributors, Inc. since 2006 - ------------------------------------------------------------------------------------------------------------------------------
* Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the investment manager or Ameriprise Financial. The SAI has additional information about the Fund's Board members and is available, without charge, upon request by calling 800.345.6611; contacting your financial intermediary; or visiting columbiamanagement.com. - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 71 BOARD MEMBERS AND OFFICERS (continued) ----------------------------------------- The Board has appointed officers who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the Fund's other officers are: FUND OFFICERS
NAME, POSITION HELD ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION AGE LENGTH OF SERVICE DURING PAST FIVE YEARS - -------------------------------------------------------------------------------------------------------- J. Kevin Connaughton President since Senior Vice President and General Manager -- Mutual One Financial Center 5/1/10 Fund Products, Columbia Management Investment Advisers, Boston, MA 02111 LLC since May 2010; President, Columbia Funds since Age 46 2009 (previously Senior Vice President and Chief Financial Officer, June 2008 -- January 2009); President, Atlantic Funds and Nations Funds since 2009; Managing Director of Columbia Management Advisors, LLC, December 2004 -- April 2010; Treasurer, Columbia Funds, October 2003 -- May 2008; Treasurer, the Liberty Funds, Stein Roe Funds and Liberty All-Star Funds, December 2000 -- December 2006; Senior Vice President -- Columbia Management Advisors, LLC, April 2003 -- December 2004; President, Columbia Funds, Liberty Funds and Stein Roe Funds, February 2004 -- October 2004 - -------------------------------------------------------------------------------------------------------- Amy K. Johnson Vice President since Senior Vice President and Chief Operating Officer, 5228 Ameriprise Financial 12/5/06 Columbia Management Investment Advisers, LLC (formerly Center Minneapolis, MN RiverSource Investments, LLC) since May 2010 55474 (previously Chief Administrative Officer, 2009 -- April Age 45 2010 and Vice President -- Asset Management and Trust Company Services, 2006-2009 and Vice President -- Operations and Compliance, 2004-2006); Senior Vice President, Atlantic Funds, Columbia Funds and Nations Funds since May 2010; Director of Product Development -- Mutual Funds, Ameriprise Financial, Inc., 2001-2004 - -------------------------------------------------------------------------------------------------------- Jeffrey P. Fox Treasurer since Chief Financial Officer, Columbia Management Investment 105 Ameriprise 7/10/02 Distributors, Inc. (formerly RiverSource Fund Financial Center Distributors, Inc.) and of Seligman Data Corp. since Minneapolis, MN 55474 2008; Vice President -- Investment Accounting, Age 55 Ameriprise Financial, Inc. since 2002; Chief Financial Officer, RiverSource Distributors, Inc. since 2006 - --------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 72 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- FUND OFFICERS (CONTINUED)
NAME, POSITION HELD ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION AGE LENGTH OF SERVICE DURING PAST FIVE YEARS - -------------------------------------------------------------------------------------------------------- Scott R. Plummer Vice President, Chief Legal Officer and Assistant Secretary, Columbia 5228 Ameriprise Financial General Counsel and Management Investment Advisers, LLC (formerly Center Secretary since RiverSource Investments, LLC) since June 2005; Vice Minneapolis, MN 55474 12/5/06 President and Lead Chief Counsel -- Asset Management, Age 51 Ameriprise Financial, Inc. since May 2010 (previously Vice President and Chief Counsel -- Asset Management, 2005-April 2010 and Vice President -- Asset Management Compliance, 2004-2005); Senior Vice President, Secretary and Chief Legal Officer, Atlantic Funds, Columbia Funds and Nations Funds since May 2010; Vice President, Chief Counsel and Assistant Secretary, Columbia Management Investment Distributors, Inc. (formerly RiverSource Fund Distributors, Inc.) since 2008; Vice President, General Counsel and Secretary, Ameriprise Certificate Company since 2005; Chief Counsel, RiverSource Distributors, Inc. since 2006; Senior Vice President and Chief Compliance Officer, USBancorp Asset Management, 2002-2004 - -------------------------------------------------------------------------------------------------------- Michael A. Jones Vice President since Director and President, Columbia Management Investment 100 Federal Street 5/1/10 Advisers, LLC since May 2010; President and Director, Boston, MA 02110 Columbia Management Investment Distributors, Inc. since Age 51 May 2010; Senior Vice President, Atlantic Funds, Columbia Funds and Nations Funds since May 2010; Manager, Chairman, Chief Executive Officer and President, Columbia Management Advisors, LLC, 2007 -- April 2010; Chief Executive Officer, President and Director, Columbia Management Distributors, Inc., 2006 -- April 2010; former Co-President and Senior Managing Director, Robeco Investment Management - -------------------------------------------------------------------------------------------------------- Colin Moore Vice President since Chief Investment Officer, Columbia Management One Financial Center 5/1/10 Investment Advisers, LLC since May 2010; Senior Vice Boston, MA 02111 President, Atlantic Funds, Columbia Funds and Nations Age 52 Funds since May 2010; Manager, Managing Director and Chief Investment Officer, Columbia Management Advisors, LLC, 2007- April 2010; Head of Equities, Columbia Management Advisors, LLC, 2002-Sept. 2007 - -------------------------------------------------------------------------------------------------------- Linda Wondrack Chief Compliance Vice President and Chief Compliance Officer, Columbia One Financial Center Officer since 5/1/10 Management Investment Advisers, LLC since May 2010; Boston, MA 02111 Chief Compliance Officer, Columbia Funds since 2007; Age 46 Senior Vice President and Chief Compliance Officer, Atlantic Funds and Nations Funds since 2007; Director (Columbia Management Group, LLC and Investment Product Group Compliance), Bank of America, June 2005 -- April 2010; Director of Corporate Compliance and Conflicts Officer, MFS Investment Management (investment management), August 2004 -- May 2005 - --------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 73 BOARD MEMBERS AND OFFICERS (continued) ----------------------------------------- FUND OFFICERS (CONTINUED)
NAME, POSITION HELD ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION AGE LENGTH OF SERVICE DURING PAST FIVE YEARS - -------------------------------------------------------------------------------------------------------- Neysa M. Alecu Money Laundering Vice President -- Compliance, Ameriprise Financial, 2934 Ameriprise Financial Prevention Officer Inc. since 2008; Anti-Money Laundering Officer and Center since 11/9/05 and Identity Theft Prevention Officer, Columbia Management Minneapolis, MN 55474 Identity Theft Investment Distributors, Inc. (formerly RiverSource Age 46 Prevention Officer Fund Distributors, Inc.) since 2008; Anti-Money since 2008 Laundering Officer, Ameriprise Financial, Inc. since 2005; Compliance Director, Ameriprise Financial, Inc., 2004-2008 - --------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 74 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT ---------------------------------------------------------------------- Columbia Management Investment Advisers, LLC ("Columbia Management" or the "investment manager"), formerly known as RiverSource Investments, LLC, a wholly- owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise Financial"), serves as the investment manager to the Fund. Under an investment management services agreement (the "IMS Agreement"), Columbia Management provides investment advice and other services to the Fund and all funds branded Columbia, RiverSource, Seligman and Threadneedle. On an annual basis, the Fund's Board of Directors (the "Board"), including the independent Board members (the "Independent Directors"), considers renewal of the IMS Agreement. Columbia Management prepared detailed reports for the Board and its Contracts Committee in March and April 2010, including reports based on data provided by independent organizations and a comprehensive response to each item of information requested by independent legal counsel to the Independent Directors ("Independent Legal Counsel") in a letter to the investment manager, to assist the Board in making this determination. All of the materials presented in March and April 2010 were first supplied in draft form to designated representatives of the Independent Directors, i.e., Independent Legal Counsel, the Chair of the Board and the Chair of the Contracts Committee (including materials relating to the Fund's proposed revised expense cap), and the final materials were revised to reflect comments provided by these Board representatives. In addition, throughout the year, the Board (or its committees) reviews information prepared by Columbia Management addressing the services Columbia Management provides and Fund performance. The Board accords particular weight to the work, deliberations and conclusions of the Contracts Committee, the Investment Review Committee and the Compliance Committee in determining whether to continue the IMS Agreement. At the April 6-8, 2010 in-person Board meeting, Independent Legal Counsel reviewed with the Independent Directors, including in an executive session without management, various factors relevant to the Board's consideration of advisory agreements and the Board's legal responsibilities related to such consideration. Following an analysis and discussion of the factors identified below, the Board, including all of the Independent Directors, approved renewal of the IMS Agreement. Nature, Extent and Quality of Services Provided by Columbia Management: The Board analyzed various reports and presentations it had received detailing the services performed by Columbia Management, as well as its expertise, resources and capabilities. The Board specifically considered many developments during the past year concerning the services provided by Columbia Management, including, in particular, the continued investment in, and resources dedicated to, the Fund's operations, most notably, management's announcement of the massive - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 75 APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT (continued) ---------------------------------------------------------- investment made in the acquisition of the long-term asset management business of Columbia Management Group, LLC (the "Columbia Transaction") and the completed integration of J. & W. Seligman & Co. Incorporated, acquisitions which should continue to enhance investment capabilities and provide access to a greater depth of experienced portfolio managers in key categories. The Board noted, in particular, that upon the close of the Columbia Transaction, the investment manager will have grown to 10 investment offices (compared to 6 in 2009). In addition, the Board reviewed information concerning the investment manager's new Chief Investment Officer upon the close of the Columbia Transaction, including the application of his particular investment philosophy, which is intended to enhance the risk and portfolio management oversight of the entire fund family. Moreover, in connection with the Board's evaluation of the overall package of services provided by Columbia Management, the Board considered the quality of the administrative and transfer agency services provided by Columbia Management's affiliates to the Fund. The Board also reviewed the financial condition of Columbia Management and its affiliates, and each entity's ability to carry out its responsibilities under the IMS Agreement. Further, the Board considered Columbia Management's ability to retain key personnel in certain targeted areas and its expectations in this regard. The Board also discussed the acceptability of the terms of the IMS Agreement (including the relatively broad scope of services required to be performed by Columbia Management). The Board concluded that the services being performed under the IMS Agreement were of a reasonably high quality. Based on the foregoing, and based on other information received (both oral and written, including the information on investment performance referenced below) and other considerations, the Board concluded that Columbia Management and its affiliates were in a position to continue to provide a high quality and level of services to the Fund. Investment Performance: For purposes of evaluating the nature, extent and quality of services provided under the IMS Agreement, the Board carefully reviewed the investment performance of the Fund. In this regard, the Board considered detailed reports containing data prepared by an independent organization showing, for various periods, the performance of the Fund, the performance of a benchmark index, the percentage ranking of the Fund among its comparison group and the net assets of the Fund. The Board observed that the Fund's investment performance reflected the interrelationship of market conditions with the particular investment strategies employed by the portfolio - -------------------------------------------------------------------------------- 76 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT - -------------------------------------------------------------------------------- management team. Further, the Board noted measures taken to address the Fund's performance, including the anticipated change in portfolio managers for the Fund. In this regard, the Board reviewed a detailed report illustrating the performance and track record of the new portfolio managers expected to assume responsibilities for the Fund upon the close of the Columbia Transaction. Comparative Fees, Costs of Services Provided and the Profits Realized By Columbia Management and its Affiliates from their Relationships with the Fund: The Board reviewed comparative fees and the costs of services to be provided under the IMS Agreement. The Board members considered detailed comparative information set forth in an annual report on fees and expenses, including, among other things, data (prepared by an independent organization) showing a comparison of the Fund's expenses with median expenses paid by funds in its peer group, as well as data showing the Fund's contribution to Columbia Management's profitability. They also reviewed information in the report showing the fees charged by Columbia Management to other client accounts (with similar investment strategies to those of the Fund). The Board accorded particular weight to the notion that the level of fees should reflect a rational pricing model applied consistently across the various product lines in the legacy RiverSource Funds' family, while assuring that the overall fees for each fund (with few defined exceptions) are generally in line with the "pricing philosophy" (i.e., that the total expense ratio of each fund (excluding the effect of a performance incentive adjustment), with few exceptions, is at or below the median expense ratio of funds in the same comparison group). The Board took into account that the Fund's total expense ratio (after considering proposed expense caps/waivers) approximated the peer group's median expense ratio. The Board also considered the Fund's performance incentive adjustment and noted its continued appropriateness. Based on its review, the Board concluded that the Fund's management fee was fair and reasonable in light of the extent and quality of services that the Fund receives. The Board also considered various preliminary integration plans in connection with the Columbia Transaction which, if implemented, would impact the fee structures of various legacy RiverSource Funds. The Board was satisfied with the principles underlying these plans, which, at their preliminary stage, are designed to achieve a rational, consistent pricing model across the combined fund families, as well as preserve the "pricing philosophy" of the legacy RiverSource Funds. The Board also considered the expected profitability of Columbia Management and its affiliates in connection with Columbia Management providing investment - -------------------------------------------------------------------------------- COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT 77 APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT (continued) ---------------------------------------------------------- management services to the Fund. In this regard, the Board referred to a detailed profitability report, discussing the profitability to Columbia Management and Ameriprise Financial from managing and operating the Fund, including data showing comparative profitability over the past two years. In this regard, the Board observed slightly reduced profitability in 2009 vs. 2008. The Board also considered the services acquired by the investment manager through the use of commission dollars paid by the legacy RiverSource Funds on portfolio transactions. The Board noted that the fees paid by the Fund should permit the investment manager to offer competitive compensation to its personnel, make necessary investments in its business and earn an appropriate profit. The Board concluded that profitability levels were reasonable. Economies of Scale to be Realized: The Board also considered the economies of scale that might be realized by Columbia Management as the Fund grows and took note of the extent to which Fund shareholders might also benefit from such growth. The Board considered that the IMS Agreement provides for lower fees as assets increase at pre-established breakpoints and concluded that the IMS Agreement satisfactorily provided for sharing these economies of scale. Based on the foregoing, the Board, including all of the Independent Directors, concluded that the investment management service fees were fair and reasonable in light of the extent and quality of services provided. In reaching this conclusion, no single factor was determinative. On April 8, 2010, the Board, including all of the Independent Directors, approved the renewal of the IMS Agreement for an additional annual period. PROXY VOTING ------------------------------------------------------------------- The policy of the Board is to vote the proxies of the companies in which the Fund holds investments consistent with the procedures as stated in the Statement of Additional Information (SAI). You may obtain a copy of the SAI without charge by calling 800.345.6611; contacting your financial intermediary; visiting columbiamanagement.com; or searching the website of the Securities and Exchange Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31 for the most recent 12-month period ending June 30 of that year, and is available without charge by visiting columbiamanagement.com; or searching the website of the SEC at www.sec.gov. - -------------------------------------------------------------------------------- 78 COLUMBIA LARGE CORE QUANTITATIVE FUND -- 2010 ANNUAL REPORT COLUMBIA LARGE CORE QUANTITATIVE FUND (FORMERLY KNOWN AS RIVERSOURCE DISCIPLINED EQUITY FUND) P.O. Box 8081 Boston, MA 02266-8081 COLUMBIAMANAGEMENT.COM This report must be accompanied or preceded by the Fund's current prospectus. The Fund is distributed by Columbia Management Investment Distributors, Inc. member FINRA, and managed by Columbia Management Investment Advisers, LLC. (C)2010 Columbia Management Investment Advisers, LLC. All (COLUMBIA MANAGEMENT LOGO) rights reserved. S-6263 K (9/10)
Item 2. Code of Ethics. (a) The Registrant has adopted a code of ethics that applies to the Registrant's principal executive officer and principal financial officer. (b) During the period covered by this report, there were not any amendments to a provision of the code of ethics adopted in 2(a) above. (c) During the period covered by this report, there were no waivers, including any implicit waivers, from a provision of the code of ethics described in 2(a) above that relates to one or more of the items set forth in paragraph (b) of this item's instructions. Item 3. Audit Committee Financial Expert. The Registrant's board of directors has determined that independent directors Pamela G. Carlton, Jeffrey Laikind, John F. Maher and Anne P. Jones, each qualify as audit committee financial experts. Item 4. Principal Accountant Fees and Services (a) Audit Fees. The fees for the year ended July 31, to Ernst & Young LLP for professional services rendered for the audits of the annual financial statements for RiverSource Large Cap Series, Inc. were as follows: 2010 - $20,127 2009 - $80,284 (b) Audit-Related Fees. The fees for the year ended July 31, to Ernst & Young LLP for additional audit-related services rendered related to the semiannual financial statement review and the 2010 transfer agent 17Ad-13 review for RiverSource Large Cap Series, Inc. were as follows: 2010 - $3,162 2009 - $1,500 (c) Tax Fees. The fees for the year ended July 31, to Ernst & Young LLP for tax compliance related services rendered for RiverSource Large Cap Series, Inc. were as follows: 2010 - $17,471 2009 - $28,872 (d) All Other Fees. The fees for the year ended July 31, to Ernst & Young LLP for additional professional services rendered for RiverSource Large Cap Series, Inc. were as follows: 2010 - $0 2009 - $0 (e) (1) Audit Committee Pre-Approval Policy. Pursuant to Sarbanes-Oxley pre-approval requirements, all services to be performed by Ernst & Young LLP for the registrant and to the registrant's investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant must be pre-approved by the audit committee. (e) (2) 100% of the services performed for items (b) through (d) above during 2010 and 2009 were pre-approved by the audit committee. (f) Not applicable. (g) Non-Audit Fees. The fees for the year ended July 31, to Ernst & Young LLP by the registrant for non-audit fees and by the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant were as follows: 2010 - $2,131,594 2009 - $852,858 (h) 100% of the services performed in item (g) above during 2010 and 2009 were pre-approved by the Ameriprise Financial Audit Committee and/or the RiverSource Mutual Funds Audit Committee. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. Investments. (a) The registrant's "Schedule 1 - Investments in securities of unaffiliated issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR. (b) Not applicable. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 10. Submission of Matters to a Vote of Security Holders. There were no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors. Item 11. 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 principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. (b) There was no change in the registrant's internal controls over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits. (a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR, is attached as Exhibit 99.CODE ETH. (a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit99.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) RiverSource Large Cap Series, Inc. By /s/ J. Kevin Connaughton ---------------------------------- J. Kevin Connaughton President and Principal Executive Officer Date October 7, 2010 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 /s/ J. Kevin Connaughton --------------------------------- J. Kevin Connaughton President and Principal Executive Officer Date October 7, 2010 By /s/ Jeffrey P. Fox --------------------------------- Jeffrey P. Fox Treasurer and Principal Financial Officer Date October 7, 2010 EX-99.CODE ETH 2 c59944exv99wcodeeth.txt CODE OF ETHICS CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS PURPOSE OF THE CODE; COVERED OFFICERS This code of ethics (the "Code") for the RiverSource Funds (collectively, the "Funds," and each a "Fund")(1) applies to the Funds' Principal Executive Officer and Principal Financial Officer (the "Covered Officers," each of whom is identified in Exhibit A) for the purpose of promoting, in connection with his or her duties: honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; full, fair, accurate, timely, and understandable disclosure in reports and documents that a Fund files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Funds; compliance with laws and governmental rules and regulations applicable to the conduct of the Funds' business and their financial reporting; the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF INTEREST A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his or her service to, the Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his or her position with the Funds. Certain conflicts of interest arise out of the relationships between Covered Officers and the Funds and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually - ---------- (1) For purposes of this Code, the Seligman Funds (including each of the Seligman branded registered investment companies and the separate series thereof) are considered part of the RiverSource Complex of Funds. engage in certain transactions, such as the purchase or sale of securities or other property, with the Funds because of their status as "affiliated persons" of the Funds. The compliance programs and procedures of the Funds and of Ameriprise Financial, Inc. and its affiliates ("Ameriprise") are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Funds and Ameriprise, of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties, whether formally for the Funds or for Ameriprise, or for both, be involved in establishing policies and implementing decisions that will have different effects on Ameriprise and the Funds. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Funds and Ameriprise and is consistent with the performance by the Covered Officers of their duties as officers of the Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Funds. Each Covered Officer must: not use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Funds whereby the Covered Officer would benefit personally to the detriment of the Funds; not cause the Funds to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Funds; and not use material non-public knowledge of portfolio transactions made or contemplated for the Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions. DISCLOSURE AND COMPLIANCE Each Covered Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Funds; should not knowingly misrepresent, or cause others to misrepresent, facts about the Funds to others, whether within or outside the Funds, including any member of the Board of Directors or Board of Trustees of any Fund ("Boards"), auditors, governmental regulators, and representatives of self-regulatory organizations; should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Funds and Ameriprise with the goal of promoting full, fair, accurate, timely, and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules, and regulations. REPORTING AND ACCOUNTABILITY Each Covered Officer must: - upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Boards that he or she has received, read, and understands the Code; - annually thereafter affirm to the Boards that he or she has complied with the requirements of the Code; - not retaliate against any other Covered Officer or any employee of Ameriprise for reports of potential violations that are made in good faith; and - notify the Funds' General Counsel promptly if he or she knows of any violation of this Code. Failure to do so is itself a violation of this Code. APPLYING THE CODE The Funds' General Counsel is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. Any approvals or waivers sought by a Covered Officers will be considered by each Board or appropriate committee of the Board. The Funds' General Counsel - shall notify the Boards whenever any evidence of a material violation has been reported, it being understood that the Funds' General Counsel may determine whether to provide such notice immediately or at the next meetings of the Boards based on the nature of the violation; - will take all appropriate action to investigate such reported violations; - shall make a determination after the investigation, and if the Funds' General Counsel believes that no violation has occurred, the Boards will be so notified and no further action is required; if the Funds' General Counsel believes a violation has occurred, the matter shall be reported to the Boards or the committees of the Funds affected by the potential violation for further determination; if the Boards or the committees determine that a violation has occurred the Boards will consider appropriate action, which may include: a review of applicable policies and procedures; the appropriate modifications to such policies and procedures; the notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer; will cause to be made such disclosures as are required by SEC rules if any changes to or waivers of this Code is made by the Boards; and shall maintain a record of each reported evidence of material violation, the response thereto, and all related correspondence for a period of not less than 10 years. OTHER POLICIES AND PROCEDURES This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds or Ameriprise govern or purport to govern the activities of the Covered Officers, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. Ameriprise's code of ethics under Rule 17j-1 under the Investment Company Act is a separate requirement applying to the Covered Officers and others, and is not part of this Code. AMENDMENTS Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of each Fund's Board, including a majority of its independent directors. Adopted: July 9, 2003; Amended: April 12, 2006; Amended: November 13, 2008 EXHIBIT A Persons Covered by this Code of Ethics: J. Kevin Connaughton President Jeffrey P. Fox Treasurer (RiverSource Brand Registered Investment Companies, Including Separate Series Thereof) EX-99.CERT 3 c59944exv99wcert.txt CERTIFICATIONS Certification Pursuant to 270.30a-2 of the Investment Company Act of 1940 I, J. Kevin Connaughton, certify that: 1. I have reviewed this report on Form N-CSR of RiverSource Large Cap Series, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 20, 2010 /s/ J. Kevin Connaughton - ------------------------------------- J. Kevin Connaughton President and Principal Executive Officer Certification Pursuant to 270.30a-2 of the Investment Company Act of 1940 I, Jeffrey P. Fox, certify that: 1. I have reviewed this report on Form N-CSR of RiverSource Large Cap Series, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 20, 2010 /s/ Jeffrey P. Fox - ------------------------------------- Jeffrey P. Fox Treasurer and Principal Financial Officer EX-99.906CERT 4 c59944exv99w906cert.txt 906 CERTIFICATION CERTIFICATION Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the Certified Shareholder Report of RiverSource Large Cap Series, Inc. (the "Trust") on Form N-CSR for the period ending July 31, 2010, as filed with the Securities and Exchange Commission on the date hereof ("the Report"), the undersigned hereby certifies that, to his knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Date: September 20, 2010 /s/ J. Kevin Connaughton ---------------------------------------- J. Kevin Connaughton President and Principal Executive Officer Date: September 20, 2010 /s/ Jeffrey P. Fox ---------------------------------------- Jeffrey P. Fox Treasurer and Principal Financial Officer A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 HAS BEEN PROVIDED TO THE REGISTRANT AND WILL BE RETAINED BY THE REGISTRANT AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR ITS STAFF UPON REQUEST. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----