-----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, KPXadjeecWpGhsP0kKZW0AlsVi3oXLNReywCuHJTZYILRqX4ghwXsbbN9BBqsHOl ZN18kA3VVBXCPCvBB121Og== 0000891804-04-002563.txt : 20041108 0000891804-04-002563.hdr.sgml : 20041108 20041108155832 ACCESSION NUMBER: 0000891804-04-002563 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20040831 FILED AS OF DATE: 20041108 DATE AS OF CHANGE: 20041108 EFFECTIVENESS DATE: 20041108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA MID CAP GROWTH FUND INC CENTRAL INDEX KEY: 0000773599 IRS NUMBER: 930896403 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-04362 FILM NUMBER: 041125822 BUSINESS ADDRESS: STREET 1: 1300 SW SIXTH AVE STREET 2: P O BOX 1350 CITY: PORTLAND STATE: OR ZIP: 97207 BUSINESS PHONE: 5032223600 MAIL ADDRESS: STREET 1: 1300 SW SIXTH AVE STREET 2: P O BOX 1350 CITY: PORTLAND STATE: OR ZIP: 92707 FORMER COMPANY: FORMER CONFORMED NAME: COLUMBIA SPECIAL FUND INC DATE OF NAME CHANGE: 19920703 N-CSR 1 file001.txt COLUMBIA MID CAP GROWTH FUND, INC. 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 811-04362 --------------------- Columbia Mid Cap Growth Fund, Inc. ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) One Financial Center, Boston, Massachusetts 02111 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Vincent Pietropaolo, Esq. Columbia Management Group, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: 1-617-772-3698 ------------------- Date of fiscal year end: 08/31/2004 ------------------ Date of reporting period: 08/31/2004 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. COLUMBIA FUNDS ANNUAL REPORT AUGUST 31, 2004 [PHOTO OF WOMAN STANDING] COLUMBIA COMMON STOCK FUND COLUMBIA GROWTH FUND COLUMBIA INTERNATIONAL STOCK FUND COLUMBIA MID CAP GROWTH FUND COLUMBIA SMALL CAP GROWTH FUND COLUMBIA REAL ESTATE EQUITY FUND COLUMBIA TECHNOLOGY FUND COLUMBIA STRATEGIC INVESTOR FUND COLUMBIA BALANCED FUND COLUMBIA SHORT TERM BOND FUND COLUMBIA FIXED INCOME SECURITIES FUND COLUMBIA NATIONAL MUNICIPAL BOND FUND COLUMBIA OREGON MUNICIPAL BOND FUND COLUMBIA HIGH YIELD FUND COLUMBIA DAILY INCOME COMPANY TABLE OF CONTENTS ECONOMIC UPDATE ......................................... 1 COLUMBIA COMMON STOCK FUND .............................. 2 COLUMBIA GROWTH FUND .................................... 6 COLUMBIA INTERNATIONAL STOCK FUND ....................... 10 COLUMBIA MID CAP GROWTH FUND ............................ 14 COLUMBIA SMALL CAP GROWTH FUND .......................... 18 COLUMBIA REAL ESTATE EQUITY FUND ........................ 22 COLUMBIA TECHNOLOGY FUND ................................ 26 COLUMBIA STRATEGIC INVESTOR FUND ........................ 30 COLUMBIA BALANCED FUND .................................. 34 COLUMBIA SHORT TERM BOND FUND ........................... 38 COLUMBIA FIXED INCOME SECURITIES FUND ................... 42 COLUMBIA NATIONAL MUNICIPAL BOND FUND ................... 46 COLUMBIA OREGON MUNICIPAL BOND FUND ..................... 50 COLUMBIA HIGH YIELD FUND ................................ 54 COLUMBIA DAILY INCOME COMPANY ........................... 58 FINANCIAL STATEMENTS .................................... 62 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM .................................. 213 UNAUDITED INFORMATION ................................... 214 TRUSTEES ................................................ 216 OFFICERS ................................................ 218 COLUMBIA FUNDS .......................................... 219 IMPORTANT INFORMATION ABOUT THIS REPORT ....................................... 225 Economic and market conditions change frequently. There is no assurance that the trends described in this report will continue or commence. NOT FDIC MAY LOSE VALUE INSURED NO BANK GUARANTEE TO OUR FELLOW SHAREHOLDERS _____________________________________________________ COLUMBIA FUNDS DEAR SHAREHOLDER: We are pleased to let you know that FleetBoston Financial Corporation and Bank of America Corporation have merged, effective April 1, 2004. As a result of the merger, Columbia Management Group became part of the Bank of America family of companies. Looking ahead, we believe this merger will be a real benefit to our shareholders. Preserving and leveraging our strengths, the combined organization intends to deliver additional research and management capabilities, as well as new products to you. There are no immediate changes planned for fund names or customer service contacts. As you might know, on March 15, 2004, FleetBoston Financial announced an agreement in principle between Columbia Management Advisors, Inc. and Columbia Funds Distributor, Inc. (collectively "Columbia Management") with the staff of the Securities and Exchange Commission ("SEC") and the New York Attorney General ("NYAG") to settle charges involving market timing in Columbia Management mutual funds. (Bank of America came to a similar settlement in principle at the same time.) Under the agreements Columbia Management agreed, among other things, to pay $70 million in disgorgement and $70 million in civil penalties. In a separate agreement with the NYAG, the Columbia Group and its affiliate Bank of America Capital Management, LLC have agreed to collectively reduce mutual fund fees by $160 million over a five-year period. Please rest assured that the settlement and all associated legal fees will be paid by Columbia Management; not by the affected funds or their shareholders. The agreement requires the final approval of the SEC and the NYAG. You should know that your fund's Board of Trustees has taken another important step to strengthen its capacity to oversee your fund. Recently, the Board of Trustees appointed Mary Joan Hoene as Chief Compliance Officer of Columbia funds. In this role, Ms. Hoene will work with the Board of Trustees, particularly focused on the overall compliance program of the funds and the responsibility and performance of the funds' service providers. Ms. Hoene will report directly to the Board of Trustees and will work closely with senior leadership of Columbia Management, the investment arm of Bank of America, and with Bank of America's principal compliance executives. Prior to her appointment, Ms. Hoene was a partner in the law firm of Carter, Ledyard & Milburn, LLP. Among the firm's clients were investment advisors and independent directors of mutual funds. Ms. Hoene has also worked for the Securities and Exchange Commission as associate director and deputy director for the Division of Investment Management. She has also been an active advisor to several fund boards in developing independent board practices. The Board is pleased that it has appointed Ms. Hoene with her broad and extensive experience to this important new position. Both your fund's trustees and Columbia Management are committed to serving the interests of our shareholders, and we will continue to work hard to help you achieve your financial goals. In the pages that follow, you'll find valuable information about the economic environment during the period and the performance of your Columbia fund. These discussions are followed by financial statements for your fund. We hope that you will take time to read this report and discuss it with your financial advisor if you have any questions. As always, thank you for choosing Columbia funds. It is a privilege to play a role in your financial future. Sincerely, /s/ Thomas C. Theobald /s/ J. Kevin Connaughton Thomas C. Theobald J. Kevin Connaughton Chairman, Board of Trustees President, Columbia Funds J. Kevin Connaughton was named president of Columbia Funds on February 27, 2004. SUMMARY FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004 o Stock prices rose for all segments of the stock market, as measured by the S&P 500 Index and the broader Russell 3000 Index. Many sectors retreated as interest rates moved higher in the spring and a host of uncertainties unsettled investors. However, performance picked up again slightly just before the period ended. [Illustration of two arrows pointing up] S&P 500 RUSSELL 3000 INDEX INDEX 11.46% 11.31% o Investment grade bonds chalked up respectable gains despite a period of extreme interest rate volatility in April and May. The Lehman Brothers Aggregate Bond Index returned 6.13%. High-yield bonds, which can be less sensitive to changing interest rates, outperformed the stock market. The Merrill Lynch US High Yield, Cash Pay Only Index returned 13.64%. [Illustration of two arrows pointing up] MERRILL LYNCH LEHMAN INDEX INDEX 13.64% 6.13% The S&P 500 Index is an unmanaged index that tracks the performance of 500 widely held, large capitalization US stocks. The Russell 3000 Index is an unmanaged index that tracks the performance of the 3,000 largest US companies based on total market capitalization. The Lehman Brothers Aggregate Bond Index is a market value-weighted index that tracks fixed-rate, publicly placed, dollar-denominated, and non-convertible investment grade debt issues. The Merrill Lynch US High Yield, Cash Pay Only Index is an unmanaged index that tracks the performance of non-investment-grade corporate bonds. ECONOMIC UPDATE ________________________________________________________________ COLUMBIA FUNDS Despite occasional uncertainty about jobs and consumer spending, the US economy grew at a pace of more than 4.5% during the 12-month period that began September 1, 2003 and ended August 31, 2004. Growth slowed in the final months of the period, and many economists lowered their expectations for the balance of 2004. Nevertheless, the US economy remained on solid ground. Consumer confidence seesawed, mostly in reaction to changing job data, which dominated much of the economic news during the year. The Conference Board reported that confidence declined on weak job figures early in 2004. Confidence rose after the US labor markets added more than 1.2 million new jobs between March and May. However, disappointing job creation in June and July curbed consumer enthusiasm again in August. Consumers expressed their confidence in the economy by spending on retail goods, autos and housing. Low mortgage rates continued to fuel a red-hot housing market. However, consumer spending declined in two of the last three months of the period, the first such pullback in a year. Businesses stepped into the gap and helped fuel the economy during the period. Industrial production rose and factories utilized more of their capacity. Spending on technology and capital equipment picked up, and outlays for office and warehouse construction turned the corner after a three-year downturn. US STOCKS OUTPERFORMED BONDS Buoyed by strong gains at the beginning of the period, the S&P 500 Index returned 11.46% during this 12-month reporting period. However, concerns about new terror threats and higher interest rates and energy prices sidelined investors as the period wore on. Late in the period, leadership passed from small-cap stocks, which were strong performers early in the period, to mid- and large-cap stocks. Value stocks continued to lead growth stocks. Energy stocks and real estate investment trusts were the best-performing stocks for the period. BONDS REFLECTED THE ECONOMIC NEWS Despite periods of interest rate volatility, the US bond market delivered respectable gains. The yield on the 10-year US Treasury bond drifted generally lower for the first eight months of the period. Then it rose sharply as the economy strengthened, the employment picture brightened and investors began to anticipate a shift in the Federal Reserve Board's policy on short-term interest rates. The Fed delivered on these expectations and raised the federal funds rate, a key short-term rate, twice during the period--from 1.00% to 1.25% in June and to 1.50% in August. 1 A shaky stock market, higher energy prices and some weak economic data gave the bond market a boost in July and August as the 10-year Treasury yield fell to 4.10%, ending the period lower than where it started. As a result, the Lehman Brothers Aggregate Bond Index, a broad measure of investment grade bond market performance, returned 6.13%. Municipals were the best performers among investment-grade bonds, returning 7.11% as measured by the Lehman Brothers Municipal Bond Index. However, the high-yield sector outdistanced all other sectors. The Merrill Lynch US High Yield, Cash Pay Only Index returned 13.64%. 1 In September, the federal funds rate was raised to 1.75%. 1 [Sidebar] PERFORMANCE OF A $ 10,000 INVESTMENT 09/01/94 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 21,761 20,506 ------------------------------------------ Class B 21,435 21,435 ------------------------------------------ Class C 21,435 21,435 ------------------------------------------ Class D 21,435 21,221 ------------------------------------------ Class Z 21,890 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA COMMON STOCK FUND VALUE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 [MOUNTAIN CHART] CLASS A CLASS A SHARES WITHOUT SHARES WITH SALES CHARGE SALES CHARGE S&P 500 INDEX ------------ ------------ ------------- 09/1994 10000.00 9425.00 10000.00 9754.00 9193.00 9755.00 9805.00 9241.00 9974.00 9564.00 9014.00 9611.00 9766.00 9205.00 9754.00 9850.00 9284.00 10006.00 10256.00 9666.00 10397.00 10468.00 9866.00 10703.00 10585.00 9976.00 11018.00 10928.00 10299.00 11459.00 11089.00 10452.00 11724.00 11512.00 10850.00 12114.00 11615.00 10947.00 12144.00 12017.00 11326.00 12656.00 11848.00 11167.00 12611.00 12382.00 11670.00 13165.00 12777.00 12042.00 13419.00 13017.00 12269.00 13875.00 13217.00 12457.00 14004.00 13491.00 12716.00 14138.00 13678.00 12891.00 14346.00 13959.00 13157.00 14716.00 14049.00 13241.00 14772.00 13393.00 12623.00 14119.00 13938.00 13136.00 14417.00 14484.00 13651.00 15229.00 14532.00 13696.00 15649.00 15516.00 14624.00 16832.00 15421.00 14534.00 16499.00 15933.00 15017.00 17530.00 16084.00 15160.00 17667.00 15850.00 14938.00 16941.00 16292.00 15355.00 17952.00 17240.00 16249.00 19045.00 17947.00 16915.00 19899.00 19228.00 18123.00 21483.00 18665.00 17592.00 20280.00 19462.00 18343.00 21391.00 18726.00 17649.00 20676.00 19016.00 17923.00 21634.00 19332.00 18220.00 22006.00 19446.00 18328.00 22250.00 20543.00 19362.00 23854.00 21517.00 20279.00 25076.00 21534.00 20296.00 25329.00 21112.00 19898.00 24893.00 22362.00 21076.00 25904.00 22107.00 20835.00 25629.00 18822.00 17739.00 21923.00 19798.00 18660.00 23329.00 20998.00 19791.00 25225.00 22313.00 21030.00 26754.00 24412.00 23009.00 28295.00 25533.00 24065.00 29478.00 24892.00 23461.00 28561.00 26204.00 24697.00 29703.00 26615.00 25085.00 30853.00 25905.00 24415.00 30125.00 27767.00 26170.00 31797.00 26915.00 25367.00 30805.00 26425.00 24905.00 30654.00 25933.00 24442.00 29814.00 27476.00 25896.00 31701.00 28457.00 26821.00 32345.00 30702.00 28937.00 34250.00 29533.00 27835.00 32530.00 30723.00 28956.00 31915.00 33887.00 31939.00 35037.00 32827.00 30939.00 33982.00 31425.00 29618.00 33286.00 32839.00 30951.00 34108.00 32445.00 30579.00 33576.00 34453.00 32472.00 35661.00 31873.00 30040.00 33778.00 30862.00 29088.00 33636.00 28397.00 26764.00 30985.00 28945.00 27280.00 31137.00 29492.00 27796.00 32243.00 26292.00 24780.00 29302.00 24614.00 23199.00 27444.00 26529.00 25004.00 29577.00 26649.00 25116.00 29775.00 25924.00 24433.00 29051.00 25413.00 23952.00 28767.00 23677.00 22316.00 26966.00 21407.00 20176.00 24787.00 21811.00 20557.00 25261.00 23524.00 22171.00 27198.00 23853.00 22481.00 27437.00 23209.00 21874.00 27037.00 22731.00 21424.00 26515.00 23495.00 22144.00 27512.00 21918.00 20658.00 25845.00 21942.00 20681.00 25653.00 20294.00 19127.00 23827.00 18419.00 17360.00 21971.00 18611.00 17541.00 22114.00 16651.00 15694.00 19710.00 18025.00 16988.00 21444.00 19220.00 18115.00 22707.00 17897.00 16868.00 21374.00 17489.00 16484.00 20814.00 17141.00 16156.00 20502.00 17237.00 16246.00 20701.00 18606.00 17536.00 22407.00 19458.00 18339.00 23588.00 19662.00 18532.00 23890.00 20034.00 18882.00 24310.00 20671.00 19483.00 24784.00 20299.00 19132.00 24521.00 21452.00 20219.00 25909.00 21739.00 20489.00 26137.00 22616.00 21315.00 27507.00 22869.00 21554.00 28013.00 23338.00 21996.00 28402.00 23002.00 21679.00 27974.00 22353.00 21068.00 27534.00 22713.00 21407.00 27912.00 23085.00 21758.00 28453.00 21908.00 20648.00 27511.00 08/2004 21761.00 20506.00 27614.00 The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Standard & Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization U.S. stocks. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D Z - ---------------------------------------------------------------------------------------------------------------------------- INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 10/01/91 - ---------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ---------------------------------------------------------------------------------------------------------------------------- 1-year 5.28 -0.78 4.44 -0.56 4.44 3.44 4.50 2.47 5.58 - ---------------------------------------------------------------------------------------------------------------------------- 5-year -3.81 -4.95 -4.10 -4.43 -4.10 -4.10 -4.10 -4.30 -3.70 - ---------------------------------------------------------------------------------------------------------------------------- 10-year 8.09 7.45 7.92 7.92 7.92 7.92 7.92 7.81 8.15
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D Z - ---------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ---------------------------------------------------------------------------------------------------------------------------- 1-year 17.40 10.65 16.49 11.49 16.49 15.49 16.43 14.28 17.79 - ---------------------------------------------------------------------------------------------------------------------------- 5-year -3.63 -4.76 -3.89 -4.21 -3.89 -3.89 -3.90 -4.09 -3.52 - ---------------------------------------------------------------------------------------------------------------------------- 10-year 9.49 8.84 9.34 9.34 9.34 9.34 9.34 9.23 9.55
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 5.75% FOR CLASS A SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS, IF ANY. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, the class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, and D (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C, and D would have been lower. 2 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA COMMON STOCK FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - -------------------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - -------------------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 935.20 1,019.25 5.69 5.94 1.17 - -------------------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 932.18 1,015.48 9.33 9.73 1.92 - -------------------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 933.29 1,015.48 9.33 9.73 1.92 - -------------------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 933.74 1,015.48 9.33 9.73 1.92 - -------------------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 935.40 1,020.51 4.48 4.67 0.92
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 3 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD THAT ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 5.28% WITHOUT SALES CHARGE. o THE FUND'S RETURN WAS LOWER THAN BOTH THE S&P 500 INDEX AND THE AVERAGE OF THE LIPPER LARGE CAP CORE FUNDS CATEGORY. o A COMBINATION OF ABOVE-AVERAGE EXPOSURE TO THE TROUBLED INFORMATION TECHNOLOGY AND CONSUMER DISCRETIONARY SECTORS AND STOCK SELECTION RESTRAINED THE FUND'S PERFORMANCE. [Illustration of two arrows pointing up] CLASS A SHARES S&P 500 Index 5.28% 11.46% OBJECTIVE Seeks capital appreciation by investing primarily in common stocks of large capitalization, well-established companies. TOTAL NET ASSETS $306.7 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 18.10 ------------------------------------------ Class B 17.88 ------------------------------------------ Class C 17.88 ------------------------------------------ Class D 17.88 ------------------------------------------ Class Z 18.12 DISTRIBUTIONS DECLARED PER SHARE 09/01/03 - 08/31/04 ($) Class A 0.03 ------------------------------------------ Class B 0.00 ------------------------------------------ Class C 0.00 ------------------------------------------ Class D 0.00 ------------------------------------------ Class Z 0.10 PORTFOLIO MANAGERS' REPORT _____________________________________________________ COLUMBIA COMMON STOCK FUND For the 12-month period ended August 31, 2004, Columbia Common Stock Fund class A shares returned 5.28% without sales charge. This was less than the S&P 500 Index, which returned 11.46% over the same period. The fund's performance was also lower than the average return of its peer group, the Lipper Large Cap Core Funds Category, 7.46%. 1 The fund's underperformance was due to a combination of poor sector and stock selection. The fund's relatively low exposure to the strong energy and utilities sectors and an above-index weight in consumer and information technology stocks detracted from the fund's return. Although tech stocks QUALCOMM and Yahoo! both rose more than 70% during the period, most tech stocks fared poorly, and losses from holdings such as Veritas Software and Seagate Technology outweighed those gains. We eliminated all four positions. Financial and materials stocks helped performance. In financials, Bank One, which was acquired by JPMorgan Chase & Co., was a top performer. CONTINUED FOCUS ON CONSUMER DISCRETIONARY SECTOR While our above-index exposure to consumer discretionary stocks did not help returns during this reporting period, we continue to believe that the modest economic growth we expect in the coming year could favor this sector. We have recently purchased DirecTV Group and increased positions on Comcast. In many parts of the country, telephone and Internet service are now available through a cable connection, and we believe this trend has the potential to continue. CAUTIOUS ON CONSUMER STAPLES We are less confident about the prospects for consumer staples stocks and currently have a low investment weight in that sector. Higher commodity prices have driven up the price of basic materials, such as cardboard for boxes and the aluminum for cans. In today's competitive markets, it is more difficult for companies to pass those costs on to the consumer in the form of higher prices. We believe it is just a matter of time before these cost increases affect the profitability of consumer staples companies. At the end of the period, we eliminated our positions in companies we believe might be affected by this trend, including Kellogg, Hershey and Avon Products. NEW HOLDING IN INDUSTRIALS In a variation on that theme, we added Southwest Airlines to the portfolio at the end of the period because we were impressed that the company anticipated rising fuel costs and took action to control them. Southwest Airlines has locked in its fuel costs for 2004 at $24 a barrel, 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as those of the fund. 4 [Sidebar] TOP 5 SECTORS AS OF 08/31/04 (%) Financials 20.0 ------------------------------------------ Information technology 17.2 ------------------------------------------ Consumer discretionary 17.2 ------------------------------------------ Health care 14.6 ------------------------------------------ Energy 7.4 TOP 10 HOLDINGS AS OF 08/31/04 (%) Microsoft 3.8 ------------------------------------------ MGIC Investment 2.7 ------------------------------------------ JPMorgan Chase & Co. 2.5 ------------------------------------------ Citigroup 2.4 ------------------------------------------ Fannie Mae 2.1 ------------------------------------------ Pfizer 2.0 ------------------------------------------ DirecTV Group 2.0 ------------------------------------------ Time Warner 2.0 ------------------------------------------ Telefonos De Mexico SA 2.0 ------------------------------------------ Kohl's 1.9 HOLDINGS DISCUSSED IN THIS REPORT AS OF 08/31/04 (%) JPMorgan Chase & Co. 2.5 ------------------------------------------ Comcast 1.8 ------------------------------------------ DirecTV Group 2.0 ------------------------------------------ Southwest Airlines 1.5 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA COMMON STOCK FUND and 50% of its supply for 2005 at $25 a barrel. With oil prices in the $40 range throughout much of this year, and many airlines struggling financially, we believe this enhances Southwest Airline's competitive position. CAUTIOUS OPTIMISM GOING FORWARD Although we are generally confident about US economic growth, we believe the past year has been a turning point for consumers. While inflation as measured by the Consumer Price Index has been negligible, we believe actual living costs have risen significantly for most Americans. Mortgage and interest rates have been low, but the cost of health coverage, car insurance and gasoline have all risen steadily. We believe this "stealth inflation" may be poised to catch up with the US economy, and could have an unexpected impact. As a result, we believe we have positioned the fund to take advantage of--and avoid the pitfalls of--some of these trends. Columbia Common Stock Fund is managed by a group of managers from Columbia's large cap core team: /s/ John Maack /s/ Guy W. Pope, CFA John Maack Guy W. Pope, CFA An investment in the fund may present certain risks, including stock market fluctuations that occur in response to economic and business developments. On October 13, 2004, the Board of Trustees approved a proposal to reorganize the Columbia Common Stock Fund, subject to shareholder approval and the satisfaction of certain other conditions. 5 [Sidebar] PERFORMANCE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 18,697 17,622 ------------------------------------------ Class B 18,449 18,449 ------------------------------------------ Class C 18,404 18,404 ------------------------------------------ Class D 18,464 18,281 ------------------------------------------ Class G 18,479 18,479 ------------------------------------------ Class Z 18,817 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA GROWTH FUND VALUE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 [MOUNTAIN CHART] CLASS A CLASS A SHARES WITHOUT SHARES WITH RUSSELL 1000 SALES CHARGE SALES CHARGE S&P 500 INDEX GROWTH INDEX ------------ ------------ ------------- ------------ 09/1994 10000.00 9425.00 10000.00 10000.00 9758.00 9197.00 9755.00 9865.00 9940.00 9369.00 9974.00 10097.00 9613.00 9061.00 9611.00 9773.00 9749.00 9188.00 9754.00 9937.00 9772.00 9210.00 10006.00 10150.00 10247.00 9658.00 10397.00 10575.00 10616.00 10006.00 10703.00 10884.00 10765.00 10146.00 11018.00 11122.00 11008.00 10375.00 11459.00 11509.00 11424.00 10767.00 11724.00 11953.00 11875.00 11193.00 12114.00 12450.00 12083.00 11389.00 12144.00 12464.00 12401.00 11688.00 12656.00 13039.00 12084.00 11389.00 12611.00 13048.00 12838.00 12099.00 13165.00 13555.00 12965.00 12219.00 13419.00 13633.00 13100.00 12346.00 13875.00 14088.00 13700.00 12912.00 14004.00 14346.00 13652.00 12867.00 14138.00 14365.00 14103.00 13293.00 14346.00 14742.00 14512.00 13678.00 14716.00 15257.00 14508.00 13674.00 14772.00 15278.00 13421.00 12650.00 14119.00 14383.00 13878.00 13080.00 14417.00 14754.00 14690.00 13845.00 15229.00 15828.00 14950.00 14090.00 15649.00 15923.00 15862.00 14950.00 16832.00 17119.00 15660.00 14760.00 16499.00 16783.00 16210.00 15278.00 17530.00 17960.00 16224.00 15291.00 17667.00 17838.00 15399.00 14513.00 16941.00 16873.00 16162.00 15233.00 17952.00 17993.00 17263.00 16270.00 19045.00 19292.00 17981.00 16947.00 19899.00 20064.00 19576.00 18450.00 21483.00 21837.00 18858.00 17773.00 20280.00 20560.00 19606.00 18479.00 21391.00 21572.00 19112.00 18013.00 20676.00 20773.00 19642.00 18512.00 21634.00 21656.00 19779.00 18642.00 22006.00 21899.00 20309.00 19141.00 22250.00 22554.00 21802.00 20548.00 23854.00 24250.00 22833.00 21520.00 25076.00 25217.00 22902.00 21585.00 25329.00 25565.00 22350.00 21065.00 24893.00 24839.00 24044.00 22661.00 25904.00 26359.00 23693.00 22330.00 25629.00 26185.00 19793.00 18655.00 21923.00 22255.00 20531.00 19351.00 23329.00 23964.00 21683.00 20436.00 25225.00 25891.00 23112.00 21783.00 26754.00 27861.00 25786.00 24303.00 28295.00 30374.00 27410.00 25834.00 29478.00 32157.00 26500.00 24977.00 28561.00 30687.00 28109.00 26493.00 29703.00 32305.00 28162.00 26543.00 30853.00 32347.00 27458.00 25880.00 30125.00 31354.00 29540.00 27841.00 31797.00 33548.00 28509.00 26870.00 30805.00 32482.00 27728.00 26133.00 30654.00 33011.00 27212.00 25647.00 29814.00 32318.00 28736.00 27083.00 31701.00 34758.00 30118.00 28386.00 32345.00 36635.00 32497.00 30629.00 34250.00 40445.00 31389.00 29584.00 32530.00 38548.00 33169.00 31262.00 31915.00 40433.00 36685.00 34575.00 35037.00 43328.00 35188.00 33165.00 33982.00 41265.00 32968.00 31072.00 33286.00 39186.00 35892.00 33828.00 34108.00 42156.00 35698.00 33645.00 33576.00 40398.00 38575.00 36357.00 35661.00 44054.00 35200.00 33176.00 33778.00 39887.00 33113.00 31209.00 33636.00 38000.00 29186.00 27507.00 30985.00 32399.00 29915.00 28195.00 31137.00 31375.00 31611.00 29794.00 32243.00 33543.00 26572.00 25045.00 29302.00 27847.00 23676.00 22315.00 27444.00 24818.00 26640.00 25109.00 29577.00 27957.00 26355.00 24840.00 29775.00 27546.00 25781.00 24298.00 29051.00 26907.00 24675.00 23256.00 28767.00 26234.00 22548.00 21251.00 26966.00 24088.00 20106.00 18950.00 24787.00 21684.00 21240.00 20019.00 25261.00 22823.00 23464.00 22114.00 27198.00 25016.00 23513.00 22161.00 27437.00 24968.00 22547.00 21250.00 27037.00 24527.00 21354.00 20126.00 26515.00 23509.00 22172.00 20897.00 27512.00 24322.00 20318.00 19150.00 25845.00 22337.00 20078.00 18924.00 25653.00 21797.00 18077.00 17037.00 23827.00 19781.00 16336.00 15396.00 21971.00 18693.00 16584.00 15630.00 22114.00 18749.00 14889.00 14033.00 19710.00 16805.00 16141.00 15213.00 21444.00 18345.00 16861.00 15892.00 22707.00 19342.00 15624.00 14725.00 21374.00 18005.00 15278.00 14400.00 20814.00 17568.00 15188.00 14315.00 20502.00 17487.00 15436.00 14548.00 20701.00 17812.00 16621.00 15666.00 22407.00 19128.00 17431.00 16428.00 23588.00 20083.00 17603.00 16591.00 23890.00 20360.00 17985.00 16951.00 24310.00 20867.00 18458.00 17397.00 24784.00 21387.00 18008.00 16972.00 24521.00 21158.00 18991.00 17899.00 25909.00 22347.00 19230.00 18125.00 26137.00 22581.00 19680.00 18549.00 27507.00 23363.00 20033.00 18881.00 28013.00 23839.00 20161.00 19002.00 28402.00 23992.00 19973.00 18825.00 27974.00 23546.00 19410.00 18294.00 27534.00 23273.00 19928.00 18783.00 27912.00 23705.00 20251.00 19087.00 28453.00 24002.00 18953.00 17863.00 27511.00 22646.00 08/2004 18697.00 17622.00 27614.00 22534.00 The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Standard & Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization U.S. stocks. The Russell 1000 Growth Index is an unmanaged index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D G Z - -------------------------------------------------------------------------------------------------------------------------------- INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 11/01/02 06/16/67 - -------------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - -------------------------------------------------------------------------------------------------------------------------------- 1-year 1.30 -4.52 0.53 -4.47 0.29 -0.71 0.57 -1.42 0.61 -4.39 1.58 - -------------------------------------------------------------------------------------------------------------------------------- 5-year -7.58 -8.67 -7.82 -8.12 -7.87 -7.87 -7.81 -7.99 7.79 -8.24 -7.46 - -------------------------------------------------------------------------------------------------------------------------------- 10-year 6.46 5.83 6.32 6.32 6.29 6.29 6.32 6.22 6.33 6.33 6.53
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D G Z - -------------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - -------------------------------------------------------------------------------------------------------------------------------- 1-year 15.04 8.43 14.07 9.07 13.82 12.82 14.21 12.07 14.29 9.29 15.38 - -------------------------------------------------------------------------------------------------------------------------------- 5-year -7.27 -8.36 -7.50 -7.80 -7.54 -7.54 -7.49 -7.67 -7.47 -7.92 -7.16 - -------------------------------------------------------------------------------------------------------------------------------- 10-year 8.16 7.52 8.03 8.03 8.00 8.00 8.04 7.93 8.05 8.05 8.22
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 5.75% FOR CLASS A SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B AND CLASS G SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS, IF ANY. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, the class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, D and G (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C, D and G would have been lower. 6 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA GROWTH FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - --------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - --------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 930.17 1,019.30 5.63 5.89 1.16 - --------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 927.00 1,015.53 9.25 9.68 1.91 - --------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 926.45 1,015.53 9.25 9.68 1.91 - --------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 926.35 1,015.53 9.25 9.68 1.91 - --------------------------------------------------------------------------------------------------------- Class G 1,000.00 1,000.00 926.90 1,015.79 9.01 9.42 1.86 - --------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 930.82 1,020.56 4.42 4.62 0.91
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 7 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 1.30% WITHOUT SALES CHARGE. o STOCK SELECTION AND OVERWEIGHT POSITIONS IN TECHNOLOGY AND CONSUMER CYCLICAL SECTORS HURT PERFORMANCE. o INDUSTRIAL STOCKS HELPED PERFORMANCE AS WORLDWIDE ECONOMIC GROWTH PICKED UP. CONSUMER STAPLES STOCKS ALSO PERFORMED WELL AS INVESTORS GREW CONCERNED WITH A SLOWDOWN IN US ECONOMIC GROWTH. [Illustration of two arrows pointing up] RUSSELL 1000 CLASS A SHARES GROWTH INDEX 1.30% 5.36% OBJECTIVE Seeks capital appreciation by investing in stocks of companies expected to experience long-term, above average earnings growth. TOTAL NET ASSETS $ 811.0 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 24.93 ------------------------------------------ Class B 24.60 ------------------------------------------ Class C 24.54 ------------------------------------------ Class D 24.62 ------------------------------------------ Class G 24.64 ------------------------------------------ Class Z 25.09 PORTFOLIO MANAGERS' REPORT _____________________________________________________ COLUMBIA GROWTH FUND For the 12-month period ended August 31, 2004, Columbia Growth Fund's class A shares returned 1.30% without sales charge. The fund underperformed its benchmark the Russell 1000 Growth Index and the S&P 500 Index, which returned 5.36% and 11.46%, respectively, over the same period. The fund also trailed the Lipper Large Cap Growth Funds Category average, whose average return was 2.90%. 1 The fund's exposure to technology and consumer cyclical stocks was higher than their weight in the benchmark. This hurt performance because technology and consumer cyclicals were weak performers during the period. Stock selection in technology and consumer cyclicals also detracted from the fund's return. STRONG GAINS FROM INDUSTRIALS, CONSUMER STAPLES SECTORS The fund's focus on large profitable companies with strong competitive positions, healthy balance sheets and above-average sales growth led us to top performers in the industrial and consumer staples sectors. An above-average stake in industrials helped the fund as economic growth picked up worldwide. Tyco International, an industrial conglomerate under new management, did particularly well. We added to the fund's consumer staples holdings, but kept exposure to the sector lower than the benchmark because valuations have neared their historical peaks. The fund's strongest performers in consumer staples included Costco Wholesale, a warehouse chain that sells consumer goods. The company trimmed costs to improve its bottom line and capitalized on growing demand from small businesses. Consumer discretionary stocks also aided performance once the fund was fully invested. Top performers included XM Satellite Radio Holdings and eBay. XM benefited from enhanced product offerings and growing demand, while eBay rallied as more people used its online auction services. Niche retailers Chico's FAS and Coach also delivered strong results. By contrast, media stocks were disappointing. Fading expectations for sustainable long-term growth in advertising revenues put pressure on the sector. MIXED HEALTH CARE AND TECHNOLOGY RETURNS The fund's health care returns were mixed. Medical products and devices companies, such as Alcon and St. Jude Medical, rallied nicely amid new product introductions. However, the fund lost some ground by not owning more shares of Johnson & Johnson when its stock price took off in the spring of 2004. Biotechnology stocks further detracted from performance. In particular, Amgen was hurt by concerns about Medicare reimbursement rates. 1 Lipper, Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as the fund. 8 [Sidebar] TOP 5 SECTORS AS OF 08/31/04 (%) Information technology 28.0 ------------------------------------------ Health care 21.7 ------------------------------------------ Consumer discretionary 13.9 ------------------------------------------ Consumer staples 11.2 ------------------------------------------ Industrials 10.8 TOP 10 HOLDINGS AS OF 08/31/04 (%) Microsoft 5.1 ------------------------------------------ Tyco International 2.9 ------------------------------------------ Pfizer 2.9 ------------------------------------------ Intel 2.7 ------------------------------------------ Cisco Systems 2.6 ------------------------------------------ Praxair 2.4 ------------------------------------------ Teva Pharmaceutical Industries 2.3 ------------------------------------------ Johnson & Johnson 2.0 ------------------------------------------ QUALCOMM 2.0 ------------------------------------------ Zimmer Holdings 1.9 HOLDINGS DISCUSSED IN THIS REPORT AS OF 08/31/04 (%) Tyco International 2.9 ------------------------------------------ Costco Wholesale 1.2 ------------------------------------------ XM Satellite Radio Holdings 1.4 ------------------------------------------ eBay 1.4 ------------------------------------------ Chico's FAS 0.9 ------------------------------------------ Coach 1.1 ------------------------------------------ Alcon 1.6 ------------------------------------------ St. Jude Medical 1.4 ------------------------------------------ Johnson & Johnson 2.0 ------------------------------------------ Amgen 0.9 ------------------------------------------ Cognizant Technology Solutions 1.0 ------------------------------------------ QUALCOMM 2.0 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA GROWTH FUND Within technology, we owned a range of companies we believed could benefit from an improving economy, increased corporate spending and the growing popularity of advanced communication devices. However, the technology sector had the largest negative impact on fund performance. Our exposure to technology was higher than its weight in the benchmark. That hurt performance because technology lagged the broader market. Stock selection also detracted from performance. We did well by overweighting Cognizant Technology Solutions and QUALCOMM. However, the gains we realized from these stocks were not enough to overcome losses from Seagate Technology, down 53%, and overweight in Red Hat, both were sold before the end of the period. OPTIMISTIC OUTLOOK FOR LARGE-CAP STOCKS We remain optimistic about the prospects for large-cap growth stocks, especially those with attractive valuations. We expect high quality companies with strategic, competitive product positioning to do better than companies whose fortunes are primarily dependent on the fortunes of the economy. With these factors in mind, we plan to maintain a diversified and balanced approach to sector exposure while picking what we believe are growth stocks with the potential to be market leaders. Alexander S. Macmillan, CFA, has managed or co-managed Columbia Growth Fund since 1992 and has been with the advisor and its predecessors since 1989. /s/ Alexander S. Macmillan Paul J. Berlinguet has co-managed the fund since October 2003 and has been with the advisor and its predecessors since 2003. /s/ Paul J. Berlinguet An investment in the fund may present certain risks, including stock market fluctuations that occur in response to economic and business developments. The fund may invest in foreign securities, which have special risks, including political or economic instability and higher transaction costs; different regulations, accounting standards, trading practices and levels of information; and currency exchange rate fluctuations. The fund's approach offers the potential for long-term growth, but also involves the possibility of losses due to the sensitivity of growth stock prices to changes in the current or expected earnings. On October 13, 2004, the Board of Trustees approved a proposal to reorganize the Columbia Growth Fund, subject to shareholder approval and the satisfaction of certain other conditions. 9 PERFORMANCE OF A $ 10,000 INVESTMENT 09/01/94 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 15,503 14,613 ------------------------------------------ Class B 15,229 15,229 ------------------------------------------ Class C 15,289 15,289 ------------------------------------------ Class D 15,348 15,192 ------------------------------------------ Class Z 15,674 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA INTERNATIONAL STOCK FUND VALUE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 [MOUNTAIN CHART] CLASS A CLASS A MSCI AC SHARES WITHOUT SHARES WITH WORLD EX US MSCI EAFE SALES CHARGE SALES CHARGE INDEX INDEX ------------ ------------ ------------ ---------- 09/1994 10000.00 9425.00 10000.00 10000.00 9663.00 9107.00 9752.00 9685.00 9964.00 9391.00 10014.00 10008.00 9450.00 8907.00 9532.00 9526.00 9275.00 8741.00 9510.00 9586.00 8566.00 8073.00 9078.00 9218.00 8417.00 7933.00 9029.00 9191.00 8738.00 8235.00 9539.00 9765.00 8932.00 8418.00 9911.00 10132.00 8827.00 8320.00 9867.00 10011.00 8790.00 8285.00 9730.00 9836.00 9372.00 8833.00 10282.00 10449.00 9215.00 8686.00 9925.00 10051.00 9439.00 8897.00 10095.00 10247.00 9335.00 8798.00 9825.00 9971.00 9521.00 8974.00 10056.00 10248.00 9753.00 9192.00 10455.00 10662.00 9879.00 9311.00 10598.00 10705.00 9879.00 9311.00 10598.00 10742.00 10245.00 9656.00 10796.00 10969.00 10633.00 10022.00 11123.00 11289.00 10804.00 10183.00 10956.00 11081.00 10999.00 10367.00 11012.00 11143.00 10431.00 9832.00 10647.00 10818.00 10595.00 9986.00 10709.00 10841.00 10864.00 10240.00 10975.00 11130.00 10805.00 10183.00 10865.00 11016.00 11223.00 10577.00 11285.00 11455.00 11371.00 10717.00 11154.00 11307.00 11363.00 10710.00 10948.00 10911.00 11683.00 11012.00 11149.00 11090.00 11798.00 11119.00 11125.00 11130.00 12076.00 11382.00 11220.00 11189.00 12773.00 12039.00 11912.00 11917.00 13380.00 12610.00 12570.00 12574.00 13781.00 12989.00 12824.00 12778.00 12714.00 11983.00 11814.00 11823.00 13584.00 12803.00 12454.00 12485.00 12641.00 11915.00 11393.00 11525.00 12585.00 11861.00 11250.00 11408.00 12675.00 11946.00 11380.00 11507.00 12777.00 12042.00 11720.00 12033.00 13295.00 12531.00 12502.00 12805.00 13749.00 12958.00 12934.00 13200.00 14091.00 13281.00 13027.00 13304.00 14285.00 13464.00 12790.00 13239.00 14331.00 13507.00 12743.00 13339.00 14414.00 13585.00 12864.00 13474.00 12452.00 11736.00 11050.00 11805.00 11796.00 11118.00 10817.00 11442.00 12749.00 12016.00 11951.00 12635.00 13638.00 12854.00 12592.00 13281.00 14302.00 13480.00 13025.00 13805.00 14737.00 13890.00 13011.00 13763.00 14376.00 13549.00 12720.00 13436.00 14747.00 13899.00 13334.00 13996.00 15201.00 14327.00 14001.00 14563.00 14664.00 13821.00 13343.00 13813.00 15414.00 14527.00 13956.00 14352.00 16043.00 15120.00 14283.00 14778.00 16394.00 15451.00 14333.00 14832.00 16737.00 15774.00 14429.00 14982.00 17644.00 16629.00 14966.00 15544.00 19865.00 18723.00 15564.00 16083.00 22587.00 21288.00 17049.00 17528.00 21507.00 20270.00 16124.00 16415.00 22933.00 21614.00 16559.00 16856.00 22557.00 21260.00 17181.00 17510.00 20685.00 19495.00 16223.00 16589.00 19082.00 17984.00 15807.00 16185.00 19873.00 18731.00 16481.00 16817.00 18963.00 17873.00 15830.00 16113.00 19538.00 18414.00 16026.00 16253.00 18330.00 17276.00 15137.00 15461.00 17509.00 16502.00 14655.00 15096.00 16718.00 15756.00 13999.00 14530.00 17475.00 16470.00 14476.00 15046.00 17381.00 16381.00 14693.00 15039.00 16446.00 15500.00 13530.00 13911.00 15309.00 14429.00 12573.00 12983.00 16255.00 15321.00 13428.00 13885.00 16007.00 15086.00 13057.00 13395.00 15486.00 14596.00 12557.00 12847.00 14978.00 14117.00 12277.00 12613.00 14694.00 13849.00 11973.00 12294.00 13239.00 12478.00 10702.00 11049.00 13606.00 12824.00 11002.00 11332.00 13926.00 13125.00 11505.00 11750.00 14247.00 13428.00 11653.00 11819.00 13619.00 12836.00 11155.00 11192.00 13714.00 12926.00 11235.00 11270.00 14353.00 13528.00 11831.00 11934.00 14425.00 13596.00 11923.00 11958.00 14568.00 13730.00 12053.00 12109.00 14178.00 13362.00 11532.00 11627.00 12958.00 12213.00 10407.00 10480.00 12840.00 12102.00 10409.00 10456.00 11526.00 10863.00 9305.00 9333.00 11944.00 11257.00 9804.00 9834.00 12325.00 11616.00 10276.00 10280.00 11956.00 11269.00 9945.00 9935.00 11421.00 10764.00 9596.00 9521.00 11254.00 10607.00 9401.00 9303.00 11171.00 10528.00 9218.00 9120.00 11944.00 11257.00 10107.00 10014.00 12598.00 11874.00 10751.00 10621.00 12824.00 12086.00 11049.00 10878.00 13169.00 12412.00 11343.00 11141.00 13490.00 12714.00 11681.00 11410.00 13858.00 13061.00 12008.00 11761.00 14679.00 13835.00 12786.00 12494.00 14821.00 13969.00 13065.00 12771.00 15808.00 14899.00 14061.00 13769.00 16129.00 15202.00 14288.00 13963.00 16331.00 15392.00 14651.00 14285.00 16486.00 15538.00 14741.00 14365.00 16046.00 15123.00 14283.00 14041.00 15868.00 14955.00 14329.00 14089.00 16164.00 15235.00 14640.00 14397.00 15534.00 14641.00 14214.00 13929.00 08/2004 15503.00 14613.00 14328.00 13993.00 The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Morgan Stanley Capital International (MSCI) All Country (AC) World ex US Index is an unmanaged index of global stock market performance that includes developed and emerging markets but excludes the US. The MSCI Europe, Australasia, Far East (EAFE) Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the US and Canada. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D Z - ------------------------------------------------------------------------------------------------------------ INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 10/01/92 - ------------------------------------------------------------------------------------------------------------ SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------------------ 1-year 14.99 8.38 14.07 9.07 14.51 13.51 14.55 12.45 15.65 - ------------------------------------------------------------------------------------------------------------ 5-year -1.11 -2.27 -1.46 -1.77 -1.38 -1.38 -1.31 -1.50 -0.89 - ------------------------------------------------------------------------------------------------------------ 10-year 4.48 3.87 4.30 4.30 4.34 4.34 4.38 4.27 4.60
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D Z - ------------------------------------------------------------------------------------------------------------ SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------------------ 1-year 26.07 18.82 24.95 19.95 25.42 24.42 25.54 23.27 26.83 - ------------------------------------------------------------------------------------------------------------ 5-year 0.95 -0.24 0.62 0.31 0.70 0.70 0.77 0.57 1.17 - ------------------------------------------------------------------------------------------------------------ 10-year 5.26 4.64 5.09 5.09 5.13 5.13 5.17 5.06 5.37
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 5.75% FOR CLASS A SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS, IF ANY. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, the class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, and D (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C and D would have been lower. 10 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA INTERNATIONAL STOCK FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - --------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - --------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 951.39 1,016.74 8.19 8.47 1.67 - --------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 949.07 1,013.02 11.81 12.19 2.41 - --------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 949.07 1,014.38 10.48 10.84 2.14 - --------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 949.32 1,014.43 10.44 10.79 2.13 - --------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 954.40 1,019.41 5.60 5.79 1.14
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. Had the Investment Advisor and the Fund's Transfer Agent not waived a portion of expenses, total return would have been reduced. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 11 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 14.99% WITHOUT SALES CHARGE. o IN AN ENVIRONMENT THAT WAS FAVORABLE FOR STOCKS, THE FUND, ITS BENCHMARK AND PEER GROUP ALL EARNED DOUBLE DIGIT RETURNS. o AN EMPHASIS ON TECHNOLOGY AND TELECOMMUNICATIONS STOCKS HURT PERFORMANCE. SOME OF THE FUND'S JAPANESE HOLDINGS WERE ALSO DISAPPOINTMENTS DURING THE PERIOD. [Illustration of two arrows pointing up] MSCI ALL COUNTRY CLASS A SHARES WORLD EX US INDEX 14.99% 22.64% OBJECTIVE Seeks long-term capital appreciation by investing in stocks issued by companies from at least three countries outside the United States. TOTAL NET ASSETS $ 593.8 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 13.04 ------------------------------------------ Class B 12.81 ------------------------------------------ Class C 12.86 ------------------------------------------ Class D 12.91 ------------------------------------------ Class Z 13.14 DISTRIBUTIONS DECLARED PER SHARE 09/01/03 - 08/31/04 ($) Class A 0.00 ------------------------------------------ Class B 0.00 ------------------------------------------ Class C 0.00 ------------------------------------------ Class D 0.00 ------------------------------------------ Class Z 0.04 PORTFOLIO MANAGERS' REPORT _____________________________________________________ COLUMBIA INTERNATIONAL STOCK FUND For the 12-month period ended August 31, 2004, Columbia International Stock Fund class A shares returned 14.99% without sales charge. The fund trailed the benchmark MSCI All Country World ex US Index, which returned 22.64% during the same period. The fund's return was also slightly lower than the 15.52% average return of its peer group, the Lipper International Multi-Cap Growth Fund Category. 1 The portfolio underperformed the benchmark mainly because of its overweight in the technology sector and its emphasis on certain telecommunications stocks. Also, some of the fund's Japanese holdings were disappointments during the period. A CHANGING INVESTMENT ENVIRONMENT There were two distinct market environments during the 12-month reporting period. During the first six months, low valuations, underestimated earnings growth and the global economic recovery provided a positive backdrop. During this period, the fund's sizeable technology allocation helped performance. However, in February the market environment began to change. Valuations began to look less attractive, fewer companies upgraded earnings estimates and concerns arose about slowing global growth and rising interest rates. In this environment, the fund's relatively large technology weight detracted from its return. BOOSTING INVESTMENT IN JAPAN, THE UNITED KINGDOM AND AUSTRIA The fund benefited from our regional allocation decisions. We reduced exposure to emerging markets, which helped the fund because emerging markets significantly underperformed developed markets. We used the proceeds from the sale of emerging market stocks to invest in Japan and the United Kingdom (UK), where the prospects for long-term economic growth appeared stronger. In Japan, the economy continued to recover from a 10-year deflationary cycle. Companies have become more competitive on a global basis and the Japanese government has demonstrated a willingness to be more accommodative toward business. Yet, some of our Japanese holdings were disappointments during the period. A long-term favorite of ours, wireless communications company NTT DoCoMo, reported lower earnings as it came up against heavy competition from companies that had better technology and offered customers more favorable pricing. The company also suffered from government policies aimed at controlling telephone rates. We recently increased our position in the stock because we believed it was attractively priced relative to its future earnings prospects. The company appears to have stemmed its earnings decline, upgraded its technology and improved its pricing. In the UK, we were drawn to the region's consistent GDP growth, relatively strong consumer spending and attractive housing sector. Our investments 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as those of the fund. 12 [Sidebar] TOP 5 COUNTRIES AS OF 08/31/04 (%) United Kingdom 25.2 ------------------------------------------ Japan 20.0 ------------------------------------------ France 10.7 ------------------------------------------ Germany 6.8 ------------------------------------------ Switzerland 5.0 TOP 10 HOLDINGS AS OF 08/31/04 (%) ENI S.p.A. 2.4 ------------------------------------------ BP PLC 2.3 ------------------------------------------ Nestle SA 1.8 ------------------------------------------ Vodafone Group PLC 1.8 ------------------------------------------ GlaxoSmithKline PLC 1.6 ------------------------------------------ ING Groep NV 1.6 ------------------------------------------ Reckitt Benckiser PLC 1.6 ------------------------------------------ Takeda Pharmaceutical 1.5 ------------------------------------------ Toyota Motor 1.5 ------------------------------------------ E.ON AG 1.5 HOLDINGS DISCUSSED IN THIS REPORT AS OF 08/31/04 (%) NTT DoCoMo 0.7 ------------------------------------------ BP PLC 2.3 ------------------------------------------ GlaxoSmithKline PLC 1.6 ------------------------------------------ Erste Bank 0.5 ------------------------------------------ Wienerberger AG 0.5 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA INTERNATIONAL STOCK FUND in BP PLC, a large integrated-energy company, and in GlaxoSmithKline PLC, a global pharmaceutical company, were positive for performance. We also invested in Austria where we emphasized companies with exposure to East European countries that have entered the European Union. We added Erste Bank, which has had a significant pick-up in loan growth, and Wienerberger AG, the world's largest producer of bricks used in construction projects. Both companies benefited performance. REDUCED EXPOSURE TO THAILAND During the period, we reduced our position in Thailand from approximately 4.2% to approximately 0.5% of net assets. Investments in Thailand aided return for several years, as the country benefited from the global economic recovery, a pro-business government and brisk trading activity with China, Japan and the United States. However, in the last few months of the period, Thailand's business policies became less expansionary, and we became concerned that the country's export growth had the potential to decline in a cooling global economy. BECOMING MORE DEFENSIVE We believe that concerns about the pace of global economic growth and rising interest rates will continue to weigh on the market for several months. With this expectation, we have structured the portfolio more defensively, we cut back the fund's exposure to small companies and focused on large, established companies with dividend-paying potential in sectors such as pharmaceuticals, consumer staples and energy. We believe more cautious positioning may help the fund weather this period of uncertainty. [PHOTO OF Penelope L. Burgess] Penelope L. Burgess has co-managed the fund since July 2004 and has been with the advisor and its predecessors since 1993. /s/ Penelope L. Burgess [PHOTO OF Deborah F. Snee] Deborah F. Snee has co-managed the fund since July 2004 and has been with the advisor and its predecessors since 1999. /s/ Deborah F. Snee An investment in the fund offers the potential for long-term growth, but also involves certain risks, including stock market fluctuations due to economic and business developments. There are also specific risks involved when investing in foreign stocks, such as currency exchange rate fluctuations, economic change, instability of emerging countries and political developments. 13 [Sidebar] PERFORMANCE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 20,402 19,230 ------------------------------------------ Class B 20,114 20,114 ------------------------------------------ Class C 20,162 20,162 ------------------------------------------ Class D 20,138 19,939 ------------------------------------------ Class G 20,054 20,054 ------------------------------------------ Class T 20,450 19,275 ------------------------------------------ Class Z 20,582 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA MID CAP GROWTH FUND VALUE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 [MOUNTAIN CHART] CLASS A CLASS A SHARES WITHOUT SHARES WITH RUSSELL MIDCAP RUSSELL MIDCAP SALES CHARGE SALES CHARGE GROWTH INDEX INDEX -------------- ------------ -------------- ------------- 09/1994 10000.00 9425.00 10000.00 10000.00 9975.00 9401.00 9835.00 9756.00 10230.00 9642.00 10005.00 9830.00 9785.00 9223.00 9564.00 9397.00 9973.00 9400.00 9698.00 9519.00 9871.00 9304.00 9814.00 9714.00 10213.00 9626.00 10336.00 10217.00 10485.00 9882.00 10747.00 10509.00 10517.00 9912.00 10837.00 10668.00 10640.00 10028.00 11104.00 11019.00 11318.00 10667.00 11609.00 11389.00 12177.00 11477.00 12339.00 11943.00 12380.00 11669.00 12475.00 12125.00 12577.00 11854.00 12753.00 12400.00 12054.00 11361.00 12430.00 12122.00 12705.00 11974.00 12986.00 12724.00 12917.00 12174.00 12992.00 12798.00 12820.00 12083.00 13222.00 13068.00 13392.00 12622.00 13722.00 13375.00 13718.00 12929.00 13830.00 13569.00 14916.00 14059.00 14498.00 13953.00 15339.00 14457.00 14794.00 14164.00 14460.00 13628.00 14347.00 13951.00 13044.00 12294.00 13234.00 13088.00 13840.00 13044.00 13950.00 13711.00 14375.00 13549.00 14836.00 14388.00 13971.00 13168.00 14662.00 14503.00 14748.00 13900.00 15526.00 15386.00 14605.00 13765.00 15265.00 15229.00 14951.00 14092.00 15940.00 15799.00 14717.00 13870.00 15589.00 15775.00 14003.00 13198.00 14708.00 15105.00 13899.00 13100.00 15069.00 15481.00 15202.00 14327.00 16419.00 16611.00 15694.00 14792.00 16874.00 17154.00 16578.00 15624.00 18488.00 18585.00 16526.00 15576.00 18307.00 18382.00 17328.00 16331.00 19234.00 19432.00 16319.00 15381.00 18270.00 18676.00 16489.00 15541.00 18462.00 19121.00 16453.00 15507.00 18704.00 19648.00 16013.00 15093.00 18367.00 19279.00 17037.00 16057.00 20094.00 20787.00 18117.00 17075.00 20935.00 21772.00 18061.00 17022.00 21220.00 21826.00 17589.00 16578.00 20348.00 21152.00 17874.00 16846.00 20924.00 21446.00 16655.00 15698.00 20028.00 20423.00 14568.00 13731.00 16205.00 17155.00 15584.00 14688.00 17430.00 18265.00 16234.00 15300.00 18713.00 19511.00 16980.00 16004.00 19976.00 20434.00 19191.00 18088.00 22046.00 21631.00 18802.00 17720.00 22707.00 21594.00 17250.00 16259.00 21597.00 20875.00 17739.00 16719.00 22799.00 21529.00 18315.00 17262.00 23839.00 23120.00 18365.00 17309.00 23532.00 23053.00 19648.00 18518.00 25174.00 23866.00 19135.00 18035.00 24374.00 23210.00 18778.00 17698.00 24120.00 22609.00 19037.00 17942.00 23915.00 21813.00 20183.00 19022.00 25764.00 22847.00 22677.00 21373.00 28433.00 23505.00 26163.00 24658.00 33357.00 25573.00 26608.00 25078.00 33351.00 24727.00 34196.00 32230.00 40361.00 26628.00 33646.00 31711.00 40401.00 28154.00 30358.00 28613.00 36478.00 26822.00 28698.00 27048.00 33819.00 26112.00 31880.00 30047.00 37407.00 26885.00 30621.00 28860.00 35039.00 26583.00 34905.00 32898.00 40323.00 29130.00 34172.00 32207.00 38352.00 28714.00 31787.00 29959.00 35728.00 28271.00 27181.00 25618.00 27965.00 25727.00 29788.00 28075.00 29438.00 27685.00 29272.00 27589.00 31119.00 28131.00 25982.00 24488.00 25736.00 26417.00 23748.00 22382.00 22053.00 24780.00 26018.00 24522.00 25729.00 26898.00 25594.00 24122.00 25608.00 27398.00 25123.00 23678.00 25621.00 27141.00 24206.00 22814.00 23894.00 26365.00 22831.00 21518.00 22162.00 25350.00 20251.00 19087.00 18498.00 22292.00 20984.00 19778.00 20443.00 23175.00 22703.00 21397.00 22644.00 25117.00 23536.00 22183.00 23505.00 26127.00 22743.00 21435.00 22741.00 25970.00 21722.00 20473.00 21451.00 25695.00 23005.00 21683.00 23088.00 27237.00 22416.00 21127.00 21867.00 26708.00 22056.00 20787.00 21215.00 26407.00 20531.00 19351.00 18873.00 24637.00 18959.00 17869.00 17039.00 22233.00 18515.00 17451.00 16979.00 22355.00 17699.00 16681.00 15631.00 20292.00 18191.00 17145.00 16842.00 21316.00 18707.00 17632.00 18161.00 22796.00 17734.00 16715.00 17064.00 21898.00 17734.00 16715.00 16897.00 21455.00 17327.00 16330.00 16750.00 21172.00 17434.00 16432.00 17061.00 21382.00 18311.00 17258.00 18223.00 22934.00 19884.00 18741.00 19976.00 25032.00 20208.00 19046.00 20262.00 25285.00 20640.00 19454.00 20985.00 26120.00 21722.00 20473.00 22142.00 27253.00 20558.00 19376.00 21712.00 26913.00 22215.00 20937.00 23462.00 28966.00 22828.00 21515.00 24091.00 29780.00 23031.00 21707.00 24353.00 30673.00 23524.00 22171.00 25157.00 31566.00 23451.00 22102.00 25580.00 32245.00 23212.00 21877.00 25531.00 32251.00 22095.00 20825.00 24811.00 31067.00 22382.00 21095.00 25397.00 31838.00 22899.00 21583.00 25800.00 32720.00 20859.00 19660.00 24092.00 31290.00 08/2004 20402.00 19230.00 23791.00 31421.00 The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Russell MidCap Growth Index is an unmanaged index that measures the performance of those Russell MidCap companies with higher price-to-book ratios and higher forecasted growth values. The Russell MidCap Index is an unmanaged index that measures the performance of the 800 smallest companies in the Russell 1000 Index, as ranked by total market capitalization. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D G T Z - ------------------------------------------------------------------------------------------------------------------------------------ INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 11/01/02 11/01/02 11/20/85 - ------------------------------------------------------------------------------------------------------------------------------------ SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------------------------------------------ 1-year -6.08 -11.48 -6.84 -11.50 -6.62 -7.55 -6.73 -8.59 -7.12 -11.76 -6.02 -11.44 -5.67 - ------------------------------------------------------------------------------------------------------------------------------------ 5-year 1.67 0.48 1.38 1.11 1.43 1.43 1.41 1.21 1.32 0.91 1.72 0.52 1.85 - ------------------------------------------------------------------------------------------------------------------------------------ 10-year 7.39 6.76 7.24 7.24 7.26 7.26 7.25 7.14 7.21 7.21 7.42 6.78 7.49
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D G T Z - ------------------------------------------------------------------------------------------------------------------------------------ SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------------------------------------------ 1-year 13.31 6.79 12.35 7.35 12.59 11.59 12.54 10.42 12.06 7.06 13.35 6.82 13.85 - ------------------------------------------------------------------------------------------------------------------------------------ 5-year 3.11 1.89 2.85 2.57 2.89 2.89 2.87 2.67 2.78 2.36 3.15 1.94 3.28 - ------------------------------------------------------------------------------------------------------------------------------------ 10-Year 9.31 8.66 9.17 9.17 9.19 9.19 9.18 9.07 9.13 9.13 9.33 8.68 9.40
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 5.75% FOR CLASS A SHARES AND CLASS T AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B AND CLASS G SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS, IF ANY. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, the class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, D, G and T (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C, D, G and T would have been lower. 14 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA MID CAP GROWTH FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - --------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - --------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 876.98 1,017.34 7.31 7.86 1.55 - --------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 872.81 1,013.67 10.73 11.54 2.28 - --------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 873.61 1,014.18 10.27 11.04 2.18 - --------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 873.41 1,014.08 10.36 11.14 2.20 - --------------------------------------------------------------------------------------------------------- Class G 1,000.00 1,000.00 870.50 1,012.02 12.27 13.20 2.61 - --------------------------------------------------------------------------------------------------------- Class T 1,000.00 1,000.00 876.43 1,017.50 7.17 7.71 1.52 - --------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 878.44 1,019.56 5.24 5.63 1.11
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. Had the Fund's Transfer Agent not waived a portion of expenses, total return would have been reduced. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 15 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED NEGATIVE 6.08% WITHOUT SALES CHARGE. o THE FUND UNDERPERFORMED ITS BENCHMARKS, THE RUSSELL MIDCAP GROWTH INDEX AND THE RUSSELL MIDCAP INDEX, AS WELL AS ITS PEER GROUP, THE LIPPER MIDCAP GROWTH FUNDS CATEGORY. o WITH A NEW MANAGEMENT TEAM AND A NEW, MORE DISCIPLINED INVESTMENT APPROACH IN PLACE, WE BELIEVE THE FUND IS POSITIONED FOR POTENTIALLY BETTER PERFORMANCE GOING FORWARD. [Illustration of an arrow pointing down and two arrows pointing up] RUSSELL RUSSELL CLASS A MIDCAP MIDCAP SHARES GROWTH INDEX INDEX -6.08% 7.46% 15.29% OBJECTIVE Seeks significant capital appreciation by investing in stocks of companies with a market capitalization, at the time of initial purchase, equal to or less than the largest stock in the Russell MidCap Index. TOTAL NET ASSETS $ 862.5 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 16.99 ------------------------------------------ Class B 16.75 ------------------------------------------ Class C 16.79 ------------------------------------------ Class D 16.77 ------------------------------------------ Class G 16.70 ------------------------------------------ Class T 17.03 ------------------------------------------ Class Z 17.14 PORTFOLIO MANAGERS' REPORT _____________________________________________________ COLUMBIA MID CAP GROWTH FUND For the 12-month period ended August 31, 2004, Columbia Mid Cap Growth Fund class A shares returned negative 6.08% without sales charge. The fund underperformed both the Russell MidCap Growth Index and the Russell MidCap Index, which returned 7.46% and 15.29%, respectively, during the same period. The fund also trailed its peer group, the Lipper MidCap Growth Funds Category average, which was 2.26%. 1 Although the fund's energy holdings benefited from rising oil prices, its lack of exposure to the better-performing segments of the market, particularly technology, hurt performance during the overall period. With a new management team in place, we have taken steps aimed at reducing volatility and improving performance going forward. SMALL COMPANY STOCKS HURT AS INVESTOR FOCUS SHIFTS TO LARGER COMPANIES Fueled by a strengthening US economy, the stock market moved higher during the first six months of this reporting period. Small company stocks were the greatest beneficiaries of this trend. Investors favored small and highly leveraged, speculative companies on the expectation that they had the most to gain in an improving economy. However, that sentiment changed dramatically as investors became concerned about the strength of the recovery early in 2004. Investors shifted their support to larger, more stable companies. The fund's technology holdings detracted from performance during the reporting period. We missed most of the major upward moves within the technology sector. ENERGY AND HEALTH CARE STOCKS DELIVER SOLID RETURNS The fund was helped by some of its energy and health care holdings. Rising oil prices boosted energy stocks and oil service stocks benefited most because companies have begun to explore for more energy sources after years of underinvestment. XTO Energy and National-Oilwell, as well as exploration and production companies such as Apache, were helped by this trend. In health care, a few high quality stocks made positive contributions to the fund, including DaVita, a dialysis services company, and Elan, an Irish biotechnology and drug company. 1 Lipper Inc., a widely respected data provider in the industry,calculates an average total return for mutual funds with similar investment objectives as those of the fund. 16 [Sidebar] TOP 5 SECTORS AS OF 08/31/04 (%) Information technology 24.9 ------------------------------------------ Health care 21.5 ------------------------------------------ Consumer discretionary 16.3 ------------------------------------------ Industrials 10.8 ------------------------------------------ Energy 7.2 TOP 10 HOLDINGS AS OF 08/31/04 (%) Medicis Pharmaceutical 2.0 ------------------------------------------ Yum! Brands 1.7 ------------------------------------------ DaVita 1.6 ------------------------------------------ Univision Communications 1.6 ------------------------------------------ Fisher Scientific International 1.4 ------------------------------------------ Potash Corp. of Saskatchewan 1.4 ------------------------------------------ Kinetic Concepts 1.4 ------------------------------------------ Corporate Executive Board 1.4 ------------------------------------------ Manpower 1.4 ------------------------------------------ ChoicePoint 1.3 HOLDINGS DISCUSSED IN THIS REPORT AS OF 08/31/04 (%) XTO Energy 0.8 ------------------------------------------ National-Oilwell 1.2 ------------------------------------------ Apache 0.5 ------------------------------------------ DaVita 1.6 ------------------------------------------ Elan 0.9 ------------------------------------------ Advanced Micro Devices 0.6 ------------------------------------------ Altera 0.7 ------------------------------------------ Juniper Networks 1.0 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA MID CAP GROWTH FUND ENCOURAGING OUTLOOK FOR ECONOMY AND STOCK MARKET Although US stock markets have traded lower for the past few months, we see reasons for optimism--and attractive investment opportunities--going forward. In light of our expectation for modest but stable growth, we believe that stocks are more attractively priced. Given this outlook, we have begun adding stocks of emerging companies with favorable earnings prospects. For example, we added Advanced Micro Devices and Altera, two semiconductor manufacturers. We also initiated a position in Juniper Networks, a communications equipment company. We initiated positions in these stocks even though we reduced the fund's overall exposure to technology. At the same time, we added to the fund's financial services and materials holdings. We believe these two sectors have the potential to benefit from an improving economy, and both made positive contributions to performance for the period. MORE DISCIPLINED INVESTMENT APPROACH IN PLACE As part of a major restructuring of the fund, we have taken steps to limit exposure to any one industry in order to help manage exposure to risk. We have also introduced a systematic process that places more emphasis on valuation relative to earnings growth in selecting individual stocks for the portfolio. With a new management team and a new, more disciplined investment approach in place, we believe that the fund is positioned for potentially better performance going forward. Kenneth A. Korngiebel has co-managed the fund since June 2004 and has been with the advisor and its predecessors since 1996. /s/ Kenneth A. Korngiebel Trent E. Nevills has co-managed the fund since June 2004 and has been with the advisor and its predecessors since 2003. /s/ Trent E. Nevills An investment in the fund offers the potential for long-term growth, but also involves certain risks, including stock market fluctuations due to economic and business developments. Mid-cap stocks can present special risks including greater price volatility than stocks of larger, more established companies. 17 [Sidebar] PERFORMANCE OF A $10,000 INVESTMENT 10/01/96 - 08/31/04 ($) SALES CHARGE WITHOUT ------------------------------------------ Class Z 20,978 Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA SMALL CAP GROWTH FUND VALUE OF A $10,000 INVESTMENT 10/01/96 - 08/31/04 [MOUNTAIN CHART] CLASS Z SHARES WITHOUT SALES RUSSELL 2000 RUSSELL 2000 CHARGE INDEX GROWTH INDEX -------------- ------------ ------------ 10/1996 10000.00 10000.00 10000.00 10174.00 9876.00 9628.00 10488.40 10282.90 9895.66 10762.10 10552.30 10088.60 11507.90 10763.30 10340.80 10819.80 10502.90 9716.25 10223.60 10007.10 9030.29 10190.90 10035.20 8925.53 11474.90 11151.10 10267.00 12244.90 11629.50 10615.10 13098.40 12170.20 11158.60 13753.30 12448.90 11493.30 15021.30 13360.20 12410.50 14449.00 12773.70 11664.60 14200.50 12690.60 11387.00 14432.00 12912.70 11393.90 13817.20 12708.70 11242.30 14952.90 13647.90 12235.00 16261.30 14210.20 12747.70 16435.30 14288.30 12825.40 15247.00 13518.20 11893.00 15715.10 13546.60 12014.30 14978.10 12449.30 11011.10 11771.30 10031.60 8469.76 12854.20 10817.10 9328.59 12984.10 11258.50 9815.54 13720.30 11848.40 10577.20 15108.80 12581.80 11534.50 15030.20 12749.20 12053.50 13452.00 11716.50 10950.60 13678.00 11899.30 11340.50 14077.40 12965.40 12341.80 14381.50 13154.70 12361.60 15681.60 13749.30 13013.00 16089.30 13372.60 12610.90 15725.70 12877.80 12139.30 16002.40 12880.40 12373.60 17554.70 12933.20 12690.30 19964.90 13705.30 14031.70 24047.80 15256.70 16505.50 24249.80 15011.10 16352.00 30794.80 17489.40 20157.10 29559.90 16336.90 18038.60 26349.70 15353.40 16216.70 24884.70 14458.30 14796.10 28385.90 15719.10 16707.80 26205.90 15212.90 15275.90 29285.10 16373.70 16882.90 28066.80 15892.30 16043.90 26663.50 15183.50 14741.10 23453.20 13624.10 12064.10 25451.40 14794.40 12802.40 25767.00 15565.20 13838.10 22981.60 14544.20 11940.90 20993.70 13832.90 10855.50 23433.20 14914.70 12184.20 23599.50 15281.60 12466.90 23984.20 15808.80 12807.20 22785.00 14953.50 11714.80 21092.10 14470.50 10982.60 17835.50 12522.80 9210.02 19105.30 13255.40 10096.00 20452.30 14281.40 10939.00 21838.90 15162.50 11620.50 21249.30 15004.80 11206.80 20197.40 14593.70 10481.80 21534.50 15765.60 11392.60 20856.20 15909.00 11146.50 20088.70 15202.70 10494.50 18740.70 14448.60 9604.54 16203.20 12266.90 8128.33 16459.20 12236.20 8124.26 15751.50 11357.70 7537.69 16027.10 11722.20 7919.10 16942.30 12767.90 8703.88 16037.60 12056.70 8103.31 15987.90 11722.70 7882.90 15741.60 11368.70 7672.43 16056.50 11515.30 7788.28 17345.80 12607.00 8525.05 18950.30 13959.70 9485.83 19422.20 14212.40 9668.90 20140.80 15102.10 10399.90 21272.70 15793.80 10958.30 20623.90 15501.60 10681.10 22669.80 16803.70 11603.90 23191.20 17400.30 11982.20 23142.50 17753.50 12036.20 24519.40 18524.00 12668.10 24431.20 18690.70 12649.10 24135.50 18864.50 12708.50 22926.40 17902.40 12070.50 23320.70 18187.10 12310.70 24029.60 18952.80 12720.70 21816.50 17677.20 11578.40 08/2004 20978.00 17591.00 11332.00 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Russell 2000 Index is an unmanaged index that tracks the performance of the 2,000 smallest of the 3,000 largest U.S. companies based on market capitalization. The Russell 2000 Growth Index is an unmanaged index that measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from October 1, 1996. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%) SHARE CLASS Z ------------------------------------------ INCEPTION 10/01/96 ------------------------------------------ SALES CHARGE WITHOUT ------------------------------------------ 1-year -1.39 ------------------------------------------ 5-year 5.93 ------------------------------------------ Life 9.81 AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%) SHARE CLASS Z ------------------------------------------ SALES CHARGE WITHOUT ------------------------------------------ 1-year 23.71 ------------------------------------------ 5-year 8.91 ------------------------------------------ Life 11.98 ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. 18 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA SMALL CAP GROWTH FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - --------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - --------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 867.88 1,019.41 5.35 5.79 1.14
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 19 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS Z SHARES RETURNED NEGATIVE 1.39% WITHOUT SALES CHARGE. o THE FUND DID NOT HAVE SIGNIFICANT EXPOSURE TO SPECIALTY SEMICONDUCTOR STOCKS, WHICH WERE AMONG THE BEST TECHNOLOGY PERFORMERS FOR THE YEAR. AS A RESULT, IT UNDERPERFORMED ITS BENCHMARK AND PEER GROUP. o THE FUND HAS A NEW MANAGEMENT TEAM, WHICH HAS TAKEN STEPS TO REDUCE VOLATILITY AND IMPROVE PERFORMANCE. [Illustration of an arrow pointing down and two arrows pointing up] RUSSELL 2000 CLASS Z GROWTH RUSSELL 2000 SHARES INDEX INDEX -1.39% 3.38% 11.35% OBJECTIVE Seeks capital appreciation by investing in stocks of companies with a market capitalization, at the time of initial purchase, equal to or less than the largest stock in the S&P SmallCap 600 Index. TOTAL NET ASSETS $ 543.0 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class Z 21.32 PORTFOLIO MANAGERS' REPORT _____________________________________________________ COLUMBIA SMALL CAP GROWTH FUND For the 12-month period ended August 31, 2004, Columbia Small Cap Growth Fund class Z shares returned negative 1.39% without sales charge. That was less than the return of the benchmark Russell 2000 Growth Index, which was 3.38%, and the Russell 2000 Index, which was 11.35%, during the same period. The fund also trailed its peer group, the Lipper Small-Cap Growth Funds Category average, which was 0.71%. 1 The fund benefited from strong stock selection in the health care, energy and materials sectors. However, technology held back performance because the fund lacked significant exposure to specialty semiconductor stocks, which were among the best technology performers during the year. With a new management team in place, we have taken steps aimed at reducing volatility and improving performance going forward. SMALL CAPS HURT AS INVESTOR FOCUS SHIFTS TO LARGER COMPANIES Fueled by a strengthening US economy, the stock market moved higher during the first six months of this reporting period. In this environment, investors favored small and highly leveraged, speculative companies that have the most to gain in an improving economy. Because the fund focuses on small-cap stocks, it was the beneficiary of this trend early in the reporting period. However, sentiment changed dramatically as investors reacted to a sluggish employment picture, the threat of higher interest rates and concerns about national security. The market's focus shifted from small companies to larger, more stable companies, and that shift hurt small-cap stocks as the year wore on. The fund's substantial exposure to technology held back performance during the period because of our emphasis on the technology services and software industry. Within technology, the fund was underrepresented in specialty semiconductor stocks, which were the best performers for the benchmark. ENERGY, MATERIALS AND HEALTH CARE STOCKS HELPED FUND DELIVER SOLID RETURNS The fund delivered a solid return for the year on the strength of many of its energy, materials and health care holdings. In energy, rising oil prices boosted oil service stocks XTO Energy and National-Oilwell. The energy sector also benefited from the fact that companies have begun exploring for new energy sources after several years of underinvestment. In health care, the fund's investments in DaVita, a dialysis services company, and Renal Care Group, a medical equipment and supply company, helped performance. In the materials sector, OM Group, a specialty chemical company, and Steel Dynamics, a steel production company, also made positive contributions to performance. 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as those of the fund. 20 [Sidebar] TOP 5 SECTORS AS OF 08/31/04 (%) Information technology 31.9 ------------------------------------------ Health care 18.1 ------------------------------------------ Industrials 16.8 ------------------------------------------ Consumer discretionary 14.0 ------------------------------------------ Energy 8.1 TOP 10 HOLDINGS AS OF 08/31/04 (%) Amphenol 2.5 ------------------------------------------ Renal Care Group 2.0 ------------------------------------------ United Defense Industries 2.0 ------------------------------------------ Polycom 1.7 ------------------------------------------ Autoliv 1.6 ------------------------------------------ DaVita 1.6 ------------------------------------------ Corporate Executive Board 1.5 ------------------------------------------ ArthroCare 1.5 ------------------------------------------ Silicon Laboratories 1.5 ------------------------------------------ Manhattan Associates 1.5 HOLDINGS DISCUSSED IN THIS REPORT AS OF 08/31/04 (%) XTO Energy 1.5 ------------------------------------------ National-Oilwell 1.4 ------------------------------------------ DaVita 1.6 ------------------------------------------ Renal Care Group 2.0 ------------------------------------------ OM Group 1.1 ------------------------------------------ Steel Dynamics 0.9 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA SMALL CAP GROWTH FUND MORE DISCIPLINED INVESTMENT APPROACH IN PLACE Although US stock markets have traded lower during the past few months, we see reasons for optimism--and attractive investment opportunities--ahead. In light of our expectation for modest but stable growth over the near term, we believe that stock prices have become more attractive. As part of a major restructuring of the fund, we have also taken steps to limit the fund's exposure to any one industry in order to help manage risk. And, we have introduced a systematic process that places more emphasis on valuations relative to earnings growth in selecting individual stocks for the portfolio. With a new management team and a new, more disciplined investment approach in place, we believe that the fund is positioned for potentially better performance going forward. Kenneth A. Korngiebel has co-managed the fund since June 2004 and has been with the advisor and its predecessors since 1996. /s/ Kenneth A. Korngiebel Trent E. Nevills has co-managed the fund since June 2004 and has been with the advisor and its predecessors since 2003. /s/ Trent E. Nevills An investment in the fund offers the potential for long-term growth, but also involves certain risks, including stock market fluctuations due to economic and business developments. Investing in small-cap stocks may present special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. 21 [Sidebar] PERFORMANCE OF A $ 10,000 INVESTMENT 09/01/94 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 36,671 34,573 ------------------------------------------ Class B 36,209 36,209 ------------------------------------------ Class C 36,193 36,193 ------------------------------------------ Class D 36,220 35,862 ------------------------------------------ Class Z 36,929 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA REAL ESTATE EQUITY FUND VALUE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 [MOUNTAIN CHART] CLASS A CLASS A SHARES WITHOUT SHARES WITH NAREIT SALES CHARGE SALES CHARGE INDEX -------------- ------------ -------- 09/1994 10000.00 9425.00 10000.00 9793.00 9230.00 9814.00 9498.00 8952.00 9473.00 9145.00 8619.00 9148.00 10058.00 9480.00 9815.00 9689.00 9132.00 9601.00 9783.00 9221.00 9839.00 9852.00 9285.00 9799.00 9704.00 9146.00 9796.00 10183.00 9598.00 10213.00 10439.00 9839.00 10375.00 10599.00 9989.00 10553.00 10670.00 10056.00 10680.00 10936.00 10308.00 10863.00 10694.00 10079.00 10630.00 10784.00 10163.00 10727.00 11755.00 11079.00 11313.00 11977.00 11289.00 11499.00 12079.00 11385.00 11634.00 12005.00 11315.00 11570.00 11996.00 11306.00 11629.00 12268.00 11563.00 11929.00 12559.00 11837.00 12084.00 12578.00 11854.00 12175.00 13186.00 12428.00 12654.00 13739.00 12949.00 12874.00 14008.00 13203.00 13257.00 14730.00 13883.00 13861.00 16257.00 15322.00 15302.00 16579.00 15626.00 15473.00 16680.00 15721.00 15442.00 16909.00 15936.00 15410.00 16330.00 15391.00 14986.00 16848.00 15879.00 15426.00 17611.00 16599.00 16176.00 18534.00 17468.00 16676.00 18349.00 17294.00 16636.00 19989.00 18840.00 18088.00 19306.00 18195.00 17600.00 19792.00 18654.00 17980.00 20279.00 19113.00 18404.00 20204.00 19042.00 18307.00 19826.00 18686.00 17996.00 20494.00 19316.00 18318.00 19605.00 18477.00 17720.00 19452.00 18333.00 17596.00 19397.00 18282.00 17477.00 18255.00 17205.00 16343.00 16915.00 15942.00 14800.00 17793.00 16770.00 15637.00 17492.00 16486.00 15348.00 17847.00 16821.00 15574.00 17774.00 16752.00 15181.00 17458.00 16454.00 14864.00 17334.00 16337.00 14515.00 17231.00 16241.00 14449.00 18657.00 17584.00 15821.00 19216.00 18111.00 16169.00 18782.00 17702.00 15907.00 18089.00 17049.00 15401.00 18078.00 17039.00 15205.00 17270.00 16277.00 14628.00 16919.00 15946.00 14268.00 16779.00 15814.00 14035.00 17336.00 16339.00 14480.00 17407.00 16406.00 14528.00 16979.00 16003.00 14355.00 17860.00 16833.00 14827.00 18932.00 17843.00 15824.00 19089.00 17991.00 15979.00 19799.00 18660.00 16389.00 21504.00 20267.00 17822.00 20652.00 19465.00 17098.00 21505.00 20268.00 17642.00 20481.00 19304.00 16878.00 21086.00 19873.00 17094.00 22338.00 21054.00 18298.00 22126.00 20854.00 18488.00 21814.00 20560.00 18192.00 21439.00 20206.00 18368.00 22195.00 20919.00 18808.00 22675.00 21371.00 19263.00 23659.00 22299.00 20391.00 23240.00 21904.00 19986.00 23977.00 22598.00 20717.00 22464.00 21172.00 19857.00 21702.00 20455.00 19289.00 22952.00 21633.00 20350.00 23545.00 22191.00 20847.00 23688.00 22326.00 20889.00 24157.00 22768.00 21292.00 25070.00 23629.00 22569.00 25253.00 23801.00 22761.00 25753.00 24273.00 23068.00 26122.00 24620.00 23698.00 24769.00 23344.00 22459.00 24516.00 23106.00 22414.00 23548.00 22194.00 21553.00 22848.00 21534.00 20516.00 24016.00 22635.00 21483.00 24242.00 22848.00 21642.00 23587.00 22231.00 21012.00 23858.00 22486.00 21359.00 24271.00 22875.00 21786.00 25283.00 23829.00 22744.00 26514.00 24990.00 24118.00 27095.00 25537.00 24644.00 28431.00 26796.00 25962.00 28997.00 27329.00 26103.00 29748.00 28037.00 26990.00 30179.00 28444.00 27479.00 31446.00 29638.00 28677.00 32708.00 30827.00 29680.00 33738.00 31798.00 30963.00 34585.00 32596.00 31504.00 36151.00 34073.00 33247.00 31647.00 29827.00 28399.00 33536.00 31608.00 30424.00 34693.00 32698.00 31315.00 34551.00 32564.00 31419.00 08/2004 36671.00 34573.00 33919.00 The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. The National Association of Real Estate Investment Trusts (NAREIT) Index is an unmanaged index that tracks performance of all publicly traded equity REIT. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D Z - --------------------------------------------------------------------------------------------------- INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 04/01/94 - --------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - --------------------------------------------------------------------------------------------------- 1-year 26.42 19.15 25.53 20.53 25.47 24.47 25.55 23.32 26.72 - --------------------------------------------------------------------------------------------------- 5-year 15.19 13.83 14.90 14.67 14.89 14.89 14.90 14.67 15.35 - --------------------------------------------------------------------------------------------------- 10-year 13.88 13.21 13.73 13.73 13.73 13.73 13.74 13.62 13.96
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D Z - --------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - --------------------------------------------------------------------------------------------------- 1-year 28.05 20.69 27.12 22.12 27.05 26.05 27.14 24.87 28.36 - --------------------------------------------------------------------------------------------------- 5-year 13.06 11.73 12.80 12.56 12.79 12.79 12.81 12.59 13.21 - --------------------------------------------------------------------------------------------------- 10-year 13.23 12.56 13.10 13.10 13.10 13.10 13.11 12.99 13.31
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 5.75% FOR CLASS A SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS, IF ANY. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, and D (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C and D would have been lower. 22 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA REAL ESTATE EQUITY FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - --------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - --------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 1,064.10 1,019.05 6.28 6.14 1.21 - --------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 1,060.83 1,015.28 10.15 9.93 1.96 - --------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 1,060.03 1,015.28 10.15 9.93 1.96 - --------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 1,059.98 1,015.28 10.15 9.93 1.96 - --------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 1,063.55 1,020.31 4.98 4.88 0.96
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 23 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 26.42% WITHOUT SALES CHARGE. o A STRONG REIT MARKET CONTRIBUTED TO DOUBLE-DIGIT RETURNS FOR THE FUND, ITS BENCHMARK AND THE LIPPER REAL ESTATE FUNDS CATEGORY. o THE FUND TRAILED ITS BENCHMARK AND PEER GROUP BECAUSE IT CONTINUED TO HOLD SIZEABLE INVESTMENTS IN PAPER AND FOREST PRODUCTS COMPANIES AS A DEFENSIVE STRATEGY. [Illustration of two arrows pointing up] CLASS A SHARES NAREIT INDEX 26.42% 29.91% OBJECTIVE Seeks capital appreciation and above-average income by investing in stocks of companies principally engaged in the real estate industry, including real estate investment trusts (REITs). TOTAL NET ASSETS $ 923.3 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 25.59 ------------------------------------------ Class B 25.60 ------------------------------------------ Class C 25.58 ------------------------------------------ Class D 25.59 ------------------------------------------ Class Z 25.60 DISTRIBUTIONS DECLARED PER SHARE 09/01/03 - 08/31/04 ($) Class A 0.89 ------------------------------------------ Class B 0.71 ------------------------------------------ Class C 0.54 ------------------------------------------ Class D 0.72 ------------------------------------------ Class Z 0.96 PORTFOLIO MANAGER'S REPORT _____________________________________________________ COLUMBIA REAL ESTATE EQUITY FUND For the 12-month period ended August 31, 2004, Columbia Real Estate Equity Fund class A shares returned 26.42% without sales charge. The fund trailed the benchmark NAREIT Index, a common measure of real estate securities' performance, which returned 29.91%. The fund also underperformed the average of the Lipper Real Estate Funds Category, which was 28.90%. 1 We believe the fund's defensive posture, represented by its overweight allocation to the paper and forest product sector, accounted for the gap in performance relative to the index and its peers. MIXED ECONOMIC SIGNALS, A SLUGGISH STOCK MARKET AID REIT RETURNS During the period, REITs benefited as the economy sent mixed signals to investors and investors sought higher yields. The REIT market corrected sharply in April and May 2004 in reaction to positive employment news that all but assured that the Federal Reserve Board would raise short-term interest rates. However, it rallied to new highs during the summer months as economic indicators weakened. The rebound favored the fund's REIT investments, but it hurt the fund's positions in non-real-estate related companies--primarily the paper & forest products and containers & packaging sectors, which represented 12% of the portfolio as of 08/31/04. (The fund's investment policy permits it to hold up to 20% of assets in non-real-estate related companies.) We added to holdings in this sector, which worked out well when the REIT market corrected in the spring. But the correction was short-lived, and the substantial defensive position had a negative impact on the fund's 12-month return. EMPHASIS ON BUSINESS PROSPECTS AIDED PERFORMANCE During the 12-month reporting period, the fund increased its holdings in lodging stocks such as Host Marriott and selected non-REIT real estate companies, resulting in a significant overweight compared to the index--14% versus 5%. Lodging securities were strong performers as the sector's prospects steadily improved on increased business travel. We believe issues in this sector remain inexpensive relative to the index. Other sectors of the real estate markets with links to economic prosperity, including shopping malls and industrial REITs, also performed well over the period. The fund benefited from its sizeable holdings in both. However we reduced our exposure to shopping malls and industrial REITs during the period because we believe they have become expensive relative to their earnings prospects. Retail remains the fastest growing sector of the REIT market, but we believe cash flow growth rates for these companies have peaked. 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as those of the fund. 24 [Sidebar] TOP 5 SECTORS AS OF 08/31/04 (%) Industrial 23.2 ------------------------------------------ Retail 18.8 ------------------------------------------ Other 18.2 ------------------------------------------ Lodging 15.7 ------------------------------------------ Office 13.2 TOP 10 HOLDINGS AS OF 08/31/04 (%) iStar Financial 4.9 ------------------------------------------ Simon Property Group 4.8 ------------------------------------------ Cousins Properties 4.7 ------------------------------------------ Hilton Hotels 4.5 ------------------------------------------ Equity Residential 4.4 ------------------------------------------ Alexandria Real Estate Equities 4.0 ------------------------------------------ Prologis 3.8 ------------------------------------------ General Growth Properties 3.8 ------------------------------------------ Host Marriott 3.6 ------------------------------------------ Bowater 3.3 HOLDINGS DISCUSSED IN THIS REPORT AS OF 08/31/04 (%) Host Marriott 3.6 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA REAL ESTATE EQUITY FUND We continued to maintain an underweight position in office and residential REITs because of poor business prospects in both sectors. Office vacancy rates remained high. Also, large unused blocks of space, which were leased prior to the 2001 recession, put a crimp on demand. We raised our exposure to residential REITs somewhat as demand for apartments improved. However, an oversupply of units--the result of overbuilding--has kept us cautious about the sector. REITs REMAIN EXPENSIVE REIT valuations remain high, both as compared to other securities and relative to the value of underlying real estate assets. The sector also faces the additional challenges of slow property cash flow growth and higher relative dividend tax rates. As a result of these factors, we believe that REIT stocks are due for a period of underperformance, particularly as the economy picks up steam. Therefore, we plan to continue to position the fund away from REIT stocks and toward other real-estate related issues, particularly in sectors linked to a recovering economy. We continue to monitor the sectors of the REIT market for positive and negative changes in light of the changing economic environment. We believe that our investment portfolio can benefit from the stronger economic conditions we expect going forward. David Jellison has managed the fund since 1994 and has been with the advisor and its predecessors since 1992. /s/ David Jellison An investment in the fund may present certain risks, including stock market fluctuations that occur in response to economic and business developments. The fund may be subject to the same types of risks associated with direct ownership of real estate including the decline of property value due to general, local and regional economic conditions. In addition, the fund's share price will likely be subject to more volatility than the overall stock market because it concentrates in real estate stocks. 25 [Sidebar] PERFORMANCE OF A $10,000 INVESTMENT 11/09/00 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 6,494 6,121 ------------------------------------------ Class B 6,394 6,202 ------------------------------------------ Class C 6,404 6,404 ------------------------------------------ Class D 6,424 6,360 ------------------------------------------ Class Z 6,544 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA TECHNOLOGY FUND VALUE OF A $10,000 INVESTMENT 11/09/00 - 08/31/04 [MOUNTAIN CHART] CLASS A CLASS A MERRILL LYNCH SHARES WITHOUT SHARES WITH 100 TECHNOLOGY SALES CHARGE SALES CHARGE INDEX -------------- ------------ --------------- 11/2000 10000.00 9425.00 10000.00 8713.00 8212.00 7744.00 8622.00 8127.00 7317.00 9142.00 8617.00 8577.00 6815.00 6423.00 6096.00 6145.00 5792.00 5123.00 7365.00 6941.00 6259.00 7135.00 6725.00 5891.00 7285.00 6866.00 5912.00 6745.00 6357.00 5377.00 6095.00 5745.00 4719.00 4547.00 4285.00 3495.00 5166.00 4869.00 4158.00 5896.00 5557.00 4944.00 6126.00 5773.00 4935.00 6086.00 5736.00 4962.00 5367.00 5058.00 4289.00 6106.00 5755.00 4788.00 5376.00 5067.00 4204.00 5047.00 4757.00 3969.00 4607.00 4342.00 3321.00 3888.00 3664.00 2877.00 3858.00 3636.00 2776.00 3468.00 3269.00 2277.00 3818.00 3598.00 2774.00 4258.00 4013.00 3386.00 3788.00 3570.00 2885.00 3828.00 3608.00 2876.00 3808.00 3589.00 2901.00 3679.00 3467.00 2880.00 4138.00 3900.00 3218.00 4888.00 4607.00 3764.00 4988.00 4701.00 3746.00 5398.00 5088.00 3916.00 5907.00 5568.00 4353.00 5977.00 5634.00 4204.00 6727.00 6340.00 4711.00 7066.00 6660.00 4862.00 6977.00 6576.00 4871.00 7496.00 7065.00 5182.00 7356.00 6933.00 5085.00 7286.00 6867.00 4941.00 6916.00 6519.00 4545.00 7226.00 6811.00 4811.00 7566.00 7131.00 4955.00 6687.00 6302.00 4389.00 08/2004 6494.00 6121.00 4192.00 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Merrill Lynch 100 Technology Index is an equally weighted, unmanaged index of 100 leading technology stocks. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from November 9, 2000. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D Z - -------------------------------------------------------------------------------------------------------------------- INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 11/09/00 - -------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - -------------------------------------------------------------------------------------------------------------------- 1-year 9.98 3.66 9.22 4.22 9.39 8.39 9.35 7.27 10.46 - -------------------------------------------------------------------------------------------------------------------- Life -10.72 -12.09 -11.08 -11.79 -11.04 -11.04 -10.97 -11.20 -10.54
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D Z - -------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - -------------------------------------------------------------------------------------------------------------------- 1-year 51.70 42.98 50.71 45.71 50.91 49.91 50.60 48.11 52.10 - -------------------------------------------------------------------------------------------------------------------- Life -7.39 -8.88 -7.76 -8.53 -7.73 -7.73 -7.63 -7.88 -7.22
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 5.75% FOR CLASS A SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS, IF ANY. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, and D (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C and D would have been lower. 26 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA TECHNOLOGY FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - --------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - --------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 888.14 1,015.58 9.02 9.63 1.90 - --------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 883.72 1,011.81 12.55 13.40 2.65 - --------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 884.92 1,011.81 12.56 13.40 2.65 - --------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 884.17 1,011.81 12.55 13.40 2.65 - --------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 890.15 1,016.84 7.84 8.36 1.65
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 27 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 9.98% WITHOUT SALES CHARGE. o THE FUND OUTPERFORMED BOTH THE MERRILL LYNCH 100 TECHNOLOGY INDEX AND THE LIPPER SCIENCE & TECHNOLOGY FUNDS CATEGORY AVERAGE, WHICH BOTH GENERATED NEGATIVE RETURNS FOR THE PERIOD. o THE MANAGEMENT TEAM'S DECISION TO EMPHASIZE CONSUMER-ORIENTED TECHNOLOGY COMPANIES IN THE SEMICONDUCTOR, WIRELESS COMMUNICATIONS AND INTERNET SECTORS ACCOUNTED FOR ITS STRONG PERFORMANCE. [Illustration of an arrow pointing up and one arrow pointing down] MERRILL LYNCH 100 CLASS A SHARES TECHNOLOGY INDEX 9.98% -3.73% OBJECTIVE Seeks capital appreciation by investing in stocks of technology companies that may benefit from technological improvements, advancements or developments. TOTAL NET ASSETS $ 35.8 MILLION NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 6.50 ------------------------------------------ Class B 6.40 ------------------------------------------ Class C 6.41 ------------------------------------------ Class D 6.43 ------------------------------------------ Class Z 6.55 PORTFOLIO MANAGERS' REPORT _____________________________________________________ COLUMBIA TECHNOLOGY FUND For the 12-month period ended August 31, 2004, Columbia Technology Fund class A shares returned 9.98% without sales charge. The fund outpaced the Merrill Lynch 100 Technology Index, which returned negative 3.73% for the same period. It also significantly outperformed the Lipper Science & Technology Category average of negative 6.20%. 1 The fund's emphasis on consumer-oriented semiconductor, wireless and Internet companies, combined with strong stock selection, helped its competitive performance. FUND HELD ITS GROUND IN A CHANGING MARKET During the first half of the 12-month period, the fund's aggressive positioning helped it generate robust returns in a rising stock market. But the broad-based economic growth that characterized the first six months hit a rough patch in the second half. Decelerating economic growth, the expectation of rising interest rates and sharply increased commodity prices slowed the stock market in 2004. Technology stock prices fell, in many cases erasing earlier gains. By contrast, the fund's strong sector and stock selection throughout the year helped it sustain its gains through the end of the period. EMPHASIS ON CONSUMER-RELATED HOLDINGS HELPED PERFORMANCE The fund's emphasis on consumer discretionary stocks proved to be an effective strategy when corporate spending did not accelerate as much as the markets had anticipated. XM Satellite Radio Holdings and eBay, the highly successful online auction company, were two of the fund's best performers. We held a substantial position in eBay, which represented 7.8% of net assets at the end of the period, a much higher weighting than its representation in the benchmark. We also had good returns from cell phone and television manufacturer Samsung Electronics. STRONG RETURNS FROM SEMICONDUCTORS Strong stock selection in semiconductors also helped fund performance. We were able to ride the computer graphics cycle with NVIDIA, buying the stock at a relatively attractive price prior to new product introductions, then taking profits after the product introductions. As new product sales slowed and the stock price declined, we added to our position again before a new product cycle resumed. We had a similar success with FormFactor, which sells testers of DDR equipment used for D-RAM computer memory upgrades in desktop computers. The company benefited as industry adoption of new DDR2 memory chips drove demand for its testers. DISAPPOINTING RETURNS FROM INTERNET SOFTWARE SERVICES The fund's weakest performers were Internet software services companies. This sector had done well in the past and we started the year with fairly large exposure to it. However, we trimmed our positions as 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as those of the fund. 28 [Sidebar] TOP 5 SECTORS AS OF 08/31/04 (%) Semiconductors & semiconductor equipment 18.6 ------------------------------------------ Communications equipment 15.7 ------------------------------------------ Software 11.8 ------------------------------------------ Internet & catalog retail 10.7 ------------------------------------------ Wireless telecommunication services 9.9 TOP 10 HOLDINGS AS OF 08/31/04 (%) Nokia Oyj 7.9 ------------------------------------------ eBay 7.8 ------------------------------------------ PalmOne 4.4 ------------------------------------------ XM Satellite Radio Holdings 3.8 ------------------------------------------ Silicon Laboratories 3.3 ------------------------------------------ Samsung Electronics 2.9 ------------------------------------------ Broadcom 2.8 ------------------------------------------ Millicom International Cellular 2.5 ------------------------------------------ Marvell Technology Group 2.5 ------------------------------------------ Amazon.com 2.3 HOLDINGS DISCUSSED IN THIS REPORT AS OF 08/31/04 (%) XM Satellite Radio Holdings 3.8 ------------------------------------------ eBay 7.8 ------------------------------------------ Samsung Electronics 2.9 ------------------------------------------ NVIDIA 0.8 ------------------------------------------ FormFactor 0.5 ------------------------------------------ Millicom International Cellular 2.5 ------------------------------------------ VimpelCom 2.0 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA TECHNOLOGY FUND the sector lost value. Free Internet provider United Online and the Internet DVD rental company NetFlix both had disappointing performance and we sold our positions during the year. COMMUNICATIONS OPPORTUNITIES OVERSEAS We maintained a relatively high exposure to international markets with investments in Millicom International Cellular and VimpelCom, which posted double-digit returns during the 12-month reporting period. Millicom provides cellular service in developing countries in Africa, Asia and South America, while VimpelCom is a leading cell phone carrier in Russia. We believe international cell phone service companies offer greater upside potential than their US counterparts because of higher growth rates and lower competition in the developing markets they serve. UNCERTAIN TIMES AHEAD The fund faired well in a 12-month period notable for its downward trend. While the difficult market for tech stocks may not yet be over, the fall season is usually the strongest season in the yearly technology cycle. Even so, incoming economic data remains somewhat difficult to interpret and markets are likely to remain volatile through the presidential election. Wayne Collette has co-managed the Columbia Technology Fund since June 2002 and has been with the advisor and its predecessors since 2001. /s/ Wayne Collette Theodore Wendell joined the advisor and its predecessors in 2000. Except for the period between June and August 2004, he has co-managed the fund since June 2002. /s/ Theodore Wendell Trent Nevills has co-managed the fund since August 2003 and has been with the advisor since 2003. /s/ Trent Nevills An investment in the fund may present certain risks, including stock market fluctuations that occur in response to economic and business developments. In addition, the fund's share price will likely be subject to more volatility than the overall stock market because it concentrates in technology stocks. 29 [Sidebar] PERFORMANCE OF A $10,000 INVESTMENT 11/09/00 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 18,694 17,621 ------------------------------------------ Class B 18,416 18,116 ------------------------------------------ Class C 18,426 18,426 ------------------------------------------ Class D 18,416 18,234 ------------------------------------------ Class Z 18,784 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA STRATEGIC INVESTOR FUND VALUE OF A $10,000 INVESTMENT 11/09/00 - 08/31/04 [MOUNTIAN CHART] CLASS A CLASS A SHARES WITHOUT SHARES WITH RUSSELL 3000 SALES CHARGE SALES CHARGE VALUE INDEX S&P 500 INDEX -------------- ------------ ------------- ------------- 11/2000 10000.00 9425.00 10000.00 10000.00 9790.00 9227.00 9730.00 9399.00 11224.00 10579.00 10253.00 9445.00 12274.00 11568.00 10308.00 9780.00 12254.00 11549.00 10040.00 8888.00 11984.00 11295.00 9699.00 8325.00 12934.00 12190.00 10172.00 8972.00 13743.00 12953.00 10403.00 9032.00 13963.00 13160.00 10218.00 8812.00 13884.00 13085.00 10182.00 8726.00 13664.00 12879.00 9799.00 8180.00 12325.00 11616.00 9082.00 7519.00 12736.00 12003.00 9024.00 7662.00 13896.00 13097.00 9558.00 8250.00 14568.00 13731.00 9808.00 8323.00 14599.00 13759.00 9747.00 8201.00 14719.00 13872.00 9766.00 8043.00 15591.00 14695.00 10248.00 8345.00 15521.00 14629.00 9951.00 7840.00 15541.00 14648.00 9970.00 7782.00 14900.00 14043.00 9426.00 7228.00 13636.00 12852.00 8510.00 6665.00 13676.00 12889.00 8567.00 6708.00 12311.00 11603.00 7639.00 5979.00 12894.00 12153.00 8172.00 6505.00 14141.00 13328.00 8696.00 6888.00 13310.00 12544.00 8318.00 6484.00 12945.00 12201.00 8115.00 6314.00 12681.00 11952.00 7895.00 6219.00 12620.00 11894.00 7913.00 6279.00 13827.00 13032.00 8613.00 6797.00 14982.00 14121.00 9192.00 7155.00 15125.00 14255.00 9310.00 7247.00 15601.00 14704.00 9472.00 7374.00 16169.00 15239.00 9634.00 7518.00 16037.00 15114.00 9539.00 7438.00 16928.00 15955.00 10137.00 7859.00 17294.00 16299.00 10294.00 7928.00 18117.00 17075.00 10908.00 8344.00 18503.00 17439.00 11114.00 8497.00 18941.00 17852.00 11351.00 8615.00 19002.00 17909.00 11271.00 8485.00 18666.00 17592.00 10971.00 8352.00 18675.00 17601.00 11084.00 8467.00 19224.00 18119.00 11369.00 8631.00 18582.00 17514.00 11178.00 8345.00 08/2004 18694.00 17621.00 11336.00 8379.00 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Russell 3000 Value Index is an unmanaged index that measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. The stocks in this index are also members of either the Russell 1000 Value or the Russell 2000 Value Index. The Standard & Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization U.S. stocks. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from November 9, 2000. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D Z - -------------------------------------------------------------------------------------------------------------------- INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 11/09/00 - -------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - -------------------------------------------------------------------------------------------------------------------- 1-year 15.64 8.99 14.85 9.85 14.92 13.92 14.93 12.79 15.98 - -------------------------------------------------------------------------------------------------------------------- Life 17.85 16.04 17.39 16.89 17.41 17.41 17.39 17.09 18.00 - --------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D Z - -------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - -------------------------------------------------------------------------------------------------------------------- 1-year 27.12 19.81 26.25 21.25 26.32 25.32 26.27 24.01 27.49 - -------------------------------------------------------------------------------------------------------------------- Life 19.68 17.75 19.23 18.71 19.25 19.25 19.21 18.89 19.82
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 5.75% FOR CLASS A SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS, IF ANY. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, and D (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C, and D would have been lower. 30 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA STRATEGIC INVESTOR FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - -------------------------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - -------------------------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 986.98 1,018.55 6.54 6.65 1.31 - -------------------------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 983.91 1,014.83 10.22 10.38 2.05 - -------------------------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 985.07 1,014.83 10.23 10.38 2.05 - -------------------------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 986.07 1,015.33 9.74 9.88 1.95 - -------------------------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 988.29 1,019.86 5.25 5.33 1.05
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. Had the Transfer Agent not waived a portion of expenses, total return would have been reduced. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 31 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 15.64% WITHOUT SALES CHARGE. o THE FUND, ITS BENCHMARK AND PEER GROUP ALL GENERATED DOUBLE-DIGIT RETURNS DURING A PERIOD THAT BEGAN ON A FAVORABLE NOTE FOR STOCKS BUT LOST STEAM AS THE PERIOD WORE ON. o THE FUND'S LARGE CASH POSITION HURT PERFORMANCE RELATIVE TO ITS BENCHMARK, THE RUSSELL 3000 VALUE INDEX. HOWEVER, WE BELIEVE THAT STRONG STOCK SELECTION HELPED THE FUND DO BETTER THAN THE LIPPER MULTI-CAP VALUE FUND CATEGORY AVERAGE. [Illustration of two arrows pointing up] RUSSELL 3000 CLASS A SHARES VALUE INDEX 15.64% 17.64% OBJECTIVE Seeks long-term growth of capital by using a "value" approach to investing primarily in common stocks. TOTAL NET ASSETS $ 409.4 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) CLASS A 18.37 ------------------------------------------ CLASS B 18.17 ------------------------------------------ CLASS C 18.18 ------------------------------------------ CLASS D 18.17 ------------------------------------------ CLASS Z 18.42 DISTRIBUTIONS DECLARED PER SHARE 09/01/03 - 08/31/04 ($) CLASS A 0.07 ------------------------------------------ CLASS B 0.00 ------------------------------------------ CLASS C 0.00 ------------------------------------------ CLASS D 0.00 ------------------------------------------ CLASS Z 0.11 PORTFOLIO MANAGERS' REPORT _____________________________________________________ COLUMBIA STRATEGIC INVESTOR FUND For the 12-month period ended August 31, 2004, Columbia Strategic Investor Fund class A shares returned 15.64% without sales charge. The fund trailed the Russell 3000 Value Index, which returned 17.64%. However, it did better than the Lipper Multi-Cap Value Fund Category average, which was 14.16%. 1 Our decision to position the fund conservatively by building its cash position hampered returns relative to its benchmark. FOCUS ON ECONOMIC RECOVERY AND ENERGY SECTOR Our decision to emphasize sectors that could benefit from the economic recovery helped performance in the first half of the fiscal year, CNH Global, Eaton, Georgia Pacific (which we sold during the period), Dow Chemical and 3M all had a favorable impact, while energy stocks have been key to the fund's return thus far in 2004. Soaring oil and natural gas prices boosted the outlook for energy company earnings, including those of a key fund holding, oil services firm Transocean. We added Texas-based Input/Output and Norway's TGS Nopec Geophysical to the portfolio, expecting these seismic service companies to benefit as large oil companies sought new deposits of oil and gas. Both stocks posted sharp gains. CONSUMER AND HEALTH CARE SECTORS The fund benefited from gains in several non-US consumer stocks. Nokian Renkaat, a Finnish tire company, and Stockmann, a Finnish department store, benefited from healthy sales in their core markets as well as new growth opportunities in Russia and other former Soviet Union countries. However, we pared back our overall stake in consumer-related stocks during the period because of our concern that US consumer spending may slow down in an environment of slower economic growth and rising interest rates. The latter also led us to underweight financial services companies. In the health care sector, pharmaceuticals came under pressure amid patent expirations and anemic new product flows. Yet, some of the fund's non-pharmaceutical health care holdings posted robust gains. Both Biogen Idec, a biotechnology firm, and Cytyc, a testing company, reported gains. By contrast, health services provider Cardinal Health (no longer in the portfolio) declined amid investigations into its accounting practices. EMERGING MARKETS Fading prospects for sustained economic growth caused some emerging and other international markets to weaken during the second half of the period, after several consecutive quarters of positive returns. In Korea, Samsung Electronics fell sharply in late April as its earnings outlook clouded over. However, we continue to own the stock because we believe 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as the fund. 32 [Sidebar] TOP 5 SECTORS AS OF 08/31/04 (%) Health care 11.8 ---------------------------------------- Financials 11.4 ---------------------------------------- Industrials 11.4 ---------------------------------------- Consumer discretionary 9.9 ---------------------------------------- Energy 8.0 TOP 10 HOLDINGS AS OF 08/31/04 (%) 3M 1.5 ---------------------------------------- JPMorgan Chase & Co. 1.3 ---------------------------------------- Samsung Electronics 0.8 ---------------------------------------- DST Systems 0.8 ---------------------------------------- Microsoft 0.8 ---------------------------------------- Transocean 0.7 ---------------------------------------- Potash Corp. of Saskatchewan 0.7 ---------------------------------------- Citigroup 0.7 ---------------------------------------- Schlumberger 0.7 ---------------------------------------- HSBC 0.7 HOLDINGS DISCUSSED IN THIS REPORT AS OF 08/31/04 (%) CNH Global 0.1 ---------------------------------------- Eaton 0.6 ---------------------------------------- Dow Chemical 0.3 ---------------------------------------- 3M 1.5 ---------------------------------------- Transocean 0.7 ---------------------------------------- Input/Output 0.5 ---------------------------------------- TGS Nopec Geophysical 0.5 ---------------------------------------- Stockmann 0.4 ---------------------------------------- Biogen Idec 0.5 ---------------------------------------- Cytyc 0.4 ---------------------------------------- Samsung Electronics 0.8 ---------------------------------------- Millicom International Cellular 0.4 ---------------------------------------- Nestle 0.6 ---------------------------------------- Unilever 0.5 ---------------------------------------- Nokian Renkaat 0.7 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA STRATEGIC INVESTOR FUND the company has the potential to rebound. Millicom International Cellular, which provides cellular phone services in more than a dozen developing countries, recorded a strong gain for the period despite recent profit-taking. Questions about the company's licensing in Pakistan made investors uneasy, as did concerns that arose in other emerging markets where the company operates. We trimmed our position in the stock. MORE CONSERVATIVE POSITIONING FOR PORTFOLIO Beginning in April, larger-capitalization stocks began to outperform small- and mid-sized issues. This shift, coupled with our concern about the sustainability of the economic recovery, precipitated our move to place the portfolio on a more conservative footing. To do this, we cut back on our exposure to economically sensitive sectors, and shifted our emphasis to larger, more stable growth stocks in less cyclical sectors. Among our additions were, Nestle and Unilever. In keeping with our cautious outlook, we allowed the fund's cash position to rise to approximately 22% by the period's end. [PHOTO OF Robert A. Unger] Robert A. Unger, CFA, has managed or co-managed Columbia Strategic Investor Fund since November 2000 and has been with the advisor and its predecessors since 1984. /s/ Robert A. Unger [PHOTO OF Emil A. Gjester] Emil A. Gjester has served as an assistant portfolio manager or co-portfolio manager of the fund since November 2002 and has been with the advisor and its predecessors since 1996. /s/ Emil A. Gjester An investment in the fund may present certain risks, including stock market fluctuations that occur in response to economic and business developments; and a greater degree of social, political and economic volatility associated with international investing. Stocks of small- and mid-cap companies may trade less frequently, may trade smaller volumes and may fluctuate more sharply in price than stocks of larger companies. 33 PERFORMANCE OF A $ 10,000 INVESTMENT 09/01/94 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 20,769 19,570 ------------------------------------------ Class B 20,483 20,483 ------------------------------------------ Class C 20,483 20,483 ------------------------------------------ Class D 20,500 20,296 ------------------------------------------ Class Z 20,914 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA BALANCED FUND VALUE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 [MOUNTAIN CHART] LEHMAN CLASS A CLASS A BROTHERS SHARES WITHOUT SHARES WITH S&P 500 AGGREGATE SALES CHARGE SALES CHARGE INDEX BOND INDEX -------------- ------------ ---------- ---------- 09/1994 10000.00 9425.00 10000.00 10000.00 9805.00 9241.00 9755.00 9853.00 9822.00 9257.00 9974.00 9844.00 9681.00 9125.00 9611.00 9822.00 9822.00 9257.00 9754.00 9890.00 9958.00 9386.00 10006.00 10086.00 10288.00 9696.00 10397.00 10326.00 10436.00 9836.00 10703.00 10389.00 10567.00 9960.00 11018.00 10535.00 10934.00 10305.00 11459.00 10942.00 11077.00 10440.00 11724.00 11022.00 11291.00 10642.00 12114.00 10998.00 11413.00 10757.00 12144.00 11131.00 11673.00 11002.00 12656.00 11239.00 11656.00 10986.00 12611.00 11385.00 12001.00 11311.00 13165.00 11556.00 12284.00 11578.00 13419.00 11718.00 12438.00 11722.00 13875.00 11795.00 12431.00 11716.00 14004.00 11590.00 12529.00 11809.00 14138.00 11509.00 12578.00 11855.00 14346.00 11444.00 12702.00 11971.00 14716.00 11421.00 12820.00 12083.00 14772.00 11574.00 12558.00 11836.00 14119.00 11606.00 12758.00 12024.00 14417.00 11586.00 13144.00 12389.00 15229.00 11787.00 13301.00 12536.00 15649.00 12049.00 13878.00 13080.00 16832.00 12255.00 13732.00 12943.00 16499.00 12141.00 14070.00 13261.00 17530.00 12179.00 14111.00 13300.00 17667.00 12209.00 13899.00 13100.00 16941.00 12074.00 14289.00 13467.00 17952.00 12255.00 14766.00 13917.00 19045.00 12371.00 15209.00 14334.00 19899.00 12518.00 16076.00 15151.00 21483.00 12856.00 15587.00 14691.00 20280.00 12747.00 16028.00 15106.00 21391.00 12935.00 15847.00 14936.00 20676.00 13122.00 16159.00 15230.00 21634.00 13182.00 16305.00 15367.00 22006.00 13316.00 16533.00 15582.00 22250.00 13486.00 17112.00 16128.00 23854.00 13475.00 17599.00 16587.00 25076.00 13521.00 17699.00 16682.00 25329.00 13591.00 17623.00 16610.00 24893.00 13720.00 18214.00 17166.00 25904.00 13837.00 18137.00 17094.00 25629.00 13866.00 16775.00 15811.00 21923.00 14092.00 17347.00 16350.00 23329.00 14422.00 17909.00 16879.00 25225.00 14346.00 18572.00 17504.00 26754.00 14427.00 19578.00 18453.00 28295.00 14471.00 20136.00 18979.00 29478.00 14573.00 19689.00 18557.00 28561.00 14318.00 20331.00 19162.00 29703.00 14397.00 20527.00 19346.00 30853.00 14443.00 20126.00 18969.00 30125.00 14316.00 20815.00 19618.00 31797.00 14270.00 20402.00 19229.00 30805.00 14209.00 20162.00 19002.00 30654.00 14202.00 20067.00 18913.00 29814.00 14366.00 20689.00 19499.00 31701.00 14420.00 21130.00 19915.00 32345.00 14418.00 22061.00 20793.00 34250.00 14349.00 21552.00 20313.00 32530.00 14302.00 22177.00 20902.00 31915.00 14475.00 23587.00 22231.00 35037.00 14666.00 23094.00 21766.00 33982.00 14623.00 22519.00 21224.00 33286.00 14616.00 23265.00 21927.00 34108.00 14920.00 23193.00 21859.00 33576.00 15056.00 24188.00 22797.00 35661.00 15274.00 23167.00 21835.00 33778.00 15370.00 22824.00 21512.00 33636.00 15472.00 21858.00 20602.00 30985.00 15725.00 22245.00 20966.00 31137.00 16018.00 22652.00 21350.00 32243.00 16281.00 21228.00 20007.00 29302.00 16422.00 20502.00 19323.00 27444.00 16504.00 21389.00 20159.00 29577.00 16435.00 21488.00 20252.00 29775.00 16534.00 21185.00 19967.00 29051.00 16596.00 21125.00 19911.00 28767.00 16968.00 20359.00 19188.00 26966.00 17163.00 19337.00 18225.00 24787.00 17364.00 19712.00 18578.00 25261.00 17727.00 20484.00 19307.00 27198.00 17482.00 20599.00 19415.00 27437.00 17371.00 20311.00 19143.00 27037.00 17511.00 20132.00 18974.00 26515.00 17681.00 20422.00 19248.00 27512.00 17388.00 19740.00 18605.00 25845.00 17725.00 19811.00 18672.00 25653.00 17876.00 18979.00 17888.00 23827.00 18029.00 18009.00 16974.00 21971.00 18247.00 18252.00 17203.00 22114.00 18556.00 17232.00 16241.00 19710.00 18856.00 17894.00 16865.00 21444.00 18770.00 18586.00 17517.00 22707.00 18764.00 17928.00 16897.00 21374.00 19152.00 17693.00 16676.00 20814.00 19170.00 17591.00 16579.00 20502.00 19434.00 17663.00 16647.00 20701.00 19419.00 18567.00 17499.00 22407.00 19580.00 19204.00 18100.00 23588.00 19944.00 19310.00 18199.00 23890.00 19904.00 19340.00 18228.00 24310.00 19235.00 19783.00 18646.00 24784.00 19362.00 19712.00 18579.00 24521.00 19875.00 20374.00 19203.00 25909.00 19691.00 20550.00 19368.00 26137.00 19738.00 21170.00 19953.00 27507.00 19939.00 21367.00 20139.00 28013.00 20099.00 21720.00 20471.00 28402.00 20316.00 21548.00 20309.00 27974.00 20468.00 20975.00 19769.00 27534.00 19936.00 21151.00 19935.00 27912.00 19856.00 21418.00 20186.00 28453.00 19969.00 20707.00 19516.00 27511.00 20167.00 08/2004 20769.00 19570.00 27614.00 20554.00 The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Lehman Brothers Aggregate Bond Index is a market value-weighted index that tracks the daily price, coupon, pay-downs, and total return performance of fixed-rate, publicly placed, dollar-denominated, and non-convertible investment grade debt issues with at least $100 million par amount outstanding and with at least one year to final maturity. The Standard & Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization U.S. stocks. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D Z - ----------------------------------------------------------------------------------------------------------- INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 10/01/91 - ----------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ----------------------------------------------------------------------------------------------------------- 1-year 4.99 -1.04 4.17 -0.83 4.18 3.18 4.14 2.11 5.27 - ----------------------------------------------------------------------------------------------------------- 5-year 0.59 -0.60 0.31 -0.02 0.31 0.31 0.33 0.13 0.73 - ----------------------------------------------------------------------------------------------------------- 10-year 7.58 6.94 7.43 7.43 7.43 7.43 7.44 7.34 7.66
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D Z - ----------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ----------------------------------------------------------------------------------------------------------- 1-year 10.93 4.55 10.12 5.12 10.12 9.12 10.15 8.05 11.34 - ----------------------------------------------------------------------------------------------------------- 5-year 0.57 -0.61 0.32 -0.01 0.32 0.32 0.34 0.13 0.71 - ----------------------------------------------------------------------------------------------------------- 10-year 8.43 7.79 8.30 8.30 8.30 8.30 8.31 8.20 8.51
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 5.75% FOR CLASS A SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS, IF ANY. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, the class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, and D (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C, and D would have been lower. 34 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA BALANCED FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - ----------------------------------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - ----------------------------------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 958.78 1,019.96 5.07 5.23 1.03 - ----------------------------------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 954.50 1,016.19 8.75 9.02 1.78 - ----------------------------------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 953.15 1,016.19 8.74 9.02 1.78 - ----------------------------------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 953.10 1,016.19 8.74 9.02 1.78 - ----------------------------------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 957.67 1,021.22 3.84 3.96 0.78
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 35 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 4.99% WITHOUT SALES CHARGE. o THE FUND UNDERPERFORMED THE S&P 500 INDEX, THE LIPPER BALANCED FUNDS CATEGORY AVERAGE AND THE LEHMAN BROTHERS AGGREGATE BOND INDEX. o THE FUND'S EMPHASIS ON CONSUMER DISCRETIONARY AND INFORMATION TECHNOLOGY STOCKS HURT PERFORMANCE IN THE STOCK SECTION OF THE PORTFOLIO. HOWEVER, THE FUND'S FIXED INCOME STRATEGY RESULTED IN SOLID GAINS. [Illustration of two arrows pointing up] S&P 500 CLASS A SHARES INDEX 4.99% 11.46% OBJECTIVE Seeks high total return by investing in common stocks and debt securities. TOTAL NET ASSETS $ 494.7 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 19.86 ------------------------------------------ Class B 19.83 ------------------------------------------ Class C 19.83 ------------------------------------------ Class D 19.82 ------------------------------------------ Class Z 19.84 DISTRIBUTIONS DECLARED PER SHARE 09/01/03 - 08/31/04 ($) Class A 0.28 ------------------------------------------ Class B 0.13 ------------------------------------------ Class C 0.12 ------------------------------------------ Class D 0.15 ------------------------------------------ Class Z 0.36 PORTFOLIO MANAGERS' REPORT _____________________________________________________ COLUMBIA BALANCED FUND For the 12-month period ended August 31, 2004, Columbia Balanced Fund class A shares returned 4.99% without sales charge. That was lower than both the Lehman Brothers Aggregate Bond Index, which returned 6.13%, and the S&P 500 Index, which returned 11.46%. The fund also underperformed the Lipper Balanced Funds Category average, which was 8.10%. 1 Overexposure to the technology and consumer discretionary sectors hurt stock portfolio performance. Through the course of the year, the fund was also underweight in energy and utility stocks, which had a strong run during the period. In the fixed income portion of the fund, mortgage-backed securities and corporate bonds helped performance. The fund's fixed income component slightly outperformed the Lehman Brothers Aggregate Bond Index. STOCKS AND BONDS RESPOND TO RISING ECONOMY Although the fund had impressive returns from selected companies, losers outnumbered winners over the course of the year. Tech stocks QUALCOMM and Yahoo! rose more than 70% during the period, and we took profits and sold both stocks. However losses from other tech holdings, including Veritas Software and Seagate Technology (both of which we sold), outweighed those gains. Fixed income securities were stronger than expected because interest rates rose more slowly than anticipated. The bond market rallied late in 2003 and, despite a volatile spring, delivered positive returns for the 12-month period. BULLISH ON CONSUMER DISCRETIONARY SECTOR, CAUTIOUS ON CONSUMER STAPLES While our above-index exposure to consumer discretionary stocks did not help relative returns during this reporting period, we continue to believe that the modest economic growth we expect in the coming year could favor this sector. We have recently purchased DirecTV Group and increased positions on Comcast. We have less confidence in the prospects for consumer staples stocks and have currently a low investment weight in that sector. Higher commodity prices have driven up the price of basic materials and we believe cost increases will begin to affect the profitability of consumer staples companies in the coming year. At the end of the period, we eliminated positions in companies we believe might be affected by this trend, including Kellogg, Hershey and Avon Products. NEW HOLDING IN INDUSTRIALS In a variation on that theme, we added Southwest Airlines to the portfolio at the end of the period because we were impressed that the company anticipated rising fuel costs and took action to control them. Southwest has locked in its fuel costs for 2004 at $24 a barrel, and has locked in 50% 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as those of the fund. 36 [Sidebar] PORTFOLIO COMPOSITION AS OF 08/31/04 (%) Common stocks 63.3 ------------------------------------------ Corporate notes & bonds 14.5 ------------------------------------------ Commercial mortgage- sacked securities 8.6 ------------------------------------------ Collateralized mortgage obligations 6.6 ------------------------------------------ Cash & equivalents 3.5 ------------------------------------------ Government issues 2.2 ------------------------------------------ Asset-backed securities 1.0 ------------------------------------------ Preferred Stock 0.3 TOP 10 EQUITY HOLDINGS AS OF 08/31/04 (%) Microsoft 2.5 ------------------------------------------ MGIC Investment 1.8 ------------------------------------------ JPMorgan Chase 1.6 ------------------------------------------ Citigroup 1.5 ------------------------------------------ Fannie Mae 1.4 ------------------------------------------ Pfizer 1.3 ------------------------------------------ DirecTV Group 1.3 ------------------------------------------ Time Warner 1.3 ------------------------------------------ Telefonos de Mexico SA 1.3 ------------------------------------------ Kohl's 1.3 HOLDINGS DISCUSSED IN THIS REPORT AS OF 08/31/04 (%) Comcast 1.1 ------------------------------------------ DirecTV Group 1.3 ------------------------------------------ Southwest Airlines 1.0 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA BALANCED FUND of its supply for 2005 at $25 a barrel. With oil prices in the $40 range throughout much of this year, and many airlines struggling financially, we believe this has enhanced Southwest's competitive position. PORTFOLIO STRUCTURE HELPED FIXED INCOME RETURNS In the fixed income portion of the portfolio, the fund used a "barbell" strategy to deal with a fluctuating interest-rate environment. We avoided owning securities in the two-to three-year maturity range and concentrated on both shorter and longer-term securities. When interest rates rose, securities in that two- to three-year range were hit hardest, longer-term securities did the best, and our strategy helped the fund gain ground. The fund's overall duration was shorter than that of the benchmark--which would generally be a negative in a period of declining long-term rates. However, the fund's under-weight exposure to securities in the two-to-three year maturity range helped our competitive performance because interest rates in that maturity range rose during the period. Duration is a measure of interest rate sensitivity. A small position in relatively higher quality, high-yield corporate bonds and an above-index weight in structured mortgage-backed securities also helped the fund's return. When mortgage rates change, structured mortgage-backed securities are less affected by prepayment activity than traditional mortgage-backed securities. CAUTIOUS OPTIMISM GOING FORWARD Although we are generally confident about the prospects for US economic growth, we believe that it will advance more slowly in the year ahead. We expect that the Federal Reserve Board will continue to increase short-term interest rates in a measured way, as it has indicated, and we have positioned the portfolio to take advantage of opportunities we believe suitable to this environment. Columbia Balanced Fund is managed by a group of managers from Columbia's large cap core team: /s/ John Maack /s/ Guy W. Pope John Maack Guy W. Pope, CFA and Columbia's bond team: /s/ Leonard A. Aplet /s/ Jeffrey L. Rippey Leonard A. Aplet, CFA Jeffrey L. Rippey, CFA An investment in the fund may present certain risks, including stock market fluctuations that occur in response to economic and business developments. The fund is also subject to risks associated with investments in bonds, including interest rate risk, credit risk and prepayment risk. High-yield bonds include increased risk of issuer default and potentially higher price volatility than other fixed-income investments. 37 [Sidebar] PERFORMANCE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 16,484 15,695 ------------------------------------------ Class B 16,250 16,250 ------------------------------------------ Class C 16,331 16,331 ------------------------------------------ Class D 16,432 16,272 ------------------------------------------ Class G 16,318 16,318 ------------------------------------------ Class T 16,515 15,725 ------------------------------------------ Class Z 16,574 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA SHORT TERM BOND FUND VALUE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 [MOUNTAIN CHART] MERRILL LYNCH MERRILL LYNCH CLASS A CLASS A 1-3 YEAR 1-5 YEAR SHARES WITHOUT SHARES WITH TREASURY GOVERNMENT/ SALES CHARGE SALES CHARGE INDEX CORPORATE INDEX -------------- ------------ ------------- --------------- 09/1994 10000.00 9525.00 10000.00 10000.00 9969.00 9495.00 9977.00 9948.00 9988.00 9514.00 9999.00 9962.00 9958.00 9485.00 9954.00 9910.00 9969.00 9495.00 9977.00 9936.00 10093.00 9613.00 10116.00 10087.00 10200.00 9715.00 10254.00 10258.00 10252.00 9765.00 10312.00 10320.00 10340.00 9849.00 10403.00 10426.00 10505.00 10006.00 10585.00 10670.00 10552.00 10051.00 10643.00 10734.00 10585.00 10082.00 10686.00 10762.00 10644.00 10139.00 10750.00 10836.00 10690.00 10182.00 10803.00 10898.00 10790.00 10277.00 10894.00 11005.00 10901.00 10383.00 10990.00 11122.00 10986.00 10464.00 11074.00 11222.00 11084.00 10557.00 11168.00 11322.00 11005.00 10482.00 11121.00 11243.00 10955.00 10435.00 11111.00 11212.00 10944.00 10424.00 11120.00 11201.00 10950.00 10430.00 11144.00 11209.00 11035.00 10511.00 11224.00 11305.00 11071.00 10545.00 11268.00 11346.00 11092.00 10565.00 11306.00 11373.00 11208.00 10676.00 11409.00 11498.00 11341.00 10803.00 11538.00 11657.00 11431.00 10888.00 11627.00 11771.00 11410.00 10868.00 11627.00 11740.00 11458.00 10914.00 11681.00 11793.00 11474.00 10929.00 11708.00 11813.00 11441.00 10898.00 11703.00 11785.00 11546.00 10998.00 11799.00 11898.00 11611.00 11060.00 11880.00 11985.00 11688.00 11133.00 11962.00 12078.00 11823.00 11262.00 12093.00 12256.00 11815.00 11254.00 12104.00 12239.00 11892.00 11327.00 12196.00 12353.00 11985.00 11415.00 12286.00 12464.00 11989.00 11420.00 12316.00 12487.00 12068.00 11495.00 12400.00 12580.00 12190.00 11611.00 12520.00 12727.00 12176.00 11597.00 12531.00 12724.00 12210.00 11630.00 12582.00 12774.00 12272.00 11689.00 12642.00 12834.00 12336.00 11750.00 12709.00 12912.00 12384.00 11796.00 12775.00 12987.00 12434.00 11843.00 12835.00 13046.00 12601.00 12003.00 12996.00 13235.00 12783.00 12176.00 13168.00 13472.00 12845.00 12235.00 13233.00 13515.00 12799.00 12191.00 13221.00 13496.00 12845.00 12235.00 13267.00 13546.00 12889.00 12277.00 13320.00 13614.00 12788.00 12181.00 13255.00 13491.00 12877.00 12265.00 13346.00 13602.00 12902.00 12290.00 13389.00 13647.00 12868.00 12256.00 13381.00 13593.00 12909.00 12296.00 13422.00 13633.00 12936.00 12321.00 13465.00 13648.00 12948.00 12333.00 13504.00 13675.00 13023.00 12404.00 13592.00 13786.00 13037.00 12418.00 13629.00 13818.00 13050.00 12430.00 13655.00 13840.00 13075.00 12454.00 13674.00 13843.00 13063.00 12443.00 13668.00 13812.00 13144.00 12520.00 13760.00 13910.00 13197.00 12570.00 13845.00 14019.00 13232.00 12604.00 13881.00 14028.00 13286.00 12655.00 13938.00 14069.00 13390.00 12754.00 14083.00 14255.00 13446.00 12808.00 14172.00 14356.00 13536.00 12893.00 14277.00 14490.00 13593.00 12948.00 14379.00 14620.00 13652.00 13003.00 14457.00 14686.00 13803.00 13148.00 14594.00 14855.00 14026.00 13359.00 14768.00 15070.00 14198.00 13524.00 14953.00 15289.00 14314.00 13635.00 15050.00 15408.00 14419.00 13734.00 15175.00 15548.00 14435.00 13749.00 15216.00 15557.00 14519.00 13829.00 15301.00 15649.00 14569.00 13877.00 15353.00 15707.00 14792.00 14090.00 15525.00 15958.00 14912.00 14204.00 15615.00 16075.00 15113.00 14396.00 15873.00 16363.00 15298.00 14571.00 16023.00 16556.00 15198.00 14476.00 15988.00 16456.00 15160.00 14440.00 15995.00 16422.00 15216.00 14494.00 16027.00 16469.00 15285.00 14559.00 16104.00 16571.00 15198.00 14476.00 15994.00 16406.00 15382.00 14651.00 16173.00 16632.00 15476.00 14740.00 16238.00 16760.00 15567.00 14827.00 16374.00 16906.00 15659.00 14915.00 16574.00 17122.00 15770.00 15021.00 16630.00 17268.00 15934.00 15177.00 16768.00 17487.00 15848.00 15095.00 16807.00 17486.00 15851.00 15098.00 16755.00 17454.00 15995.00 15235.00 16914.00 17721.00 16014.00 15254.00 16912.00 17730.00 16141.00 15374.00 16983.00 17886.00 16155.00 15388.00 17014.00 17922.00 16218.00 15448.00 17046.00 18002.00 16340.00 15564.00 17111.00 18195.00 16347.00 15570.00 17137.00 18219.00 16106.00 15341.00 17044.00 17984.00 16126.00 15360.00 17056.00 17994.00 16297.00 15523.00 17211.00 18281.00 16244.00 15473.00 17148.00 18169.00 16233.00 15462.00 17139.00 18167.00 16335.00 15559.00 17238.00 18305.00 16383.00 15605.00 17273.00 18373.00 16430.00 15650.00 17356.00 18505.00 16496.00 15712.00 17410.00 18609.00 16351.00 15574.00 17243.00 18319.00 16300.00 15526.00 17227.00 18271.00 16310.00 15535.00 17225.00 18291.00 16378.00 15600.00 17287.00 18397.00 08/2004 16484.00 15695.00 17404.00 18608.00 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Merrill Lynch 1-3 Year Treasury Index is an unmanaged index that measures the return of Treasury bills with maturities of 1-3 years and is intended to provide a benchmark for the prior investment objective and strategy of the fund. The Merrill Lynch 1-5 Year Government/Corporate Index is an unmanaged index that includes all US government debt with at least $100 million face value outstanding, as well as investment-grade rated corporate debt with at least $100 million face value outstanding and a maturity of 1-5 years. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D G T Z - -------------------------------------------------------------------------------------------------------------------------------- INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 11/01/02 11/01/02 11/06/86 - -------------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - -------------------------------------------------------------------------------------------------------------------------------- 1-year 2.25 -2.61 1.44 -3.56 1.94 0.94 2.08 0.03 1.65 -3.35 2.31 -2.55 2.51 - -------------------------------------------------------------------------------------------------------------------------------- 5-year 4.95 3.94 4.65 4.32 4.75 4.75 4.88 4.68 4.74 4.24 4.99 3.98 5.07 - -------------------------------------------------------------------------------------------------------------------------------- 10-year 5.12 4.61 4.97 4.97 5.03 5.03 5.09 4.99 5.02 5.02 5.14 4.63 5.18
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D G T Z - -------------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - -------------------------------------------------------------------------------------------------------------------------------- 1-year -0.21 -4.98 -0.98 -5.88 -0.61 -1.59 -0.36 -2.34 -0.78 -5.68 -0.13 -4.91 0.05 - -------------------------------------------------------------------------------------------------------------------------------- 5-year 4.79 3.78 4.52 4.18 4.60 4.60 4.73 4.53 4.60 4.09 4.83 3.82 4.90 - -------------------------------------------------------------------------------------------------------------------------------- 10-year 5.12 4.61 4.99 4.99 5.03 5.03 5.09 4.99 5.02 5.02 5.14 4.62 5.17
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 4.75% FOR CLASS A AND T SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B AND G SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, D, G and T (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C, D, G and T would have been lower. 38 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA SHORT TERM BOND FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - ----------------------------------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - ----------------------------------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 1,003.97 1,020.56 4.58 4.62 0.91 - ----------------------------------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 999.95 1,016.79 8.35 8.42 1.66 - ----------------------------------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 1,003.37 1,019.81 5.34 5.38 1.06 - ----------------------------------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 1,003.07 1,019.81 5.34 5.38 1.06 - ----------------------------------------------------------------------------------------------------------------------------------- Class G 1,000.00 1,000.00 1,001.11 1,017.80 7.34 7.41 1.46 - ----------------------------------------------------------------------------------------------------------------------------------- Class T 1,000.00 1,000.00 1,004.27 1,021.06 4.08 4.12 0.81 - ----------------------------------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 1,004.78 1,021.82 3.33 3.35 0.66
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. Had the Investment Advisor and/or Distributor not reimbursed a portion of expenses, total return would have been reduced. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 39 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 2.25% WITHOUT SALES CHARGE. o THE FUND'S RETURN WAS HIGHER THAN THE MERRILL LYNCH 1-3 YEAR TREASURY INDEX, LOWER THAN THE MERRILL LYNCH 1-5 YEAR GOVERNMENT/CORPORATE INDEX AND ON PAR WITH THE LIPPER SHORT INVESTMENT GRADE DEBT CATEGORY AVERAGE. o THE FUND MADE A STRONG SHOWING BY COMBINING SHORT-TERM FLOATING RATE INSTRUMENTS WITH SECURITIES AT THE LONGER END OF ITS MATURITY SPECTRUM AND BY EMPHASIZING MORTGAGE BONDS, WHICH HAVE PERFORMED WELL IN 2004. [Illustration of two arrows pointing up] MERRILL LYNCH 1-3 CLASS A SHARES YEAR TREASURY INDEX 2.25% 2.05% OBJECTIVE Seeks a high level of current income consistent with a high degree of principal stability by investing primarily in short- term, investment-grade, fixed income securities. TOTAL NET ASSETS $ 525.5 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 8.64 ------------------------------------------ Class B 8.64 ------------------------------------------ Class C 8.64 ------------------------------------------ Class D 8.64 ------------------------------------------ Class G 8.64 ------------------------------------------ Class T 8.64 ------------------------------------------ Class Z 8.64 DISTRIBUTIONS DECLARED PER SHARE 09/01/03 - 08/31/04 ($) Class A 0.17 ------------------------------------------ Class B 0.10 ------------------------------------------ Class C 0.14 ------------------------------------------ Class D 0.16 ------------------------------------------ Class G 0.12 ------------------------------------------ Class T 0.18 ------------------------------------------ Class Z 0.19 PORTFOLIO MANAGERS' REPORT _____________________________________________________ COLUMBIA SHORT TERM BOND FUND For the 12-month period ended August 31, 2004, Columbia Short Term Bond Fund class A shares returned 2.25% without sales charge. The fund's performance was higher than the benchmark Merrill Lynch 1-3 Year Treasury Index, which returned 2.05%, and lower than the Merrill Lynch 1-5 Year Government/Corporate Index, which returned 3.37%, during the period. The fund was on par with its peer group, the Lipper Short Investment Grade Debt Category whose average return was 2.26%. 1 The fund's barbell structure, which combines short-term floating rate instruments with securities at the longer end of its maturity spectrum, was chiefly responsible for the strong showing. BARBELL STRUCTURE HELPED PERFORMANCE For most of the 12-month period, the fixed-income market rewarded investors who were willing to take on risk by investing in bonds with longer maturities or lower credit quality. This environment was slightly negative for the fund, which concentrates on higher quality short-term bonds. In addition, the fund sacrificed some performance by maintaining a shorter duration than its index as long-term interest rates fell. Duration is a measure of interest-rate sensitivity. However, the fund was able to generate a competitive return because of its barbell structure. We owned short-term floating rate notes, which carried higher yields than Treasury securities of comparable maturities. We also owned longer-term securities--in this context, those with maturities of about five years--which increased in value as long-term interest rates declined. The Federal Reserve Board raised the federal funds rate--the key overnight bank lending rate--from 1.00% to 1.25% in June and to 1.50% in August. 2 In anticipation of the Fed's action, fixed income markets were weak during the spring and early summer. Lower quality bonds were especially weak, reversing a trend that had been in place for over a year. In this changed environment, the fund's relatively defensive positioning was helpful. MORTGAGE STRATEGY PAID OFF AS RATES FLUCTUATED The fund also was aided by its emphasis on the mortgage sector. During the first part of the period, we shifted investments from conventional pass through securities into structured instruments such as CMOs (collateralized mortgage obligations). This was a defensive move in advance of rising interest rates. Refinancing activity tends to slow when interest rates rise, delaying the return of principal to holders of conventional mortgage bonds. 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as the fund. 2 In September, the federal funds rate was raised to 1.75%. 40 [Sidebar] PORTFOLIO QUALITY AS OF 08/31/04 (%) Aaa 34.7 ------------------------------------------ Aa 9.5 ------------------------------------------ A 21.0 ------------------------------------------ Baa 11.7 ------------------------------------------ Agency 17.2 ------------------------------------------ Treasury 5.9 Portfolio quality is calculated as a percentage of total investments. Ratings shown represent the highest rating assigned to a particular bond by one of the following nationally recognized rating agencies: Standard & Poor's Corporation, Moody's Investors Service, Inc. or Fitch Ratings Ltd. PORTFOLIO COMPOSITION AS OF 08/31/04 (%) Corporate notes & bonds 39.2 ------------------------------------------ Collateralized mortgage obligations 26.1 ------------------------------------------ Asset-backed securities 11.0 ------------------------------------------ Mortgage-backed securities 11.0 ------------------------------------------ Cash & cash equivalents, net receivables & payables 6.5 ------------------------------------------ Government issues 6.2 MATURITY BREAKDOWN AS OF 08/31/04 (%) 0-1 years 44.1 ------------------------------------------ 1-3 years 34.6 ------------------------------------------ 3-5 years 18.9 ------------------------------------------ 5+ years 2.4 Your fund is actively managed and the composition of its portfolio will change over time. Portfolio composition and maturity breakdown are calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA SHORT TERM BOND FUND The benefit of our strategy emerged as short-term rates rose and long-term rates declined near the end of the period. In this environment, mortgage bonds were strong performers. FUND POSITIONED FOR HIGHER RATES AHEAD Because we had expected higher short-term interest rates for some time, we did not have to make significant adjustments to the fund after the Fed declared that a series of incremental rate hikes may be in store. In particular, our emphasis on floating rate securities, whose interest payments are adjusted with market rates, helped to position the fund for higher short-term rates. Leonard A. Aplet, CFA, has co-managed Columbia Short Term Bond Fund since November 2000 and has been with the advisor and its predecessors since 1987. /s/ Leonard A. Aplet Richard R. Cutts, CFA, has co-managed the fund since December 2002 and has been with the advisor and its predecessors since 1994. /s/ Richard R. Cutts The fund offers the potential for current income and capital preservation but is subject to interest rate risk, credit risk and prepayment risk. 41 [Sidebar] PERFORMANCE OF A $ 10,000 INVESTMENT 09/01/94 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 19,334 18,413 ------------------------------------------ Class B 19,067 19,067 ------------------------------------------ Class C 19,092 19,092 ------------------------------------------ Class D 19,137 18,942 ------------------------------------------ Class Z 19,481 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION_________________________________________________________ COLUMBIA FIXED INCOME SECURITIES FUND VALUE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 [MOUNTAIN CHART] LEHMAN CLASS A CLASS A BROTHERS SHARES WITHOUT SHARES WITH AGGREGATE SALES CHARGE SALES CHARGE BOND INDEX ------------ ------------ ---------- 09/1994 10000.00 9525.00 10000.00 9858.00 9390.00 9853.00 9836.00 9369.00 9844.00 9814.00 9348.00 9822.00 9889.00 9420.00 9890.00 10079.00 9600.00 10086.00 10308.00 9818.00 10326.00 10378.00 9885.00 10389.00 10531.00 10030.00 10535.00 10951.00 10431.00 10942.00 11038.00 10514.00 11022.00 11010.00 10487.00 10998.00 11148.00 10619.00 11131.00 11270.00 10735.00 11239.00 11418.00 10875.00 11385.00 11592.00 11042.00 11556.00 11759.00 11201.00 11718.00 11831.00 11269.00 11795.00 11612.00 11060.00 11590.00 11535.00 10987.00 11509.00 11447.00 10903.00 11444.00 11421.00 10879.00 11421.00 11582.00 11032.00 11574.00 11601.00 11050.00 11606.00 11592.00 11041.00 11586.00 11800.00 11240.00 11787.00 12050.00 11478.00 12049.00 12273.00 11690.00 12255.00 12157.00 11579.00 12141.00 12205.00 11626.00 12179.00 12243.00 11662.00 12209.00 12113.00 11538.00 12074.00 12292.00 11708.00 12255.00 12406.00 11817.00 12371.00 12549.00 11952.00 12518.00 12894.00 12281.00 12856.00 12779.00 12172.00 12747.00 12963.00 12347.00 12935.00 13160.00 12535.00 13122.00 13199.00 12572.00 13182.00 13320.00 12687.00 13316.00 13479.00 12839.00 13486.00 13469.00 12829.00 13475.00 13500.00 12858.00 13521.00 13570.00 12925.00 13591.00 13704.00 13053.00 13720.00 13815.00 13159.00 13837.00 13836.00 13179.00 13866.00 14061.00 13393.00 14092.00 14328.00 13648.00 14422.00 14202.00 13528.00 14346.00 14262.00 13585.00 14427.00 14312.00 13632.00 14471.00 14414.00 13729.00 14573.00 14137.00 13465.00 14318.00 14227.00 13552.00 14397.00 14274.00 13596.00 14443.00 14104.00 13434.00 14316.00 14042.00 13375.00 14270.00 13948.00 13286.00 14209.00 13920.00 13259.00 14202.00 14092.00 13422.00 14366.00 14131.00 13460.00 14420.00 14148.00 13476.00 14418.00 14093.00 13423.00 14349.00 14010.00 13344.00 14302.00 14153.00 13480.00 14475.00 14332.00 13652.00 14666.00 14282.00 13604.00 14623.00 14271.00 13593.00 14616.00 14580.00 13888.00 14920.00 14684.00 13986.00 15056.00 14907.00 14199.00 15274.00 15011.00 14298.00 15370.00 15094.00 14377.00 15472.00 15369.00 14639.00 15725.00 15681.00 14936.00 16018.00 15958.00 15200.00 16281.00 16097.00 15332.00 16422.00 16184.00 15415.00 16504.00 16082.00 15318.00 16435.00 16190.00 15421.00 16534.00 16237.00 15466.00 16596.00 16609.00 15820.00 16968.00 16768.00 15972.00 17163.00 16944.00 16139.00 17364.00 17286.00 16465.00 17727.00 17070.00 16259.00 17482.00 16956.00 16151.00 17371.00 17059.00 16249.00 17511.00 17198.00 16381.00 17681.00 16955.00 16150.00 17388.00 17269.00 16448.00 17725.00 17400.00 16573.00 17876.00 17464.00 16635.00 18029.00 17632.00 16794.00 18247.00 17934.00 17082.00 18556.00 18195.00 17331.00 18856.00 17984.00 17130.00 18770.00 17964.00 17111.00 18764.00 18238.00 17371.00 19152.00 18259.00 17392.00 19170.00 18513.00 17634.00 19434.00 18500.00 17622.00 19419.00 18639.00 17754.00 19580.00 18937.00 18038.00 19944.00 18877.00 17980.00 19904.00 18274.00 17406.00 19235.00 18390.00 17516.00 19362.00 18857.00 17961.00 19875.00 18691.00 17803.00 19691.00 18681.00 17794.00 19738.00 18853.00 17958.00 19939.00 18998.00 18096.00 20099.00 19175.00 18264.00 20316.00 19309.00 18392.00 20468.00 18863.00 17967.00 19936.00 18741.00 17851.00 19856.00 18819.00 17926.00 19969.00 18998.00 18096.00 20167.00 08/2004 19334.00 18413.00 20554.00 The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Lehman Brothers Aggregate Bond Index is a market value-weighted index that tracks the daily price, coupon, pay-downs, and total return performance of fixed-rate, publicly placed, dollar-denominated, and non-convertible investment grade debt issues with at least $100 million par amount outstanding and with at least one year to final maturity. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D Z - ---------------------------------------------------------------------------------------------------- INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 02/25/83 - ---------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ---------------------------------------------------------------------------------------------------- 1-year 5.13 0.10 4.33 -0.67 4.47 3.47 4.51 2.52 5.40 - ---------------------------------------------------------------------------------------------------- 5-year 6.79 5.75 6.49 6.18 6.52 6.52 6.57 6.35 6.95 - ---------------------------------------------------------------------------------------------------- 10-year 6.81 6.29 6.67 6.67 6.68 6.68 6.71 6.60 6.90
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D Z - ---------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ---------------------------------------------------------------------------------------------------- 1-year -0.30 -5.06 -1.05 -5.85 -0.95 -1.91 -0.85 -2.80 0.04 - ---------------------------------------------------------------------------------------------------- 5-year 6.04 5.01 5.77 5.45 5.79 5.79 5.84 5.63 6.19 - ---------------------------------------------------------------------------------------------------- 10-year 6.72 6.21 6.59 6.59 6.60 6.60 6.63 6.52 6.80
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 4.75% FOR CLASS A SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, the class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, and D (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C and D would have been lower. 42 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA FIXED INCOME SECURITIES FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 -- AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - ----------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - ----------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 1,010.05 1,019.61 5.56 5.58 1.10 - ----------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 1,005.78 1,015.84 9.33 9.37 1.85 - ----------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 1,005.93 1,016.59 8.57 8.62 1.70 - ----------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 1,005.78 1,016.59 8.57 8.62 1.70 - ----------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 1,008.95 1,020.86 4.29 4.32 0.85
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. Had the Distributor not waived a portion of expenses, total return would have been reduced. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 43 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 5.13% WITHOUT SALES CHARGE. o BECAUSE THE FUND WAS POSITIONED CONSERVATIVELY AT A TIME WHEN RISK-TAKING WAS REWARDED, IT TRAILED ITS BENCHMARK, THE LEHMAN BROTHERS AGGREGATE BOND INDEX, AND THE AVERAGE RETURN OF ITS PEER GROUP, THE LIPPER CORPORATE DEBT FUNDS A RATED CATEGORY. o A SUBSTANTIAL ALLOCATION TO MORTGAGE BONDS AIDED PERFORMANCE AS THESE BONDS DID EXCEPTIONALLY WELL. [Illustration of two arrows pointing up] LEHMAN BROTHERS AGGREGATE CLASS A SHARES BOND INDEX 5.13% 6.13% OBJECTIVE Seeks a high level of income by investing in a broad range of debt securities with intermediate to long-term maturities. TOTAL NET ASSETS $ 341.3 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 13.49 ------------------------------------------ Class B 13.49 ------------------------------------------ Class C 13.49 ------------------------------------------ Class D 13.49 ------------------------------------------ Class Z 13.49 DISTRIBUTIONS DECLARED PER SHARE 09/01/03 - 08/31/04 ($) Class A 0.52 ------------------------------------------ Class B 0.42 ------------------------------------------ Class C 0.40 ------------------------------------------ Class D 0.44 ------------------------------------------ Class Z 0.56 PORTFOLIO MANAGERS' REPORT _____________________________________________________ COLUMBIA FIXED INCOME SECURITIES FUND For the 12-month period ended August 31, 2004, Columbia Fixed Income Securities Fund class A shares returned 5.13% without sales charge. By comparison, the Lehman Brothers Aggregate Bond Index and the Lipper Corporate Debt Funds A Rated Category average returned 6.13% and 5.99%, respectively, over the same period. 1 The fund trailed its benchmark and peer group because it was positioned conservatively at a time when risk-taking was rewarded. CORPORATE BONDS OUTPERFORMED TREASURIES For most of the 12-month period, corporate bonds outperformed Treasury securities. As the economic recovery progressed, investors gained confidence in the corporate sector and were attracted to the higher yields it offered. For the full year, corporate bonds returned 7.49% as measured by the Lehman Brothers U.S. Credit Index, well above the 5.38% return from Treasury securities. Among corporate bond issues, securities with lower credit ratings tended to outperform those with higher ratings. Although we increased the fund's commitment to corporate bonds during the period, the portfolio's above-average credit quality caused a slight performance shortfall relative to its index and peer group. The fund devoted only 7% of its assets to the high-yield sector, which was by far the best performing sector within the fixed-income market during the period. Short-term interest rates rose relative to longer-term rates during the period. For maturities of 10 years and longer, this was somewhat better-than-expected performance for a time of sustained economic growth. As a result, longer-term maturities tended to outperform shorter-term securities. This trend was slightly negative for the fund, whose average maturity was slightly less than that of its index and peer group. SECTOR ALLOCATION AIDED PERFORMANCE The fund benefited from its substantial allocation to the mortgage sector, which gained 5.98% as measured by the Lehman Brothers Mortgage-Backed Securities Index during the 12-month period. Among our mortgage investments, we emphasized collateralized mortgage obligations, or CMOs, which offer a yield advantage over Treasuries and are less sensitive to changes in interest rates than conventional mortgage securities. Higher rates hurt conventional mortgage securities because fewer homeowners refinance their mortgages when interest rates rise, thus delaying the return of principal to bond holders. In a widely anticipated move, policymakers at the Federal Reserve Board raised a key overnight bank lending rate twice during the period. The Fed raised the federal funds rate from 1.00% to 1.25% in June and to 1.50% in August. 2 The fund's bias toward higher quality securities helped 1 Lipper, Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as the fund. 2 In September, the federal funds rate was raised to 1.75%. 44 [Sidebar] PORTFOLIO QUALITY AS OF 08/31/04 (%) Treasury/Agency 45.1 ------------------------------------------ Aaa 13.0 ------------------------------------------ Aa 7.9 ------------------------------------------ A 14.5 ------------------------------------------ Baa 12.4 ------------------------------------------ Ba 4.1 ------------------------------------------ B 3.0 Portfolio quality is calculated as a percentage of total investments. Ratings shown represent the highest rating assigned to a particular bond by one of the nationally recognized rating agencies: Standard and Poor's Corporation, Moody's Investors Service, Inc. or Fitch Ratings Ltd. PORTFOLIO COMPOSITION AS OF 08/31/04 (%) Corporate notes & bonds 42.5 ------------------------------------------ Collateralized mortgage obligations 23.8 ------------------------------------------ Mortgage-backed securities 22.2 ------------------------------------------ U.S. Government & Agency 5.9 ------------------------------------------ Asset-backed securities 4.0 ------------------------------------------ Cash & cash equivalents, net receivables & payables 1.6 MATURITY BREAKDOWN AS OF 08/31/04 (%) 0-1 years 13.4 ------------------------------------------ 1-5 years 51.2 ------------------------------------------ 5-10 years 25.0 ------------------------------------------ 10-20 years 2.4 ------------------------------------------ 20+ years 8.0 Your fund is actively managed and the composition of its portfolio will change over time. Portfolio composition and maturity breakdown are calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA FIXED INCOME SECURITIES FUND the fund after the Fed's action. Our minimal exposure to high-yield securities aided performance when low quality bonds declined sharply in July, erasing much of their earlier gains. DEFENSIVE POSITIONING MAINTAINED Now that the Fed has signaled its intentions to raise short-term interest rates at a "measured" pace, we see every reason to maintain our defensive positioning. Overall, we expect to keep the fund's average maturity relatively short and its average credit quality relatively high. In addition, we continue to emphasize floating rate securities and to maintain a small allocation to Treasury Inflation Protected Securities, or TIPs, which provide price protection against rising inflation. Leonard A. Aplet, CFA, has co-managed Columbia Fixed Income Securities Fund since January1988 and has been with the advisor and its predecessors since 1987. /s/ Leonard A. Aplet Richard R. Cutts, CFA, has co-managed the fund since December 2002 and has been with the advisor and its predecessors since 1994. /s/ Richard R. Cutts Investing in fixed-income securities offers the potential for attractive current income and total returns but also involves certain risks. The value and return of your investment may fluctuate as a result of changes in interest rates; the financial strength of issuers of lower-rated bonds; foreign, political and economic developments; and changes in currency exchange rates. 45 [Sidebar] PERFORMANCE OF A $ 10,000 INVESTMENT 02/24/99 - 08/31/04 ($) SALES CHARGE WITHOUT WITH -------------------------------------------- Class A 13,061 12,439 -------------------------------------------- Class B 12,886 12,786 -------------------------------------------- Class C 12,927 12,927 -------------------------------------------- Class D 12,962 12,834 -------------------------------------------- Class Z 13,129 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA NATIONAL MUNICIPAL BOND FUND VALUE OF A $10,000 INVESTMENT 02/24/99 - 08/31/04 [MOUNTAIN CHART] LEHMAN CLASS A CLASS A BROTHERS SHARES WITHOUT SHARES WITH MUNICIPAL SALES CHARGE SALES CHARGE BOND INDEX -------------- ------------ ---------- 02/1999 10000.00 9525.00 10000.00 9934.00 9462.00 10014.00 9920.00 9449.00 10039.00 9951.00 9478.00 9981.00 9893.00 9423.00 9837.00 9733.00 9271.00 9872.00 9768.00 9304.00 9794.00 9671.00 9212.00 9797.00 9675.00 9216.00 9692.00 9567.00 9112.00 9794.00 9674.00 9214.00 9721.00 9608.00 9152.00 9678.00 9543.00 9089.00 9790.00 9641.00 9183.00 10004.00 9868.00 9399.00 9945.00 9791.00 9326.00 9893.00 9714.00 9253.00 10155.00 9985.00 9511.00 10296.00 10110.00 9630.00 10455.00 10267.00 9779.00 10401.00 10209.00 9724.00 10514.00 10336.00 9845.00 10594.00 10407.00 9913.00 10856.00 10654.00 10148.00 10963.00 10749.00 10238.00 10998.00 10765.00 10253.00 11097.00 10861.00 10345.00 10977.00 10737.00 10227.00 11096.00 10844.00 10329.00 11170.00 10918.00 10399.00 11335.00 11082.00 10555.00 11522.00 11256.00 10721.00 11483.00 11216.00 10684.00 11620.00 11346.00 10807.00 11522.00 11217.00 10684.00 11413.00 11097.00 10570.00 11610.00 11297.00 10760.00 11750.00 11426.00 10883.00 11519.00 11205.00 10673.00 11744.00 11454.00 10910.00 11816.00 11517.00 10970.00 11941.00 11649.00 11096.00 12095.00 11818.00 11257.00 12240.00 11952.00 11384.00 12508.00 12236.00 11655.00 12300.00 12017.00 11446.00 12249.00 11950.00 11382.00 12507.00 12209.00 11629.00 12476.00 12137.00 11561.00 12651.00 12328.00 11742.00 12658.00 12339.00 11753.00 12742.00 12431.00 11841.00 13040.00 12733.00 12129.00 12985.00 12665.00 12063.00 12531.00 12210.00 11630.00 12625.00 12302.00 11717.00 12996.00 12694.00 12091.00 12931.00 12585.00 11987.00 13065.00 12694.00 12091.00 13174.00 12803.00 12195.00 13249.00 12851.00 12240.00 13448.00 13074.00 12453.00 13401.00 12985.00 12369.00 13083.00 12647.00 12046.00 13036.00 12644.00 12043.00 13083.00 12693.00 12090.00 13255.00 12843.00 12233.00 13524.00 08/2004 13061.00 12439.00 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Lehman Brothers Municipal Bond Index is an unmanaged index considered representative of the broad market for investment-grade, tax exempt bonds with a maturity of at least one year. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from February 28, 1999. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D Z INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 02/24/99 SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------- 1-year 6.22 1.17 5.44 0.44 5.77 4.77 5.79 3.77 6.47 - ------------------------------------------------------------------------------------------------- 5-year 6.19 5.17 5.91 5.59 5.98 5.98 6.03 5.81 6.30 - ------------------------------------------------------------------------------------------------- Life 4.96 4.04 4.70 4.56 4.76 4.76 4.82 4.63 5.06
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D Z - ------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------- 1-year 0.21 -4.55 -0.53 -5.32 -0.31 -1.27 -0.21 -2.19 0.42 - ------------------------------------------------------------------------------------------------- 5-year 5.44 4.42 5.19 4.86 5.23 5.23 5.30 5.08 5.55 - ------------------------------------------------------------------------------------------------- Life 4.55 3.60 4.31 4.16 4.36 4.36 4.42 4.22 4.65
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 4.75% FOR CLASS A SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, and D (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C, and D would have been lower. 46 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA NATIONAL MUNICIPAL BOND FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - ----------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - ----------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 999.40 1,020.61 4.52 4.57 0.90 - ----------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 995.73 1,016.84 8.28 8.36 1.65 - ----------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 997.89 1,018.60 6.53 6.60 1.30 - ----------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 997.39 1,018.60 6.53 6.60 1.30 - ----------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 1,000.55 1,021.87 3.27 3.30 0.65
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. Had the Investment Advisor and/or Distributor not reimbursed or waived a portion of expenses, total return would have been reduced. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 47 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 6.22% WITHOUT SALES CHARGE. o THE FUND UNDERPERFORMED ITS BENCHMARK, THE LEHMAN BROTHERS MUNICIPAL BOND INDEX, BUT OUTPERFORMED THE AVERAGE FOR ITS PEER GROUP, THE LIPPER INTERMEDIATE MUNICIPAL DEBT FUNDS CATEGORY. o THE FUND'S INVESTMENTS IN NON-RATED BONDS HELPED PERFORMANCE, WHILE OUR FOCUS ON INTERMEDIATE MATURITIES DETRACTED FROM PERFORMANCE. BONDS WITH LONGER MATURITIES GENERALLY PROVIDED HIGHER RETURNS. [Illustration of two arrows pointing up] LEHMAN BROTHERS MUNICIPAL BOND CLASS A SHARES INDEX 6.22% 7.11% OBJECTIVE Seeks a high level of income exempt from federal income tax by investing primarily in municipal securities issued by state and local governments, their agencies and authorities, as well as the District of Columbia and U.S. territories and possessions. TOTAL NET ASSETS $14.8 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 10.30 ------------------------------------------ Class B 10.30 ------------------------------------------ Class C 10.30 ------------------------------------------ Class D 10.30 ------------------------------------------ Class Z 10.30 DISTRIBUTIONS DECLARED PER SHARE 09/01/03 - 08/31/04 ($) Class A 0.43 ------------------------------------------ Class B 0.35 ------------------------------------------ Class C 0.35 ------------------------------------------ Class D 0.39 ------------------------------------------ Class Z 0.45 PORTFOLIO MANAGER'S REPORT _____________________________________________________ COLUMBIA NATIONAL MUNICIPAL BOND FUND For the 12-month period ended August 31, 2004, Columbia National Municipal Bond Fund class A shares returned 6.22% without sales charge. This was lower than the return of its benchmark, the Lehman Brothers Municipal Bond Index, which was 7.11% over the same period. However, the fund beat the average return of the Lipper Intermediate Municipal Debt Funds Category, which was 5.06%. 1 Our focus on intermediate-maturity bonds, at a time when bonds with longer maturities were providing higher returns, hurt performance relative to our benchmark. However, we believe that contributions from non-rated bonds, helped the fund outperform the average for its peer group. A VOLATILE PERIOD FOR MUNICIPAL BONDS Although municipal bonds provided good returns for the period covered by this report, they experienced considerable volatility--especially in the second half of the period. Early in the period, bond yields drifted lower and bond prices moved higher as inflation remained in check and manufacturers continued to operate below capacity. However interest rates rose sharply following strong employment reports in the spring of 2004. As a result, long-term yields rose sharply and bond prices fell. To complicate matters, non-traditional investors, such as hedge funds, moved money in and out of the municipal market in an attempt to take advantage of short-term price fluctuations. Their presence in the market heightened volatility. AVERAGE MATURITY REDUCED, GEOGRAPHIC DIVERSIFICATION INCREASED The fund continued to emphasize high-quality issues while increasing the portfolio's national diversification. We reduced the average maturity of the fund to 9.02 years and reduced the fund's duration to 5.5 years. Duration measures the fund's sensitivity to a given change in interest rates. Typically, we lower duration when we expect interest rates to rise and lengthen duration when we expect rates to fall. Thus, we lowered duration in an effort to give the portfolio some price protection against rising interest rates. The fund's non-rated bonds did well during the period as investors took on more risk for potentially higher returns. However, we sold some of these bonds during the period because we grew concerned about the financial strength of certain issuers. Proceeds from these sales were shifted into higher-quality bonds, which also aided the fund's geographic diversification. For example, we reduced the fund's exposure to Oregon and Washington State and put more money in California, Florida and New York, where we saw the potential to add yield and value to the portfolio. 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as the fund. 48 [Sidebar] PORTFOLIO QUALITY AS OF 08/31/04 (%) AAA 58.8 ------------------------------------------ AA 15.8 ------------------------------------------ A 4.0 ------------------------------------------ BBB 1.1 ------------------------------------------ Non Rated 11.0 ------------------------------------------ Net cash & equivalents 9.3 Ratings shown represent the highest rating assigned to a particular bond by one of the nationally-recognized rating agencies: Standard and Poor's Corporation, Moody's Investors Service, Inc. or Fitch Ratings, Ltd. TOP 10 STATES AS OF 08/31/04 (%) Washington 13.1 ------------------------------------------ Oregon 10.2 ------------------------------------------ Illinois 8.2 ------------------------------------------ Michigan 4.8 ------------------------------------------ Texas 4.7 ------------------------------------------ Tennessee 4.4 ------------------------------------------ New York 3.8 ------------------------------------------ Indiana 3.6 ------------------------------------------ Wisconsin 3.6 ------------------------------------------ California 3.3 Your fund is actively managed and the composition of its portfolio will change over time. Portfolio composition and holdings discussed are calculated as a percentage of net assets. MATURITY BREAKDOWN AS OF 08/31/04 (%) 0-1 years 1.4 ------------------------------------------ 1-3 years 1.8 ------------------------------------------ 3-5 years 4.4 ------------------------------------------ 5-7 years 10.5 ------------------------------------------ 7-10 years 28.1 ------------------------------------------ 10-15 years 36.7 ------------------------------------------ 15-20 years 7.1 ------------------------------------------ 20-25 years 0.7 ------------------------------------------ Net cash & equivalents 9.3 Portfolio quality and maturity breakdown are calculated as a percentage of total investments. ABOUT DURATION Duration is a measure, expressed in years, of interest-rate sensitivity. It is similar to maturity, but because it takes into consideration the entire stream of future principal and interest payments and how long it will take to collect them, it is a more complex and more accurate measure of a fund's exposure to changing interest rates. Because we are active duration managers, we tend to use duration as a tactical tool to anticipate or respond to interest rate changes. Because bond prices and interest rates move in opposite directions, we lower duration when we expect interest rates to rise and we raise duration when we expect interest rates to fall. This adjustment provides the potential to benefit performance. If we are wrong and interest rates rise after we lengthen duration, or fall after we shorten duration, fund performance could be hurt. ________________________________________________________________________________ COLUMBIA NATIONAL MUNICIPAL BOND FUND POTENTIAL FOR A MORE STABLE ECONOMIC ENVIRONMENT Our outlook is for a more stable economic climate for municipal bonds in coming months. As long as growth is maintained at a modest pace, state and local governments should be able to expect higher tax revenues, which would aid their balance sheets and maintain or improve their credit ratings. These factors have the potential to create a better environment for existing bonds. Going forward, we plan to maintain our focus on intermediate-maturity bonds. However, given that interest rates are higher than they were one year ago, our focus has shifted away from the longer end of the intermediate maturity range, because these bonds are more vulnerable to rising rates than prices of shorter-term bonds. We continue to reduce the fund's already small position in bonds subject to the alternative minimum tax. Susan Sanderson has managed Columbia National Municipal Bond Fund since December 2003 and has been with the advisor and its predecessors since 1985. /s/ Susan Sanderson Tax-exempt investing offers current tax-free income, but it also involves certain risks. The value of the fund shares will be affected by interest rate changes and the creditworthiness of issues held in the fund. Interest income from certain tax-exempt bonds may be subject to the federal alternative minimum tax for individuals and corporations. Capital gains earned on tax-exempt investments are taxable. 49 [Sidebar] PERFORMANCE OF A $ 10,000 INVESTMENT 09/01/94 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 17,411 16,580 ------------------------------------------ Class B 17,174 17,174 ------------------------------------------ Class C 17,228 17,228 ------------------------------------------ Class D 17,292 17,120 ------------------------------------------ Class Z 17,526 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA OREGON MUNICIPAL BOND FUND VALUE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 [MOUNTAIN CHART] LEHMAN BROTHERS CLASS A CLASS A GENERAL SHARES WITHOUT SHARES WITH OBLIGATION SALES CHARGE SALES CHARGE BOND INDEX -------------- ------------ ---------- 09/1994 10000.00 9525.00 10000.00 9868.00 9399.00 9860.00 9746.00 9283.00 9718.00 9588.00 9132.00 9565.00 9779.00 9314.00 9735.00 10013.00 9538.00 9965.00 10236.00 9749.00 10229.00 10343.00 9852.00 10367.00 10354.00 9863.00 10374.00 10609.00 10105.00 10683.00 10524.00 10024.00 10610.00 10615.00 10111.00 10732.00 10750.00 10239.00 10869.00 10822.00 10308.00 10938.00 10948.00 10428.00 11063.00 11100.00 10573.00 11219.00 11165.00 10634.00 11308.00 11229.00 10696.00 11417.00 11173.00 10643.00 11365.00 11056.00 10531.00 11239.00 11011.00 10488.00 11199.00 11003.00 10480.00 11181.00 11113.00 10585.00 11294.00 11206.00 10674.00 11402.00 11207.00 10675.00 11400.00 11337.00 10799.00 11541.00 11451.00 10907.00 11676.00 11630.00 11077.00 11893.00 11583.00 11033.00 11845.00 11613.00 11061.00 11877.00 11706.00 11150.00 11985.00 11582.00 11032.00 11831.00 11658.00 11105.00 11923.00 11795.00 11235.00 12101.00 11901.00 11336.00 12231.00 12204.00 11625.00 12548.00 12126.00 11550.00 12436.00 12254.00 11672.00 12578.00 12314.00 11729.00 12647.00 12372.00 11784.00 12707.00 12551.00 11955.00 12887.00 12671.00 12070.00 13020.00 12656.00 12055.00 13030.00 12646.00 12045.00 13042.00 12603.00 12004.00 12973.00 12786.00 12178.00 13186.00 12814.00 12205.00 13233.00 12843.00 12233.00 13265.00 13037.00 12418.00 13475.00 13199.00 12572.00 13655.00 13177.00 12551.00 13658.00 13216.00 12588.00 13703.00 13250.00 12621.00 13748.00 13417.00 12780.00 13928.00 13314.00 12682.00 13857.00 13322.00 12689.00 13863.00 13361.00 12726.00 13902.00 13239.00 12610.00 13824.00 13051.00 12431.00 13622.00 13102.00 12480.00 13676.00 12989.00 12372.00 13596.00 12996.00 12379.00 13608.00 12862.00 12251.00 13490.00 12991.00 12374.00 13627.00 12898.00 12286.00 13541.00 12818.00 12210.00 13491.00 12926.00 12312.00 13626.00 13195.00 12568.00 13901.00 13124.00 12500.00 13831.00 13042.00 12423.00 13757.00 13358.00 12723.00 14111.00 13540.00 12897.00 14297.00 13745.00 13093.00 14501.00 13673.00 13023.00 14428.00 13822.00 13165.00 14579.00 13911.00 13251.00 14681.00 14223.00 13547.00 15028.00 14385.00 13702.00 15191.00 14426.00 13740.00 15237.00 14542.00 13852.00 15371.00 14385.00 13702.00 15211.00 14539.00 13849.00 15365.00 14631.00 13936.00 15460.00 14833.00 14128.00 15680.00 15072.00 14356.00 15932.00 15031.00 14317.00 15897.00 15222.00 14499.00 16059.00 15047.00 14332.00 15918.00 14869.00 14163.00 15790.00 15111.00 14394.00 16049.00 15288.00 14562.00 16245.00 15013.00 14300.00 15935.00 15307.00 14580.00 16263.00 15404.00 14672.00 16353.00 15586.00 14845.00 16536.00 15794.00 15044.00 16741.00 15981.00 15222.00 16932.00 16331.00 15555.00 17274.00 16032.00 15270.00 16994.00 15910.00 15154.00 16911.00 16224.00 15453.00 17242.00 16160.00 15393.00 17213.00 16411.00 15631.00 17450.00 16398.00 15619.00 17483.00 16512.00 15728.00 17597.00 16904.00 16101.00 17986.00 16811.00 16012.00 17900.00 16211.00 15441.00 17305.00 16316.00 15541.00 17466.00 16807.00 16009.00 17968.00 16684.00 15892.00 17847.00 16860.00 16059.00 17994.00 16998.00 16190.00 18121.00 17062.00 16252.00 18212.00 17375.00 16549.00 18498.00 17248.00 16429.00 18448.00 16818.00 16019.00 18033.00 16815.00 16016.00 18008.00 16881.00 16079.00 18078.00 17073.00 16262.00 18297.00 08/2004 17411.00 16580.00 18642.00 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Lehman Brothers General Obligation Bond Index is a unmanaged index that represents average market-weighted performance of general obligation securities that have been issued in the last five years with maturities greater than one year. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D Z - ------------------------------------------------------------------------------------------------- INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 07/02/84 - ------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------- 1-year 6.68 1.61 5.87 0.87 6.20 5.20 6.25 4.20 6.97 - ------------------------------------------------------------------------------------------------- 5-year 6.03 5.01 5.74 5.42 5.81 5.81 5.89 5.67 6.17 - ------------------------------------------------------------------------------------------------- 10-year 5.70 5.19 5.56 5.56 5.59 5.59 5.63 5.52 5.77
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D Z - ------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------- 1-year 0.41 -4.36 -0.36 -5.14 -0.12 -1.07 0.02 -1.93 0.72 - ------------------------------------------------------------------------------------------------- 5-year 5.29 4.26 5.03 4.70 5.08 5.08 5.16 4.95 5.42 - ------------------------------------------------------------------------------------------------- 10-year 5.57 5.06 5.44 5.44 5.47 5.47 5.51 5.40 5.64
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 4.75% FOR CLASS A SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B SHARES AND 1.00% CONTINGENT SALES CHARGE FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, and D (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C, and D would have been lower. 50 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA OREGON MUNICIPAL BOND FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - ----------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - ----------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 1,003.12 1,020.61 4.53 4.57 0.90 - ----------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 998.99 1,016.84 8.29 8.36 1.65 - ----------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 1,000.00 1,018.60 6.54 6.60 1.30 - ----------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 1,000.40 1,018.60 6.54 6.60 1.30 - ----------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 1,003.17 1,021.87 3.27 3.30 0.65
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. Had the Distributor not waived a portion of expenses for class C and class D, total return would have been reduced. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 51 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 6.68% WITHOUT SALES CHARGE. o THE FUND'S RETURN FELL JUST SHORT OF THE RETURN OF ITS BENCHMARK, THE LEHMAN BROTHERS GENERAL OBLIGATION BOND INDEX, BUT WAS HIGHER THAN THE AVERAGE RETURN FOR ITS PEER GROUP, THE LIPPER OREGON MUNICIPAL DEBT FUNDS CATEGORY. o THE FUND BENEFITED FROM ITS FOCUS ON BONDS WITH INTERMEDIATE MATURITIES, WHICH WERE THE STRONGEST-PERFORMERS IN THE OREGON BOND MARKET DURING THE PERIOD. [Illustration of two arrows pointing up] LEHMAN BROTHERS GENERAL OBLIGATION CLASS A SHARES BOND INDEX 6.68% 6.76% OBJECTIVE Seeks a high level of income= exempt from federal and Oregon income tax by investing primarily in municipal securities issued by the state of Oregon. TOTAL NET ASSETS $440.4 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 12.45 ------------------------------------------ Class B 12.45 ------------------------------------------ Class C 12.45 ------------------------------------------ Class D 12.45 ------------------------------------------ Class Z 12.45 DISTRIBUTIONS DECLARED PER SHARE 09/01/03 - 08/31/04 ($) Class A 0.60 ------------------------------------------ Class B 0.51 ------------------------------------------ Class C 0.51 ------------------------------------------ Class D 0.55 ------------------------------------------ Class Z 0.64 PORTFOLIO MANAGER'S REPORT _____________________________________________________ COLUMBIA OREGON MUNICIPAL BOND FUND For the 12-month period ended August 31, 2004, Columbia Oregon Municipal Bond Fund class A shares returned 6.68% without sales charge. This was slightly less than the fund's benchmark, the Lehman Brothers General Obligation Bond Index, which returned 6.76%. The fund outperformed its peer group, the Lipper Oregon Municipal Debt Funds Category, which returned an average of 5.72%. 1 The fund benefited from its focus on bonds with intermediate maturities, which performed better than either short or longer-term bonds in the Oregon municipal market during the period. The fund's investment in non-rated bonds also made a positive contribution to performance. A VOLATILE PERIOD FOR MUNICIPAL BONDS Although municipal bonds provided good returns for the period covered by this report, they experienced considerable volatility--especially in the second half of the period. Early in the period, bond yields drifted lower and bond prices moved higher as inflation remained in check and manufacturers continued to operate below capacity. However interest rates rose sharply following strong employment reports in the spring of 2004. As a result, long-term yields rose sharply and bond prices fell. To complicate matters, non-traditional investors, such as hedge funds, moved money in and out of the municipal market in an attempt to take advantage of short-term price fluctuations. Their presence in the market heightened volatility. Oregon, like many other states, has benefited from increased revenues resulting from an improving economy. However, the state's economy, which relied heavily on the technology industry in the 1990s, remained behind the rest of the country. While the state has recently experienced some job growth, it has had one of the highest unemployment rates in the country since 2000. MIXED RESULTS FROM SECTOR ALLOCATION AND SECURITY SELECTION The fund benefited from its holdings of hospital and non-rated bonds. Hospital bonds performed well as the financial outlook improved for many issuers. The fund's non-rated bonds gained ground as investors were increasingly willing to accept more risk for potentially higher returns. As low mortgage rates favored individual home ownership over rental housing, our investments in multi-family housing bonds underperformed. In general, it was difficult for issuers to maintain occupancy levels as home ownership rates climbed. As a result, we cut back on exposure to housing bonds, particularly some multi-family 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as the fund. 52 [Sidebar] PORTFOLIO QUALITY AS OF 08/31/04 (%) AAA 43.1 ------------------------------------------ AA 35.1 ------------------------------------------ A 5.7 ------------------------------------------ BBB 3.5 ------------------------------------------ D 0.1 ------------------------------------------ Non rated 10.6 ------------------------------------------ Net cash & equivalents 1.9 Ratings shown represent the highest rating assigned to a particular bond by one of the nationally-recognized rating agencies: Standard and Poor's Corporation, Moody's Investors Service, Inc. or Fitch Ratings, Ltd. PORTFOLIO COMPOSITION AS OF 08/31/04 (%) Oregon Revenue 33.0 ------------------------------------------ General obligations 19.2 ------------------------------------------ Insured revenue 19.0 ------------------------------------------ Insured general obligations 14.2 ------------------------------------------ Other bonds 6.5 ------------------------------------------ State of Oregon general obligations 2.6 ------------------------------------------ Pre-funded bond 2.3 ------------------------------------------ Cash & cash equivalents, net receivables & payables 2.8 ------------------------------------------ U.S. territories bonds 0.4 HOLDINGS DISCUSSED IN THIS REPORT AS OF 08/31/04 (%) Oregon Coast Aquarium (Oregon St Health Hsg Edl) 0.1 MATURITY BREAKDOWN AS OF 08/31/04 (%) 0-1 years 0.5 ------------------------------------------ 1-3 years 2.0 ------------------------------------------ 3-5 years 2.9 ------------------------------------------ 5-7 years 12.3 ------------------------------------------ 7-10 years 29.3 ------------------------------------------ 10-15 years 33.8 ------------------------------------------ 15-20 years 11.7 ------------------------------------------ 20-25 years 3.2 ------------------------------------------ 25+ years 2.4 ------------------------------------------ Net cash & equivalents 1.9 Portfolio quality and maturity breakdown are calculated as a percentage of total investments. Your fund is actively managed and the composition of its portfolio will change over time. Portfolio composition and holdings discussed are calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA OREGON MUNICIPAL BOND FUND housing projects. Also, our position in Oregon Coast Aquarium bonds hurt performance. The Oregon Coast Aquarium has experienced severe cash shortfalls as a result of a decline in tourism. We continue to work with the Aquarium to restructure its debt or find other ways to enhance the value of its outstanding bonds. POTENTIAL FOR A STABLE ECONOMIC ENVIRONMENT Our outlook calls for increasing stability in the economy market. As long as a modest rate of growth is maintained, state and local governments should be able to expect higher tax revenues, which would aid their balance sheets and maintain or improve their credit quality. We see Oregon revenue streams picking up if employment and tax revenues gradually increase. We expect Oregon's muni market to benefit from a steady, although lower, level of issuance and continued strong demand. Going forward, we expect to maintain our focus on the intermediate maturity range, which we believe offers the best opportunity in a stable economic climate. As a result, we shifted some assets to the longer end of the intermediate maturity range, which we believe is likely to benefit most from an improved economy. In an effort to increase tax-exempt returns to shareholders, we plan to continue to reduce the fund's exposure to bonds subject to the alternative minimum tax. [PHOTO OF Brian McGreevy] Brian McGreevy has managed the Columbia Oregon Municipal Bond Fund since December 2003 and has been with the advisor and its predecessors since 1994. /s/ Brian McGreevy Tax-exempt investing offers current tax-free income, but it also involves certain risks. The value of the fund shares will be affected by interest rate changes and the creditworthiness of issues held in the funds. Single-state municipal bond funds pose additional risks due to limited geographical diversification. Interest income from certain tax-exempt bonds may be subject to the federal alternative minimum tax for individuals and corporations. Capital gains earned on tax-exempt investments are taxable. 53 [Sidebar] PERFORMANCE OF A $ 10,000 INVESTMENT 09/01/94 - 08/31/04 ($) SALES CHARGE WITHOUT WITH ------------------------------------------ Class A 20,872 19,885 ------------------------------------------ Class B 20,561 20,561 ------------------------------------------ Class C 20,576 20,576 ------------------------------------------ Class D 20,626 20,428 ------------------------------------------ Class Z 20,983 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA HIGH YIELD FUND VALUE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 [MOUNTAIN CHART] MERRILL LYNCH CLASS A CLASS A US HIGH YIELD, SHARES WITHOUT SHARES WITH CASH PAY SALES CHARGE SALES CHARGE ONLY INDEX -------------- ------------ -------------- 09/1994 10000.00 9525.00 10000.00 10050.00 9573.00 9996.00 10061.00 9583.00 10021.00 9949.00 9477.00 9936.00 10052.00 9574.00 10046.00 10209.00 9724.00 10188.00 10460.00 9963.00 10506.00 10555.00 10054.00 10652.00 10791.00 10279.00 10901.00 11064.00 10539.00 11241.00 11141.00 10612.00 11326.00 11295.00 10758.00 11456.00 11315.00 10777.00 11525.00 11498.00 10952.00 11657.00 11650.00 11097.00 11740.00 11783.00 11223.00 11855.00 11972.00 11404.00 12045.00 12139.00 11562.00 12236.00 12179.00 11600.00 12254.00 12041.00 11469.00 12221.00 12024.00 11453.00 12227.00 12035.00 11464.00 12315.00 12069.00 11496.00 12389.00 12158.00 11581.00 12473.00 12389.00 11801.00 12602.00 12604.00 12005.00 12873.00 12742.00 12137.00 13014.00 13010.00 12392.00 13277.00 13102.00 12480.00 13379.00 13218.00 12590.00 13483.00 13418.00 12781.00 13671.00 13216.00 12588.00 13520.00 13372.00 12737.00 13674.00 13693.00 13042.00 13950.00 13865.00 13207.00 14162.00 14238.00 13562.00 14502.00 14225.00 13550.00 14477.00 14416.00 13731.00 14717.00 14403.00 13719.00 14815.00 14567.00 13875.00 14955.00 14765.00 14064.00 15097.00 15006.00 14293.00 15322.00 15095.00 14378.00 15385.00 15188.00 14467.00 15517.00 15264.00 14539.00 15590.00 15311.00 14584.00 15700.00 15420.00 14688.00 15778.00 15608.00 14867.00 15868.00 14989.00 14277.00 15182.00 15254.00 14529.00 15213.00 15181.00 14460.00 14963.00 15682.00 14937.00 15644.00 15686.00 14941.00 15649.00 15879.00 15125.00 15804.00 15792.00 15042.00 15684.00 15980.00 15221.00 15819.00 16093.00 15329.00 16065.00 15886.00 15131.00 15954.00 15836.00 15084.00 15924.00 15821.00 15069.00 15948.00 15732.00 14985.00 15785.00 15715.00 14968.00 15725.00 15718.00 14971.00 15633.00 15974.00 15215.00 15811.00 16059.00 15296.00 15893.00 15977.00 15218.00 15814.00 15991.00 15232.00 15828.00 15900.00 15145.00 15606.00 15973.00 15214.00 15611.00 15964.00 15205.00 15439.00 16299.00 15525.00 15703.00 16446.00 15664.00 15816.00 16723.00 15929.00 16009.00 16723.00 15929.00 15916.00 16583.00 15795.00 15450.00 16346.00 15569.00 14966.00 16799.00 16001.00 15291.00 17375.00 16549.00 16203.00 17521.00 16689.00 16459.00 17430.00 16602.00 16241.00 17388.00 16562.00 16064.00 17501.00 16670.00 16373.00 17347.00 16523.00 16035.00 17557.00 16723.00 16284.00 17785.00 16940.00 16442.00 17090.00 16278.00 15388.00 17676.00 16836.00 15840.00 18139.00 17277.00 16355.00 17914.00 17063.00 16239.00 18021.00 17165.00 16330.00 17857.00 17009.00 16173.00 18025.00 17169.00 16558.00 18110.00 17250.00 16821.00 18074.00 17215.00 16731.00 17615.00 16778.00 15541.00 17322.00 16499.00 14923.00 17591.00 16755.00 15296.00 17522.00 16690.00 15051.00 17499.00 16668.00 14924.00 17993.00 17138.00 15814.00 18112.00 17251.00 16054.00 18269.00 17401.00 16517.00 18414.00 17539.00 16730.00 18730.00 17841.00 17163.00 19155.00 18246.00 18128.00 19171.00 18260.00 18323.00 19405.00 18483.00 18824.00 19036.00 18132.00 18554.00 19163.00 18253.00 18798.00 19579.00 18649.00 19299.00 19799.00 18858.00 19693.00 19919.00 18973.00 19965.00 20135.00 19178.00 20428.00 20328.00 19362.00 20747.00 20405.00 19436.00 20738.00 20581.00 19603.00 20884.00 20399.00 19430.00 20733.00 20000.00 19050.00 20402.00 20174.00 19215.00 20699.00 20492.00 19519.00 20983.00 08/2004 20872.00 19885.00 21362.00 The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Merrill Lynch US High Yield, Cash Pay Only Index is an unmanaged index that tracks the performance of non-investment-grade corporate bonds. Unlike mutual funds, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%)
SHARE CLASS A B C D Z - ------------------------------------------------------------------------------------------------- INCEPTION 11/01/02 11/01/02 10/13/03 11/01/02 10/01/93 - ------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------- 1-year 8.90 3.76 8.07 3.07 8.14 7.14 8.23 6.11 9.16 - ------------------------------------------------------------------------------------------------- 5-year 5.81 4.78 5.50 5.19 5.51 5.51 5.56 5.36 5.93 - ------------------------------------------------------------------------------------------------- 10-year 7.64 7.12 7.47 7.47 7.48 7.48 7.51 7.40 7.69
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%)
SHARE CLASS A B C D Z - ------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT - ------------------------------------------------------------------------------------------------- 1-year 3.96 -0.94 3.14 -1.74 3.18 2.20 3.31 1.29 4.20 - ------------------------------------------------------------------------------------------------- 5-year 4.96 3.94 4.67 4.37 4.68 4.68 4.73 4.52 5.06 - ------------------------------------------------------------------------------------------------- 10-year 7.40 6.89 7.26 7.26 7.26 7.26 7.29 7.18 7.46
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF 4.75% FOR CLASS A SHARES AND 1% FOR CLASS D SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR CLASS B SHARES AND 1.00% FOR CLASS C AND D SHARES FOR THE FIRST YEAR ONLY. ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. PERFORMANCE FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Effective October 13, 2003, class D shares were closed to all new investors and new accounts. Existing class D shareholders will be able to make additional purchases at any time. In addition, class D initial sales charge of 1.00% is waived after October 13, 2003. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Classes A, B, and D (newer class shares) share performance information includes returns of the fund's class Z shares (the oldest existing fund class) for periods prior to the inception of the newer class shares. The returns for class C include the returns of class B prior to 10/13/03, the date on which class C was initially offered by the fund. The returns shown for class C also include the performance of class Z prior to the inception of class B (11/01/02). Class Z share returns are not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class Z shares and the newer class shares. Had the expense differential been reflected, the returns for the periods prior to the inception of classes A, B, C and D would have been lower. 54 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA HIGH YIELD FUND As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, and/or Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - ----------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - ----------------------------------------------------------------------------------------------------------- Class A 1,000.00 1,000.00 1,023.43 1,020.01 5.19 5.18 1.02 - ----------------------------------------------------------------------------------------------------------- Class B 1,000.00 1,000.00 1,020.26 1,016.24 8.99 8.97 1.77 - ----------------------------------------------------------------------------------------------------------- Class C 1,000.00 1,000.00 1,021.01 1,016.99 8.23 8.21 1.62 - ----------------------------------------------------------------------------------------------------------- Class D 1,000.00 1,000.00 1,020.61 1,016.99 8.23 8.21 1.62 - ----------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 1,024.73 1,021.27 3.92 3.91 0.77
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. Had the Fund's Distributor not waived a portion of expenses for class C and class D, total return would have been reduced. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 55 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2004, THE FUND'S CLASS A SHARES RETURNED 8.90% WITHOUT SALES CHARGE. o THE FUND'S SOLID RETURN REFLECTS A STRONG ENVIRONMENT FOR THE HIGH YIELD MARKET. HOWEVER, IT TRAILED ITS BENCHMARK, THE MERRILL LYNCH US HIGH YIELD, CASH PAY ONLY INDEX, BECAUSE IT DID NOT OWN LOWER QUALITY SECURITIES, WHICH DID ESPECIALLY WELL LATE IN 2003. o AS THE PERIOD WORE ON, THE PERFORMANCE GAP BETWEEN HIGHER AND LOWER QUALITY SECURITIES NARROWED AND THE FUND'S RELATIVE PERFORMANCE IMPROVED. [Illustration of two arrows pointing up] MERRILL LYNCH US HIGH YIELD, CASH CLASS A SHARES PAY ONLY INDEX 8.90% 13.64% OBJECTIVE Seeks a high level of income, with capital appreciation as a secondary goal, by investing in non-investment-grade, corporate debt securities. TOTAL NET ASSETS $1,731.3 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class A 8.69 ------------------------------------------ Class B 8.69 ------------------------------------------ Class C 8.69 ------------------------------------------ Class D 8.69 ------------------------------------------ Class Z 8.69 DISTRIBUTIONS DECLARED PER SHARE 09/01/03 - 08/31/04 ($) Class A 0.54 ------------------------------------------ Class B 0.47 ------------------------------------------ Class C 0.43 ------------------------------------------ Class D 0.48 ------------------------------------------ Class Z 0.56 PORTFOLIO MANAGERS' REPORT _____________________________________________________ COLUMBIA HIGH YIELD FUND For the 12-month period ended August 31, 2004, Columbia High Yield Fund class A shares returned 8.90% without sales charge. The fund lagged the Merrill Lynch US High Yield, Cash Pay Only Index, which returned 13.64%. The fund's performance was held back because it did not own lower quality securities, which did especially well during the later months of 2003. However, as the period wore on, the performance gap between higher and lower quality securities narrowed, and the fund's relative performance improved. A RISK-TAKER'S MARKET As the economic recovery unfolded in 2003, fixed-income investors became increasingly willing to assume the risks of lower quality securities in return for their substantially higher yields. The market's preference for low quality securities created a striking performance gap: BB-rated securities returned 9.9% during the first six months of the reporting period, while CCC-rated issues did far better, returning 14.5%. The fund's strategy to generally not own CCC-rated bonds, which carry above-average bankruptcy risk, placed it at a disadvantage. However, CCC-rated securities lost ground in the second half of the period. ALLOCATION DECISIONS GENERALLY HELPED PERFORMANCE In general, the fund's returns were aided by favorable sector allocation decisions. In part, the fund benefited because of what it DIDN'T own. For example, the fund had no exposure to the airline sector, which suffered from increased competition and higher fuel prices. The fund also had minimal exposure to the telecommunications sector, an industry in which many companies continued to struggle. The fund's only holding in this sector, Nextel Communications, improved its competitive standing during the year and was a positive performer for the fund. Cable television holdings also made a positive contribution to performance. Satellite companies continued to take market share from traditional cable companies, a trend that favored fund holdings such as DirecTV Holdings and EchoStar DBS. However, not all our allocation decisions worked out well. We had no exposure to the electric utility industry, which returned 16.1% over the past 12 months. QUALITY BIAS IN ENERGY DETRACTED FROM PERFORMANCE Our preference for quality in security selection also hurt performance. This was especially evident within the energy sector, the fund's largest industry position. Energy companies benefited from the steady increase in oil prices during the period. But the best performers were companies such as CCC-rated El Paso, which the fund does not own, and B-rated Williams Companies, which the fund recently purchased. 56 [Sidebar] PORTFOLIO QUALITY AS OF 08/31/04 (%) Baa 1.2 ------------------------------------------ Ba 61.9 ------------------------------------------ B 36.9 Portfolio quality is calculated as a percentage of total investments. Ratings shown represent the highest rating assigned to a particular bond by one of the nationally recognized rating agencies: Standard and Poor's Corporation, Moody's Investors Service, Inc. or Fitch Ratings Ltd. TOP 5 SECTORS AS OF 08/31/04 (%) Energy 10.9 ------------------------------------------ Health care 8.1 ------------------------------------------ Casinos & gaming 8.1 ------------------------------------------ Cable TV 5.5 ------------------------------------------ Services 5.1 HOLDINGS DISCUSSED IN THIS REPORT AS OF 08/31/04 (%) Nextel Communications 2.0 ------------------------------------------ Directv Holdings 1.6 ------------------------------------------ EchoStar DBS 2.0 ------------------------------------------ Williams Companies 0.9 ------------------------------------------ Fisher Scientific International 0.2 ------------------------------------------ Royal Caribbean Cruises 2.1 MATURITY BREAKDOWN AS OF 08/31/04 (%) 0-3 years 7.0 ------------------------------------------ 3-5 years 12.4 ------------------------------------------ 5-10 years 76.5 ------------------------------------------ 10+ years 4.1 Your fund is actively managed and the composition of its portfolio will change over time. Portfolio composition and holdings discussed are calculated as a percentage of net assets. ________________________________________________________________________________ COLUMBIA HIGH YIELD FUND BUYOUTS AND UPGRADES, PURCHASES AND SALES Several holdings were bought out or upgraded by rating agencies during the period--both positive factors for the fund. Among our health care holdings, Apogent Technology was bought by Fisher Scientific International. Its bonds moved up sharply as a result. Within the automotive sector, American Axle & Manufacturing and Lear were upgraded to investment-grade status. During the period, Lear's bonds were sold and American Axle's bonds were called. We also eliminated positions in Abitibi Consolidated and Cascades, two forest products companies whose fundamentals didn't show the improvement we had anticipated. We made several new purchases for the fund. We initiated a sizable position in cruise operator Royal Caribbean Cruises, which recently completed a major program to augment its fleet. With capital spending now sharply down and the travel business showing increased strength, the company offers an attractive risk/reward profile. SOLID PROSPECTS GOING FORWARD Overall, the fundamentals of the high-yield bond market remain attractive. Default rates have continued to move down. Even if interest rates tick higher, we believe the high-yield market is capable of holding its ground. High-yield securities have historically outperformed investment-grade securities when interest rates have risen. [PHOTO OF Jeffrey L. Rippey] Jeffrey L. Rippey, CFA, has managed or co-managed Columbia High Yield Fund since its inception in October 1993 and has been with the advisor and its predecessors since 1981. /s/ Jeffrey L. Rippey [PHOTO OF Kurt M. Havnaer] Kurt M. Havnaer, CFA, has co-managed the fund since February 2000. Mr. Havnaer was on a leave of absence for the period March 2004 to April 2004. He has been associated with Columbia Management or its predecessors since 1996. /s/ Kurt M. Havnaer Investing in high-yield securities (commonly known as "junk bonds") offers the potential for high current income and attractive total return, but involves certain risks. Changes in economic conditions or other circumstances may adversely affect a junk bond issuer's ability to make timely principal and interest payments. Rising interest rates tend to lower the value of all bonds. Investing in junk bonds of foreign and emerging markets includes additional risk such as currency exchange rate fluctuations and economic and political change. 57 [Sidebar] PERFORMANCE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 ($) SALES CHARGE WITHOUT ------------------------------------------ Class Z 14,570 Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION ________________________________________________________ COLUMBIA DAILY INCOME COMPANY VALUE OF A $10,000 INVESTMENT 09/01/94 - 08/31/04 [MOUNTAIN CHART] LIPPER MONEY MARKET FUNDS CATEGORY AVERAGE CLASS Z SHARES -------------- ------------ 09/1994 10000.00 10000.00 10033.00 10034.00 10069.00 10071.00 10106.00 10109.00 10150.00 10153.00 10193.00 10199.00 10235.00 10241.00 10282.00 10290.00 10328.00 10337.00 10375.00 10385.00 10421.00 10432.00 10467.00 10480.00 10512.00 10527.00 10556.00 10573.00 10601.00 10619.00 10645.00 10665.00 10689.00 10712.00 10734.00 10758.00 10774.00 10800.00 10816.00 10843.00 10857.00 10885.00 10899.00 10929.00 10940.00 10971.00 10983.00 11016.00 11027.00 11062.00 11069.00 11106.00 11114.00 11151.00 11156.00 11196.00 11200.00 11242.00 11245.00 11288.00 11285.00 11330.00 11329.00 11376.00 11373.00 11422.00 11419.00 11470.00 11465.00 11518.00 11512.00 11567.00 11559.00 11617.00 11604.00 11665.00 11652.00 11715.00 11699.00 11764.00 11748.00 11816.00 11797.00 11868.00 11841.00 11914.00 11889.00 11964.00 11936.00 12013.00 11985.00 12064.00 12032.00 12113.00 12082.00 12165.00 12131.00 12217.00 12179.00 12269.00 12226.00 12320.00 12271.00 12368.00 12317.00 12418.00 12362.00 12466.00 12402.00 12509.00 12445.00 12555.00 12488.00 12600.00 12531.00 12647.00 12574.00 12692.00 12619.00 12740.00 12666.00 12790.00 12713.00 12840.00 12762.00 12893.00 12812.00 12946.00 12866.00 13004.00 12920.00 13064.00 12972.00 13118.00 13027.00 13179.00 13083.00 13238.00 13144.00 13303.00 13204.00 13368.00 13269.00 13438.00 13334.00 13508.00 13397.00 13575.00 13462.00 13646.00 13525.00 13714.00 13592.00 13784.00 13656.00 13853.00 13709.00 13910.00 13764.00 13968.00 13812.00 14020.00 13856.00 14067.00 13895.00 14111.00 13932.00 14152.00 13967.00 14190.00 13998.00 14224.00 14023.00 14253.00 14043.00 14275.00 14060.00 14295.00 14074.00 14313.00 14086.00 14327.00 14099.00 14343.00 14112.00 14357.00 14124.00 14371.00 14137.00 14386.00 14150.00 14400.00 14161.00 14414.00 14172.00 14427.00 14184.00 14440.00 14194.00 14452.00 14202.00 14464.00 14209.00 14472.00 14215.00 14479.00 14222.00 14487.00 14228.00 14494.00 14234.00 14503.00 14239.00 14510.00 14243.00 14516.00 14248.00 14522.00 14252.00 14526.00 14256.00 14530.00 14261.00 14535.00 14265.00 14539.00 14269.00 14542.00 14273.00 14546.00 14278.00 14551.00 14282.00 14553.00 14286.00 14556.00 14291.00 14561.00 14296.00 14567.00 08/2004 14303.00 14570.00 The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Although the fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the fund. AVERAGE ANNUAL TOTAL RETURN AS OF 08/31/04 (%) LIPPER MONEY MARKET CLASS Z FUNDS CATEGORY AVERAGE - ------------------------------------------------ 1-year 0.36 0.38 - ------------------------------------------------ 5-year 2.64 2.49 - ------------------------------------------------ 10-year 3.84 3.76 AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/04 (%) LIPPER MONEY MARKET CLASS Z FUNDS CATEGORY AVERAGE - ------------------------------------------------- 1-year 0.35 0.36 - ------------------------------------------------- 5-year 2.78 2.62 - ------------------------------------------------- 10-year 3.90 3.81 ALL RESULTS SHOWN ASSUME REINVESTMENT OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1 FEES. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. 58 [Sidebar] ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS SERVICES, INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR BY CALLING SHAREHOLDER SERVICES AT 800.345.6611 o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE 1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6 2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR ACCOUNT DURING THE PERIOD UNDERSTANDING YOUR EXPENSES ____________________________________________________ COLUMBIA DAILY INCOME COMPANY As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the reporting period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using the fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column for each share class assumes that the return each year is 5% before expenses and includes the fund's actual expense ratio. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period. MARCH 1, 2004 - AUGUST 31, 2004
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%) - ----------------------------------------------------------------------------------------------------------- ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL - ----------------------------------------------------------------------------------------------------------- Class Z 1,000.00 1,000.00 1,001.76 1,021.57 3.57 3.61 0.71
Expenses paid during the period are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 366. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. COMPARE WITH OTHER FUNDS Since all mutual fund companies are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 59 [Sidebar] SUMMARY o FOR THE 12-MONTH PERIOD THAT ENDED AUGUST 31, 2004, THE FUND'S CLASS Z SHARES RETURNED 0.36% AS THE LOWEST INTEREST RATES IN 40 YEARS PREVAILED. o THE FUND'S RETURN WAS IN LINE WITH THE LIPPER MONEY MARKET FUNDS CATEGORY AVERAGE OF 0.38%. o SHORT-TERM RATES MOVED HIGHER TOWARD THE END OF THE PERIOD, BUT IT WILL TAKE SOME TIME FOR THE INCREASE TO BE FULLY REFLECTED IN MONEY MARKET RETURNS. [Illustration of two arrows pointing up] LIPPER MONEY MARKET FUNDS CLASS Z SHARES CATEGORY AVERAGE 0.36% 0.38% OBJECTIVE Seeks a high level of income consistent with the maintenance of liquidity and the preservation of capital by investing primarily in high quality money market securities TOTAL NET ASSETS $ 661.1 million NET ASSET VALUE PER SHARE AS OF 08/31/04 ($) Class Z 1.00 PORTFOLIO MANAGER'S REPORT _____________________________________________________ COLUMBIA DAILY INCOME COMPANY For the 12-month period ended August 31, 2004, Columbia Daily Income Company class Z shares returned 0.36%. This return was in line with the Lipper Money Market Funds Category average, which averaged a gain of 0.38% for the period. 1 Returns on money-market funds remained low because the yields on short-term fixed-income securities were at a 40-year historical low throughout the twelve-month period. RATES LOW BUT TRENDING HIGHER For most of the 12-month reporting period, the Federal Reserve kept short-term interest rates low in an effort to stimulate economic growth. Low interest rates were intended as a temporary economic stimulus with the expectation that the Fed would raise short-term interest rates when the economy posted respectable growth. Unusually low rates can create a negative real rate of return, which occurs when short-term rates are lower than the prevailing inflation rate, which can result in a loss of purchasing power over time. Although there were doubts about the sustainability of economic growth early in 2004, it quickly dissipated on strong employment news in the second quarter. On June 30th, policymakers raised a key short-term interest rate, the federal funds rate, from 1.00% to 1.25% and to 1.50% when they met in August. 2 POSITIONING THE FUND WITHIN A CHANGING MARKET During the period, we maintained a lower average time to maturity in order to make it easier to invest at higher rates when rates rose. At the end of August, the fund's weighted average maturity was 35 days, somewhat toward the lower end of our normal range of 30 to 50 days. Although the fund has maintained a higher-than-average weight in US Treasury securities over the past several years, its investments are currently divided between agency discount notes and A1/P1-rated commercial paper, with no exposure to US Treasuries. We are comfortable with the portfolio's positioning, because the credit environment has improved after a two-year period during which the credit quality of certain corporate issuers was questioned. The current positioning offers the opportunity for higher yields. 1 Lipper Inc., a widely respected data provider in the industry, calculates an average total return for mutual funds with similar investment objectives as those of the fund. 2 In September, the federal funds rate was raised to 1.75%. 60 [Sidebar] PORTFOLIO HIGHLIGHTS AS OF 08/31/04 Seven day current yield 0.58% ------------------------------------------------- Seven day effective yield 0.58% ------------------------------------------------- Average days to maturity 35 ________________________________________________________________________________ COLUMBIA DAILY INCOME COMPANY AN IMPROVING OUTLOOK As securities in the portfolio mature, we plan to reinvest at new, higher rates and eventually those higher rates should be reflected in higher returns for the fund. We expect the Federal Reserve to make good on its word to continue raising rates at a measured pace. The consensus of the market is that the fed funds rate will rise to 2% early in 2005 en route to a more sustainable level of under 3%. The current level of economic growth, while not spectacular, appears solid enough to justify such advances, which could bring money market rates above the inflation rate for the first time in several years. Leonard Aplet has managed the fund since 1988 and has been with the advisor and its predecessors since 1987. /s/ Leonard Aplet Effective October 7, 2004 Karen M. Arneil and William A. Goldthwait began co-managing Columbia Daily Income Fund, replacing Leonard Aplet. Ms. Arneil is a Senior Vice President and has been associated with the advisor and its predecessors since 1996. Mr. Goldthwait is a Senior Vice President and has been associated with the advisor and its predecessors since 1997. There is a chance that the fund's investments may not keep pace with the rate of inflation over the long-term. Also, an investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Although the fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the fund. 61 FINANCIAL STATEMENTS ___________________________________________________________ COLUMBIA FUNDS AUGUST 31, 2004 A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS -------------------------------------------- INVESTMENT PORTFOLIO The investment portfolio details all of the fund's holdings and their market value as of the last day of the reporting period. Portfolio holdings are organized by type of asset, industry, country or geographic region (if applicable) to demonstrate areas of concentration and diversification. -------------------------------------------- STATEMENT OF ASSETS AND This statement details the fund's assets, LIABILITIES liabilities, net assets and share price for each share class as of the last day of the reporting period. Net assets are calculated by subtracting all the fund's liabilities (including any unpaid expenses) from the total of the fund's investment and non-investment assets. The share price for each class is calculated by dividing net assets for that class by the number of shares outstanding in that class as of the last day of the reporting period. -------------------------------------------- STATEMENT OF OPERATIONS This statement details income earned by the fund and the expenses accrued by the fund during the reporting period. The Statement of Operations also shows any net gain or loss the fund realized on the sales of its holdings during the period, as well as any unrealized gains or losses recognized over the period. The total of these results represents the fund's net increase or decrease in net assets from operations. -------------------------------------------- STATEMENT OF CHANGES IN NET This statement demonstrates how the fund's ASSETS net assets were affected by its operating results, distributions to shareholders and shareholder transactions (e.g., subscriptions, redemptions and dividend reinvestments) during the reporting period. The Statement of Changes in Net Assets also details changes in the number of shares outstanding. -------------------------------------------- NOTES TO FINANCIAL These notes disclose the organizational STATEMENTS background of the fund, its significant accounting policies (including those surrounding security valuation, income recognition and distributions to shareholders), federal tax information, fees and compensation paid to affiliates and significant risks and contingencies. -------------------------------------------- FINANCIAL HIGHLIGHTS The financial highlights demonstrate how the fund's net asset value per share was affected by the fund's operating results. The financial highlights table also discloses the classes' performance and certain key ratios (e.g., class expenses and net investment income as a percentage of average net assets). 62 This page intentionally left blank. INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA COMMON STOCK FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - 97.6% CONSUMER DISCRETIONARY - 17.2% HOTELS, RESTAURANTS & LEISURE - 1.3% Darden Restaurants, Inc. 190,300 3,998,203 ------------- Hotels, Restaurants & Leisure Total 3,998,203 HOUSEHOLD DURABLES - 1.2% Garmin Ltd. 95,400 3,712,014 ------------- Household Durables Total 3,712,014 LEISURE EQUIPMENT & PRODUCTS - 0.6% Hasbro, Inc. 100,400 1,860,412 ------------- Leisure Equipment & Products Total 1,860,412 MEDIA - 7.8% Comcast Corp., Class A (a) 194,442 5,477,431 DirecTV Group, Inc. (a) 382,800 6,075,036 Liberty Media Corp., Series A (a) 567,200 5,053,752 Liberty Media International, Inc., Series A (a) 31,433 1,062,435 Time Warner, Inc. (a) 370,400 6,056,040 ------------- Media Total 23,724,694 MULTILINE RETAIL - 3.5% Kohl's Corp. (a) 117,800 5,828,744 Sears, Roebuck and Co. 125,500 4,804,140 ------------- Multiline Retail Total 10,632,884 SPECIALTY RETAIL - 1.3% RadioShack Corp. 151,000 4,067,940 ------------- Specialty Retail Total 4,067,940 TEXTILES, APPAREL & LUXURY GOODS - 1.5% Liz Claiborne, Inc. 122,400 4,659,768 ------------- Textiles, Apparel & Luxury Goods Total 4,659,768 ------------- CONSUMER DISCRETIONARY TOTAL 52,655,915 CONSUMER STAPLES - 5.6% BEVERAGES - 0.8% Coca-Cola Femsa, SA de CV, ADR 115,100 2,345,738 ------------- Beverages Total 2,345,738 FOOD & STAPLES RETAILING - 1.6% Safeway, Inc. (a) 245,700 4,963,140 ------------- Food & Staples Retailing Total 4,963,140 FOOD PRODUCTS - 1.3% Sara Lee Corp. 182,700 4,043,151 ------------- Food Products Total 4,043,151 TOBACCO - 1.9% Altria Group, Inc. 118,165 5,784,177 ------------- Tobacco Total 5,784,177 ------------- CONSUMER STAPLES TOTAL 17,136,206 SHARES VALUE ($) ------------ ------------- ENERGY - 7.4% ENERGY EQUIPMENT & SERVICES - 0.6% Transocean, Inc. (a) 60,600 1,860,420 ------------- Energy Equipment & Services Total 1,860,420 OIL & GAS - 6.8% Anadarko Petroleum Corp. 39,800 2,356,956 BP PLC, ADR 30,000 1,611,000 Devon Energy Corp. 45,600 2,955,336 El Paso Corp. 326,000 2,666,680 Kerr-McGee Corp. 107,900 5,694,962 Noble Energy, Inc. 34,800 1,791,504 Unocal Corp. 98,200 3,666,788 ------------- Oil & Gas Total 20,743,226 ------------- ENERGY TOTAL 22,603,646 FINANCIALS - 20.0% CAPITAL MARKETS - 2.2% A.G. Edwards, Inc. 49,600 1,725,088 Morgan Stanley 96,000 4,870,080 ------------- Capital Markets Total 6,595,168 COMMERCIAL BANKS - 1.0% Fifth Third Bancorp 63,900 3,182,859 ------------- Commercial Banks Total 3,182,859 CONSUMER FINANCE - 1.0% American Express Co. 62,550 3,128,751 ------------- Consumer Finance Total 3,128,751 DIVERSIFIED FINANCIAL SERVICES - 5.5% Citigroup, Inc. 159,689 7,438,314 E*TRADE Financial Corp. (a) 146,400 1,724,592 JPMorgan Chase & Co. 191,012 7,560,255 ------------- Diversified Financial Services Total 16,723,161 INSURANCE - 5.5% ACE Ltd. 115,900 4,467,945 Allstate Corp. 39,400 1,860,074 Chubb Corp. 37,300 2,536,773 Marsh & McLennan Companies, Inc. 55,600 2,484,764 UnumProvident Corp. 338,500 5,476,930 ------------- Insurance Total 16,826,486 THRIFTS & MORTGAGE FINANCE - 4.8% Fannie Mae 84,765 6,310,754 MGIC Investment Corp. 123,000 8,397,210 ------------- Thrifts & Mortgage Finance Total 14,707,964 ------------- FINANCIALS TOTAL 61,164,389 HEALTH CARE - 14.6% BIOTECHNOLOGY - 3.4% Amgen, Inc. (a) 94,882 5,625,554 MedImmune, Inc. (a) 197,000 4,702,390 ------------- Biotechnology Total 10,327,944 See Accompanying Notes to Financial Statements. 64 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA COMMON STOCK FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) HEALTH CARE - (CONTINUED) HEALTH CARE PROVIDERS & SERVICES - 4.8% Cardinal Health, Inc. 121,400 5,487,280 McKesson Corp. 120,780 3,738,141 WebMD Corp. (a) 748,200 5,446,896 ------------- Health Care Providers & Services Total 14,672,317 PHARMACEUTICALS - 6.4% Barr Pharmaceuticals, Inc. (a) 141,100 5,540,997 Biovail Corp. (a) 258,660 3,921,286 Endo Pharmaceuticals Holdings, Inc. (a) 61,900 1,049,824 Johnson & Johnson 54,225 3,150,472 Pfizer, Inc. 188,504 6,158,426 ------------- Pharmaceuticals Total 19,821,005 ------------- HEALTH CARE TOTAL 44,821,266 INDUSTRIALS - 3.0% AIRLINES - 1.5% Southwest Airlines Co. 306,700 4,545,294 ------------- Airlines Total 4,545,294 COMMERCIAL SERVICES & SUPPLIES - 1.5% ServiceMaster Co. 132,100 1,642,003 Waste Management, Inc. 110,075 3,058,984 ------------- Commercial Services & Supplies Total 4,700,987 ------------- INDUSTRIALS TOTAL 9,246,281 INFORMATION TECHNOLOGY - 17.2% COMMUNICATIONS EQUIPMENT - 3.3% Cisco Systems, Inc. (a) 162,890 3,055,816 Nortel Networks Corp. (a) 981,900 3,691,944 UTStarcom, Inc. (a) 209,800 3,245,606 ------------- Communications Equipment Total 9,993,366 COMPUTERS & PERIPHERALS - 4.8% Hewlett-Packard Co. 247,200 4,422,408 International Business Machines Corp. 65,725 5,566,250 SanDisk Corp. (a) 204,750 4,780,913 ------------- Computers & Peripherals Total 14,769,571 INTERNET SOFTWARE & SERVICES - 1.0% IAC/InterActiveCorp (a) 137,400 3,134,094 ------------- Internet Software & Services Total 3,134,094 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.1% Linear Technology Corp. 131,000 4,685,870 NVIDIA Corp. (a) 144,450 1,799,847 ------------- Semiconductors & Semiconductor Equipment Total 6,485,717 SOFTWARE - 6.0% Fair Isaac Corp. 48,100 1,295,333 Microsoft Corp. 422,200 11,526,060 SHARES VALUE ($) ------------ ------------- Oracle Corp. (a) 302,820 3,019,115 Synopsys, Inc. (a) 163,800 2,614,248 ------------- Software Total 18,454,756 ------------- INFORMATION TECHNOLOGY TOTAL 52,837,504 MATERIALS - 5.5% CHEMICALS - 1.3% E.I. du Pont de Nemours & Co. 95,500 4,035,830 ------------- Chemicals Total 4,035,830 CONTAINERS & PACKAGING - 3.1% Sealed Air Corp. (a) 88,800 4,361,856 Smurfit-Stone Container Corp. (a) 287,400 5,098,476 ------------- Containers & Packaging Total 9,460,332 METALS & MINING - 1.1% International Steel Group, Inc. (a) 113,200 3,441,280 ------------- Metals & Mining Total 3,441,280 ------------- MATERIALS TOTAL 16,937,442 TELECOMMUNICATION SERVICES - 7.1% DIVERSIFIED TELECOMMUNICATION SERVICES - 5.0% Brasil Telecom Participacoes SA 119,400 3,896,022 CenturyTel, Inc. 57,900 1,863,801 Qwest Communications International, Inc. (a) 421,000 1,216,690 Telefonos de Mexico SA de CV, ADR 186,200 6,031,018 Verizon Communications, Inc. 59,500 2,335,375 ------------- Diversified Telecommunication Services Total 15,342,906 WIRELESS TELECOMMUNICATION SERVICES - 2.1% AT&T Wireless Services, Inc. (a) 262,700 3,840,674 Nextel Communications, Inc., Class A (a) 114,300 2,650,617 ------------- Wireless Telecommunication Services Total 6,491,291 ------------- TELECOMMUNICATION SERVICES TOTAL 21,834,197 TOTAL COMMON STOCKS (Cost of $277,783,745) 299,236,846 PREFERRED STOCK - 0.4% CONSUMER DISCRETIONARY - 0.4% MEDIA - 0.4% News Corp., Ltd., ADR 42,850 1,274,788 ------------- Media Total 1,274,788 ------------- CONSUMER DISCRETIONARY TOTAL 1,274,788 Total Preferred Stock (Cost of $1,370,889) 1,274,788 See Accompanying Notes to Financial Statements. 65 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA COMMON STOCK FUND PAR ($) VALUE ($) ------------ ------------- SHORT-TERM OBLIGATION - 3.3% Repurchase agreement with State Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by a U.S. Treasury Bond maturing 11/15/10, market value $10,473,012 (repurchase proceeds $10,266,428) 10,266,000 10,266,000 ------------- TOTAL SHORT-TERM OBLIGATION (cost of $10,266,000) 10,266,000 TOTAL INVESTMENTS - 101.3% (COST OF $289,420,634) (b) 310,777,634 OTHER ASSETS & LIABILITIES, NET - (1.3)% (4,104,246) NET ASSETS - 100.0% 306,673,388 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing security. (b) Cost for federal income tax purposes is $290,604,004. ACRONYM NAME ------- ---- ADR American Depositary Receipt See Accompanying Notes to Financial Statements. 66 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA GROWTH FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - 98.1% CONSUMER DISCRETIONARY - 13.9% HOTELS, RESTAURANTS & LEISURE - 1.8% Carnival Corp. 108,100 4,949,899 Marriott International, Inc., Class A 208,400 9,888,580 ------------- Hotels, Restaurants & Leisure Total 14,838,479 INTERNET & CATALOG RETAIL - 1.4% eBay, Inc. (a) 134,600 11,648,284 ------------- Internet & Catalog Retail Total 11,648,284 MEDIA - 2.4% Omnicom Group 93,400 6,426,854 Viacom, Inc., Class B 48,190 1,605,209 XM Satellite Radio Holdings, Inc., Class A (a) 402,300 11,051,181 ------------- Media Total 19,083,244 SPECIALTY RETAIL - 7.2% Bed Bath & Beyond, Inc. (a) 209,960 7,856,703 Best Buy Co., Inc. 231,160 10,753,563 Chico's FAS, Inc. (a) 183,800 7,517,420 Home Depot, Inc. 144,900 5,297,544 Lowe's Companies, Inc. 276,980 13,765,906 Staples, Inc. 459,200 13,169,856 ------------- Specialty Retail Total 58,360,992 TEXTILES, APPAREL & LUXURY GOODS - 1.1% Coach, Inc. (a) 208,100 8,771,415 ------------- Textiles, Apparel & Luxury Goods Total 8,771,415 ------------- CONSUMER DISCRETIONARY TOTAL 112,702,414 CONSUMER STAPLES - 11.2% BEVERAGES - 1.8% PepsiCo, Inc. 293,040 14,652,000 ------------- Beverages Total 14,652,000 FOOD & STAPLES RETAILING - 2.1% Costco Wholesale Corp. 230,000 9,469,100 Sysco Corp. 239,010 7,681,782 ------------- Food & Staples Retailing Total 17,150,882 FOOD PRODUCTS - 1.3% Bunge Ltd. 58,800 2,345,532 Hershey Foods Corp. 173,800 8,391,064 ------------- Food Products Total 10,736,596 HOUSEHOLD PRODUCTS - 1.6% Procter & Gamble Co. 236,120 13,215,636 ------------- Household Products Total 13,215,636 SHARES VALUE ($) ------------ ------------- PERSONAL PRODUCTS - 3.2% Alberto-Culver Co. 310,445 14,991,389 Avon Products, Inc. 239,500 10,581,110 ------------- Personal Products Total 25,572,499 TOBACCO - 1.2% Altria Group, Inc. 197,700 9,677,415 ------------- Tobacco Total 9,677,415 ------------- CONSUMER STAPLES TOTAL 91,005,028 ENERGY - 0.8% ENERGY EQUIPMENT & SERVICES - 0.3% Smith International, Inc. (a) 43,400 2,472,932 ------------- Energy Equipment & Services Total 2,472,932 OIL & GAS - 0.5% EOG Resources, Inc. 76,000 4,390,520 ------------- Oil & Gas Total 4,390,520 ------------- ENERGY TOTAL 6,863,452 FINANCIALS - 6.8% CAPITAL MARKETS - 1.3% Merrill Lynch & Co., Inc. 210,700 10,760,449 ------------- Capital Markets Total 10,760,449 CONSUMER FINANCE - 2.2% American Express Co. 222,000 11,104,440 MBNA Corp. 286,500 6,916,110 ------------- Consumer Finance Total 18,020,550 DIVERSIFIED FINANCIAL SERVICES - 1.1% Citigroup, Inc. 182,726 8,511,377 ------------- Diversified Financial Services Total 8,511,377 INSURANCE - 2.2% American International Group, Inc. 124,200 8,848,008 Chubb Corp. 64,700 4,400,247 Progressive Corp. 52,400 4,207,720 ------------- Insurance Total 17,455,975 ------------- FINANCIALS TOTAL 54,748,351 HEALTH CARE - 21.7% BIOTECHNOLOGY - 2.7% Amgen, Inc. (a) 123,400 7,316,386 Biogen Idec, Inc. (a) 73,100 4,337,023 Genentech, Inc. (a) 213,000 10,390,140 ------------- Biotechnology Total 22,043,549 HEALTH CARE EQUIPMENT & SUPPLIES - 8.9% Alcon, Inc. 172,900 12,939,836 Boston Scientific Corp. (a) 233,440 8,340,811 See Accompanying Notes to Financial Statements. 67 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA GROWTH FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) HEALTH CARE - (CONTINUED) HEALTH CARE EQUIPMENT & SUPPLIES - (CONTINUED) Kinetic Concepts, Inc. (a) 88,900 4,424,553 St. Jude Medical, Inc. (a) 166,700 11,210,575 Thermo Electron Corp. (a) 267,700 7,032,479 Varian Medical Systems, Inc. (a) 402,000 13,326,300 Zimmer Holdings, Inc. (a) 214,900 15,322,370 ------------- Health Care Equipment & Supplies Total 72,596,924 HEALTH CARE PROVIDERS & SERVICES - 1.9% Anthem, Inc. (a) 74,500 6,052,380 Caremark Rx, Inc. (a) 311,600 8,942,920 ------------- Health Care Providers & Services Total 14,995,300 PHARMACEUTICALS - 8.2% Eli Lilly and Co. 126,400 8,020,080 Johnson & Johnson 282,500 16,413,250 Pfizer, Inc. 720,433 23,536,546 Teva Pharmaceutical Industries Ltd., ADR 685,346 18,675,679 ------------- Pharmaceuticals Total 66,645,555 ------------- HEALTH CARE TOTAL 176,281,328 INDUSTRIALS - 10.8% COMMERCIAL SERVICES & SUPPLIES - 1.0% Cendant Corp. 370,900 8,022,567 ------------- Commercial Services & Supplies Total 8,022,567 ELECTRICAL EQUIPMENT - 0.9% Rockwell Automation, Inc. 177,800 6,934,200 ------------- Electrical Equipment Total 6,934,200 INDUSTRIAL CONGLOMERATES - 6.0% 3M Co. 154,600 12,732,856 General Electric Co. 377,485 12,377,733 Tyco International Ltd. 752,610 23,571,745 ------------- Industrial Conglomerates Total 48,682,334 MACHINERY - 2.9% Ingersoll-Rand Co., Class A 136,100 8,847,861 ITT Industries, Inc. 186,500 14,752,150 ------------- Machinery Total 23,600,011 ------------- INDUSTRIALS TOTAL 87,239,112 INFORMATION TECHNOLOGY - 28.0% COMMUNICATIONS EQUIPMENT - 5.9% Avaya, Inc. (a) 308,300 3,736,596 Cisco Systems, Inc. (a) 1,105,075 20,731,207 Juniper Networks, Inc. (a) 198,600 4,545,954 Motorola, Inc. 160,400 2,590,460 QUALCOMM, Inc. 420,600 16,003,830 ------------- Communications Equipment Total 47,608,047 SHARES VALUE ($) ------------ ------------- COMPUTERS & PERIPHERALS - 4.5% Dell, Inc. (a) 385,290 13,423,504 EMC Corp. (a) 331,400 3,569,178 International Business Machines Corp. 139,500 11,814,255 Lexmark International, Inc., Class A (a) 88,000 7,783,600 ------------- Computers & Peripherals Total 36,590,537 ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.5% Flextronics International Ltd. (a) 325,500 4,039,455 ------------- Electronic Equipment & Instruments Total 4,039,455 INTERNET SOFTWARE & SERVICES - 1.0% Yahoo!, Inc. (a) 289,900 8,265,049 ------------- Internet Software & Services Total 8,265,049 IT CONSULTING & SERVICES - 1.4% Cognizant Technology Solutions Corp., Class A (a) 309,500 8,486,490 Paychex, Inc. 105,500 3,130,185 ------------- IT Consulting & Services Total 11,616,675 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.7% Altera Corp. (a) 203,500 3,850,220 Broadcom Corp., Class A (a) 113,218 3,072,737 Intel Corp. 1,015,370 21,617,227 Linear Technology Corp. 53,800 1,924,426 Marvell Technology Group Ltd. (a) 190,200 4,397,424 Microchip Technology, Inc. 186,000 4,908,540 Samsung Electronics Co. Ltd., GDR (b) 58,000 11,237,500 Texas Instruments, Inc. 158,100 3,089,274 ------------- Semiconductors & Semiconductor Equipment Total 54,097,348 SOFTWARE - 8.0% Amdocs Ltd. (a) 271,300 5,453,130 Mercury Interactive Corp. (a) 60,200 2,077,502 Microsoft Corp. 1,501,300 40,985,490 Oracle Corp. (a) 523,590 5,220,192 SAP AG, ADR 229,400 8,363,924 Symantec Corp. (a) 63,300 3,035,868 ------------- Software Total 65,136,106 ------------- INFORMATION TECHNOLOGY TOTAL 227,353,217 MATERIALS - 4.9% CHEMICALS - 2.4% Praxair, Inc. 474,700 19,263,326 ------------- Chemicals Total 19,263,326 METALS & MINING - 2.5% Alcoa, Inc. 338,900 10,973,582 Phelps Dodge Corp. (a) 114,390 9,329,649 ------------- Metals & Mining Total 20,303,231 ------------- MATERIALS TOTAL 39,566,557 TOTAL COMMON STOCKS (Cost of $683,842,209) 795,759,459 See Accompanying Notes to Financial Statements. 68 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA GROWTH FUND SHARES VALUE ($) ------------ ------------- PREFERRED STOCK - 0.9% CONSUMER DISCRETIONARY - 0.9% MEDIA - 0.9% News Corp., Ltd., ADR 239,400 7,122,150 ------------- Media Total 7,122,150 ------------- CONSUMER DISCRETIONARY TOTAL 7,122,150 TOTAL PREFERRED STOCK (Cost of $7,990,668) 7,122,150 SHORT-TERM OBLIGATION - 0.5% PAR ($) Repurchase agreement with State Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by a U.S. Treasury Note maturing 06/15/09, market value $4,108,256 (repurchase proceeds $4,024,168) 4,024,000 4,024,000 ------------- TOTAL SHORT-TERM OBLIGATION (Cost of $4,024,000) 4,024,000 TOTAL INVESTMENTS - 99.5% (COST OF $695,856,877) (c) 806,905,609 OTHER ASSETS & LIABILITIES, NET - 0.5% 4,073,708 NET ASSETS - 100.0% 810,979,317 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing security. (b) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2004, the value of this security represents 1.4% of net assets. (c) Cost for federal income tax purposes is $706,683,505. ACRONYM NAME ------- ---- ADR American Depositary Receipt GDR Global Depositary Receipt See Accompanying Notes to Financial Statements. 69 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA INTERNATIONAL STOCK FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - 95.1% CONSUMER DISCRETIONARY - 14.8% AUTO COMPONENTS - 0.8% Denso Corp. 181,700 4,502,035 ------------- Auto Components Total 4,502,035 AUTOMOBILES - 2.9% Renault SA 100,341 8,097,700 Toyota Motor Corp. 228,300 9,052,218 ------------- Automobiles Total 17,149,918 HOTELS, RESTAURANTS & LEISURE - 2.8% Accor SA 104,400 4,428,704 Carnival Corp. 80,000 3,663,200 Compass Group PLC 467,838 2,634,593 InterContinental Hotels Group PLC 302,965 3,102,253 OPAP SA 148,860 2,847,527 ------------- Hotels, Restaurants & Leisure Total 16,676,277 HOUSEHOLD DURABLES - 2.6% Funai Electric Co., Ltd. 20,000 2,816,455 Koninklijke (Royal) Philips Electronics NV 194,900 4,524,073 Matsushita Electric Industrial Co., Ltd. 420,000 5,687,886 Nitori Co., Ltd. 42,750 2,734,519 ------------- Household Durables Total 15,762,933 MEDIA - 2.8% Dentsu, Inc. 742 1,800,825 JC Decaux SA (a) 116,700 2,287,031 News Corp., Ltd. 437,400 3,423,437 Pearson PLC 338,200 3,792,651 Reuters Group PLC 380,300 2,205,969 WPP Group PLC 349,000 3,136,749 ------------- Media Total 16,646,662 MULTILINE RETAIL - 2.0% Metro AG (a) 93,688 4,367,684 Seiyu Ltd. (a) 691,000 1,814,245 Takashimaya Co., Ltd. 288,000 2,646,418 Wal-Mart de Mexico SA de CV, Series V 913,000 2,910,072 ------------- Multiline Retail Total 11,738,419 SPECIALTY RETAIL - 0.3% Aoyama Trading Co., Ltd. 64,500 1,565,754 ------------- Specialty Retail Total 1,565,754 TEXTILES, APPAREL & LUXURY GOODS - 0.6% Burberry Group PLC 544,846 3,572,196 ------------- Textiles, Apparel & Luxury Goods Total 3,572,196 ------------- CONSUMER DISCRETIONARY TOTAL 87,614,194 SHARES VALUE ($) ------------ ------------- CONSUMER STAPLES - 10.3% BEVERAGES - 1.9% Diageo PLC 606,450 7,493,795 ITO EN Ltd. 44,200 1,915,124 SABMiller PLC 144,820 1,805,573 ------------- Beverages Total 11,214,492 FOOD & STAPLES RETAILING - 0.7% Aeon Co., Ltd. 71,300 1,173,246 Aeon Co., Ltd. 71,300 1,190,858 William Morrison Supermarkets PLC 588,442 1,922,465 ------------- Food & Staples Retailing Total 4,286,569 FOOD PRODUCTS - 4.1% Ajinomoto Co., Inc. 245,000 2,777,162 Cadbury Schweppes PLC 346,930 2,796,216 Nestle SA, Registered Shares 44,797 10,635,163 Unilever PLC 897,120 7,722,524 ------------- Food Products Total 23,931,065 HOUSEHOLD PRODUCTS - 2.6% Kao Corp. 233,000 5,757,688 Reckitt Benckiser PLC 370,420 9,779,167 ------------- Household Products Total 15,536,855 TOBACCO - 1.0% Imperial Tobacco Group PLC 268,797 5,950,870 ------------- Tobacco Total 5,950,870 ------------- CONSUMER STAPLES TOTAL 60,919,851 ENERGY - 9.4% ENERGY EQUIPMENT & SERVICES - 0.2% Saipem S.p.A. 141,500 1,502,062 ------------- Energy Equipment & Services Total 1,502,062 OIL & GAS - 9.2% BP PLC, ADR 259,430 13,931,391 EnCana Corp. 159,800 6,526,271 ENI S.p.A. 685,050 14,068,504 Fortum Oyj 204,600 2,881,205 Norsk Hydro ASA 38,280 2,394,853 PTT Public Co., Ltd. 788,100 2,840,682 Shell Transport & Trading Co., PLC 569,000 4,176,995 Total SA 39,790 7,788,650 ------------- Oil & Gas Total 54,608,551 ------------- ENERGY TOTAL 56,110,613 FINANCIALS - 22.1% COMMERCIAL BANKS - 14.1% Anglo Irish Bank Corp., PLC 206,000 3,435,383 Banco Popolare di Verona e Novara 211,600 3,494,418 Banco Popular Espanol SA 60,780 3,304,856 Bank of Ireland 231,680 3,128,880 Barclays PLC 965,610 8,997,457 BNP Paribas SA 47,554 2,897,776 Credit Agricole SA 306,871 7,773,139 See Accompanying Notes to Financial Statements. 70 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA INTERNATIONAL STOCK FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) FINANCIALS - (CONTINUED) COMMERCIAL BANKS - (CONTINUED) Credit Suisse Group 76,212 2,393,572 Danske Bank A/S 160,000 3,875,875 Deutsche Bank AG, Registered Shares 21,098 1,441,767 Erste Bank der oesterreichischen Sparkassen AG 77,309 2,954,016 Hansabank Ltd. 252,357 2,115,319 HBOS PLC 328,150 4,036,698 Kookmin Bank (a) 97,500 3,134,183 Lloyds TSB Group PLC 366,200 2,765,136 Mitsubishi Tokyo Financial Group, Inc. 487 4,410,811 Mizuho Financial Group, Inc. 755 3,075,342 National Bank of Greece SA 125,190 2,753,435 Royal Bank of Scotland Group PLC 255,071 7,142,374 Skandinaviska Enskilda Banken AB, Class A 312,200 4,408,103 Societe Generale 41,900 3,603,133 Sumitomo Mitsui Financial Group, Inc. 461 2,807,165 ------------- Commercial Banks Total 83,948,838 DIVERSIFIED FINANCIAL SERVICES - 1.6% ING Groep NV 379,140 9,323,887 ------------- Diversified Financial Services Total 9,323,887 INSURANCE - 4.1% Aegon NV 137,134 1,474,789 Allianz AG 45,593 4,415,128 Axa 185,880 3,828,704 Irish Life & Permanent PLC 196,100 3,012,174 Millea Holdings, Inc. 423 5,876,585 Mitsui Sumitomo Insurance Co., Ltd. 322,000 2,872,166 T&D Holdings, Inc. 65,000 2,974,444 ------------- Insurance Total 24,453,990 REAL ESTATE - 2.3% Mitsubishi Estate Co., Ltd. 480,000 5,441,475 Sun Hung Kai Properties Ltd. 737,000 6,881,784 Swire Pacific Ltd., Series A 208,000 1,475,536 ------------- Real Estate Total 13,798,795 ------------- FINANCIALS TOTAL 131,525,510 HEALTH CARE - 10.8% HEALTH CARE EQUIPMENT & SUPPLIES - 2.2% Nobel Biocare Holding AG 14,880 2,109,458 Smith & Nephew PLC 887,110 8,025,425 Synthes, Inc. 28,200 3,026,053 ------------- Health Care Equipment & Supplies Total 13,160,936 PHARMACEUTICALS - 8.6% AstraZeneca PLC 145,300 6,719,887 Chugai Pharmaceutical Co., Ltd. 277,000 4,095,872 GlaxoSmithKline PLC 478,450 9,797,084 Novartis AG, Registered Shares 160,260 7,435,899 Sanofi-Aventis SA 107,930 7,693,766 SHARES VALUE ($) ------------ ------------- Takeda Pharmaceutical Co., Ltd. 202,600 9,192,250 Teva Pharmaceutical Industries Ltd., ADR 215,400 5,869,650 ------------- Pharmaceuticals Total 50,804,408 ------------- HEALTH CARE TOTAL 63,965,344 INDUSTRIALS - 9.8% BUILDING PRODUCTS - 0.5% Wienerberger AG 78,755 2,865,696 ------------- Building Products Total 2,865,696 COMMERCIAL SERVICES & SUPPLIES - 1.1% Randstad Holding NV 205,218 6,279,520 ------------- Commercial Services & Supplies Total 6,279,520 CONSTRUCTION & ENGINEERING - 2.0% JGC Corp. 392,000 3,772,820 Shimizu Corp. 586,000 2,601,869 Vinci SA 50,900 5,457,352 ------------- Construction & Engineering Total 11,832,041 ELECTRICAL EQUIPMENT - 0.5% Siemens AG, Registered Shares 42,778 2,940,880 ------------- Electrical Equipment Total 2,940,880 INDUSTRIAL CONGLOMERATES - 1.2% Hutchison Whampoa Ltd. 380,000 2,995,743 NIWS Co., Ltd. 475 1,393,821 Smiths Group PLC 225,978 2,841,351 ------------- Industrial Conglomerates Total 7,230,915 MACHINERY - 2.8% Atlas Copco AB, Class B 212,100 6,894,398 Heidelberger Druckmaschinen AG 92,000 2,726,364 Linde AG 49,400 2,658,444 Volvo AB, Class B 135,200 4,649,788 ------------- Machinery Total 16,928,994 ROAD & RAIL - 0.5% Canadian National Railway Co. 70,785 3,231,899 ------------- Road & Rail Total 3,231,899 TRADING COMPANIES & DISTRIBUTORS - 0.7% Mitsubishi Corp. 413,000 4,301,498 ------------- Trading Companies & Distributors Total 4,301,498 TRANSPORTATION INFRASTRUCTURE - 0.5% BAA PLC 289,700 2,907,820 ------------- Transportation Infrastructure Total 2,907,820 ------------- INDUSTRIALS TOTAL 58,519,263 See Accompanying Notes to Financial Statements. 71 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA INTERNATIONAL STOCK FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) INFORMATION TECHNOLOGY - 3.4% ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.7% Keyence Corp. 10,500 2,168,981 Tandberg ASA 302,600 2,710,181 TDK Corp. 78,000 5,207,359 ------------- Electronic Equipment & Instruments Total 10,086,521 OFFICE ELECTRONICS - 0.9% Canon, Inc. 118,700 5,702,795 ------------- Office Electronics Total 5,702,795 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.8% Samsung Electronics Co., Ltd. 11,500 4,539,036 ------------- Semiconductors & Semiconductor Equipment Total 4,539,036 ------------- INFORMATION TECHNOLOGY TOTAL 20,328,352 MATERIALS - 4.5% CHEMICALS - 3.4% BASF AG 112,200 6,079,049 L'Air Liquide SA 36,410 5,726,819 Novozymes A/S, Class B 33,300 1,403,911 Syngenta AG (a) 77,136 6,943,872 ------------- Chemicals Total 20,153,651 CONSTRUCTION MATERIALS - 0.7% Cemex SA de CV 149,900 4,242,170 ------------- Construction Materials Total 4,242,170 PAPER & FOREST PRODUCTS - 0.4% UPM-Kymmene Oyj 112,100 2,148,675 ------------- Paper & Forest Products Total 2,148,675 ------------- MATERIALS TOTAL 26,544,496 TELECOMMUNICATION SERVICES - 6.4% DIVERSIFIED TELECOMMUNICATION SERVICES - 4.0% Belgacom SA (a) 90,300 3,022,598 Bharti Tele-Ventures Ltd. (a) 798,500 2,410,898 Deutsche Telekom AG, Registered Shares (a) 82,495 1,444,765 France Telecom SA 160,300 3,816,639 Nippon Telegraph & Telephone Corp. 778 3,394,822 TDC A/S 89,700 3,172,780 Telecom Italia S.p.A. 983,791 2,957,681 Telefonaktiebolaget LM Ericsson, ADR (a) 122,000 3,298,880 ------------- Diversified Telecommunication Services Total 23,519,063 SHARES VALUE ($) ------------ ------------- WIRELESS TELECOMMUNICATION SERVICES - 2.4% NTT DoCoMo, Inc. 2,193 4,102,740 Vodafone Group PLC 4,566,860 10,436,815 ------------- Wireless Telecommunication Services Total 14,539,555 ------------- TELECOMMUNICATION SERVICES TOTAL 38,058,618 UTILITIES - 3.6% ELECTRIC UTILITIES - 3.1% E.ON AG 127,010 9,042,039 National Grid Transco PLC 750,736 6,314,694 Scottish Power PLC 408,384 2,969,583 ------------- Electric Utilities Total 18,326,316 GAS UTILITIES - 0.5% Centrica PLC 651,700 2,902,850 ------------- Gas Utilities Total 2,902,850 ------------- UTILITIES TOTAL 21,229,166 TOTAL COMMON STOCKS (Cost of $522,865,352) 564,815,407 PREFERRED STOCK - 0.9% CONSUMER DISCRETIONARY - 0.9% AUTOMOBILES - 0.9% Porsche AG 9,000 5,497,206 ------------- Automobiles Total 5,497,206 ------------- CONSUMER DISCRETIONARY TOTAL 5,497,206 TOTAL PREFERRED STOCK (Cost of $5,753,047) 5,497,206 SHORT-TERM OBLIGATION - 4.8% PAR ($) Repurchase agreement with State Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by a U.S. Treasury Note maturing 06/15/09, market value $28,981,125 (repurchase proceeds $28,413,184) 28,412,000 28,412,000 ------------- TOTAL SHORT-TERM OBLIGATION (Cost of $28,412,000) 28,412,000 TOTAL INVESTMENTS - 100.8% (cost of $557,030,399) (b) 598,724,613 OTHER ASSETS & LIABILITIES, NET - (0.8)% (4,933,346) NET ASSETS - 100.0% 593,791,267 See Accompanying Notes to Financial Statements. 72 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA INTERNATIONAL STOCK FUND NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing security. (b) Cost for federal income tax purposes is $558,824,342. SUMMARY OF SECURITIES % OF TOTAL BY COUNTRY (UNAUDITED) VALUE INVESTMENTS -------------------------------------------------------------------------- United Kingdom $149,880,581 25.0% Japan 118,827,248 19.8 France 63,399,413 10.6 Germany 40,613,326 6.8 United States* 31,438,053 5.2 Switzerland 29,517,964 4.9 Italy 22,022,665 3.7 Netherlands 21,602,269 3.6 Sweden 19,251,169 3.2 Hong Kong 11,353,063 1.9 Canada 9,758,170 1.6 Ireland 9,576,437 1.6 Denmark 8,452,566 1.4 South Korea 7,673,219 1.3 Mexico 7,152,242 1.2 Israel 5,869,650 1.0 Austria 5,819,712 1.0 Greece 5,600,962 0.9 Norway 5,105,034 0.9 Finland 5,029,880 0.8 Panama 3,663,200 0.6 Australia 3,423,437 0.6 Spain 3,304,856 0.6 Belgium 3,022,598 0.5 Thailand 2,840,682 0.5 India 2,410,898 0.4 Estonia 2,115,319 0.4 ------------ ------------- $598,724,613 100.0% ============ ============= * Includes Short-Term Obligation. Certain securities are listed by country of underlying exposure but may trade predominately on other exchanges. ACRONYM NAME ------- ---- ADR American Depositary Receipt See Accompanying Notes to Financial Statements. 73 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA MID CAP GROWTH FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - 97.9% CONSUMER DISCRETIONARY - 16.3% AUTO COMPONENTS - 0.6% Autoliv, Inc. 114,130 4,821,992 ------------- Auto Components Total 4,821,992 HOTELS, RESTAURANTS & LEISURE - 5.4% Applebee's International, Inc. 191,200 4,602,184 Cheesecake Factory, Inc. (a) 116,900 4,837,322 Four Seasons Hotels, Inc. 46,000 2,636,720 Harrah's Entertainment, Inc. 137,500 6,626,125 Hilton Hotels Corp. 447,900 7,995,015 Marriott International, Inc., Class A 118,600 5,627,570 Yum! Brands, Inc. 369,000 14,652,990 ------------- Hotels, Restaurants & Leisure Total 46,977,926 HOUSEHOLD DURABLES - 1.9% Centex Corp. 106,700 4,883,659 D.R. Horton, Inc. 178,900 5,535,166 Harman International Industries, Inc. 37,300 3,606,537 Pulte Homes, Inc. 41,900 2,470,005 ------------- Household Durables Total 16,495,367 LEISURE EQUIPMENT & PRODUCTS - 0.4% Marvel Enterprises, Inc. (a) 251,300 3,686,571 ------------- Leisure Equipment & Products Total 3,686,571 MEDIA - 3.2% Lamar Advertising Co., Class A (a) 112,900 4,932,601 Univision Communications, Inc., Class A (a) 405,950 13,396,350 XM Satellite Radio Holdings, Inc., Class A (a) 325,000 8,927,750 ------------- Media Total 27,256,701 SPECIALTY RETAIL - 3.6% Bed Bath & Beyond, Inc. (a) 103,100 3,858,002 Chico's FAS, Inc. (a) 135,200 5,529,680 PETCO Animal Supplies, Inc. (a) 151,700 5,024,304 PETsMART, Inc. 231,200 6,487,472 Staples, Inc. 349,900 10,035,132 ------------- Specialty Retail Total 30,934,590 TEXTILES, APPAREL & LUXURY GOODS - 1.2% Coach, Inc. (a) 245,200 10,335,180 ------------- Textiles, Apparel & Luxury Goods Total 10,335,180 ------------- CONSUMER DISCRETIONARY TOTAL 140,508,327 CONSUMER STAPLES - 3.3% FOOD & STAPLES RETAILING - 0.7% Whole Foods Market, Inc. 77,100 5,992,983 ------------- Food & Staples Retailing Total 5,992,983 SHARES VALUE ($) ------------ ------------- FOOD PRODUCTS - 2.1% Bunge Ltd. 110,000 4,387,900 Dean Foods Co. (a) 240,100 8,900,507 Hershey Foods Corp. 100,200 4,837,656 ------------- Food Products Total 18,126,063 PERSONAL PRODUCTS - 0.5% Alberto-Culver Co. 95,700 4,621,353 ------------- Personal Products Total 4,621,353 ------------- CONSUMER STAPLES TOTAL 28,740,399 ENERGY - 7.2% ENERGY EQUIPMENT & SERVICES - 5.2% Baker Hughes, Inc. 289,000 11,366,370 BJ Services Co. (a) 150,700 7,241,135 Cooper Cameron Corp. (a) 63,300 3,223,869 Nabors Industries Ltd. (a) 60,450 2,665,845 National-Oilwell, Inc. (a) 338,800 10,130,120 Patterson-UTI Energy, Inc. 572,500 9,915,700 ------------- Energy Equipment & Services Total 44,543,039 OIL & GAS - 2.0% Apache Corp. 90,944 4,064,287 EOG Resources, Inc. 55,200 3,188,904 Murphy Oil Corp. 36,100 2,725,911 XTO Energy, Inc. 254,375 7,132,675 ------------- Oil & Gas Total 17,111,777 ------------- ENERGY TOTAL 61,654,816 FINANCIALS - 5.3% CAPITAL MARKETS - 0.6% E*TRADE Financial Corp. (a) 465,100 5,478,878 ------------- Capital Markets Total 5,478,878 COMMERCIAL BANKS - 2.6% North Fork Bancorporation, Inc. 120,800 5,066,352 TCF Financial Corp. 121,800 7,747,698 UCBH Holdings, Inc. 120,000 4,818,000 Zions Bancorporation 77,900 4,851,612 ------------- Commercial Banks Total 22,483,662 INSURANCE - 1.1% Ambac Financial Group, Inc. 128,800 9,724,400 ------------- Insurance Total 9,724,400 REAL ESTATE - 1.0% St. Joe Co. 173,000 8,373,200 ------------- Real Estate Total 8,373,200 ------------- FINANCIALS TOTAL 46,060,140 See Accompanying Notes to Financial Statements. 74 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA MID CAP GROWTH FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) HEALTH CARE - 21.5% BIOTECHNOLOGY - 3.9% Amylin Pharmaceuticals, Inc. (a) 361,180 7,147,752 Gen-Probe, Inc. (a) 179,800 6,490,780 Genzyme Corp. (a) 179,600 9,698,400 ImClone Systems, Inc. (a) 79,200 4,219,776 Martek Biosciences Corp. (a) 112,600 6,012,840 ------------- Biotechnology Total 33,569,548 HEALTH CARE EQUIPMENT & SUPPLIES - 7.0% Beckman Coulter, Inc. 115,200 6,427,008 Biomet, Inc. 209,200 9,549,980 Boston Scientific Corp. (a) 98,900 3,533,697 Fisher Scientific International, Inc. (a) 219,500 12,504,915 Kinetic Concepts, Inc. (a) 243,100 12,099,087 Thermo Electron Corp. (a) 339,900 8,929,173 Varian Medical Systems, Inc. (a) 224,480 7,441,512 ------------- Health Care Equipment & Supplies Total 60,485,372 HEALTH CARE PROVIDERS & SERVICES - 4.9% Accredo Health, Inc. (a) 199,600 4,361,260 Anthem, Inc. (a) 58,600 4,760,664 Community Health Systems, Inc. (a) 176,230 4,405,750 DaVita, Inc. (a) 455,925 13,819,087 McKesson Corp. 358,600 11,098,670 UnitedHealth Group, Inc. 61,355 4,057,406 ------------- Health Care Providers & Services Total 42,502,837 PHARMACEUTICALS - 5.7% Barr Pharmaceuticals, Inc. (a) 132,562 5,205,710 Elan Corp., PLC, ADR (a) 361,000 8,169,430 Endo Pharmaceuticals Holdings, Inc. (a) 355,100 6,022,496 IVAX Corp. (a) 259,875 5,031,180 Medicis Pharmaceutical Corp., Class A 473,300 17,332,246 Nektar Therapeutics (a) 334,200 4,257,708 Teva Pharmaceutical Industries Ltd., ADR 110,100 3,000,225 ------------- Pharmaceuticals Total 49,018,995 ------------- HEALTH CARE TOTAL 185,576,752 INDUSTRIALS - 10.8% AEROSPACE & DEFENSE - 1.1% L-3 Communications Holdings, Inc. 77,400 4,848,336 United Defense Industries, Inc. (a) 132,800 5,076,944 ------------- Aerospace & Defense Total 9,925,280 AIR FREIGHT & LOGISTICS - 1.1% C.H. Robinson Worldwide, Inc. 117,900 5,030,793 Expeditors International of Washington, Inc. 95,200 4,643,856 ------------- Air Freight & Logistics Total 9,674,649 SHARES VALUE ($) ------------ ------------- AIRLINES - 0.4% JetBlue Airways Corp. (a) 144,400 3,443,940 ------------- Airlines Total 3,443,940 BUILDING PRODUCTS - 0.6% Masco Corp. 151,200 4,858,056 ------------- Building Products Total 4,858,056 COMMERCIAL SERVICES & SUPPLIES - 6.8% Avery Dennison Corp. 83,800 5,208,170 Career Education Corp. (a) 93,500 2,883,540 ChoicePoint, Inc. (a) 274,590 11,601,428 Cintas Corp. 106,800 4,379,868 Corporate Executive Board Co. 203,700 11,989,782 Education Management Corp. (a) 211,700 6,152,002 Manpower, Inc. 282,600 11,934,198 Robert Half International, Inc. 176,400 4,321,800 ------------- Commercial Services & Supplies Total 58,470,788 CONSTRUCTION & ENGINEERING - 0.8% Jacobs Engineering Group, Inc. (a) 172,300 6,738,653 ------------- Construction & Engineering Total 6,738,653 ------------- INDUSTRIALS TOTAL 93,111,366 INFORMATION TECHNOLOGY - 24.9% COMMUNICATIONS EQUIPMENT - 3.3% Comverse Technology, Inc. (a) 564,100 9,877,391 Harris Corp. 92,100 4,435,536 Juniper Networks, Inc. (a) 385,970 8,834,853 Polycom, Inc. (a) 276,100 5,392,233 ------------- Communications Equipment Total 28,540,013 COMPUTERS & PERIPHERALS - 0.9% Lexmark International, Inc. (a) 46,200 4,086,390 PalmOne, Inc. (a) 119,100 3,888,615 ------------- Computers & Peripherals Total 7,975,005 ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.0% CDW Corp. 139,300 8,149,050 FLIR Systems, Inc. (a) 75,500 4,406,935 National Instruments Corp. 169,300 4,413,651 ------------- Electronic Equipment & Instruments Total 16,969,636 INTERNET SOFTWARE & SERVICES - 0.7% Ask Jeeves, Inc. (a) 240,300 6,228,576 ------------- Internet Software & Services Total 6,228,576 IT SERVICES - 2.6% Cognizant Technology Solutions Corp., Class A (a) 360,200 9,876,684 Iron Mountain, Inc. (a) 291,500 8,986,945 SunGard Data Systems, Inc. (a) 156,540 3,600,420 ------------- IT Services Total 22,464,049 See Accompanying Notes to Financial Statements. 75 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA MID CAP GROWTH FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) INFORMATION TECHNOLOGY - (CONTINUED) OFFICE ELECTRONICS - 1.1% Zebra Technologies Corp., Class A (a) 159,900 9,138,285 ------------- Office Electronics Total 9,138,285 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 8.0% Advanced Micro Devices, Inc. (a) 423,300 4,838,319 Altera Corp. (a) 304,310 5,757,545 Broadcom Corp., Class A (a) 366,900 9,957,666 Linear Technology Corp. 255,100 9,124,927 Marvell Technology Group Ltd. (a) 448,630 10,372,326 Microchip Technology, Inc. 357,050 9,422,549 National Semiconductor Corp. (a) 494,600 6,593,018 NVIDIA Corp. (a) 369,300 4,601,478 Silicon Laboratories, Inc. (a) 268,500 8,804,115 ------------- Semiconductors & Semiconductor Equipment Total 69,471,943 SOFTWARE - 6.3% Amdocs Ltd. (a) 270,800 5,443,080 BMC Software, Inc. (a) 419,600 6,281,412 Check Point Software Technologies Ltd. (a) 379,600 6,658,184 Citrix Systems, Inc. (a) 378,100 6,015,571 Hyperion Solutions Corp. (a) 224,200 8,196,752 Intuit, Inc. (a) 107,400 4,541,946 Mercury Interactive Corp. (a) 249,150 8,598,167 Novell, Inc. (a) 677,800 3,999,020 VERITAS Software Corp. (a) 265,450 4,438,324 ------------- Software Total 54,172,456 ------------- INFORMATION TECHNOLOGY TOTAL 214,959,963 MATERIALS - 4.8% CHEMICALS - 1.4% Potash Corp. of Saskatchewan, Inc. 222,400 12,347,648 ------------- Chemicals Total 12,347,648 CONSTRUCTION MATERIALS - 0.3% Florida Rock Industries, Inc. 58,900 2,679,950 ------------- Construction Materials Total 2,679,950 METALS & MINING - 3.1% Allegheny Technologies, Inc. 165,000 3,103,650 Freeport-McMoRan Copper & Gold, Inc. 132,000 4,967,160 Inco Ltd. (a) 131,300 4,482,582 Peabody Energy Corp. 178,200 9,501,624 Phelps Dodge Corp. 59,400 4,844,664 ------------- Metals & Mining Total 26,899,680 ------------- MATERIALS TOTAL 41,927,278 SHARES VALUE ($) ------------ ------------- TELECOMMUNICATION SERVICES - 3.8% WIRELESS TELECOMMUNICATION SERVICES - 3.8% American Tower Corp., Class A (a) 226,900 3,378,541 Crown Castle International Corp. (a) 521,100 7,456,941 Millicom International Cellular SA (a) 373,900 5,762,173 Nextel Partners, Inc., Class A (a) 456,700 6,585,614 VimpelCom, ADR (a) 39,000 3,825,900 Western Wireless Corp., Class A (a) 212,200 5,324,098 ------------- Wireless Telecommunication Services Total 32,333,267 ------------- TELECOMMUNICATION SERVICES TOTAL 32,333,267 TOTAL COMMON STOCKS (Cost of $816,559,759) 844,872,308 CONVERTIBLE PREFERRED STOCK - 0.0% INFORMATION TECHNOLOGY - 0.0% INTERNET SOFTWARE & SERVICES - 0.0% Network Specialists, Inc., Series A (a)(b)(c) 394,218 3,942 ------------- Internet Software & Services Total 3,942 ------------- INFORMATION TECHNOLOGY TOTAL 3,942 TOTAL CONVERTIBLE PREFERRED STOCK (Cost of $3,000,000) 3,942 SHORT-TERM OBLIGATION - 2.7% PAR ($) Repurchase agreement with State Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by a U.S. Treasury Note maturing 08/31/06, market value $23,550,525 (repurchase proceeds $23,086,962) 23,086,000 23,086,000 ------------- TOTAL SHORT-TERM OBLIGATION (Cost of $23,086,000) 23,086,000 TOTAL INVESTMENTS - 100.6% (COST OF $842,645,759) (d) 867,962,250 OTHER ASSETS & LIABILITIES, NET - (0.6)% (5,480,931) NET ASSETS - 100.0% 862,481,319 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing security. (b) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2004, the value of this security represents less than 0.01% of net assets. (c) Represents fair value as determined in good faith under procedures approved by the Board of Directors. (d) Cost for federal income tax purposes is $844,541,336. ACRONYM NAME ------- ---- ADR American Depositary Receipt See Accompanying Notes to Financial Statements. 76 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA SMALL CAP GROWTH FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - 99.0% CONSUMER DISCRETIONARY - 14.0% AUTO COMPONENTS - 2.2% Autoliv, Inc. 205,570 8,685,332 Gentex Corp. 96,040 3,298,014 ------------- Auto Components Total 11,983,346 HOTELS, RESTAURANTS & LEISURE - 3.2% Applebee's International, Inc. 114,710 2,761,070 CBRL Group, Inc. 106,990 3,410,841 Cheesecake Factory, Inc. (a) 50,030 2,070,241 P.F. Chang's China Bistro, Inc. (a) 66,510 2,788,099 Scientific Games Corp. (a) 209,750 3,572,043 WMS Industries, Inc. (a) 116,870 2,361,943 ------------- Hotels, Restaurants & Leisure Total 16,964,237 HOUSEHOLD DURABLES - 0.5% Beazer Homes USA, Inc. 13,900 1,357,335 Ryland Group, Inc. 16,000 1,410,400 ------------- Household Durables Total 2,767,735 INTERNET & CATALOG RETAIL - 0.8% Insight Enterprises, Inc. (a) 272,410 4,358,560 ------------- Internet & Catalog Retail Total 4,358,560 LEISURE EQUIPMENT & PRODUCTS - 1.2% Nautilus Group, Inc. 330,430 6,440,081 ------------- Leisure Equipment & Products Total 6,440,081 MEDIA - 3.0% Entercom Communications Corp. (a) 82,300 3,102,710 Entravision Communications Corp., Class A (a) 243,690 1,973,889 Getty Images, Inc. (a) 113,800 6,310,210 Radio One, Inc., Class D (a) 320,852 5,005,291 ------------- Media Total 16,392,100 SPECIALTY RETAIL - 2.3% Advance Auto Parts, Inc. (a) 48,840 1,810,010 Aeropostale, Inc. (a) 181,210 5,644,691 PETCO Animal Supplies, Inc. (a) 151,830 5,028,610 ------------- Specialty Retail Total 12,483,311 TEXTILES, APPAREL & LUXURY GOODS - 0.8% Columbia Sportswear Co. (a) 81,120 4,424,285 ------------- Textiles, Apparel & Luxury Goods Total 4,424,285 ------------- CONSUMER DISCRETIONARY TOTAL 75,813,655 CONSUMER STAPLES - 0.5% FOOD PRODUCTS - 0.5% Bunge Ltd. 69,300 2,764,377 ------------- Food Products Total 2,764,377 ------------- CONSUMER STAPLES TOTAL 2,764,377 SHARES VALUE ($) ------------ ------------- ENERGY - 8.1% ENERGY EQUIPMENT & SERVICES - 6.1% Atwood Oceanics, Inc. (a) 58,020 2,423,496 Cal Dive International, Inc. (a) 131,310 3,922,230 Input/Output, Inc. (a) 137,280 1,350,835 Key Energy Services, Inc. (a) 545,260 5,501,673 Lone Star Technologies, Inc. (a) 53,770 1,651,814 Maverick Tube Corp. (a) 71,050 2,104,501 National-Oilwell, Inc. (a) 263,320 7,873,268 Patterson-UTI Energy, Inc. 316,050 5,473,986 Precision Drilling Corp. (a) 61,900 3,057,860 ------------- Energy Equipment & Services Total 33,359,663 OIL & GAS - 2.0% Quicksilver Resources, Inc. (a) 96,750 2,725,448 XTO Energy, Inc. 281,760 7,900,550 ------------- Oil & Gas Total 10,625,998 ------------- ENERGY TOTAL 43,985,661 FINANCIALS - 3.2% COMMERCIAL BANKS - 0.3% Umpqua Holdings Corp. 68,270 1,579,085 ------------- Commercial Banks Total 1,579,085 DIVERSIFIED FINANCIAL SERVICES - 1.4% Affiliated Managers Group, Inc. (a) 157,090 7,705,265 ------------- Diversified Financial Services Total 7,705,265 INSURANCE - 1.5% Allmerica Financial Corp. (a) 141,460 4,102,340 ProAssurance Corp. (a) 123,450 4,167,672 ------------- Insurance Total 8,270,012 ------------- FINANCIALS TOTAL 17,554,362 HEALTH CARE - 18.1% BIOTECHNOLOGY - 1.6% Connetics Corp. (a) 223,730 5,738,675 Nabi Biopharmaceuticals (a) 155,900 1,820,912 Onyx Pharmaceuticals, Inc. (a) 37,800 1,403,892 ------------- Biotechnology Total 8,963,479 HEALTH CARE EQUIPMENT & SUPPLIES - 3.4% ArthroCare Corp. (a) 346,700 8,320,800 Kyphon, Inc. (a) 125,130 2,794,153 Regeneration Technologies, Inc. (a) 164,950 1,637,954 ResMed, Inc. (a) 116,990 5,588,612 ------------- Health Care Equipment & Supplies Total 18,341,519 HEALTH CARE PROVIDERS & SERVICES - 11.2% Accredo Health, Inc. (a) 126,090 2,755,066 Cerner Corp. (a) 108,050 4,733,670 Chemed Corp. 61,800 3,379,842 DaVita, Inc. (a) 281,476 8,531,538 See Accompanying Notes to Financial Statements. 77 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA SMALL CAP GROWTH FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) HEALTH CARE - (CONTINUED) HEALTH CARE PROVIDERS & SERVICES - (CONTINUED) Henry Schein, Inc. (a) 112,221 6,989,124 ICON PLC, ADR (a) 213,980 7,690,441 IDX Systems Corp. (a) 104,990 3,044,710 Kindred Healthcare, Inc. (a) 185,800 4,804,788 Pharmaceutical Product Development, Inc. (a) 83,350 2,829,733 Renal Care Group, Inc. (a) 343,040 10,864,077 United Surgical Partners International, Inc. (a) 146,940 5,306,003 ------------- Health Care Providers & Services Total 60,928,992 PHARMACEUTICALS - 1.9% MGI Pharma, Inc. (a) 164,990 3,832,718 Nektar Therapeutics (a) 231,620 2,950,839 Salix Pharmaceuticals Ltd. (a) 152,245 3,561,010 ------------- Pharmaceuticals Total 10,344,567 ------------- HEALTH CARE TOTAL 98,578,557 INDUSTRIALS - 16.8% AEROSPACE & DEFENSE - 2.5% Armor Holdings, Inc. (a) 80,420 2,851,693 United Defense Industries, Inc. (a) 281,770 10,772,067 ------------- Aerospace & Defense Total 13,623,760 AIR FREIGHT & LOGISTICS - 0.7% UTI Worldwide, Inc. 78,250 4,014,225 ------------- Air Freight & Logistics Total 4,014,225 COMMERCIAL SERVICES & SUPPLIES - 5.6% Corinthian Colleges, Inc. (a) 276,930 3,148,694 Corporate Executive Board Co. 142,120 8,365,183 Education Management Corp. (a) 231,272 6,720,765 Ionics, Inc. (a) 64,410 1,688,186 Resources Connection, Inc. (a) 143,350 4,699,013 Tetra Tech, Inc. (a) 337,840 6,003,417 ------------- Commercial Services & Supplies Total 30,625,258 CONSTRUCTION & ENGINEERING - 1.0% URS Corp. (a) 220,150 5,437,705 ------------- Construction & Engineering Total 5,437,705 ELECTRICAL EQUIPMENT - 1.8% Artesyn Technologies, Inc. (a) 405,160 3,447,912 Power-One, Inc. (a) 373,640 2,806,036 Roper Industries, Inc. 60,820 3,354,223 ------------- Electrical Equipment Total 9,608,171 MACHINERY - 4.6% IDEX Corp. 130,870 4,020,326 Joy Global, Inc. 152,650 4,626,822 Kennametal, Inc. 150,870 6,169,074 Terex Corp. (a) 104,170 3,763,662 SHARES VALUE ($) ------------ ------------- Wabtec Corp. 358,490 6,133,764 ------------- Machinery Total 24,713,648 ROAD & RAIL - 0.6% Sirva, Inc. (a) 143,750 3,044,625 ------------- Road & Rail Total 3,044,625 ------------- INDUSTRIALS TOTAL 91,067,392 INFORMATION TECHNOLOGY - 31.9% COMMUNICATIONS EQUIPMENT - 5.4% Aspect Communications Corp. (a) 395,300 3,383,768 F5 Networks, Inc. (a) 263,970 6,485,743 Ixia (a) 639,360 5,070,125 Packeteer, Inc. (a) 522,440 5,240,073 Polycom, Inc. (a) 480,060 9,375,572 ------------- Communications Equipment Total 29,555,281 COMPUTERS & PERIPHERALS - 2.0% Electronics for Imaging, Inc. (a) 392,910 7,811,051 PalmOne, Inc. (a) 35,700 1,165,605 Stratasys, Inc. (a) 66,730 1,663,579 ------------- Computers & Peripherals Total 10,640,235 ELECTRONIC EQUIPMENT & INSTRUMENTS - 5.8% Amphenol Corp., Class A (a) 449,500 13,511,970 Benchmark Electronics, Inc. (a) 230,790 6,637,520 Electro Scientific Industries, Inc. (a) 182,180 3,769,304 KEMET Corp. (a) 167,250 1,450,058 National Instruments Corp. 153,540 4,002,788 RadiSys Corp. (a) 199,140 2,310,024 ------------- Electronic Equipment & Instruments Total 31,681,664 INTERNET SOFTWARE & SERVICES - 1.3% Ask Jeeves, Inc. (a) 100,090 2,594,333 Equinix, Inc. (a) 111,170 3,534,094 FindWhat.com (a) 43,930 643,574 ------------- Internet Software & Services Total 6,772,001 IT SERVICES - 5.4% Anteon International Corp. (a) 118,590 3,895,681 CACI International, Inc., Class A (a) 135,310 6,588,244 Cognizant Technology Solutions Corp., Class A (a) 217,810 5,972,350 Euronet Worldwide, Inc. (a) 171,210 3,006,448 Global Payments, Inc. 102,616 4,552,046 MPS Group, Inc. (a) 401,710 3,587,270 Sapient Corp. (a) 226,750 1,700,625 ------------- IT Services Total 29,302,664 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.6% Axcelis Technologies, Inc. (a) 352,290 2,747,862 Credence Systems Corp. (a) 624,690 4,166,682 FormFactor, Inc. (a) 72,700 1,272,250 Integrated Device Technology, Inc. (a) 539,920 5,782,543 PLX Technology, Inc. (a) 212,080 1,331,863 Power Integrations, Inc. (a) 147,240 2,956,579 See Accompanying Notes to Financial Statements. 78 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA SMALL CAP GROWTH FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) INFORMATION TECHNOLOGY - (CONTINUED) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - (CONTINUED) Sigmatel, Inc. (a) 231,100 3,880,169 Silicon Laboratories, Inc. (a) 249,420 8,178,482 ------------- Semiconductors & Semiconductor Equipment Total 30,316,430 SOFTWARE - 6.4% Agile Software Corp. (a) 221,530 1,688,059 Altiris, Inc. (a) 146,530 3,477,157 Autodesk, Inc. 85,830 3,811,710 Citrix Systems, Inc. (a) 168,340 2,678,289 Embarcadero Technologies, Inc. (a) 320,480 2,538,202 Macromedia, Inc. (a) 309,240 5,993,071 Manhattan Associates, Inc. (a) 338,920 7,910,393 Parametric Technology Corp. (a) 902,240 4,393,909 Quest Software, Inc. (a) 247,610 2,505,813 ------------- Software Total 34,996,603 ------------- INFORMATION TECHNOLOGY TOTAL 173,264,878 MATERIALS - 5.0% CHEMICALS - 1.7% Airgas, Inc. 146,760 3,265,410 OM Group, Inc. (a) 178,270 6,070,093 ------------- Chemicals Total 9,335,503 METALS & MINING - 3.3% Allegheny Technologies, Inc. 104,900 1,973,169 Arch Coal, Inc. 91,860 2,960,648 GrafTech International Ltd. (a) 429,400 4,577,404 Massey Energy Co. 117,160 3,224,243 Steel Dynamics, Inc. 158,000 4,954,880 ------------- Metals & Mining Total 17,690,344 ------------- MATERIALS TOTAL 27,025,847 TELECOMMUNICATION SERVICES - 1.4% DIVERSIFIED TELECOMMUNICATION SERVICES - 0.7% PTEK Holdings, Inc. (a) 453,430 3,885,895 ------------- Diversified Telecommunication Services Total 3,885,895 WIRELESS TELECOMMUNICATION SERVICES - 0.7% Wireless Facilities, Inc. (a) 552,190 3,522,972 ------------- Wireless Telecommunication Services Total 3,522,972 ------------- TELECOMMUNICATION SERVICES TOTAL 7,408,867 TOTAL COMMON STOCKS (Cost of $496,113,210) 537,463,596 PAR ($) VALUE ($) ------------ ------------- SHORT-TERM OBLIGATION - 1.3% Repurchase agreement with State Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by a U.S. Treasury Note maturing 06/15/09, market value $7,063,500 (repurchase proceeds $6,921,288) 6,921,000 6,921,000 ------------- TOTAL SHORT-TERM OBLIGATION (Cost of $6,921,000) 6,921,000 TOTAL INVESTMENTS - 100.3% (COST OF $503,034,210) (b) 544,384,596 OTHER ASSETS & LIABILITIES, NET - (0.3)% (1,368,289) NET ASSETS - 100.0% 543,016,307 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing security. (b) Cost for federal income tax purposes is $505,508,937. ACRONYM NAME ------- ---- ADR American Depositary Receipt See Accompanying Notes to Financial Statements. 79 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA REAL ESTATE EQUITY FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - 95.4% CONSUMER DISCRETIONARY - 11.6% HOTELS, RESTAURANTS & LEISURE - 11.6% Hilton Hotels Corp. 2,321,900 41,445,915 La Quinta Corp. (a) 1,856,500 14,554,960 Marriott International, Inc., Class A 485,300 23,027,485 Starwood Hotels & Resorts Worldwide, Inc. 625,900 27,664,780 ------------- Hotels, Restaurants & Leisure Total 106,693,140 ------------- CONSUMER DISCRETIONARY TOTAL 106,693,140 FINANCIALS - 71.7% REAL ESTATE - 71.7% Alexandria Real Estate Equities, Inc., REIT 570,400 36,961,920 Archstone-Smith Trust, REIT 601,571 18,799,094 AvalonBay Communities, Inc., REIT 324,000 19,569,600 Boston Properties, Inc., REIT 227,400 12,616,152 Brookfield Properties Corp. 412,600 13,050,538 CenterPoint Properties Trust, REIT 461,800 19,423,308 Corporate Office Properties, Inc., REIT 371,180 9,817,711 Cousins Properties, Inc., REIT 1,214,850 43,734,600 Duke Realty Corp., REIT 676,700 23,007,800 Essex Property Trust, REIT 99,600 7,345,500 Equity Office Properties Trust, REIT 891,737 25,468,009 Equity Residential, REIT 1,258,306 40,756,531 General Growth Properties, Inc., REIT 1,148,480 34,649,642 Host Marriott Corp., REIT 2,521,300 33,659,355 iStar Financial, Inc., REIT 1,117,250 44,958,140 Kimco Realty Corp., REIT 503,500 25,336,120 Liberty Property Trust, REIT 444,500 17,984,470 Newcastle Investment Corp., REIT 592,300 17,928,921 Pan Pacific Retail Properties, Inc., REIT 299,900 16,011,661 ProLogis, REIT 961,706 34,765,672 Public Storage, Inc., REIT 584,532 29,723,452 Regency Centers Corp., REIT 652,000 29,992,000 Simon Property Group, Inc., REIT 785,256 43,935,073 SL Green Realty Corp., REIT 259,000 12,950,000 St. Joe Co. 457,800 22,157,520 United Dominion Realty Trust, Inc., REIT 502,800 10,674,444 Vornado Realty Trust, REIT 274,000 17,196,240 ------------- Real Estate Total 662,473,473 ------------- FINANCIALS TOTAL 662,473,473 SHARES VALUE ($) ------------ ------------- MATERIALS - 12.1% CONTAINERS & PACKAGING - 2.9% Smurfit-Stone Container Corp. (a) 970,400 17,214,896 Temple-Inland, Inc. 139,200 9,504,576 ------------- Containers & Packaging Total 26,719,472 PAPER & FOREST PRODUCTS - 9.2% Bowater, Inc. 844,600 30,346,478 International Paper Co. 705,500 28,234,110 MeadWestvaco Corp. 537,700 16,211,655 Weyerhaeuser Co. 166,100 10,382,911 ------------- Paper & Forest Products Total 85,175,154 ------------- MATERIALS TOTAL 111,894,626 TOTAL COMMON STOCKS (Cost of $603,250,342) 881,061,239 INCOME DEPOSIT SECURITY - 1.0% CONSUMER DISCRETIONARY - 1.0% HOTELS, RESTAURANTS & LEISURE - 1.0% Volume Services America Holdings, Inc. 665,500 9,676,370 ------------- Hotels, Restaurants & Leisure Total 9,676,370 ------------- CONSUMER DISCRETIONARY TOTAL 9,676,370 TOTAL INCOME DEPOSIT SECURITY (Cost of $9,987,045) 9,676,370 SHORT-TERM OBLIGATION - 4.7% PAR ($) Repurchase agreement with State Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by a U.S. Treasury Note maturing 05/15/08, market value $43,945,781 (repurchase proceeds $43,080,795) 43,079,000 43,079,000 ------------- TOTAL SHORT-TERM OBLIGATION (Cost of $43,079,000) 43,079,000 TOTAL INVESTMENTS - 101.1% (COST OF $656,316,387) (b) 933,816,609 OTHER ASSETS & LIABILITIES, NET - (1.1)% (10,493,270) NET ASSETS - 100.0% 923,323,339 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing security. (b) Cost for federal income tax purposes is $659,206,636. ACRONYM NAME ------- ---- REIT Real Estate Investment Trust See Accompanying Notes to Financial Statements. 80 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA TECHNOLOGY FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - 94.3% CONSUMER DISCRETIONARY - 17.4% HOUSEHOLD DURABLES - 0.9% Sony Corp., ADR 9,000 312,030 ------------- Household Durables Total 312,030 INTERNET & CATALOG RETAIL - 10.7% Amazon.com, Inc. (a) 22,000 839,080 Blue Nile, Inc. (a) 6,500 169,260 eBay, Inc. (a) 32,450 2,808,223 ------------- Internet & Catalog Retail Total 3,816,563 LEISURE EQUIPMENT & PRODUCTS - 1.8% Eastman Kodak Co. 6,500 192,270 Marvel Enterprises, Inc. (a) 30,000 440,100 ------------- Leisure Equipment & Products Total 632,370 MEDIA - 3.8% XM Satellite Radio Holdings, Inc., Class A (a) 49,550 1,361,138 ------------- Media Total 1,361,138 SPECIALTY RETAIL - 0.2% PC Connection, Inc. (a) 14,000 92,400 ------------- Specialty Retail Total 92,400 ------------- CONSUMER DISCRETIONARY TOTAL 6,214,501 HEALTH CARE - 2.1% BIOTECHNOLOGY - 1.1% Amylin Pharmaceuticals, Inc. (a) 12,000 237,480 Cubist Pharmaceuticals, Inc. (a) 20,000 157,400 ------------- Biotechnology Total 394,880 HEALTH CARE EQUIPMENT & SUPPLIES - 1.0% Orthovita, Inc. (a) 34,500 153,525 Thermo Electron Corp. (a) 8,500 223,295 ------------- Health Care Equipment & Supplies Total 376,820 ------------- HEALTH CARE TOTAL 771,700 INFORMATION TECHNOLOGY - 64.1% COMMUNICATIONS EQUIPMENT - 15.7% ADTRAN, Inc. 5,270 141,130 Alvarion Ltd. (a) 27,800 311,916 Comverse Technology, Inc. (a) 23,000 402,730 ECI Telecom Ltd. (a) 50,100 345,690 ECtel Ltd. (a) 2,148 5,089 Harris Corp. 11,250 541,800 Lucent Technologies, Inc. (a) 63,100 197,503 Motorola, Inc. 7,000 113,050 Nokia Oyj, ADR 239,000 2,839,320 QUALCOMM, Inc. 11,700 445,185 Scientific-Atlanta, Inc. 10,000 272,400 ------------- Communications Equipment Total 5,615,813 SHARES VALUE ($) ------------ ------------- COMPUTERS & PERIPHERALS - 7.0% Apple Computer, Inc. (a) 5,400 186,246 Hypercom Corp. (a) 43,200 315,360 LG.Philips LCD Co., Ltd., ADR (a) 21,900 325,872 PalmOne, Inc. (a) 48,200 1,573,730 Sigma Designs, Inc. (a) 16,900 117,455 ------------- Computers & Peripherals Total 2,518,663 ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.4% Symbol Technologies, Inc. 10,000 129,000 ------------- Electronic Equipment & Instruments Total 129,000 INTERNET SOFTWARE & SERVICES - 4.5% Ask Jeeves, Inc. (a) 1,600 41,472 Critical Path, Inc. (a) 275,000 194,920 NIC, Inc. (a) 94,000 508,540 VeriSign, Inc. (a) 16,000 277,760 Yahoo!, Inc. (a) 20,900 595,859 ------------- Internet Software & Services Total 1,618,551 IT SERVICES - 5.2% Alliance Data Systems Corp. (a) 6,600 252,120 Carreker Corp. (a) 21,000 214,200 Cognizant Technology Solutions Corp., Class A (a) 16,960 465,043 Computer Sciences Corp. (a) 6,000 278,100 Global Payments, Inc. 8,000 354,880 Satyam Computer Services Ltd., ADR 5,200 102,024 Wipro Ltd., ADR 11,150 192,226 ------------- IT Services Total 1,858,593 OFFICE ELECTRONICS - 0.9% Zebra Technologies Corp., Class A (a) 5,925 338,614 ------------- Office Electronics Total 338,614 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 18.6% Broadcom Corp., Class A (a) 36,275 984,504 California Micro Devices Corp. (a) 8,540 45,774 FormFactor, Inc. (a) 11,000 192,500 Marvell Technology Group Ltd. (a) 38,760 896,131 Microchip Technology, Inc. 18,550 489,535 Microtune, Inc. (a) 58,000 287,680 NVIDIA Corp. (a) 24,000 299,040 Power Integrations, Inc. (a) 25,000 502,000 Samsung Electronics Co. Ltd., GDR (b) 5,400 1,046,250 Silicon Laboratories, Inc. (a) 36,000 1,180,440 Silicon Storage Technology, Inc. (a) 16,000 92,320 Trident Microsystems, Inc. (a) 15,300 207,774 Volterra Semiconductor Corp. (a) 11,500 93,150 ZiLOG, Inc. (a) 42,700 329,644 ------------- Semiconductors & Semiconductor Equipment Total 6,646,742 SOFTWARE - 11.8% Agile Software Corp. (a) 30,000 228,600 Amdocs Ltd. (a) 14,000 281,400 Citrix Systems, Inc. (a) 20,000 318,200 Computer Associates International, Inc. 10,300 249,466 See Accompanying Notes to Financial Statements. 81 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA TECHNOLOGY FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) INFORMATION TECHNOLOGY - (CONTINUED) SOFTWARE - (CONTINUED) Intellisync Corp. (a) 241,600 541,184 Intuit, Inc. (a) 12,000 507,480 Macromedia, Inc. (a) 10,000 193,800 Manhattan Associates, Inc. (a) 24,000 560,160 Mercury Interactive Corp. (a) 5,500 189,805 Novell, Inc. (a) 25,000 147,500 Parametric Technology Corp. (a) 24,000 116,880 PeopleSoft, Inc. (a) 6,000 104,400 Peregrine Systems, Inc. (a) 10,000 189,000 SAP AG, ADR 4,000 145,840 Symantec Corp. (a) 9,600 460,416 ------------- Software Total 4,234,131 ------------- INFORMATION TECHNOLOGY TOTAL 22,960,107 TELECOMMUNICATION SERVICES - 10.7% DIVERSIFIED TELECOMMUNICATION SERVICES - 0.8% SpectraSite, Inc. (a) 6,150 276,381 ------------- Diversified Telecommunication Services Total 276,381 WIRELESS TELECOMMUNICATION SERVICES - 9.9% American Tower Corp., Class A (a) 26,600 396,074 Crown Castle International Corp. (a) 27,000 386,370 Millicom International Cellular SA (a) 58,500 901,544 Mobile Telesystems, ADR 6,000 776,160 US Unwired, Inc. (a) 57,000 128,250 VimpelCom, ADR (a) 7,400 725,940 Western Wireless Corp., Class A (a) 9,300 233,337 ------------- Wireless Telecommunication Services Total 3,547,675 ------------- TELECOMMUNICATION SERVICES TOTAL 3,824,056 TOTAL COMMON STOCKS (Cost of $31,604,269) 33,770,364 PAR ($) VALUE ($) ------------ ------------- SHORT-TERM OBLIGATION - 4.2% Repurchase agreement with Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by a U.S. Treasury Note maturing 10/15/06, market value $1,532,124 (repurchase proceeds $1,501,063) 1,501,000 1,501,000 ------------- TOTAL SHORT-TERM OBLIGATION (Cost of $1,501,000) 1,501,000 TOTAL INVESTMENTS - 98.5% (COST OF $33,105,269) (c) 35,271,364 OTHER ASSETS & LIABILITIES, NET - 1.5% 523,441 NET ASSETS - 100.0% 35,794,805 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing security. (b) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2004, the value of this security represents 2.9% of net assets. (c) Cost for federal income tax purposes is $33,905,477. ACRONYM NAME ------- ---- ADR American Depositary Receipt GDR Global Depositary Receipt See Accompanying Notes to Financial Statements. 82 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA STRATEGIC INVESTOR FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - 77.1% CONSUMER DISCRETIONARY - 9.9% AUTO COMPONENTS - 1.4% Cooper Tire & Rubber Co. 50,000 1,132,000 Modine Manufacturing Co. 52,500 1,564,500 Nokian Renkaat Oyj (Finland) 27,500 2,829,787 ------------- Auto Components Total 5,526,287 AUTOMOBILES - 0.4% Brilliance China Automotive Holdings Ltd., ADR 75,000 1,716,750 ------------- Automobiles Total 1,716,750 HOTELS, RESTAURANTS & LEISURE - 0.6% California Pizza Kitchen, Inc. (a) 32,500 620,425 Darden Restaurants, Inc. 20,000 420,200 Fairmont Hotels & Resorts, Inc. 50,000 1,349,500 ------------- Hotels, Restaurants & Leisure Total 2,390,125 HOUSEHOLD DURABLES - 1.6% Cavco Industries, Inc. (a) 20,000 762,400 Ekornes ASA (Norway) 110,000 2,270,903 Makita Corp., ADR 62,000 924,420 Matsushita Electric Industrial Co. Ltd., ADR 75,000 1,012,500 Newell Rubbermaid, Inc. 45,000 968,850 Sony Corp., ADR 20,000 693,400 ------------- Household Durables Total 6,632,473 LEISURE EQUIPMENT & PRODUCTS - 0.5% Eastman Kodak Co. 40,000 1,183,200 Nautilus Group, Inc. 50,000 974,500 ------------- Leisure Equipment & Products Total 2,157,700 MEDIA - 3.0% Comcast Corp., Class A (a) 50,000 1,387,500 DirecTV Group, Inc. (a) 100,000 1,587,000 Entravision Communications Corp., Class A (a) 75,000 607,500 Fox Entertainment Group, Inc., Class A (a) 30,000 814,200 Grupo Televisa SA, ADR 20,000 962,600 Liberty Media Corp., Series A (a) 110,000 980,100 Liberty Media International, Inc., Series A (a) 5,500 185,900 McGraw-Hill Companies, Inc. 10,000 757,300 Media General, Inc. 30,000 1,745,700 Time Warner, Inc. (a) 125,000 2,043,750 Tribune Co. 30,000 1,252,500 ------------- Media Total 12,324,050 MULTILINE RETAIL - 1.1% Dillard's, Inc., Class A 50,000 950,000 ITO-Yokado Co. Ltd. (Japan) 50,000 1,860,365 Stockmann Oyj, Class B (Finland) 75,000 1,765,534 ------------- Multiline Retail Total 4,575,899 SHARES VALUE ($) ------------ ------------- SPECIALTY RETAIL - 1.3% Bombay Co., Inc. (a) 100,000 550,000 Cabelas, Inc., Class A (a) 40,000 1,024,000 CarMax, Inc. (a) 62,500 1,223,750 Circuit City Stores, Inc. 40,000 518,800 RadioShack Corp. 30,000 808,200 Toys `R' Us, Inc. (a) 50,000 812,000 West Marine, Inc. (a) 20,000 361,800 ------------- Specialty Retail Total 5,298,550 ------------- CONSUMER DISCRETIONARY TOTAL 40,621,834 CONSUMER STAPLES - 5.2% BEVERAGES - 0.5% Coca-Cola Femsa, SA de CV, ADR 92,500 1,885,150 ------------- Beverages Total 1,885,150 FOOD & STAPLES RETAILING - 1.4% Albertson's, Inc. 100,000 2,458,000 United Natural Foods, Inc. (a) 50,000 1,238,000 Walgreen Co. 57,500 2,095,875 ------------- Food & Staples Retailing Total 5,791,875 FOOD PRODUCTS - 2.1% Chips Abp, Class B 30,000 655,294 Delta & Pine Land Co. 50,000 1,270,500 General Mills, Inc. 25,000 1,181,250 Interstate Bakeries Corp. 75,000 387,750 Nestle SA, Registered Shares (Switzerland) 10,000 2,374,079 Tyson Foods, Inc., Class A 42,500 700,400 Unilever NV, NY Shares 32,500 1,951,950 ------------- Food Products Total 8,521,223 HOUSEHOLD PRODUCTS - 0.4% Kimberly-Clark Corp. 27,500 1,834,250 ------------- Household Products Total 1,834,250 PERSONAL PRODUCTS - 0.5% Natura Cosmeticos SA 52,500 1,011,402 NBTY, Inc. (a) 20,000 478,600 Playtex Products, Inc. (a) 20,000 130,600 Revlon, Inc., Class A (a) 150,000 400,500 ------------- Personal Products Total 2,021,102 TOBACCO - 0.3% Altria Group, Inc. 22,500 1,101,375 ------------- Tobacco Total 1,101,375 ------------- CONSUMER STAPLES TOTAL 21,154,975 See Accompanying Notes to Financial Statements. 83 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA STRATEGIC INVESTOR FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) ENERGY - 8.0% ENERGY EQUIPMENT & SERVICES - 4.5% Core Laboratories NV (a) 50,000 1,093,500 GlobalSantaFe Corp. 37,500 1,045,500 Halliburton Co. 62,500 1,823,125 Input/Output, Inc. (a) 225,500 2,218,920 Rowan Companies, Inc. (a) 47,500 1,155,200 Schlumberger Ltd. 47,500 2,935,500 TGS Nopec Geophysical Co., ASA (Norway) (a) 100,000 1,856,115 Transocean, Inc. (a) 100,000 3,070,000 Varco International, Inc. (a) 75,000 1,821,000 Willbros Group, Inc. (a) 100,000 1,400,000 ------------- Energy Equipment & Services Total 18,418,860 OIL & GAS - 3.5% Anadarko Petroleum Corp. 20,000 1,184,400 BP PLC, ADR 40,000 2,148,000 ConocoPhillips 22,500 1,674,675 Devon Energy Corp. 30,000 1,944,300 El Paso Corp. 40,000 327,200 Exxon Mobil Corp. 50,000 2,305,000 Newfield Exploration Co. (a) 47,500 2,629,125 Plains Exploration & Production Co. (a) 42,500 824,925 Unocal Corp. 20,000 746,800 Valero Energy Corp. 10,000 660,300 ------------- Oil & Gas Total 14,444,725 ------------- ENERGY TOTAL 32,863,585 FINANCIALS - 11.4% CAPITAL MARKETS - 1.8% Bank of New York Co., Inc. 37,500 1,117,500 Morgan Stanley 50,000 2,536,500 Nikko Cordial Corp. 150,000 679,683 Nomura Holdings, Inc., ADR 100,000 1,388,000 Piper Jaffray Companies, Inc. (a) 34,850 1,502,035 ------------- Capital Markets Total 7,223,718 COMMERCIAL BANKS - 3.5% Allied Irish Banks PLC, ADR 30,000 943,800 Fifth Third Bancorp 40,000 1,992,400 HSBC Holdings PLC, ADR 37,500 2,920,500 Kookmin Bank, ADR 40,000 1,278,000 Mitsubishi Tokyo Financial Group, Inc., ADR 200,000 1,812,000 SunTrust Banks, Inc. 22,500 1,532,250 U.S. Bancorp 75,000 2,212,500 Zions Bancorporation 30,000 1,868,400 ------------- Commercial Banks Total 14,559,850 CONSUMER FINANCE - 0.2% MBNA Corp. 40,000 965,600 ------------- Consumer Finance Total 965,600 SHARES VALUE ($) ------------ ------------- DIVERSIFIED FINANCIAL SERVICES - 2.5% Citigroup, Inc. 65,000 3,027,700 GATX Corp. 77,500 2,090,175 JPMorgan Chase & Co. 130,200 5,153,316 ------------- Diversified Financial Services Total 10,271,191 INSURANCE - 2.1% Hannover Rueckversicherung AG, Registered Shares 50,000 1,620,757 Marsh & McLennan Companies, Inc. 27,500 1,228,975 St. Paul Traveler Companies, Inc. 42,505 1,474,498 UnumProvident Corp. 87,500 1,415,750 Wesco Financial Corp. 7,750 2,681,500 ------------- Insurance Total 8,421,480 REAL ESTATE - 0.3% Mitsubishi Estate Co., Ltd. 30,000 340,092 Post Properties, Inc., REIT 30,000 912,000 ------------- Real Estate Total 1,252,092 THRIFTS & MORTGAGE FINANCE - 1.0% Freddie Mac 20,000 1,342,400 MGIC Investment Corp. 20,000 1,365,400 Radian Group, Inc. 32,500 1,439,750 ------------- Thrifts & Mortgage Finance Total 4,147,550 ------------- FINANCIALS TOTAL 46,841,481 HEALTH CARE - 11.8% BIOTECHNOLOGY - 1.9% Amgen, Inc. (a) 47,500 2,816,275 Applera Corp. - Applied Biosystems Group 65,000 1,237,600 Biogen Idec, Inc. (a) 37,500 2,224,875 MedImmune, Inc. (a) 62,500 1,491,875 ------------- Biotechnology Total 7,770,625 HEALTH CARE EQUIPMENT & SUPPLIES - 2.5% Baxter International, Inc. 75,000 2,290,500 Cyberonics, Inc. (a) 67,500 1,155,600 Cytyc Corp. (a) 72,500 1,737,100 Haemonetics Corp. (a) 50,000 1,581,000 Hospira, Inc. (a) 82,500 2,285,250 National Dentex Corp. (a) 15,819 427,904 Waters Corp. (a) 20,000 866,200 ------------- Health Care Equipment & Supplies Total 10,343,554 HEALTH CARE PROVIDERS & SERVICES - 2.2% AmerisourceBergen Corp. 12,500 676,250 Andrx Corp. (a) 50,000 1,008,000 Anthem, Inc. (a) 12,500 1,015,500 Genesis HealthCare Corp. 14,800 460,132 McKesson Corp. 82,500 2,553,375 Quest Diagnostics, Inc. 30,000 2,568,000 Tenet Healthcare Corp. 62,500 651,250 ------------- Health Care Providers & Services Total 8,932,507 See Accompanying Notes to Financial Statements. 84 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA STRATEGIC INVESTOR FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) HEALTH CARE - (CONTINUED) PHARMACEUTICALS - 5.2% Abbott Laboratories 50,000 2,084,500 Bristol-Myers Squibb Co. 62,500 1,483,125 Dr. Reddy's Laboratories Ltd., ADR 30,000 474,000 Elan Corp., PLC, ADR (a) 50,000 1,131,500 Eli Lilly and Co. 32,500 2,062,125 Endo Pharmaceuticals Holdings, Inc. (a) 34,800 590,208 Gedeon Richter Ltd. (Hungary) 12,500 1,342,514 King Pharmaceuticals, Inc. (a) 40,000 498,400 Novartis AG, ADR 37,500 1,741,875 Pfizer, Inc. 86,200 2,816,154 Schering-Plough Corp. 100,000 1,846,000 Shire Pharmaceuticals Group PLC, ADR 47,500 1,231,200 Valeant Pharmaceuticals International 82,500 1,935,450 Wyeth 50,000 1,828,500 ------------- Pharmaceuticals Total 21,065,551 ------------- HEALTH CARE TOTAL 48,112,237 INDUSTRIALS - 11.4% AEROSPACE & DEFENSE - 0.4% BE Aerospace, Inc. (a) 72,500 768,500 Raytheon Co. 30,000 1,041,900 ------------- Aerospace & Defense Total 1,810,400 AIRLINES - 0.2% Continental Airlines, Inc., Class B (a) 67,500 651,375 ------------- Airlines Total 651,375 BUILDING PRODUCTS - 0.3% Toto Ltd. 130,000 1,292,957 ------------- Building Products Total 1,292,957 COMMERCIAL SERVICES & SUPPLIES - 3.0% Avery Dennison Corp. 42,500 2,641,375 Cendant Corp. 100,000 2,163,000 Central Parking Corp. 50,000 812,500 Copart, Inc. (a) 75,000 1,629,000 G&K Services, Inc. 30,000 1,092,300 Ionics, Inc. (a) 20,000 524,200 R.R. Donnelley & Sons Co. 62,500 1,920,625 Waste Management, Inc. 50,000 1,389,500 ------------- Commercial Services & Supplies Total 12,172,500 CONSTRUCTION & ENGINEERING - 0.5% Shaw Group, Inc. (a) 67,500 694,575 URS Corp. (a) 50,000 1,235,000 ------------- Construction & Engineering Total 1,929,575 ELECTRICAL EQUIPMENT - 0.6% Thomas & Betts Corp. (a) 100,000 2,460,000 ------------- Electrical Equipment Total 2,460,000 SHARES VALUE ($) ------------ ------------- INDUSTRIAL CONGLOMERATES - 2.2% 3M Co. 72,500 5,971,100 General Electric Co. 60,000 1,967,400 Walter Industries, Inc. 61,100 906,724 ------------- Industrial Conglomerates Total 8,845,224 MACHINERY - 3.6% AGCO Corp. (a) 40,000 799,600 Bucyrus Intl, Inc., Class A (Netherlands) 50,000 1,321,500 Caterpillar, Inc. 32,500 2,362,750 CNH Global NV 20,000 347,400 Eaton Corp. 40,000 2,414,000 Federal Signal Corp. 75,000 1,373,250 Flowserve Corp. (a) 30,000 688,200 JLG Industries, Inc. 125,000 1,731,250 Pall Corp. 62,500 1,522,500 Timken Co. 77,500 1,801,875 Tomra Systems ASA (Norway) 100,000 372,171 ------------- Machinery Total 14,734,496 MARINE - 0.4% AP Moller - Maersk A/S (Denmark) 140 951,710 Finnlines Oyj (Finland) 29,000 883,648 ------------- Marine Total 1,835,358 ROAD & RAIL - 0.2% Kansas City Southern (a) 50,000 750,000 ------------- Road & Rail Total 750,000 ------------- INDUSTRIALS TOTAL 46,481,885 INFORMATION TECHNOLOGY - 8.0% COMMUNICATIONS EQUIPMENT - 1.3% Andrew Corp. (a) 40,000 443,600 Comverse Technology, Inc. (a) 50,000 875,500 Lucent Technologies, Inc. (a) 100,000 313,000 Motorola, Inc. 40,000 646,000 Nokia Oyj, ADR 112,500 1,336,500 Polycom, Inc. (a) 57,500 1,122,975 Tellabs, Inc. (a) 75,000 680,250 ------------- Communications Equipment Total 5,417,825 COMPUTERS & PERIPHERALS - 0.7% Gateway, Inc. (a) 75,000 329,250 Hypercom Corp. (a) 150,000 1,095,000 SanDisk Corp. (a) 37,500 875,625 Sun Microsystems, Inc. (a) 175,000 672,000 ------------- Computers & Peripherals Total 2,971,875 ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.3% Celestica, Inc. (a) 52,500 750,750 Solectron Corp. (a) 100,000 516,000 ------------- Electronic Equipment & Instruments Total 1,266,750 See Accompanying Notes to Financial Statements. 85 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA STRATEGIC INVESTOR FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) INFORMATION TECHNOLOGY - (CONTINUED) INTERNET SOFTWARE & SERVICES - 0.1% NIC, Inc. (a) 75,000 405,750 ------------- Internet Software & Services Total 405,750 IT SERVICES - 1.7% BISYS Group, Inc. (a) 40,000 568,000 DST Systems, Inc. (a) 72,500 3,279,900 Electronic Data Systems Corp. 50,000 961,000 First Data Corp. 48,250 2,038,563 ------------- IT Services Total 6,847,463 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.0% FEI Co. (a) 75,000 1,424,250 NVIDIA Corp. (a) 125,000 1,557,500 Samsung Electronics Co. Ltd., GDR (b) 17,500 3,390,625 Texas Instruments, Inc. 82,500 1,612,050 ------------- Semiconductors & Semiconductor Equipment Total 7,984,425 SOFTWARE - 1.9% Activision, Inc. (a) 50,000 719,500 BMC Software, Inc. (a) 40,000 598,800 Check Point Software Technologies Ltd. (a) 57,500 1,008,550 Epiphany, Inc. (a) 50,000 196,500 Microsoft Corp. 112,500 3,071,250 Novell, Inc. (a) 125,000 737,500 Parametric Technology Corp. (a) 150,000 730,500 Quest Software, Inc. (a) 75,000 759,000 ------------- Software Total 7,821,600 ------------- INFORMATION TECHNOLOGY TOTAL 32,715,688 MATERIALS - 6.4% CHEMICALS - 3.6% Air Products & Chemicals, Inc. 32,500 1,702,350 Calgon Carbon Corp. 125,000 856,250 Dow Chemical Co. 30,000 1,284,300 E.I. du Pont de Nemours & Co. 42,500 1,796,050 IMC Global, Inc. 40,000 637,600 International Flavors & Fragrances, Inc. 57,500 2,215,475 Millennium Chemicals, Inc. (a) 50,000 932,500 Potash Corp. of Saskatchewan, Inc. (Canada) 55,000 3,053,600 Rohm & Haas Co. 40,000 1,621,200 Zeon Corp. (Japan) 75,000 516,867 ------------- Chemicals Total 14,616,192 CONSTRUCTION MATERIALS - 0.4% Martin Marietta Materials, Inc. 27,500 1,237,225 Vulcan Materials Co. 10,000 476,700 ------------- Construction Materials Total 1,713,925 SHARES VALUE ($) ------------ ------------- CONTAINERS & PACKAGING - 0.5% Sealed Air Corp. (a) 20,000 982,400 Smurfit-Stone Container Corp. (a) 50,000 887,000 ------------- Containers & Packaging Total 1,869,400 METALS & MINING - 1.1% Centerra Gold, Inc. (a) 50,000 603,166 Companhia Vale do Rio Doce (a) 42,500 2,455,225 CONSOL Energy, Inc. 20,000 641,600 Gammon Lake Resources, Inc. (a) 75,000 375,000 WMC Resources Ltd. 40,000 578,400 ------------- Metals & Mining Total 4,653,391 PAPER & FOREST PRODUCTS - 0.8% Bowater, Inc. 22,500 808,425 Sappi Ltd., ADR 70,000 986,300 Votorantim Celulose e Papel SA, ADR 40,000 1,405,200 ------------- Paper & Forest Products Total 3,199,925 ------------- MATERIALS TOTAL 26,052,833 TELECOMMUNICATION SERVICES - 2.4% DIVERSIFIED TELECOMMUNICATION SERVICES - 1.7% CenturyTel, Inc. 40,000 1,287,600 Compania Anonima Nacional Telefonos de Venezuela, ADR 75,000 1,486,500 SBC Communications, Inc. 50,000 1,289,500 Telekomunikasi Indonesia, ADR 62,500 1,016,250 Verizon Communications, Inc. 47,500 1,864,375 ------------- Diversified Telecommunication Services Total 6,944,225 WIRELESS TELECOMMUNICATION SERVICES - 0.7% Millicom International Cellular SA (a) 100,000 1,541,100 VimpelCom, ADR (a) 15,000 1,471,500 ------------- Wireless Telecommunication Services Total 3,012,600 ------------- TELECOMMUNICATION SERVICES TOTAL 9,956,825 UTILITIES - 2.6% ELECTRIC UTILITIES - 1.2% Edison International 60,000 1,612,800 TECO Energy, Inc. 100,000 1,326,000 TXU Corp. 30,000 1,248,900 Westar Energy, Inc. 30,000 630,000 ------------- Electric Utilities Total 4,817,700 GAS UTILITIES - 0.5% NiSource, Inc. 75,000 1,560,000 NUI Corp. 32,000 428,160 ------------- Gas Utilities Total 1,988,160 MULTI-UTILITIES & UNREGULATED POWER - 0.7% Duke Energy Corp. 57,500 1,273,050 Dynegy, Inc., Class A (a) 100,000 436,000 ONEOK, Inc. 47,500 1,119,100 ------------- Multi-Utilities & Unregulated Power Total 2,828,150 See Accompanying Notes to Financial Statements. 86 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA STRATEGIC INVESTOR FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) UTILITIES - (CONTINUED) WATER UTILITIES - 0.2% California Water Service Group 37,500 1,066,875 ------------- Water Utilities Total 1,066,875 ------------- UTILITIES TOTAL 10,700,885 TOTAL COMMON STOCKS (Cost of $263,328,051) 315,502,228 INVESTMENT MANAGEMENT COMPANY - 0.3% Japan Smaller Capitalization Fund, Inc. (Cost of $818,254) 125,000 1,448,750 ------------- RIGHTS - 0.0% CONSUMER STAPLES - 0.0% BEVERAGES - 0.0% Coca Cola Femsa SA de CV, Expires 09/01/04 33,768 --(c) ------------- Beverages Total -- ------------- CONSUMER STAPLES TOTAL -- Total RIGHTS (Cost of $0) -- SHORT-TERM OBLIGATION - 22.4% PAR ($) Repurchase agreement with State Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by U.S. Treasury Notes with various maturities to 01/15/09, market value $93,422,344 (repurchase proceeds $91,583,816) 91,580,000 91,580,000 ------------- TOTAL SHORT-TERM OBLIGATION (Cost of $91,580,000) 91,580,000 TOTAL INVESTMENTS - 99.8% (COST OF $355,726,305) (d) 408,530,978 OTHER ASSETS & LIABILITIES, NET - 0.2% 839,538 NET ASSETS - 100.0% 409,370,516 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing security. (b) Security is exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2004, the value of this security represents 0.8% of net assets. (c) Security has no value. (d) Cost for federal income tax purposes is $356,959,218. ACRONYM NAME ------- ---- ADR American Depositary Receipt GDR Global Depositary Receipt REIT Real Estate Investment Trust See Accompanying Notes to Financial Statements. 87 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA BALANCED FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - 63.3% CONSUMER DISCRETIONARY - 11.3% HOTELS, RESTAURANTS & LEISURE - 0.9% Darden Restaurants, Inc. 203,700 4,279,737 ------------- Hotels, Restaurants & Leisure Total 4,279,737 LEISURE EQUIPMENT & PRODUCTS - 0.4% Hasbro, Inc. 106,400 1,971,592 ------------- Leisure Equipment & Products Total 1,971,592 MEDIA - 5.8% Comcast Corp., Class A (a) 197,956 5,576,420 DirecTV Group, Inc. (a) 410,300 6,511,461 IAC/InterActiveCorp (a) 141,800 3,234,458 Liberty Media Corp., Class A (a) 607,100 5,409,261 Liberty Media International, Inc., Class A (a) 43,465 1,469,117 Time Warner, Inc. (a) 394,700 6,453,345 ------------- Media Total 28,654,062 MULTILINE RETAIL - 2.3% Kohl's Corp. (a) 127,000 6,283,960 Sears, Roebuck and Co. 134,300 5,141,004 ------------- Multiline Retail Total 11,424,964 SPECIALTY RETAIL - 0.9% RadioShack Corp. 159,600 4,299,624 ------------- Specialty Retail Total 4,299,624 TEXTILES, APPAREL & LUXURY GOODS - 1.0% Liz Claiborne, Inc. 130,400 4,964,328 ------------- Textiles, Apparel & Luxury Goods Total 4,964,328 ------------- CONSUMER DISCRETIONARY TOTAL 55,594,307 CONSUMER STAPLES - 3.3% BEVERAGES - 0.1% Coca-Cola Femsa, SA de CV, ADR 37,600 766,288 ------------- Beverages Total 766,288 FOOD & STAPLES RETAILING - 1.1% Safeway Inc. (a) 261,200 5,276,240 ------------- Food & Staples Retailing Total 5,276,240 FOOD PRODUCTS - 0.9% Sara Lee Corp. 194,200 4,297,646 ------------- Food Products Total 4,297,646 TOBACCO - 1.2% Altria Group, Inc. 123,215 6,031,374 ------------- Tobacco Total 6,031,374 ------------- CONSUMER STAPLES TOTAL 16,371,548 SHARES VALUE ($) ------------ ------------- ENERGY - 4.9% ENERGY EQUIPMENT & SERVICES - 0.4% Transocean Inc. (a) 64,200 1,970,940 ------------- Energy Equipment & Services Total 1,970,940 OIL & GAS - 4.5% Anadarko Petroleum Corp. 42,300 2,505,006 BP PLC., ADR 31,900 1,713,030 Devon Energy Corp. 48,400 3,136,804 El Paso Corp. 347,400 2,841,732 Kerr-McGee Corp. 115,400 6,090,812 Noble Energy, Inc. 36,900 1,899,612 Unocal Corp. 107,400 4,010,316 ------------- Oil & Gas Total 22,197,312 ------------- ENERGY Total 24,168,252 FINANCIALS - 12.7% CAPITAL MARKETS - 3.0% A.G. Edwards, Inc. 47,300 1,645,094 JPMorgan Chase & Co. 200,220 7,924,708 Morgan Stanley 104,675 5,310,163 ------------- Capital Markets Total 14,879,965 COMMERCIAL BANKS - 0.6% Fifth Third Bancorp 66,000 3,287,460 ------------- Commercial Banks Total 3,287,460 CONSUMER FINANCE - 0.7% American Express Co. 66,525 3,327,581 ------------- Consumer Finance Total 3,327,581 DIVERSIFIED FINANCIAL SERVICES - 1.5% Citigroup, Inc. 156,393 7,284,786 ------------- Diversified Financial Services Total 7,284,786 INSURANCE - 3.7% Ace Ltd. 123,500 4,760,925 Allstate Corp. 42,100 1,987,541 Chubb Corp. 49,700 3,380,097 Marsh & McLennan Companies 59,100 2,641,179 UnumProvident Corp. 357,200 5,779,496 ------------- Insurance Total 18,549,238 THRIFTS & MORTGAGE FINANCE - 3.2% Fannie Mae 89,925 6,694,916 MGIC Investment Corp. 130,700 8,922,889 ------------- Thrifts & Mortgage Finance Total 15,617,805 ------------- FINANCIALS TOTAL 62,946,835 See Accompanying Notes to Financial Statements. 88 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA BALANCED FUND SHARES VALUE ($) ------------ ------------- COMMON STOCKS - (CONTINUED) HEALTH CARE - 10.1% BIOTECHNOLOGY - 2.2% Amgen, Inc. (a) 97,933 5,806,448 MedImmune, Inc. (a) 214,300 5,115,341 ------------- Biotechnology Total 10,921,789 HEALTH CARE PROVIDERS & SERVICES - 3.2% Cardinal Health, Inc. 133,900 6,052,280 McKesson Corp. 129,390 4,004,620 WebMD Corp. (a) 812,300 5,913,544 ------------- Health Care Providers & Services Total 15,970,444 PHARMACEUTICALS - 4.7% Barr Pharmaceticals, Inc. (a) 151,500 5,949,405 Biovail Corp. (a) 255,220 3,869,135 Bristol-Myers Squibb Co. 97,600 2,316,048 Endo Pharmaceuticals Holdings, Inc. (a) 65,800 1,115,968 Johnson & Johnson 56,045 3,256,215 Pfizer, Inc. 202,090 6,602,280 ------------- Pharmaceuticals Total 23,109,051 ------------- HEALTH CARE TOTAL 50,001,284 INDUSTRIALS - 2.0% AIRLINES - 1.0% Southwest Airlines Co. 326,000 4,831,320 ------------- Airlines Total 4,831,320 COMMERCIAL SERVICES & SUPPLIES - 1.0% ServiceMaster Co. 141,600 1,760,088 Waste Management, Inc. 118,175 3,284,083 ------------- Commercial Services & Supplies Total 5,044,171 ------------- INDUSTRIALS TOTAL 9,875,491 INFORMATION TECHNOLOGY - 11.5% COMMUNICATIONS EQUIPMENT - 2.1% Cisco Systems, Inc. (a) 169,460 3,179,070 Nortel Networks Corp. (a) 1,066,100 4,008,536 UTStarcom, Inc. (a) 216,800 3,353,896 ------------- Communications Equipment Total 10,541,502 COMPUTERS & PERIPHERALS - 3.2% Hewlett-Packard Co. 262,800 4,701,492 International Business Machines Corp. 70,150 5,941,004 SanDisk Corp. (a) 219,800 5,132,330 ------------- Computers & Peripherals Total 15,774,826 ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.8% Garmin Ltd. 102,100 3,972,711 ------------- Electronic Equipment & Instruments Total 3,972,711 SHARES VALUE ($) ------------ ------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 1.4% Linear Technology Corp. 139,800 5,000,646 NVIDIA Corp. (a) 154,175 1,921,020 ------------- Semiconductors & Semiconductor Equipment Total 6,921,666 SOFTWARE - 4.0% Fair Isaac Corp. 51,600 1,389,588 Microsoft Corp. 451,775 12,333,458 Oracle Corp. (a) 322,845 3,218,765 Synopsys, Inc. (a) 176,700 2,820,132 ------------- Software Total 19,761,943 ------------- INFORMATION TECHNOLOGY TOTAL 56,972,648 MATERIALS - 3.6% CHEMICALS - 0.9% EI. du Pont de Nemours & Co. 101,400 4,285,164 ------------- Chemicals Total 4,285,164 CONTAINERS & PACKAGING - 2.0% Sealed Air Corp. (a) 94,400 4,636,928 Smurfit-Stone Container Corp. (a) 305,700 5,423,118 ------------- Containers & Packaging Total 10,060,046 METALS & MINING - 0.7% International Steel Group, Inc. (a) 120,300 3,657,120 ------------- Metals & Mining Total 3,657,120 ------------- MATERIALS TOTAL 18,002,330 TELECOMMUNICATION SERVICES - 3.9% DIVERSIFIED TELECOMMUNICATION SERVICES - 3.3% Brasil Telecom Participacoes S.A., ADR (a) 127,500 4,160,325 CenturyTel, Inc. 61,800 1,989,342 Qwest Communications International, Inc. (a) 447,600 1,293,564 Telefonos de Mexico SA, ADR 198,600 6,432,654 Verizon Communications, Inc. 63,500 2,492,375 ------------- Diversified Telecommunication Services Total 16,368,260 WIRELESS TELECOMMUNICATION SERVICES - 0.6% Nextel Communications, Inc. (a) 120,000 2,782,800 ------------- Wireless Telecommunication Services 2,782,800 ------------- TELECOMMUNICATION SERVICES TOTAL 19,151,060 TOTAL COMMON STOCKS (Cost of $297,687,440) 313,083,755 See Accompanying Notes to Financial Statements. 89 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA BALANCED FUND PAR ($) VALUE ($) ------------ ------------- CORPORATE NOTES & BONDS - 14.5% INDUSTRIALS - 8.4% Acetex Corp., 10.875% 08/01/09 25,000 27,500 Airgas, Inc., 9.125% 10/01/11 125,000 140,469 Alcan, Inc., 7.250% 03/15/31 675,000 794,536 Allied Waste North America, Inc.: 6.375% 04/15/11 75,000 74,250 6.500% 11/15/10 50,000 50,125 7.375% 04/15/14 125,000 121,250 American Home Product, 6.950% 03/15/11 575,000 630,464 AmerisourceBergen Corp., 8.125% 09/01/08 200,000 219,500 Anthem, Inc., 6.800% 08/01/12 925,000 1,043,456 Arch Western Finance, 7.500% 07/01/13 (b)(c) 205,000 212,175 AT&T Wireless Services, Inc., 8.750% 03/01/31 750,000 969,030 Autonation, Inc., 9.000% 08/01/08 100,000 114,250 Ball Corp., 7.750% 08/01/06 250,000 267,500 Boeing Co., 6.125% 02/15/33 850,000 879,963 Canadian National Railway Co., 7.195% 01/02/16 891,544 1,053,983 Chesapeake Energy Corp.: 7.500% 09/15/13 145,000 156,237 8.375% 11/01/08 50,000 54,625 9.000% 08/15/12 20,000 22,800 Cinemark USA, Inc., 9.000% 02/01/13 170,000 189,125 Coca-Cola Enterprises, Inc., 6.750% 01/15/38 1,045,000 1,177,433 Comcast Corp., 7.050% 03/15/33 375,000 408,416 Constellation Brands, Inc. 8.000% 02/15/08 225,000 248,063 Corrections Corp. of America, 7.500% 05/01/11 175,000 184,188 Cott Beverages, Inc., 8.000% 12/15/11 250,000 270,000 Couche-Tard, 7.500% 12/15/13 125,000 131,875 Countrywide Home Loan, Inc., 2.875% 02/15/07 600,000 595,296 Cox Enterprises, Inc., 8.000% 02/15/07 (b) 850,000 922,369 DaimlerChrysler NA Holding Corp., 8.500% 01/18/31 475,000 578,854 PAR ($) VALUE ($) ------------ ------------- Deutsche Telekom International Finance BV, 8.500% 06/15/10 525,000 629,444 Dex Media East LLC, 12.125% 11/15/12 65,000 79,950 Diageo Capital PLC, 3.375% 03/20/08 1,100,000 1,096,381 DirecTV Holdings, 8.375% 03/15/13 170,000 193,375 EchoStar DBS Corp., 5.750% 10/01/08 250,000 251,250 EquiStar Chemicals LP: 10.125% 09/01/08 25,000 27,750 10.625% 05/01/11 25,000 28,000 Ethyl Corp., 8.875% 05/01/10 50,000 53,625 Exelon Generation Co. LLC, 6.950% 06/15/11 625,000 702,650 Extendicare Health Services: 6.875% 05/01/14 10,000 9,900 9.500% 07/01/10 10,000 11,150 Group 1 Automotive, Inc., 8.250% 08/15/13 50,000 52,250 Finlay Fine Jewelry Corp., 8.375% 06/01/12 (b) 35,000 37,275 Fisher Scientific International, 6.750% 08/15/14 (b) 20,000 20,600 Freescale Semiconductor, 6.875% 07/15/11 (b) 135,000 137,700 General Electric Co., 5.000% 02/01/13 2,000,000 2,057,720 Genworth Financial, Inc., 4.750% 06/15/09 650,000 671,456 Grant Prideco, Inc.: 9.000% 12/15/09 220,000 244,200 9.625% 12/01/07 15,000 16,800 Harrah's Operating Co., Inc., 7.875% 12/15/05 125,000 132,031 Hasbro, Inc., 6.150% 07/15/08 125,000 132,188 HCA, Inc., 6.950% 05/01/12 125,000 134,401 Houghton Mifflin Co., 9.875% 02/01/13 61,000 63,440 International Business Machines Corp., 5.875% 11/29/32 1,000,000 1,027,400 Iron Mountain, Inc., 7.750% 01/15/15 250,000 260,000 Jefferson Smurfit Corp., 8.250% 10/01/12 105,000 114,450 John Deere Capital Corp., 3.900% 01/15/08 550,000 558,415 K2, Inc., 7.375% 07/01/14 (b) 60,000 63,085 K & F Industries, Inc., 9.625% 12/15/10 145,000 160,950 KB Home, 8.625% 12/15/08 250,000 278,125 See Accompanying Notes to Financial Statements. 90 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA BALANCED FUND PAR ($) VALUE ($) ------------ ------------- CORPORATE NOTES & BONDS - (CONTINUED) INDUSTRIALS - (CONTINUED) Kennametal, Inc., 7.200% 06/15/12 135,000 146,846 Key Energy Services, Inc., 6.375% 05/01/13 25,000 23,875 Kroger Co., 6.200% 06/15/12 650,000 702,683 L-3 Communications Corp., 6.125% 07/15/13 5,000 4,963 7.625% 06/15/12 225,000 243,562 Lamar Media Corp., 7.250% 01/01/13 225,000 238,500 LIN Television Corp., 6.500% 05/15/13 125,000 123,437 Lockheed Martin Corp., 8.500% 12/01/29 700,000 913,955 Lowe's Companies, Inc., 6.500% 03/15/29 700,000 767,739 MacDermid, Inc., 9.125% 07/15/11 50,000 55,813 Marathon Oil Corp., 6.800% 03/15/32 600,000 659,226 MGM Mirage, Inc., 9.750% 06/01/07 235,000 261,731 Nalco Co., 7.750% 11/15/11 (b) 75,000 79,687 Newell Rubbermaid, Inc., 4.000% 05/01/10 950,000 925,224 Newfield Exploration Co., 6.625% 09/01/14 (b) 130,000 132,600 Nextel Communications, Inc.: 7.375% 08/01/15 225,000 235,125 9.500% 02/01/11 10,000 11,300 Occidental Petroleum Corp., 4.250% 03/15/10 775,000 779,309 Offshore Logistics, Inc., 6.125% 06/15/13 205,000 202,950 Omnicare, Inc., 8.125% 03/15/11 175,000 187,250 Owens-Illinois, Inc., 7.350% 05/15/08 75,000 77,062 Park Place Entertainment Corp., 9.375% 02/15/07 200,000 222,000 Peabody Energy Corp., 6.875% 03/15/13 245,000 257,250 PepsiAmericas, Inc., 3.875% 09/12/07 1,000,000 1,016,430 Plains E&P Company 7.125% 06/15/14 (b) 100,000 106,000 Pogo Producing Co., 8.250% 04/15/11 30,000 32,925 Pride International, Inc., 7.375% 07/15/14 (b) 120,000 127,500 Province Healthcare Co., 7.500% 06/01/13 125,000 139,063 PAR ($) VALUE ($) ------------ ------------- R.H. Donnelley Financial Corp., 10.875% 12/15/12 (b) 215,000 254,775 Rogers Cable, Inc.: 6.250% 06/15/13 45,000 43,874 7.875% 05/01/12 185,000 199,805 Royal Caribbean Cruises Ltd.: 6.750% 03/15/08 45,000 47,025 6.875% 12/01/13 50,000 51,375 8.000% 05/15/10 15,000 16,688 8.750% 02/02/11 130,000 150,150 Russel Metals, Inc., 6.375% 03/01/14 65,000 62,075 Safeway, Inc., 4.950% 08/16/10 650,000 659,782 Scotts Co., 6.625% 11/15/13 70,000 72,800 Select Medical Corp., 9.500% 06/15/09 150,000 163,125 Sempra Energy, 4.750% 05/15/09 700,000 717,612 Silgan Holdings, Inc., 6.750% 11/15/13 140,000 140,000 Sinclair Broadcasting Group, Inc., 8.000% 03/15/12 220,000 226,600 Smurfit-Stone Container Corp.: 8.375% 07/01/12 25,000 27,375 9.750% 02/01/11 35,000 39,113 Speedway Motorsports, Inc., 6.750% 06/01/13 121,000 124,630 Starwood Hotels & Resorts Worldwide, Inc., 7.375% 05/01/07 150,000 162,563 Station Casinos, Inc., 6.875% 03/01/16 240,000 239,400 Suburban Propane Partners, 6.875% 12/15/13 70,000 70,000 Sun International Hotels, 8.875% 08/15/11 75,000 82,313 Synagro Technologies, Inc., 9.500% 04/01/09 50,000 52,625 TCI Communications, Inc., 7.250% 08/01/05 335,000 349,489 Teekay Shipping Corp., 8.875% 07/15/11 200,000 223,000 Time Warner, Inc., 6.625% 05/15/29 775,000 778,340 Toll Corp., 8.250% 12/01/11 175,000 193,375 TransDigm, Inc., 8.375% 07/15/11 125,000 131,875 Triad Hospitals, Inc., 7.000% 05/15/12 200,000 208,000 Union Pacific Corp., 3.875% 02/15/09 1,000,000 992,760 United Rentals NA, Inc., 7.750% 11/15/13 155,000 144,150 United Technologies Corp., 6.500% 06/01/09 750,000 837,998 See Accompanying Notes to Financial Statements. 91 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA BALANCED FUND PAR ($) VALUE ($) ------------ ------------- CORPORATE NOTES & BONDS - (CONTINUED) INDUSTRIALS - (CONTINUED) Universal Compression, Inc., 7.250% 05/15/10 120,000 125,400 Verizon Global Funding Corp., 7.750% 12/01/30 1,100,000 1,298,770 Vintage Petroleum, Inc., 7.875% 05/15/11 125,000 130,938 Vodafone Group, 7.750% 02/15/10 750,000 880,613 Wal-Mart Stores, Inc., 4.125% 02/15/11 1,000,000 996,920 Warner Music Group, 7.375% 04/15/14 (b) 60,000 59,700 Waste Management, Inc., 7.375% 08/01/10 700,000 806,260 Westinghouse Air Brake Technology, 6.875% 07/31/13 180,000 180,450 Williams Companies, Inc.: 7.125% 09/01/11 15,000 16,425 8.125% 03/15/12 80,000 92,000 ------------- Industrials Total 41,507,866 FINANCIALS - 4.2% Allstate Financial Global Funding II, 2.625% 10/22/06 (b) 1,000,000 993,870 American General Finance Corp., 5.375% 09/01/09 475,000 502,232 Capital One Bank, 4.875% 05/15/08 525,000 542,010 CIT Group, Inc., 4.125% 02/21/06 575,000 587,535 Citigroup, Inc., 7.250% 10/01/10 1,565,000 1,806,651 Ford Motor Credit Co., 7.375% 10/28/09 1,605,000 1,752,243 General Motors Acceptance Corp., 7.750% 01/19/10 1,175,000 1,294,592 Goldman Sachs Group, Inc., 6.345% 02/15/34 745,000 746,609 Health Care Property Investors, Inc., 6.450% 06/25/12 850,000 926,976 Household Finance Corp., 6.400% 06/17/08 1,250,000 1,367,100 iStar Financial, Inc.: 5.125% 04/01/11 25,000 24,709 6.000% 12/15/10 75,000 76,687 7.000% 03/15/08 25,000 26,844 8.750% 08/15/08 39,000 44,363 JPMorgan Chase & Co., 5.750% 01/02/13 1,000,000 1,055,950 Lehman Brothers Holdings, Inc., 4.000% 01/22/08 800,000 812,800 Merrill Lynch & Co., Inc., 4.125% 01/15/09 1,000,000 1,011,960 Morgan Stanley, 4.750% 04/01/14 1,000,000 964,740 PAR ($) VALUE ($) ------------ ------------- SLM Corp., 5.125% 08/27/12 990,000 1,007,048 US Bank NA, 6.375% 08/01/11 1,500,000 1,672,740 Wachovia Corp., 3.500% 08/15/08 1,300,000 1,295,996 Washington Mutual, Inc., 5.625% 01/15/07 1,275,000 1,350,276 Wells Fargo & Co., 5.900% 05/21/06 1,090,000 1,148,271 ------------- Financials Total 21,012,202 UTILITIES - 0.9% Centerpoint Energy Houston, 5.750% 01/15/14 750,000 795,525 Devon Energy, 7.95% 04/15/32 700,000 854,630 Dominion Resources, Inc., 2.800% 02/15/05 1,250,000 1,254,000 Kinder Morgan Energy Partners LP, 6.750% 03/15/11 765,000 844,101 Sprint Capital Corp., 6.875% 11/15/28 450,000 467,667 ------------- Utilities Total 4,215,923 INTERNATIONAL - 1.0% Ontario Province, 3.500% 09/17/07 1,000,000 1,009,600 Quebec Province, 6.500% 01/17/06 1,100,000 1,160,698 Republic of Italy, 2.500% 03/31/06 1,300,000 1,301,638 United Mexican States, 7.500% 04/08/33 1,250,000 1,318,750 ------------- International Total 4,790,686 ------------- TOTAL CORPORATE NOTES & BONDS (Cost of $69,005,208) 71,526,677 U.S. GOVERNMENT & AGENCY SECURITIES - 14.1% - ----------------------------------------------------------------------------- U.S. TREASURY NOTES & BONDS - 2.2% U.S. Treasury Bonds: 6.250% 08/15/23 1,120,000 1,300,994 7.250% 05/15/16 1,360,000 1,710,465 U.S. Treasury Inflation Index Note, 3.625% 01/15/08 3,310,934 3,639,571 U.S. Treasury Notes: 3.500% 11/15/06 3,350,000 3,422,628 4.875% 02/15/12 475,000 506,321 ------------- U.S. Treasury Notes & Bonds Total 10,579,979 GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - 0.2% 7.000% 10/15/31 - 05/15/32 843,824 902,070 ------------- Government National Mortgage Association (GNMA) Total 902,070 See Accompanying Notes to Financial Statements. 92 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA BALANCED FUND PAR ($) VALUE ($) ------------ ------------- U.S. GOVERNMENT & AGENCY SECURITIES - (CONTINUED) FEDERAL HOME LOAN MORTGAGE CORP. (FHLMC) - 5.9% 4.000% 09/15/15 3,120,000 3,099,597 4.500% 08/15/28 18,714,719 18,729,318 5.000% 05/01/34 1,999,372 1,985,259 5.500% 12/01/18 - 07/01/19 2,520,252 2,610,983 6.000% 03/01/17 - 08/01/17 2,377,412 2,499,432 6.500% 08/01/32 407,303 429,648 ------------- Federal Home Loan Mortgage Corp. (FHLMC) Total 29,354,237 FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 1.2% 5.000% 07/01/18 - 10/01/18 4,951,134 5,055,577 5.876% 07/01/32 (c) 876,904 910,101 ------------- Federal National Mortgage Association (FNMA) Total 5,965,678 FEDERAL HOUSING ADMINISTRATION (FHA) - 0.3% FHA Insured Project, Pool #53-43077, 9.125% 03/25/33 1,543,377 1,558,810 ------------- Federal Housing Administration (FHA) Total 1,558,810 AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS - 4.3% FHLMC Multiclass Mtg. Partn. Ctfs., Gtd.: Series 2235, Class VN, 7.000% 06/15/14 314,820 314,783 Series 2462, Class JE, 6.500% 11/15/30 1,218,878 1,250,456 Series 2687, Class MQ, 4.500% 10/15/18 1,840,000 1,876,489 Series 2695, Class AT, 4.000% 10/15/26 5,300,000 5,353,005 Series 2695, Class DB, 4.000% 09/15/15 3,100,000 3,109,130 Series 2695, Class DG, 4.000% 10/15/18 3,600,000 3,337,889 Series 2700, Class PD, 4.500% 02/15/27 630,000 635,859 Series 2702, Class AB, 4.500% 07/15/27 1,312,012 1,324,197 FNMA Gtd. Remic Pass Thru Ctfs.: Remic Tr. 2001-56, Class KD, 6.500% 08/15/31 473,409 477,179 Remic Tr. 2002-8, Class PD, 6.500% 07/25/30 2,448,791 2,501,889 Remic Tr. 2002-27, Class OG, 6.500% 12/25/30 662,812 665,525 Remic Tr. 2003-87, Class TG, 4.500% 11/25/14 630,000 637,658 ------------- Agency Collateralized Mortgage Obligations Total 21,484,059 ------------- TOTAL U.S. GOVERNMENT & AGENCY SECURITIES (Cost of $69,164,161) 69,844,833 PAR ($) VALUE ($) ------------ ------------- OTHER SECURITIZED LOANS - 4.3% ASSET-BACKED SECURITIES - 1.0% Cityscape Home Equity Loan Trust: Series 1997-B, Class A7, 7.410% 05/25/28 812,886 814,024 Series 1997-4, Class A4, 7.940% 10/25/18 (c) 617,382 616,566 First Alliance Mortgage Trust, Series 1996-1, Class A1, 7.340% 06/20/27 214,890 215,440 IMC Home Equity Loan Trust: Series 1997-3, Class A6, 7.520% 08/20/28 665,720 666,692 Series 1997-5, Class A9, 7.310% 11/20/28 1,338,774 1,341,813 Salomon Brothers Mortgage Securities VII, Series 1998-AQ1, Class A5, 7.150% 06/25/28 1,160,020 1,155,218 ------------- Asset-Backed Securities Total 4,809,753 COLLATERALIZED MORTGAGE OBLIGATIONS - 2.3% Bear Stearns Asset-Backed Securities, Inc., Series 2003-AC7, Class A1, 5.000% 01/25/34 (c) 2,517,884 2,569,778 Bear Stearns Mortgage Securities, Inc., Series 1996-2, Class A1, 12.700% 01/28/25 (c) 11,965 11,940 Countrywide Alternative Loan Trust, Series 2004-2CB, Class 1A4, 2.015% 03/25/34 (c) 5,562,291 5,560,218 First Nationwide Trust, Series 2000-1, Class IIA3, 8.000% 10/25/30 310,909 311,086 SACO I, Inc., Series 1995-1, Class A, 13.468% 09/25/24 (c) 41,672 41,255 Structured Asset Securities Corp.: Series 2003-14, Class 1A3, 5.500% 05/25/33 1,136,105 1,142,467 Series 2003-21, Class 1A3, 5.500% 07/25/33 1,605,436 1,595,787 ------------- Collateralized Mortgage Obligations Total 11,232,531 COMMERCIAL MORTGAGE-BACKED SECURITIES - 1.0% GMAC Commercial Mortgage Asset Corp., Series 2001-FLAA, Class B1, 2.100% 06/15/13 (b)(c) 334,960 335,001 Nationslink Funding Corp., Series 1999-SL, Class A5, 6.888% 05/10/07 4,380,000 4,795,793 ------------- Commercial Mortgage-Backed Securities Total 5,130,794 ------------- TOTAL OTHER SECURITIZED LOANS (Cost of $20,760,758) 21,173,078 See Accompanying Notes to Financial Statements. 93 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA BALANCED FUND SHARES VALUE ($) ------------ ------------- PREFERRED STOCK - 0.3% CONSUMER DISCRETIONARY - 0.3% MEDIA - 0.3% News Corp., Ltd., ADR 45,825 1,363,294 Media Total 1,363,294 ------------- CONSUMER DISCRETIONARY TOTAL 1,363,294 TOTAL PREFERRED STOCK (Cost of $1,476,767) 1,363,294 SHORT-TERM OBLIGATION - 3.9% PAR ($) U.S. TREASURY BILL - 0.7% 1.440% 11/04/04 3,785,000 3,775,293 ------------- REPURCHASE AGREEMENT - 3.2% Repurchase agreement with State Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by a U.S. Treasury Note maturing 02/15/10, market value $16,111,500 (repurchase proceeds $15,793,658) 15,793,000 15,793,000 ------------- TOTAL SHORT-TERM OBLIGATIONS (Cost of $19,568,293) 19,568,293 TOTAL INVESTMENTS - 100.4% (COST OF $477,662,627) (d) 496,559,930 OTHER ASSETS & LIABILITIES, NET - (0.4)% (1,859,688) NET ASSETS - 100.0% 494,700,242 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing security. (b) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2004, these securities amounted to $3,482,337, which represents 0.7% of net assets. (c) Variable rate security. The interest rate shown reflects the rate as of August 31, 2004. (d) Cost for federal income tax purposes is $479,538,783. ACRONYM NAME ------- ---- ADR American Depositary Receipt See Accompanying Notes to Financial Statements. 94 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA SHORT TERM BOND FUND PAR ($) VALUE ($) ------------ ------------- CORPORATE NOTES & BONDS - 39.2% INDUSTRIAL - 17.4% Anthem, Inc., 4.875% 08/01/05 2,225,000 2,272,459 AOL Time Warner, Inc., 6.125% 04/15/06 2,460,000 2,583,148 AT&T Wireless Services, Inc., 7.500% 05/01/07 1,970,000 2,180,081 Bell Atlantic Financial Services, Inc., 7.600% 03/15/07 600,000 660,360 Boeing Co., 8.100% 11/15/06 1,820,000 2,015,250 Bottling Group LLC, 2.450% 10/16/06 4,300,000 4,261,128 Canadian National Railway Co., 6.450% 07/15/06 (b) 460,000 488,184 Caterpillar Financial Services Corp., 2.500% 10/03/06 5,000,000 4,953,850 ChevronTexaco Capital Co., 3.500% 09/17/07 3,350,000 3,385,175 Coca-Cola Enterprises, Inc., 8.000% 01/04/05 650,000 663,188 Costco Wholesale Corp., 5.500% 03/15/07 640,000 678,746 Cox Enterprises, Inc., 8.000% 02/15/07 (a) 1,300,000 1,410,682 CSX Corp., 6.460% 06/22/05 2,250,000 2,324,362 DaimlerChrysler NA Holding Corp., 4.750% 01/15/08 1,575,000 1,623,116 Deutsche Telekom International Finance, 8.500% 06/15/10 1,450,000 1,738,463 Devon Energy Corp., 2.750% 08/01/06 2,825,000 2,811,666 Fortune Brands, Inc., 2.875% 12/01/06 3,275,000 3,271,758 Gannett Co., Inc., 4.950% 04/01/05 2,000,000 2,032,660 General Mills, Inc., 2.625% 10/24/06 2,800,000 2,778,020 GTE Southwest, Inc., 6.000% 01/15/06 3,725,000 3,892,402 Honeywell International, Inc., 5.125% 11/01/06 3,120,000 3,258,590 International Business Machines Corp., 2.375% 11/01/06 2,700,000 2,677,752 Jones Intercable, Inc., 7.625% 04/15/08 1,875,000 2,090,063 Kellogg Co., 6.000% 04/01/06 1,250,000 1,313,563 Kroger Co., 7.650% 04/15/07 1,585,000 1,745,941 Lockheed Martin Corp., 7.700% 06/15/08 990,000 1,132,144 Lowe's Companies, Inc., 7.500% 12/15/05 1,675,000 1,782,552 PAR ($) VALUE ($) ------------ ------------- Marathon Oil Corp., 5.375% 06/01/07 2,725,000 2,870,897 Newell Rubbermaid, Inc., 2.000% 05/01/05 3,725,000 3,711,106 Occidental Petroleum Corp., 7.650% 02/15/06 1,500,000 1,605,750 Pitney Bowes Corp., 5.750% 08/15/08 1,525,000 1,646,207 Procter & Gamble Co., 4.750% 06/15/07 725,000 756,712 Safeway, Inc., 4.950% 08/16/10 1,900,000 1,928,595 Target Corp., 5.950% 05/15/06 1,000,000 1,054,800 TCI Communications, Inc., 7.250% 08/01/05 1,125,000 1,173,656 Union Pacific Corp., 3.875% 02/15/09 1,825,000 1,811,787 United Technologies Corp., 4.875% 11/01/06 2,475,000 2,580,707 USA Waste Services, Inc., 7.125% 10/01/07 2,430,000 2,686,730 Vodafone Group PLC, 7.750% 02/15/10 2,350,000 2,759,253 Wachovia Corp., 3.500% 08/15/08 3,720,000 3,708,542 Wal-Mart Stores, Inc., 4.125% 02/15/11 1,000,000 996,920 Wyeth, 4.125% 03/01/08 2,100,000 2,141,643 ------------- Industrial Total 91,458,608 FINANCIALS - 16.7% Allstate Financial Global Funding II, 2.625% 10/22/06 (a) 2,950,000 2,931,916 American Express Credit Corp., 3.000% 05/16/08 4,000,000 3,942,760 American General Finance Corp., 3.000% 11/15/06 4,500,000 4,498,740 Bear Stearns Companies, Inc., 6.500% 05/01/06 2,600,000 2,761,096 Capital One Bank, 4.875% 05/15/08 1,625,000 1,677,650 CIT Group, Inc., 4.125% 02/21/06 1,700,000 1,737,060 Citigroup, Inc., 6.750% 12/01/05 2,700,000 2,845,071 Countrywide Home Loans, Inc., 2.875% 02/15/07 500,000 496,080 Credit Suisse First Boston USA, Inc., 5.750% 04/15/07 2,375,000 2,525,171 Fifth Third Bank, 2.700% 01/30/07 2,075,000 2,069,231 Ford Motor Credit Co., 7.375% 10/28/09 5,425,000 5,922,690 General Motors Acceptance Corp., 7.750% 01/19/10 4,000,000 4,407,120 See Accompanying Notes to Financial Statements. 95 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA SHORT TERM BOND FUND PAR ($) VALUE ($) ------------ ------------- CORPORATE NOTES & BONDS - (CONTINUED) FINANCIALS - (CONTINUED) Genworth Financial, Inc., 4.750% 06/15/09 2,010,000 2,076,350 Goldman Sachs Group, Inc., 4.125% 01/15/08 2,560,000 2,612,429 Health Care Property Investors, Inc., 6.875% 06/08/05 (b) 2,075,000 2,138,246 Household Finance Corp., 6.400% 06/17/08 3,225,000 3,527,118 JPMorgan Chase & Co., 3.125% 12/11/06 4,000,000 4,021,320 Lehman Brothers Holdings, Inc.: 4.000% 01/22/08 2,500,000 2,540,000 8.750% 03/15/05 500,000 518,030 Marshall & Ilsley Corp., 4.375% 08/01/09 2,670,000 2,725,616 Merrill Lynch & Co., Inc., 2.470% 03/10/06 2,460,000 2,457,097 Morgan Stanley, 6.100% 04/15/06 2,500,000 2,636,775 Security Capital Group, Inc., 7.150% 06/15/07 6,315,000 6,966,771 UnitedHealth Group, Inc., 3.375% 08/15/07 1,415,000 1,419,938 U.S. Bancorp, 3.125% 03/15/08 5,750,000 5,689,453 USA Education, Inc., 5.625% 04/10/07 4,000,000 4,230,000 Washington Mutual, Inc., 5.625% 01/15/07 2,600,000 2,753,504 Wells Fargo & Co., 5.900% 05/21/06 5,200,000 5,477,992 ------------- Financials Total 87,605,224 UTILITIES - 2.1% Dominion Resources, Inc., 2.800% 02/15/05 2,050,000 2,056,560 Exelon Generation Co., 6.950% 06/15/11 1,850,000 2,079,844 Kinder Morgan Energy Partners LP, 8.000% 03/15/05 2,415,000 2,488,054 Sempra Energy, 4.750% 05/15/09 2,150,000 2,204,094 Sprint Capital Corp., 6.375% 05/01/09 1,250,000 1,366,463 Virginia Electric & Power Co., 5.375% 02/01/07 1,200,000 1,254,384 ------------- Utilities Total 11,449,399 INTERNATIONAL - 3.0% Canadian Government Bond, 6.750% 08/28/06 1,000,000 1,082,070 Province of Ontario, 3.500% 09/17/07 3,500,000 3,533,600 PAR ($) VALUE ($) ------------ ------------- Quebec Province: 5.500% 04/11/06 4,125,000 4,297,755 6.500% 01/17/06 1,100,000 1,160,698 Republic of Italy, 2.500% 03/31/06 1,950,000 1,952,457 United Mexican States, 4.625% 10/08/08 3,600,000 3,659,400 ------------- International Total 15,685,980 ------------- TOTAL CORPORATE NOTES & BONDS (Cost of $212,188,540) 206,199,211 OTHER SECURITIZED LOANS - 31.7% ASSET-BACKED SECURITIES - 11.0% Americredit Automobile Receivables Trust, Series 2001-B, Class A4, 5.370% 06/12/08 672,865 685,252 Cityscape Home Equity Loan Trust: Series 1997-B, Class A7, 7.410% 05/25/28 91,336 91,463 Series 1997-C, Class A3, 7.380% 07/25/28 (b) 182,440 182,677 Ford Credit Auto Owner Trust, Series 2002-B, Class A3A, 4.140% 12/15/05 908,062 911,694 Harley Davidson Motorcycle Trust, Series 2002-2, Class A2, 3.090% 06/15/10 1,525,000 1,541,424 Honda Auto Receivables Owner Trust, Series 2002-3, Class A3, 3.000% 05/18/06 2,486,686 2,495,241 IMC Home Equity Loan Trust: Series 1995-3, Class A5, 7.500% 04/25/26 970,415 980,119 Series 1997-3, Class A6, 7.520% 08/20/28 524,587 525,353 Series 1997-3, Class A7, 7.080% 08/20/28 178,837 178,998 Series 1997-5, Class A9, 7.310% 11/20/28 101,329 101,559 Keycorp Student Loan Trust: Series 1997-1, Class A2, 2.090% 01/27/23 (a) 3,864,544 3,916,432 Series 2003-A, Class 2A2, 1.970% 10/25/25 (a) 12,080,000 12,174,949 Money Store Home Equity Trust, Series 1998-A, Class AF7, 6.870% 04/15/39 1,783,300 1,786,795 Nissan Auto Receivables Owner Trust, Series 2002-B, Class A4, 4.600% 09/17/07 2,500,000 2,540,975 Residential Asset Mortgage Products, Series 2003-RS8, Class AII8, 1.955% 09/25/33 (b) 2,861,680 2,871,238 Residential Funding Mortgage Securities I, Inc., Series 2003-HS3, Class A2B, 1.905% 08/25/33 (b) 195,142 195,170 See Accompanying Notes to Financial Statements. 96 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA SHORT TERM BOND FUND PAR ($) VALUE ($) ------------ ------------- OTHER SECURITIZED LOANS - (CONTINUED) ASSET-BACKED SECURITIES - (CONTINUED) Sears Corp., Series 84, Class 3, 8.500% 04/01/17 127,722 127,722 SLM Student Loan Trust: Series 1996-1, Class CTFS: 2.136% 07/25/11 (b) 6,030,000 6,033,920 Series 1996-4, Class CTFS, 2.186% 07/25/11 (b) 5,500,000 5,554,230 Series 1997-2, Class A2, 1.806% 01/25/10 (b) 1,337,642 1,340,794 Series 1997-4, Class CTFS, 2.256% 01/25/13 (b) 8,950,000 9,055,218 Series 2001-2, Class A1T, 1.970% 07/27/09 (b) 1,913,098 1,917,346 Toyota Auto Receivables Owner Trust, Series 2001-C, Class A4, 4.720% 09/15/08 1,197,745 1,216,334 University Support Services Inc., Series 1995-A, Class A, 1.880% 09/20/15 (b) 1,562,254 1,577,705 ------------- Asset-Backed Securities Total 58,002,608 COLLATERALIZED MORTGAGE OBLIGATIONS - 20.0% ABFS Mortgage Loan Trust, Series 2002-4, Class A, 4.425% 12/15/33 (b) 210,781 206,472 Advanta Mortgage Loan Trust, Series 1999-3, Class A4, 7.750% 10/25/26 158,797 162,753 Amresco Residential Securities Mortgage Loan & Trust: Series 1997-2, Class A9, 1.825% 06/25/27 175,932 175,962 Series 1998-3, Class A7, 1.855% 07/25/28 (b) 263,364 264,702 Bank of America Mortgage Securities: Series 2003-1, Class 2A2, 5.250% 02/25/18 (c) 2,252,966 2,260,153 Bear Stearns Asset-Backed Securities, Inc.: Series 1997-2, Class 1A5, 7.000% 08/25/36 (a) 943,312 964,510 Series 2003-AC2, Class A3, 3.500% 06/25/33 (b) 1,560,339 1,555,175 Series 2004-4, Class A6, 3.516% 06/25/34 (b) 3,583,400 3,556,632 CIT Equipment Collateral, Series 2004-VT1, Class A3, 2.200% 03/20/08 3,050,000 3,031,388 Countrywide Home Loans: Series 2002-32, Class 2A3, 5.000% 01/25/18 1,236,192 1,241,532 Series 2002-J5, Class 1A1, 5.750% 01/25/33 139,779 140,120 Series 2003-J7, Class 4A2, 2.015% 08/25/18 (b) 10,554,501 10,493,391 PAR ($) VALUE ($) ------------ ------------- Series 2004-J2, Class A2, 2.115% 03/25/34 (b) 8,342,729 8,353,908 Series 2004-2CB, Class 1A4, 2.015% 03/25/34 (b) 1,522,020 1,521,453 First Alliance Mortage Loan Trust, Series 1994-2, Class A2, 6.680% 06/25/25 284,752 284,382 First Horizon Mortgage Pass-Through Trust: Series 2003-2, Class 2A1, 2.115% 03/25/18 (b) 7,190,112 7,228,075 Series 2003-4, Class 2A2, 2.065% 06/25/18 (b) 2,452,306 2,462,875 GMAC Mortgage Corp. Loan Trust, Series 2003-J3, Class A1, 2.115% 05/25/18 (b) 4,893,964 4,893,964 Ocwen Residential MBS Corp., Series 1998-R1, Class A1, 7.000% 10/25/40 220,703 225,195 PNC Mortgage Securities Corp.: Series 1996-PR1, Class A, (e) 04/28/27 (a) 15,358 15,095 Series 1998-14, Class 2A1, 6.250% 01/25/14 902,126 913,898 Residential Accredited Loans, Inc.: Series 2002-QS9, Class A1, 2.215% 07/25/32 (b) 239,336 239,437 Series 2004-QS9, Class A1, 2.015% 06/25/34 (b) 10,491,398 10,491,398 Residential Asset Securitization Trust: Series 2002-A14J, Class A14, 6.000% 01/25/33 394,938 395,937 Series 2003-A15, Class 1A2, 2.065% 02/25/34 11,422,817 11,421,446 Residential Funding Mortgage Securities I, Inc., Series 2003-S14, Class A5, 2.020% 07/25/18 (b) 10,090,355 10,055,039 Structured Asset Securities Corp.: Series 2002-17, Class 1A3, 6.000% 09/25/32 603,384 602,467 Series 2003-8, Class 2A7, 5.750% 04/25/33 5,042,922 5,124,877 Series 2003-14, Class 1A3, 5.500% 05/25/33 568,052 571,233 Series 2003-21, Class 1A3, 5.500% 07/25/33 384,808 382,495 Washington Mutual Mortgage Securities Corp.: Series 2003-MS5, Class 1A4, 2.115% 03/25/18 (b) 4,471,407 4,495,731 Series 2003-S4, Class 1A3, 2.115% 06/25/18 (b) 3,816,651 3,837,719 Wells Fargo Mortgage-Backed Securities Trust, Series 2002-D, Class 1A1, 5.500% 08/25/32 218,249 221,540 Series 2003-9, Class 1A12, 5.250% 08/25/33 7,481,477 7,478,933 ------------- Collateralized Mortgage Obligations Total 105,269,887 See Accompanying Notes to Financial Statements. 97 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA SHORT TERM BOND FUND PAR ($) VALUE ($) ------------ ------------- OTHER SECURITIZED LOANS - (CONTINUED) COMMERCIAL MORTGAGE-BACKED SECURITIES - 0.7% GMAC Commercial Mortgage Asset Corp., Series 2001-FLAA, Class B1, 2.100% 06/15/13 (a)(b) 429,357 429,410 Merrill Lynch Mortgage Investors, Inc., Series 1996-C1, Class A3, 7.420% 04/25/28 135,094 137,377 Nationslink Funding Corp., Series 1999-SL, Class A5, 6.888% 11/10/30 2,630,000 2,879,666 ------------- Commercial Mortgage-Backed Securities Total 3,446,453 ------------- TOTAL OTHER SECURITIZED LOANS (Cost of $160,028,120) 166,718,948 U.S. GOVERNMENT & AGENCY SECURITIES - 18.8% U.S. TREASURY NOTES - 2.1% U.S. Treasury Inflation Index Notes, 3.625% 01/15/08 10,020,858 11,015,508 ------------- U.S. Treasury Notes Total 11,015,508 U.S. AGENCY BONDS - 0.3% Federal Home Loan Bank, 3.875% 12/15/04 (d) 400,000 402,287 Morocco Government AID Bond, 1.938% 05/01/23 (b) 475,000 465,500 Small Business Administration, 2.375% 06/25/22 (b) 541,578 541,902 ------------- U.S. Agency Bonds Total 1,409,689 GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - 0.3% 6.500% 09/15/13-07/15/32 1,179,676 1,249,356 7.000% 11/15/13-08/15/29 462,648 494,170 ------------- Government National Mortgage Association (GNMA) Total 1,743,526 FEDERAL HOME LOAN MORTGAGE CORP. (FHLMC) - 8.6% 4.000% 05/01/11 6,228,067 6,189,566 4.500% 05/01/19 26,914,033 26,933,328 5.000% 05/01/34 1,905,109 1,891,661 5.500% 05/01/17-07/01/19 8,365,026 8,670,491 6.000% 10/01/06-08/01/17 1,039,187 1,089,285 7.000% 05/01/19 802 833 7.500% 09/01/15 227,190 241,590 8.500% 07/01/30 173,994 189,330 ------------- Federal Home Loan Mortgage Corp. (FHLMC) Total 45,206,084 PAR ($) VALUE ($) ------------ ------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 1.4% 5.500% 02/01/18 3,867,280 4,011,112 6.000% 03/01/09-05/01/17 2,288,170 2,389,830 6.500% 03/01/12-07/01/32 147,989 156,980 7.500% 08/01/15 183,159 195,047 8.000% 05/01/15-07/01/31 602,208 650,782 ------------- Federal National Mortgage Association (FNMA) Total 7,403,751 AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS - 6.1% FHLMC Multiclass Mtg. Partn. Ctfs., Gtd.: Series 1138, Class G, 8.500% 09/15/06 50,047 50,008 Series 1283, Class K, 7.000% 06/15/22 287,542 290,165 Series 1558, Class C, 6.500% 07/15/23 73,110 73,372 Series 2500, Class PE, 6.000% 06/15/31 1,430,000 1,479,730 Series 2617, Class UA, 3.000% 06/15/09 3,826,268 3,840,271 Series 2695, Class AT, 4.000% 10/15/26 7,670,000 7,746,707 Series 2695, Class DB, 4.000% 09/15/15 3,980,000 3,991,722 FNMA: Series 2001-34, Class AE, 6.000% 07/25/29 141,587 141,893 Series 2002-42, Class A, 6.000% 01/25/16 458,875 464,147 Series 2002-95, Class EB, 5.000% 04/25/31 7,290,552 7,390,692 Series 2003-92, Class FA, 2.165% 09/25/18 (b) 4,123,735 4,127,717 Gtd. Remic Pass Thru Ctfs.: Remic Tr. 1991-146, Class Z, 8.000% 10/25/06 17,911 18,590 Remic Tr. 1993-92, Class C, (e) 05/25/23 1,295,000 985,220 Remic Tr. 1998-36, Class GA, 6.000% 12/18/27 353,272 355,664 GNMA Gtd. Remic Pass Thru Ctfs., Remic Tr. 1997-7, Class PC, 5.000% 05/16/27 948,663 972,239 ------------- Agency Collateralized Mortgage Obligations Total 31,928,137 ------------- TOTAL U.S. GOVERNMENT & AGENCY SECURITIES (Cost of $97,749,455) 98,706,695 See Accompanying Notes to Financial Statements. 98 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA SHORT TERM BOND FUND PAR ($) VALUE ($) ------------ ------------- SHORT-TERM OBLIGATIONS - 9.7% U.S. TREASURY BILL - 3.8% 1.443% 11/04/04 19,955,000 19,903,827 ------------- REPURCHASE AGREEMENT - 5.9% Repurchase agreement with State Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by a U.S. Treasury Note maturing 08/31/06, market value $31,680,350 (repurchase proceeds $31,056,294) 31,055,000 31,055,000 ------------- TOTAL SHORT-TERM OBLIGATIONS (Cost of $50,958,827) 50,958,827 TOTAL INVESTMENTS - 99.4% (COST OF $520,924,942) (F) 522,583,681 OTHER ASSETS & LIABILITIES, NET - 0.6% 2,914,506 NET ASSETS - 100.0% 525,498,187 NOTES TO INVESTMENT PORTFOLIO: (a) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2004, these securities amounted to $21,827,899, which represents 4.2% of net assets. (b) Variable rate security. The interest rate shown reflects the rate as of August 31, 2004. (c) Investments in affiliates during the year ended August 31, 2004: Security Name: Bank of America Mortgage Securities (as a result of a merger effective April 1, 2004, Bank of America Corp. became the parent company of the Investment Advisor.) Par as of 08/31/03: $ -- Par purchased: $2,252,966 Par as of 08/31/04: $2,252,966 Net realized gain or loss: $ -- Interest income earned: $ 128,854 Value at end of period: $2,260,153 (d) Security pledged as collateral for open futures contracts. (e) Zero coupon bond. (f) Cost for federal income tax purposes is $520,756,129. At August 31, 2004, the Fund held the following open short futures contracts: AGGREGATE EXPIRATION UNREALIZED TYPE VALUE FACE VALUE DATE DEPRECIATION ----------------------------------------------------------------------- 2-Year U.S. Treasury Note $57,151,407 $57,071,250 Dec-2004 $ (80,157) See Accompanying Notes to Financial Statements. 99 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA FIXED INCOME SECURITIES FUND PAR ($) VALUE ($) ------------ ------------- U.S. GOVERNMENT & AGENCY SECURITIES - 42.4% U.S. TREASURY NOTES & BONDS - 2.8% U.S. Treasury Bond, 4.875% 02/15/12 2,400,000 2,558,251 U.S. Treasury Inflation Index Note, 3.625% 01/15/08 6,281,381 6,904,858 ------------- U.S. Treasury Notes & Bonds Total 9,463,109 FEDERAL HOME LOAN MORTGAGE CORP. (FHLMC) - 16.2% 3.500% 10/01/18 5,036,244 4,773,487 4.500% 05/01/19 31,846,662 31,869,494 5.000% 05/01/34 2,594,719 2,576,403 5.500% 12/01/17 - 07/01/19 5,215,075 5,402,748 6.000% 05/01/17 - 07/01/17 4,782,556 5,028,021 6.500% 08/01/32 270,735 285,588 To Be Announced, 5.500% 09/15/34 5,230,000 5,311,719 ------------- Federal Home Loan Mortgage Corp. (FHLMC) Total 55,247,460 FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 3.9% 5.000% 06/01/18 - 08/01/18 10,252,008 10,467,279 5.976% 06/01/32 (a) 91,825 92,799 6.000% 03/01/09 1,153,239 1,185,242 6.000% 08/01/34 - 09/01/34 374,414 388,372 6.098% 07/01/32 (a) 961,900 991,908 6.500% 07/01/32 110,414 116,329 ------------- Federal National Mortgage Association (FNMA) Total 13,241,929 FEDERAL HOUSING ADMINISTRATION (FHA) - 0.6% FHA Insured Project, 8.625% 05/15/33 2,099,873 2,120,871 ------------- Federal Housing Administration (FHA) Total 2,120,871 GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - 1.3% 5.000% 06/15/34 2,850,883 2,845,642 To Be Announced, 6.000% 09/22/34 1,455,000 1,509,563 ------------- Government National Mortgage Association (GNMA) Total 4,355,205 AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS - 17.6% FHLMC Multiclass Mtg. Partn. Ctfs. Gtd.: Series 1558, Class C, 6.500% 07/15/23 291,564 292,607 Series 1602, Class PJ, 6.500% 10/15/23 510,000 551,545 Series 2113, Class MU, 6.500% 08/15/27 199,533 199,952 Series 2235, Class VN, 7.000% 06/15/14 391,547 391,502 Series 2462, Class JE, 6.500% 11/15/30 3,151,575 3,233,224 PAR ($) VALUE ($) ------------ ------------- Series 2500, Class PE, 6.000% 06/15/31 5,630,000 5,825,791 Series 2687, Class MQ, 4.500% 10/15/18 3,166,000 3,228,785 Series 2689, Class PC, 4.000% 09/15/15 5,900,000 5,861,417 Series 2695, Class AT, 4.000% 10/15/26 7,720,000 7,797,207 Series 2695, Class BO, 4.500% 08/15/28 2,430,000 2,435,735 Series 2695, Class DB, 4.000% 09/15/15 7,155,000 7,176,074 Series 2695, Class DG, 4.000% 10/15/18 9,000,000 8,344,723 Series 2700, Class PD, 4.500% 02/15/27 2,050,000 2,069,064 Series 2702, Class AB, 4.500% 07/15/27 6,880,000 6,943,897 FNMA Gtd. Remic Pass Thru Ctfs.: Remic Tr. 1996-W2, Class A7, 7.800% 06/25/26 571,286 616,724 Remic Tr. 2001-56, Class KD, 6.500% 07/25/30 1,003,376 1,011,366 Remic Tr. 2003-87, Class TG, 4.500% 11/25/14 2,050,000 2,074,919 GNMA Gtd. Remic Pass Thru Ctfs., Remic Tr. 2003-97, Class NC, 4.500% 04/16/28 2,090,000 2,114,528 ------------- Agency Collateralized Mortgage Obligations Total 60,169,060 TOTAL U.S. GOVERNMENT & AGENCY SECURITIES (Cost of $142,286,185) 144,597,634 CORPORATE NOTES & BONDS - 42.5% INDUSTRIALS - 26.2% Acetex Corp., 10.875% 08/01/09 215,000 236,500 Airgas, Inc., 9.125% 10/01/11 215,000 241,606 Alcan, Inc., 7.250% 03/15/31 1,400,000 1,647,926 Allied Waste North America, Inc.: 6.375% 04/15/11 175,000 173,250 6.500% 11/15/10 150,000 150,375 7.375% 04/15/14 225,000 218,250 AmerisourceBergen Corp., 8.125% 09/01/08 300,000 329,250 Anheuser-Busch Companies, Inc., 5.750% 04/01/10 530,000 574,096 Anthem, Inc., 6.800% 08/01/12 1,550,000 1,748,493 Arch Western Finance, 6.750% 07/01/13 (b) 460,000 476,100 See Accompanying Notes to Financial Statements. 100 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FIXED INCOME SECURITIES FUND PAR ($) VALUE ($) ------------ ------------- CORPORATE NOTES & BONDS - (CONTINUED) INDUSTRIALS - (CONTINUED) AT&T Wireless Services, Inc., 8.750% 03/01/31 1,200,000 1,550,448 Autonation, Inc., 9.000% 08/01/08 200,000 228,500 Ball Corp., 7.750% 08/01/06 450,000 481,500 Boeing Co.: 5.125% 02/15/13 335,000 343,837 6.125% 02/15/33 1,475,000 1,526,994 BP Amoco PLC, 5.900% 04/15/09 1,800,000 1,968,642 Canadian National Railway Co., 7.195% 01/02/16 1,906,913 2,254,352 Chesapeake Energy Corp.: 7.500% 09/15/13 320,000 344,800 8.375% 11/01/08 165,000 180,263 Cinemark USA, Inc., 9.000% 02/01/13 285,000 317,063 Coca-Cola Enterprises, Inc., 6.750% 01/15/38 1,000,000 1,126,730 Comcast Corp., 7.050% 03/15/33 870,000 947,526 Constellation Brands, Inc., 8.000% 02/15/08 475,000 523,688 Corrections Corp. of America, 7.500% 05/01/11 400,000 421,000 Costco Wholesale Corp., 5.500% 03/15/07 1,900,000 2,015,026 Cott Beverages, Inc., 8.000% 12/15/11 470,000 507,600 Couche-Tard, 7.500% 12/15/13 245,000 258,476 Cox Communications, Inc., 7.875% 08/15/09 235,000 258,947 Cox Enterprises, Inc., 8.000% 02/15/07 (b) 1,350,000 1,464,939 CSX Corp., 4.875% 11/01/09 960,000 987,312 DaimlerChrysler NA Holding Corp., 8.500% 01/18/31 1,175,000 1,431,902 Deutsche Telekom International Finance BV, 8.500% 06/15/10 1,390,000 1,666,527 Devon Energy Corp., 7.950% 04/15/32 1,550,000 1,892,395 Dex Media East LLC, 12.125% 11/15/12 227,000 279,210 Diageo Capital PLC, 3.375% 03/20/08 1,570,000 1,564,835 DirecTV Holdings, 8.375% 03/15/13 245,000 278,688 EchoStar DBS Corp., 5.750% 10/01/08 525,000 527,625 PAR ($) VALUE ($) ------------ ------------- EquiStar Chemicals LP: 10.125% 09/01/08 25,000 27,750 10.625% 05/01/11 100,000 112,000 Ethyl Corp., 8.875% 05/01/10 50,000 53,625 Finlay Fine Jewelry Corp., 8.375% 06/01/12 (b) 70,000 74,550 Fisher Scientific International., 6.750% 08/15/14 (b) 40,000 41,200 Freescale Semiconductor, Inc., 6.875% 07/15/11 (b) 275,000 280,500 General Electric Co., 5.000% 02/01/13 2,875,000 2,957,973 General Mills, Inc., 2.625% 10/24/06 1,915,000 1,899,967 Grant Prideco, Inc.: 9.000% 12/15/09 460,000 510,600 9.625% 12/01/07 40,000 44,800 Group 1 Automotive, Inc., 8.250% 08/15/13 80,000 83,600 Harrah's Operating Co., Inc., 7.875% 12/15/05 250,000 264,062 Hasbro, Inc., 6.150% 07/15/08 250,000 264,375 HCA, Inc., 6.950% 05/01/12 225,000 241,922 Houghton Mifflin Co., 9.875% 02/01/13 120,000 124,800 International Business Machines Corp., 5.875% 11/29/32 2,000,000 2,054,800 International Paper Co., 4.250% 01/15/09 510,000 512,728 Iron Mountain, Inc., 8.625% 04/01/13 500,000 540,000 ITT Corp., 6.750% 11/15/05 275,000 285,656 John Deere Capital Corp., 3.900% 01/15/08 1,400,000 1,421,420 K2, Inc., 7.375% 07/01/14 (b) 125,000 131,428 K & F Industries, Inc., 9.625% 12/15/10 285,000 316,350 KB Home, 8.625% 12/15/08 500,000 556,250 Kennametal, Inc., 7.200% 06/15/12 240,000 261,060 Key Energy Services, Inc., 6.375% 05/01/13 60,000 57,300 Kinder Morgan Energy Partners LP, 6.750% 03/15/11 1,500,000 1,655,100 Kroger Co., 7.650% 04/15/07 1,450,000 1,597,233 L-3 Communications Corp.: 6.125% 07/15/13 5,000 4,962 7.625% 06/15/12 460,000 497,950 Lamar Media Corp., 7.250% 01/01/13 325,000 344,500 See Accompanying Notes to Financial Statements. 101 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FIXED INCOME SECURITIES FUND PAR ($) VALUE ($) ------------ ------------- CORPORATE NOTES & BONDS - (CONTINUED) INDUSTRIALS - (CONTINUED) LIN Television Corp., 6.500% 05/15/13 300,000 296,250 Lockheed Martin Corp., 8.500% 12/01/29 1,175,000 1,534,139 Lowe's Companies, Inc., 6.500% 03/15/29 1,510,000 1,656,123 MacDermid, Inc., 9.125% 07/15/11 115,000 128,369 Marathon Oil Corp., 6.800% 03/15/32 1,000,000 1,098,710 MGM Mirage, Inc.: 6.000% 10/01/09 225,000 229,500 9.750% 06/01/07 250,000 278,437 Nalco Co., 7.750% 11/15/11 (b) 175,000 185,937 Newell Rubbermaid, Inc., 4.000% 05/01/10 1,845,000 1,796,882 Newfield Exploration Co., 6.625% 09/01/14 (b) 210,000 214,200 Nextel Communications, Inc.: 7.375% 08/01/15 450,000 470,250 9.500% 02/01/11 40,000 45,200 Occidental Petroleum Corp., 4.250% 03/15/10 1,825,000 1,835,147 Offshore Logistics, Inc., 6.125% 06/15/13 405,000 400,950 Omnicare, Inc., 8.125% 03/15/11 340,000 363,800 Owens-Illinois, Inc., 7.350% 05/15/08 125,000 128,437 Park Place Entertainment Corp., 9.375% 02/15/07 450,000 499,500 Peabody Energy Corp., 6.875% 03/15/13 465,000 488,250 Pepsi Bottling Holdings, Inc., 5.625% 02/17/09 (b) 2,050,000 2,208,608 Plains E&P Co., 7.125% 06/15/14 (b) 185,000 196,100 Pogo Producing Co., 8.250% 04/15/11 65,000 71,337 Pride International, Inc., 7.375% 07/15/14 (b) 220,000 233,750 Province Healthcare Co., 7.500% 06/01/13 275,000 305,937 R.H. Donnelley Financial Corp.: 10.875% 12/15/12 75,000 88,875 10.875% 12/15/12 (b) 360,000 426,600 Rogers Cable, Inc., 7.875% 05/01/12 470,000 507,614 Royal Caribbean Cruises, Ltd.: 6.750% 03/15/08 80,000 83,600 6.875% 12/01/13 100,000 102,750 8.000% 05/15/10 35,000 38,937 8.750% 02/02/11 255,000 294,525 PAR ($) VALUE ($) ------------ ------------- Russel Metals, Inc., 6.375% 03/01/14 135,000 128,925 Safeway, Inc., 4.950% 08/16/10 1,145,000 1,162,232 Scotts Co., 6.625% 11/15/13 175,000 182,000 Select Medical Corp., 9.500% 06/15/09 375,000 407,813 Sempra Energy, 4.750% 05/15/09 1,350,000 1,383,966 Silgan Holdings, Inc., 6.750% 11/15/13 385,000 385,000 Sinclair Broadcasting Group, Inc., 8.000% 03/15/12 440,000 453,200 Smurfit-Stone Container Corp., 9.750% 02/01/11 355,000 396,712 Speedway Motorsports, Inc., 6.750% 06/01/13 240,000 247,200 Spint Capital Corp., 6.875% 11/15/28 950,000 987,297 Station Casinos, Inc.: 6.500% 02/01/14 15,000 14,925 6.875% 03/01/16 500,000 498,750 Suburban Propane Partners, 6.875% 12/15/13 150,000 150,000 Sun International Hotels, 8.875% 08/15/11 150,000 164,625 Synagro Technologies, Inc., 9.500% 04/01/09 100,000 105,250 TCI Communications, Inc., 7.250% 08/01/05 500,000 521,625 Teekay Shipping Corp., 8.875% 07/15/11 475,000 529,625 Time Warner, Inc., 6.625% 05/15/29 1,660,000 1,667,155 Toll Corp., 8.250% 12/01/11 390,000 430,950 TransDigm, Inc., 8.375% 07/15/11 300,000 316,500 Triad Hospitals, Inc., 7.000% 05/15/12 350,000 364,000 Union Pacific Corp., 3.875% 02/15/09 790,000 784,280 United Rentals NA, Inc., 7.750% 11/15/13 325,000 302,250 United Technologies Corp., 7.125% 11/15/10 1,900,000 2,204,152 UnitedHealth Group, Inc., 3.375% 08/15/07 1,000,000 1,003,490 Universal Compression, Inc., 7.250% 05/15/10 240,000 250,800 Verizon Global Funding Corp., 7.750% 12/01/30 2,500,000 2,951,750 Vintage Petroleum, Inc.: 7.875% 05/15/11 275,000 288,063 8.250% 05/01/12 25,000 27,250 Vodafone Group PLC, 7.750% 02/15/10 1,500,000 1,761,225 See Accompanying Notes to Financial Statements. 102 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FIXED INCOME SECURITIES FUND PAR ($) VALUE ($) ------------ ------------- CORPORATE NOTES & BONDS - (CONTINUED) INDUSTRIALS - (CONTINUED) Wal-Mart Stores, Inc., 4.125% 02/15/11 1,020,000 1,016,858 Warner Music Group, 7.375% 04/15/14 (b) 130,000 129,350 Waste Management, Inc., 7.375% 08/01/10 1,330,000 1,531,894 Westinghouse Air Brake Technology, 6.875% 07/31/13 200,000 200,500 Williams Companies, Inc.: 7.125% 09/01/11 30,000 32,850 8.125% 03/15/12 195,000 224,250 Wyeth, 6.700% 03/15/11 1,200,000 1,315,752 Yum! Brands, Inc., 8.500% 04/15/06 250,000 271,777 ------------- Industrials Total 89,366,087 FINANCIALS - 12.8% Allstate Financial Global Fund II, 2.625% 10/22/06 (b) 2,500,000 2,484,675 American General Finance Corp., 5.375% 09/01/09 850,000 898,731 Bear Stearns Companies, Inc., 6.500% 05/01/06 1,635,000 1,736,305 Capital One Bank, 4.875% 05/15/08 1,025,000 1,058,210 CIT Group, Inc., 4.125% 02/21/06 1,060,000 1,083,108 Citigroup, Inc., 7.250% 10/01/10 3,095,000 3,572,899 Countrywide Home Loan Bank, 2.875% 02/15/07 1,000,000 992,160 Extendicare Health Services: 6.875% 05/01/14 25,000 24,750 9.500% 07/01/10 15,000 16,725 Ford Motor Credit Co., 7.375% 10/28/09 2,700,000 2,947,698 General Electric Capital Corp., 6.750% 03/15/32 665,000 755,507 General Motors Acceptance Corp., 7.750% 01/19/10 2,350,000 2,589,183 Genworth Financial, Inc., 4.750% 06/15/09 1,500,000 1,549,515 Goldman Sachs Group, Inc., 6.345% 02/15/34 1,550,000 1,553,348 Health Care Property Investors, Inc., 6.450% 06/25/12 1,410,000 1,537,690 Household Finance Corp., 6.400% 06/17/08 2,550,000 2,788,884 iStar Financial, Inc.: 5.125% 04/01/11 175,000 172,966 7.000% 03/15/08 150,000 161,062 8.750% 08/15/08 50,000 56,875 PAR ($) VALUE ($) ------------ ------------- JPMorgan Chase & Co., 5.750% 01/02/13 2,545,000 2,687,393 Lehman Brothers Holdings, Inc., 4.000% 01/22/08 1,000,000 1,016,000 Merrill Lynch & Co., Inc., 4.125% 01/15/09 1,885,000 1,907,545 Morgan Stanley, 4.750% 04/01/14 1,530,000 1,476,052 SLM Corp., 5.125% 08/27/12 2,000,000 2,034,440 US Bank NA, 6.375% 08/01/11 3,000,000 3,345,480 Wachovia Corp., 3.500% 08/15/08 2,660,000 2,651,807 Wells Fargo & Co., 5.900% 05/01/06 2,600,000 2,738,996 ------------- Financials Total 43,838,004 UTILITIES - 0.9% Centerpoint Energy Houston, 5.750% 01/15/14 1,400,000 1,484,980 Exelon Generation Co. LLC, 6.950% 06/15/11 1,300,000 1,461,512 ------------- Utilities Total 2,946,492 INTERNATIONAL - 2.6% Hydro-Quebec, 6.970% 03/01/05 1,000,000 1,022,140 Quebec Province, 7.000% 01/30/07 2,490,000 2,725,380 Republic of Italy, 2.500% 03/31/06 2,750,000 2,753,465 United Mexican States, 7.500% 04/08/33 2,390,000 2,521,450 ------------- International Total 9,022,435 TOTAL CORPORATE NOTES & BONDS (Cost of $141,532,408) 145,173,018 OTHER SECURITIZED LOANS - 10.4% ASSET-BACKED SECURITIES - 4.0% Cityscape Home Equity Loan Trust, Series 1997-4, Class A4, 7.440% 10/25/18 (a) 419,820 419,265 ContiMortgage Home Equity Loan Trust, Series 1999-3, Class A6, 7.680% 12/25/29 (a) 1,946,732 2,018,430 IMC Home Equity Loan Trust: Series 1995-3, Class A5, 7.500% 04/25/26 1,431,760 1,446,078 Series 1997-3, Class A6, 7.520% 08/20/28 1,459,258 1,461,389 Series 1997-5, Class A9, 7.310% 11/20/28 3,611,005 3,619,202 Nationslink Funding Corp., Series 1999-SL, Class A5, 6.888% 05/10/07 3,120,000 3,416,182 See Accompanying Notes to Financial Statements. 103 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FIXED INCOME SECURITIES FUND PAR ($) VALUE ($) ------------ ------------- OTHER SECURITIZED LOANS - (CONTINUED) ASSET-BACKED SECURITIES - (CONTINUED) New Century Home Equity Loan Trust, Series 1999-NCA, Class A7, 7.320% 07/25/29 (a) 707,312 736,128 Salomon Brothers Mortgage Securities VII, Inc., Series 1998-AQ1, Class A5, 7.150% 06/25/28 721,791 718,802 ------------- Asset-Backed Securities Total 13,835,476 COLLATERALIZED MORTGAGE OBLIGATIONS - 6.2% Bear Stearns Asset-Backed Securities, Inc., Series 2002-AC5, Class 2A4, 5.000% 01/25/34 (a) 6,238,282 6,366,853 Bear Stearns Mortgage Securities, Inc., Series 1996-2, Class A1, 12.700% 01/28/25 (a) 10,031 10,010 Countrywide Alternative Loan Trust, Series 2004-2CB, Class 1A4, 2.020% 03/25/34 (a) 3,994,149 3,992,661 Countrywide Home Loans, Inc.: Series 2002-5, Class 2A1, 6.000% 04/25/17 785,830 790,443 Series 2003-49, Class A9, 4.648% 12/19/33 (a) 4,231,949 4,200,337 Credit Suisse First Boston Mortgage Securities Corp., Series 2001-11, Class 1A3, 7.000% 06/25/31 178,204 178,517 IMPAC Secured Assets Common Owner Trust, Series 2002-3, Class A3, 6.360% 08/25/32 (a) 1,261,109 1,271,526 Structured Asset Securities Corp., Series 2003-21, Class 1A3, 5.500% 07/25/33 4,402,535 4,376,075 ------------- Collateralized Mortgage Obligations Total 21,186,422 COMMERCIAL MORTGAGE-BACKED SECURITIES - 0.2% GMAC Commercial Mortgage Asset Corp., Series 2001-FLAA, Class B1, 2.100% 06/15/13 (a)(b) 675,416 675,499 ------------- Commercial Mortgage-Backed Securities Total 675,499 TOTAL OTHER SECURITIZED LOANS (Cost of $35,150,020) 35,697,397 PAR ($) VALUE ($) ------------ ------------- SHORT-TERM OBLIGATIONS - 5.8% U.S. TREASURY BILL - 3.1% 1.465% 11/04/04 10,790,000 10,762,330 ------------- REPURCHASE AGREEMENT - 2.7% Repurchase agreement with State Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by a U.S. Treasury Note maturing 06/15/09, market value $9,327,975 (repurchase proceeds $9,144,381) 9,144,000 9,144,000 ------------- TOTAL SHORT-TERM OBLIGATIONS (Cost of $19,906,330) 19,906,330 TOTAL INVESTMENTS - 101.1% (COST OF $338,874,943) (c) 345,374,379 OTHER ASSETS & LIABILITIES, NET - (1.1)% (4,104,816) NET ASSETS - 100.0% 341,269,563 NOTES TO INVESTMENT PORTFOLIO: (a) Variable rate security. The interest rate shown reflects the rate as of August 31, 2004. (b) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2004, these securities amounted to $9,223,436, which represents 2.7% of net assets (c) Cost for federal income tax purposes is $339,657,708. See Accompanying Notes to Financial Statements. 104 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA NATIONAL MUNICIPAL BOND FUND PAR ($) VALUE ($) ------------ ------------- MUNICIPAL BONDS - 92.3% ALASKA - 2.4% Industrial Development & Export Authority, Snettisham Hydroelectric, Series 1, Insured AMBAC: Pre-refunded (AMT), 5.500% 01/01/08 5,000 5,432 Unrefunded (AMT), 5.500% 01/01/08 95,000 103,579 Municipal Bond Bank Authority, Series C, Insured: MBIA, 5.500% 09/15/16 100,000 111,839 Palmer Valley Hospital Association, Insured: RADIAN, 5.350% 12/01/12 125,000 141,510 ------------- Alaska Total 362,360 ARIZONA - 1.9% Arizona State Transportation Board Highway Revenue, Series 2004 B, 5.000% 07/01/13 250,000 278,673 ------------- Arizona Total 278,673 ARKANSAS - 1.8% Little Rock Waste Disposal Revenue, Series 2002, Insured: MBIA, 5.000% 05/01/16 250,000 268,580 ------------- Arkansas Total 268,580 CALIFORNIA - 3.3% State Department of Water Resource, Power Supply Revenue, Series 2002, Insured: AMBAC, 5.000% 05/01/16 250,000 270,438 State Economic Recovery, Series 2004 A, Insured: MBIA, 5.000% 07/01/11 200,000 222,450 ------------- California Total 492,888 COLORADO - 0.1% Housing Finance Authority, Single Family, 4.875% 04/01/07 15,000 15,212 ------------- Colorado Total 15,212 FLORIDA - 1.9% Orlando Utilities Commission, Utility System Revenue, 5.250% 07/01/09 250,000 278,335 ------------- Florida Total 278,335 PAR ($) VALUE ($) ------------ ------------- IDAHO - 0.7% Health Facilities Authority, Bingham Memorial Hospital Project, 5.850% 03/01/19 100,000 100,262 ------------- Idaho Total 100,262 ILLINOIS - 8.2% Chicago Motor Fuel Tax Revenue, Series 2003 A, Insured: AMBAC, 5.250% 01/01/17 250,000 274,415 Chicago Park District Aquarium & Museum, Insured: FGIC, 5.800% 01/01/18 150,000 167,976 Madison & St. Clair Counties, School District No. 010, Collinsville School Building, Insured: FGIC, 5.500% 02/01/12 250,000 281,272 Regional Transportation Authority, Series A, Insured: AMBAC, 6.400% 06/01/12 100,000 118,778 State Educational Facilities Authority, DePaul University, Series 2003 C, Insured: AMBAC, 5.000% 09/01/18 250,000 265,285 Will County Forest Preservation District, Series 1999 B, Insured: FGIC, (a) 12/01/11 150,000 114,369 ------------- Illinois Total 1,222,095 INDIANA - 3.6% Board Bank Revenue, Special Program, Hendricks, Series 2002 D, Insured: AMBAC, 5.375% 04/01/15 250,000 275,550 West Lafayette Industrial Building Corp., First Mortgage, Police Station Project, Insured: FGIC, 5.000% 07/15/18 250,000 265,515 ------------- Indiana Total 541,065 IOWA - 2.7% Finance Authority: Health Care Facilities Revenue, Genesis Medical Center, Insured: MBIA, 6.100% 07/01/15 285,000 324,678 Single Family Mortgage, Series A, Insured: GNMA, 5.800% 07/01/16 70,000 73,612 ------------- Iowa Total 398,290 See Accompanying Notes to Financial Statements. 105 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA NATIONAL MUNICIPAL BOND FUND PAR ($) VALUE ($) ------------ ------------- MUNICIPAL BONDS - (CONTINUED) KENTUCKY - 1.9% State Property & Buildings Commission Revenues, Series 2001, 5.250% 11/01/11 250,000 282,340 ------------- Kentucky Total 282,340 LOUISIANA - 1.9% Calcasieu Parish School District No. 31, Public School Improvement, Series 2000, Insured: FGIC, 5.500% 05/01/16 250,000 277,930 ------------- Louisiana Total 277,930 MICHIGAN - 4.8% State Hospital Finance Authority, Ascension Health Credit, Series A: 5.375% 11/15/33 (b) 100,000 108,877 Insured: MBIA, 6.000% 11/15/19 100,000 116,314 State Trunk Line Fund, Department of Treasury, Insured: FGIC, 5.000% 09/01/14 185,000 205,816 Sturgis Public School District, School Building & Site, Insured: QSBLF, 5.500% 05/01/14 250,000 280,535 ------------- Michigan Total 711,542 MISSISSIPPI - 1.9% Development Bank, Natchez Convention Center Project, Insured: AMBAC, 6.500% 07/01/13 230,000 280,073 ------------- Mississippi Total 280,073 MONTANA - 1.5% Whitefish Tax Increment, Urban Renewal Revenue, 6.625% 07/15/20 200,000 215,834 ------------- Montana Total 215,834 NEVADA - 1.9% Colorado River Commission, Hoover Dam Project, Series 2002, Insured: FSA, 5.375% 10/01/14 250,000 282,942 ------------- Nevada Total 282,942 PAR ($) VALUE ($) ------------ ------------- NEW HAMPSHIRE - 1.7% Health & Education Facilities Authority, Concord Hospital Revenue, Series 2004, Insured: FGIC, 5.000% 10/01/12 230,000 253,251 ------------- New Hampshire Total 253,251 NEW YORK - 3.8% New York City: Series 2000, Insured: AMBAC TCRS, 5.750% 08/01/11 250,000 285,535 Series A, 6.000% 05/15/21 250,000 273,242 ------------- New York Total 558,777 NORTH DAKOTA - 1.9% Fargo School District Building Authority Development, Series 2000, Insured: MBIA, 5.500% 05/01/13 250,000 276,215 ------------- North Dakota Total 276,215 OHIO - 2.8% Oak Hills Local School District, Insured: MBIA, 7.200% 12/01/09 100,000 120,800 State Water Development Authority Revenue, Fresh Water, Series 2001 B, Insured: FSA, 5.500% 12/01/18 250,000 292,200 ------------- Ohio Total 413,000 OKLAHOMA - 1.5% Okmulgee County, 1st Mortgage, Insured: MBIA, 6.000% 03/01/15 200,000 223,996 ------------- Oklahoma Total 223,996 OREGON - 10.2% Benton County Hospital Facilities Authority Refunding, Samaritan Health Services Project: 4.200% 10/01/05 40,000 40,998 4.600% 10/01/09 40,000 42,415 Clackamas County, Hospital Facility Authority, Gross-Willamette Falls Hospital Project, Insured: RADIAN, 5.500% 04/01/22 250,000 265,077 Damascus Water District, Certificates of Participation, 5.250% 03/01/19 100,000 109,710 See Accompanying Notes to Financial Statements. 106 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA NATIONAL MUNICIPAL BOND FUND PAR ($) VALUE ($) ------------ ------------- MUNICIPAL BONDS - (CONTINUED) OREGON - (CONTINUED) Deschutes County Hospital Facilities Authority, Cascade Health Services, Inc., Series 2002, 5.600% 01/01/27 100,000 104,136 Eugene Trojan Nuclear Project, 5.900% 09/01/09 25,000 25,341 Hillsboro Hospital Facility Authority Refunding, Tuality Healthcare, 5.250% 10/01/04 55,000 55,150 Klamath Community College District: 4.700% 04/01/10 55,000 58,369 4.800% 04/01/11 25,000 26,364 Lebanon Urban Renewal Agency, 5.625% 06/01/19 100,000 105,720 Port of St. Helens Pollution Control, Portland General Electric Co., Series B, 4.800% 06/01/10 105,000 104,972 Redmond Urban Renewal Agency, Downtown Area B, 5.650% 06/01/13 100,000 104,086 Salem Hospital Facilities Authority, Capital Manor, Inc., Series 1994, 7.500% 12/01/24 150,000 155,325 State Veterans Welfare, Series 75, 5.875% 10/01/18 10,000 10,353 Washington & Clackamas Counties School District No. 23J Tigard, Series 2000, (a) 06/15/21 300,000 133,770 West Linn Oregon Water System, 6.000% 10/01/20 165,000 176,103 Oregon Total 1,517,889 PUERTO RICO - 0.8% Public Finance Corp., Series 2004 A, Insured: AMBAC, 5.250% 08/01/30 (b) 110,000 122,278 ------------- Puerto Rico Total 122,278 SOUTH CAROLINA - 2.6% Charleston County, School District, Series 2001, Insured: FSA, 5.000% 02/01/18 200,000 213,248 Charleston County, Certificates of Participation, Series 2004, Insured: MBIA, 5.000% 12/01/10 150,000 165,517 ------------- South Carolina Total 378,765 PAR ($) VALUE ($) ------------ ------------- TENNESSEE - 4.4% Lawrenceburg Public Building Authority, Electric System Public Works, Series C, Insured: FSA, 5.500% 07/01/16 295,000 330,376 Metropolitan Government Nashville, Series 2002 A, Insured: AMBAC, 5.125% 10/01/13 285,000 316,293 ------------- Tennessee Total 646,669 TEXAS - 4.7% Harris County Health Facilities, de Teco Project, Series 1999 B, Insured: AMBAC, 5.700% 02/15/15 150,000 168,372 Laredo Sports Venue Sales Tax, Insured: FGIC, 5.750% 03/15/13 200,000 223,616 Magnolia Independent School District, Insured: PSF-GTD, 5.250% 08/15/17 280,000 307,376 ------------- Texas Total 699,364 WASHINGTON - 13.1% Grant County Public Hospital, District No. 3, Columbia Basin Hospital, 5.500% 12/01/18 170,000 176,610 Jefferson County, Public Utility District No. 1, Water & Sewer: 5.250% 05/01/16 50,000 52,568 5.250% 05/01/17 50,000 52,482 Poulsbo Water & Sewer, 5.250% 06/01/06 135,000 141,957 Seattle Municipal Light & Power: 5.000% 07/01/13 235,000 247,370 6.000% 10/01/16 150,000 167,574 Shelton Water & Sewer, 5.250% 12/01/18 50,000 52,392 State Certificates of Participation, Department of General Administration, 5.400% 07/01/13 100,000 106,908 State Health Care Facilities Authority Revenue, Grays Harbor Community Hospital, Series 1996, Insured: RADIAN, 5.700% 07/01/16 200,000 213,342 See Accompanying Notes to Financial Statements. 107 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA NATIONAL MUNICIPAL BOND FUND PAR ($) VALUE ($) ------------ ------------- MUNICIPAL BONDS - (CONTINUED) WASHINGTON - (CONTINUED) State Public Power Supply System: Nuclear Project No. 1 Revenue, Series 1997 B, 5.125% 07/01/14 300,000 316,500 Nuclear Project No. 2 Refunding, Series A, 5.000% 07/01/11 50,000 54,126 Nuclear Project No. 3 Revenue, Capital Appreciation, Series 1989 B, (a) 07/01/12 145,000 105,795 Tacoma Solid Waste Utilities: Pre-refunded, Series 1997 B, Insured: AMBAC, 6.000% 12/01/09 15,000 17,348 Unrefunded, Series 1997 B, Insured: AMBAC, 6.000% 12/01/09 85,000 97,667 Thurston County School District No. 401, Rochester, 4.800% 12/01/07 55,000 55,307 Toppenish, 4.600% 12/01/06 65,000 68,381 Yakima County, School District No. 119 Selah, Insured: FGIC, 5.000% 12/01/06 10,000 10,680 ------------- Washington Total 1,937,007 WISCONSIN - 3.6% Marshall School District, Series 2002 A, Insured: FGIC, 5.000% 03/01/14 250,000 278,158 State, Series 2004 2, Insured: MBIA, 5.000% 05/01/12 225,000 250,070 ------------- Wisconsin Total 528,228 WYOMING - 0.7% Municipal Power Agency, Power Supply Refunding, Series 1998, Insured: MBIA, 5.250% 01/01/11 100,000 110,757 ------------- Wyoming Total 110,757 TOTAL MUNICIPAL BONDS (Cost of $12,999,099) 13,674,617 PAR ($) VALUE ($) ------------ ------------- SHORT-TERM OBLIGATIONS - 9.5% VARIABLE RATE DEMAND NOTES (c) - 9.5% FL Alachua County Health Facilities Authority, Continuing Care, Oak Hammock at the University of Florida, Series 2002 A, 1.350% 10/01/32 100,000 100,000 IL Quad Cities Regional Economic Development Authority, Two Rivers YMCA, Series 2002, 1.400% 12/01/31 200,000 200,000 IN Health Facilities Financing Agency, Fayette Memorial Hospital Association, Series 2002 A, 1.400% 10/01/32 100,000 100,000 MS Jackson County Pollution Control Revenue, Chevron Corp., Series 1992, 1.340% 12/01/16 200,000 200,000 NY New York City, Series 1993, 1.320% 08/01/20 300,000 300,000 1.320% 08/01/21 300,000 300,000 WY Uinta County Pollution Control, Chevron U.S.A., Inc., Series 1992, 1.340% 12/01/22 200,000 200,000 ------------- Variable Rate Demand Notes Total 1,400,000 TOTAL SHORT-TERM OBLIGATIONS (Cost of $1,400,000) 1,400,000 TOTAL INVESTMENTS - 101.8% (COST OF $14,399,099) (d) 15,074,617 OTHER ASSETS & LIABILITIES, NET - (1.8)% (262,814) NET ASSETS - 100.0% 14,811,803 See Accompanying Notes to Financial Statements. 108 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA NATIONAL MUNICIPAL BOND FUND NOTES TO INVESTMENT PORTFOLIO: (a) Zero coupon bond. (b) Variable rate security. The interest rate shown reflects the rate as of August 31, 2004. (c) Variable rate demand notes. These securities are payable upon demand and are secured by letters of credit or other credit support agreements from banks. The interest rates change periodically and the interest rates shown reflect the rates as of August 31, 2004. (d) Cost for federal income tax purposes is $14,395,525. Columbia National Municipal Bond Fund holds investments that are insured by private insurers who guarantee the payment of principal and interest in the event of default. At August 31, 2004, investments in these securities represented 61.5% of holdings. ACRONYM NAME ------- ---- AMBAC American Municipal Bond Assurance Corp. AMT Alternative Minimum Tax FGIC Federal Guaranty Insurance Corp. FSA Financial Security Assurance Corp. GNMA Government National Mortgage Association MBIA Municipal Bond Insurance Association PSF-GTD Permanent School Fund Guaranteed QSBLF Qualified School Bond Loan Fund RADIAN Radian Asset Assurance Inc. TCRS Transferable Custodial Receipts See Accompanying Notes to Financial Statements. 109 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA OREGON MUNICIPAL BOND FUND PAR ($) VALUE ($) ------------ ------------- GENERAL OBLIGATION BONDS - 33.2% STATE OF OREGON GENERAL OBLIGATIONS - 2.6% Board of Higher Education: Series A: 5.000% 08/01/12 2,075,000 2,310,077 5.250% 08/01/14 255,000 284,284 5.250% 08/01/16 780,000 856,658 Deferred Interest, Series A: (a) 08/01/14 490,000 326,374 (a) 08/01/17 1,050,000 592,452 Elderly & Disabled Housing Refunding, Series B: 4.950% 08/01/20 985,000 1,022,440 6.250% 08/01/13 55,000 55,214 State of Oregon, Series A, 5.250% 10/15/15 1,735,000 1,934,699 Veteran's Welfare: 5.850% 10/01/15 420,000 435,616 8.000% 07/01/08 580,000 696,354 9.200% 10/01/08 385,000 483,163 Series 80 A, 5.700% 10/01/32 2,490,000 2,566,792 ------------- State of Oregon General Obligations Total 11,564,123 GENERAL OBLIGATIONS - 14.1% Aurora, 5.600% 06/01/24 1,205,000 1,254,754 Bend Municipal Airport Project, Series B (AMT), 5.375% 06/01/13 150,000 159,567 Canyonville South Umpqua Rural Fire District, 5.400% 07/01/31 610,000 636,425 Clackamas County: Lake Oswego Series: 5.375% 06/01/15 2,450,000 2,725,478 5.375% 06/01/16 1,295,000 1,436,492 5.375% 06/01/17 2,535,000 2,811,974 Coos Bay, 4.900% 09/01/07 1,960,000 2,099,591 Crook County School District, 5.000% 02/01/14 2,860,000 3,127,095 Eugene Public Safety Facilities: 5.500% 06/01/10 850,000 901,127 5.625% 06/01/13 1,295,000 1,374,733 Lane County, School District No. 4J Eugene, Refunding: 5.000% 07/01/12 1,000,000 1,115,730 5.250% 07/01/13 1,000,000 1,134,380 Metro Oregon, 5.250% 09/01/14 3,130,000 3,507,415 Metro Washington Park Zoo, Series A, 5.300% 01/15/11 1,000,000 1,070,960 PAR ($) VALUE ($) ------------ ------------- Portland Community College District, Series A: 5.375% 06/01/14 1,925,000 2,159,138 5.375% 06/01/16 2,705,000 3,000,548 5.375% 06/01/17 2,540,000 2,817,520 Portland Limited Tax: Series A: 3.400% 06/01/13 2,700,000 2,724,786 4.900% 04/01/12 1,430,000 1,505,704 5.750% 06/01/14 450,000 451,579 Series B: (a) 06/01/12 1,750,000 1,302,123 (a) 06/01/13 1,500,000 1,056,060 (a) 06/01/16 3,500,000 2,098,810 (a) 06/01/18 4,000,000 2,148,960 (a) 06/01/19 4,000,000 2,030,480 (a) 06/01/20 4,000,000 1,915,520 Washington & Clackamas Counties: Deferred Interest, Series A, (a) 06/01/10 1,520,000 1,243,938 School District No. 23J, Tigard, (a) 06/15/18 2,700,000 1,440,234 Washington County: 5.500% 06/01/16 2,785,000 3,115,357 Criminal Justice Facilities, Refunding, 5.000% 12/01/10 1,400,000 1,510,964 School District No. 48J, Beaverton: 5.125% 01/01/14 2,000,000 2,198,240 5.125% 01/01/17 1,820,000 1,966,219 5.125% 01/01/18 2,260,000 2,441,568 Washington, Multnomah & Yamhill Counties, School District No. 1J: 5.000% 11/01/13 1,100,000 1,228,656 5.250% 06/01/14 500,000 549,670 ------------- General Obligations Total 62,261,795 INSURED GENERAL OBLIGATIONS - 16.5% Benton & Linn Counties, School District No. 509J, Corvallis, Insured: FSA, 5.000% 06/01/17 2,665,000 2,886,568 Clackamas Community College, Insured: FGIC, 5.250% 06/15/15 1,500,000 1,653,510 Clackamas County: School District School District No. 62, Insured FSA, 3.250% 06/15/12 3,655,000 3,616,403 School District No. 108, Insured FSA, 5.375% 06/15/15 1,055,000 1,174,226 No. 12, North Clackamas, Insured: FGIC: 5.250% 06/01/11 1,000,000 1,101,670 5.250% 06/01/15 2,750,000 2,974,895 See Accompanying Notes to Financial Statements. 110 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA OREGON MUNICIPAL BOND FUND PAR ($) VALUE ($) ------------ ------------- GENERAL OBLIGATION BONDS - (CONTINUED) INSURED GENERAL OBLIGATIONS - (CONTINUED) Columbia County, School District No. 502, Deferred Interest, Insured: FGIC: (a) 06/01/13 1,685,000 1,194,480 (a) 06/01/14 1,025,000 691,352 Coos County, School District No. 13, North Bend, Insured: FSA, 5.500% 06/15/15 1,765,000 1,994,750 Deschutes County, School District No. 1, Series A, Insured: FSA, 5.500% 06/15/18 1,000,000 1,119,230 Jackson County: School District No. 4, Phoenix-Talent, Insured: FSA, 5.500% 06/15/16 1,000,000 1,119,230 School District No. 6, Central Point, 6.000% 06/15/09 1,090,000 1,247,091 School District No. 9, Eagle Point, Insured: FSA, 5.625% 06/15/15 1,920,000 2,169,485 Jefferson County, School District No. 509J, Madras School District, Insured: FGIC, 5.250% 06/15/18 1,075,000 1,179,157 Josephine County, School District No. 7, Grants Pass, Insured: FSA, 4.000% 06/15/11 2,000,000 2,104,980 Lane County, School District No. 19, Springfield Refunding, Insured: FGIC: 6.000% 10/15/12 1,740,000 2,062,857 6.000% 10/15/14 1,310,000 1,573,690 Lincoln County School District, Insured: FGIC, 5.600% 06/15/10 3,480,000 3,899,618 Linn Benton Community College, Insured: FGIC: (a) 06/15/13 1,000,000 700,040 (a) 06/15/14 1,000,000 665,090 Linn County, Community School District No. 9, Lebanon, Insured: FGIC: 5.250% 06/15/15 710,000 791,891 5.550% 06/15/21 2,000,000 2,225,500 Multnomah-Clackamas Counties: Centennial School District No. 28-302, Insured: FGIC: 5.375% 06/15/16 2,055,000 2,280,680 5.375% 06/15/17 2,280,000 2,530,390 5.375% 06/15/18 2,490,000 2,763,352 PAR ($) VALUE ($) ------------ ------------- Multnomah-Clackamas Counties, School District No. 10JT, Series A, Insured FSA, 5.250% 06/15/12 1,000,000 1,132,560 Multnomah County: School District No. 7, Reynolds: 5.625% 06/15/14 2,670,000 3,034,241 5.625% 06/15/17 1,000,000 1,126,720 School District No. 40, Insured: FSA, 5.000% 12/01/14 1,790,000 1,961,285 Northern Oregon Corrections, Insured: AMBAC: 5.250% 09/15/12 1,000,000 1,084,570 5.300% 09/15/13 1,000,000 1,086,150 Salem-Keizer, School District No. 24J, Insured: FSA, 5.000% 06/15/18 2,000,000 2,162,260 Washington & Clackamas Counties: School District No. 003JT, Insured FGIC, (a) 06/15/17 6,000,000 3,361,080 School District No. 23J, Tigard, Insured: FSA, 5.375% 06/15/17 1,500,000 1,671,345 Washington County: School District No. 15, Forest Grove, Insured: FSA: 5.375% 06/15/13 2,070,000 2,329,226 5.375% 06/15/15 2,515,000 2,799,220 Washington, Multnomah & Yamhill Counties, School District No. 1J Insured: MBIA, 5.000% 06/01/13 1,500,000 1,649,010 Yamhill County: School District No. 029J, Insured: MBIA, 5.250% 06/15/16 2,535,000 2,797,727 School District No. 40, Insured: FGIC, 6.000% 06/01/09 500,000 573,310 ------------- Insured General Obligations Total 72,488,839 ------------- TOTAL GENERAL OBLIGATION BONDS (Cost of $138,318,199) 146,314,757 REVENUE BONDS - 50.3% OREGON REVENUE - 24.9% Albany Hospital Facility Authority, Mennonite Home Albany, Series PJ-A: 4.750% 10/01/11 (b) 660,000 684,862 5.000% 10/01/12 (b) 680,000 711,416 Benton County Hospital Facilities Authority, Samaritan Health Services Project, Refunding: 4.400% 10/01/07 220,000 231,724 4.800% 10/01/11 245,000 257,277 5.200% 10/01/17 2,255,000 2,339,698 See Accompanying Notes to Financial Statements. 111 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA OREGON MUNICIPAL BOND FUND PAR ($) VALUE ($) ------------ ------------- REVENUE BONDS - (CONTINUED) OREGON REVENUE - (CONTINUED) Clackamas County Hospital Facility Authority: Legacy Health System: 4.600% 05/01/10 885,000 948,242 5.000% 02/15/16 1,010,000 1,056,783 5.500% 02/15/13 5,450,000 5,940,064 5.500% 02/15/14 2,385,000 2,589,943 5.750% 05/01/12 2,000,000 2,265,960 Legacy Health System, Refunding: 5.250% 05/01/21 4,890,000 5,128,485 5.750% 05/01/16 1,500,000 1,662,780 Odd Fellows Home, Series A, Refunding, 5.875% 09/15/21 705,000 637,355 Robison Jewish Home Project, 6.250% 10/01/21 1,650,000 1,727,401 Willamette Falls Hospital Project, 5.750% 04/01/14 705,000 737,846 Willamette View, Inc. Project, Series A, 6.850% 11/01/15 1,580,000 1,701,897 Clackamas County Housing Authority, Multi-Family Housing, Easton Ridge, Series A, 5.800% 12/01/16 2,255,000 2,313,292 Deschutes County Hospital Facilities Authority, Cascade Health Services, Inc.: 5.500% 01/01/22 2,000,000 2,107,020 5.600% 01/01/27 5,550,000 5,779,548 5.600% 01/01/32 2,000,000 2,075,260 Deschutes Valley Water District, 5.875% 09/01/05 1,585,000 1,645,658 Eugene Airport, Refunding (AMT): 5.650% 05/01/06 325,000 341,403 5.650% 05/01/07 555,000 594,211 5.700% 05/01/08 515,000 558,126 Multnomah County Educational Facilities, University of Portland Project: 5.700% 04/01/15 1,000,000 1,067,260 6.000% 04/01/20 1,000,000 1,088,100 6.000% 04/01/25 500,000 525,315 Multnomah County Hospital Facilities Authority Revenue, Providence Health System, 5.250% 10/01/16 2,970,000 3,259,961 Myrtle Point Water, 6.000% 12/01/20 510,000 545,124 Oregon State Economic Development, Dove Lewis 24 Hour Emergency Animal Hospital, 7.000% 12/01/19 (c) 1,380,000 1,420,544 PAR ($) VALUE ($) ------------ ------------- Oregon State Health, Housing, Educational & Cultural Facilities Authority: Authority/Aquarium: 4.750% 10/01/08 (d) 1,550,000 325,500 4.900% 10/01/09 (d) 670,000 140,700 Goodwill Industries Lane County, Series A, 6.650% 11/15/22 (c) 3,855,000 3,730,291 Linfield College Project, Series A: 4.650% 10/01/09 555,000 583,455 5.500% 10/01/18 1,000,000 1,038,020 Reed College Project, Series A, 5.300% 07/01/11 500,000 536,820 St. Anthony's Village Housing, Series A (AMT), 7.250% 06/01/28 1,360,000 1,342,714 Oregon State Housing & Community Services, Department of Mortgage Revenue, Single Family Mortgage Program: Series A, 4.850% 07/01/10 180,000 191,979 Series D, 6.700% 07/01/13 615,000 616,082 Series E, 5.375% 07/01/21 3,435,000 3,608,536 Series H (AMT), 5.500% 07/01/17 1,195,000 1,241,533 Series J, 5.150% 07/01/24 2,770,000 2,853,626 Series M (AMT), 5.800% 07/01/12 265,000 281,926 Series Q: 4.700% 07/01/15 750,000 787,852 4.900% 07/01/17 735,000 771,302 Mountain Shadows Apts. B-1, 6.250% 12/01/05 (d) 3,937,414 2,994,167 Port Morrow, 6.700% 06/01/20 2,000,000 2,029,760 Port of St. Helens: 5.600% 08/01/14 315,000 326,082 5.750% 08/01/19 425,000 439,705 Port of St. Helens Pollution Control, Portland General Electric Co.: Series A, 4.800% 04/01/10 5,195,000 5,162,168 Series B, 4.800% 06/01/10 3,500,000 3,499,055 Powell Valley Water District, 6.000% 02/01/15 620,000 664,566 Reedsport Water, 7.000% 10/01/14 520,000 521,383 Salem Hospital Facility Authority: 5.000% 08/15/18 2,000,000 2,060,860 5.250% 08/15/14 4,860,000 5,153,787 See Accompanying Notes to Financial Statements. 112 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA OREGON MUNICIPAL BOND FUND PAR ($) VALUE ($) ------------ ------------- REVENUE BONDS - (CONTINUED) OREGON REVENUE - (CONTINUED) Sheridan Water Revenue: 6.200% 05/01/15 625,000 674,025 6.450% 05/01/20 520,000 562,089 Sheridan Water Revenue, Refunding, 5.350% 04/01/18 300,000 312,249 State of Oregon French American International School Project, Series A, 6.250% 04/01/27 5,270,000 5,320,803 Umatilla County, Hospital Facility Authority, Catholic Health Initiatives, Series A: 5.750% 12/01/20 530,000 568,690 6.000% 12/01/30 4,825,000 5,176,887 Washington County Housing Authority: Affordable Housing, Series A, 6.000% 07/01/20 2,000,000 2,051,080 Affordable Housing Pool, Series A: 5.750% 07/01/23 1,000,000 1,022,660 6.000% 07/01/23 1,000,000 1,031,490 ------------- Oregon Revenue Total 109,564,397 INSURED REVENUE - 25.4% Clackamas County, Hospital Facilities Authority, Legacy Health System, Insured: MBIA, 5.500% 02/15/13 495,000 551,762 Deschutes County, Certificates of Participation, Series A, 5.050% 06/01/17 420,000 429,752 Emerald Peoples Utilities District, Insured: FGIC: 7.350% 11/01/10 2,160,000 2,675,938 7.350% 11/01/11 2,000,000 2,514,400 7.350% 11/01/12 2,490,000 3,178,510 7.350% 11/01/13 2,675,000 3,462,573 Series A, Insured: FSA, 5.250% 11/01/20 605,000 660,581 Eugene Electric Utilities System, Series B, Refunding, Insured: FSA, 5.250% 08/01/13 1,040,000 1,159,434 Guam Housing Corp., Single Family Mortgage-Backed Securities, Insured: FHA, Series A (AMT), 5.750% 09/01/31 175,000 191,033 Medford Hospital Facilities Authority, Asante Health System, Series A, Insured: MBIA: 5.250% 08/15/10 1,500,000 1,648,590 5.250% 08/15/11 800,000 875,400 PAR ($) VALUE ($) ------------ ------------- Multnomah County Educational Facilities Authority, University of Portland Project, Refunding, Insured: AMBAC: 5.000% 04/01/11 1,150,000 1,248,796 5.750% 04/01/10 2,000,000 2,212,960 Ontario Catholic Health Holy Rosary Medical Center, Insured MBIA, 5.500% 11/15/12 1,500,000 1,592,685 Oregon State Department of Administrative Services: Certificates of Participation, Series A, Insured: AMBAC: 4.500% 05/01/12 1,020,000 1,078,528 5.000% 05/01/13 4,240,000 4,641,994 5.000% 05/01/14 1,000,000 1,091,200 5.300% 05/01/08 750,000 816,090 Series B, Insured: MBIA, 5.250% 05/01/10 840,000 939,641 Series C, Insured: MBIA: 5.250% 11/01/15 1,000,000 1,107,830 5.250% 11/01/17 5,000,000 5,510,550 Series E, Insured FSA, 5.000% 11/01/13 1,470,000 1,618,029 Lottery Education Project: Series A, Insured: FSA: 5.000% 04/01/14 2,830,000 3,139,072 5.250% 04/01/11 4,000,000 4,427,960 Series B, Insured: FSA, 5.250% 04/01/15 1,315,000 1,430,891 Oregon State Economic Community Development Department, Series A, Insured: MBIA, 5.375% 01/01/11 1,105,000 1,226,683 Oregon State Health, Housing, Educational & Cultural Facilities Authority, Reed College Project, Series A, Insured: MBIA, 5.100% 07/01/10 900,000 993,321 Oregon State Health Sciences University, Series A, Insured: MBIA: (a) 07/01/09 1,530,000 1,323,022 (a) 07/01/12 1,315,000 980,306 (a) 07/01/14 2,550,000 1,709,877 (a) 07/01/15 4,325,000 2,740,623 (a) 07/01/21 12,515,000 5,604,342 See Accompanying Notes to Financial Statements. 113 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA OREGON MUNICIPAL BOND FUND PAR ($) VALUE ($) ------------ ------------- REVENUE BONDS - (CONTINUED) INSURED REVENUE - (CONTINUED) Oregon State Housing & Community Services: Department of Housing Finance Revenue, Assisted Insured Multi-Unit, Series B, Insured: FHA, 6.800% 07/01/13 7,250,000 7,263,195 Department of Mortgage Revenue, Single Family Mortgage Program: Series E, Insured: FHA: 5.700% 07/01/12 815,000 844,927 5.800% 07/01/14 720,000 747,180 6.000% 07/01/20 2,015,000 2,095,217 Series F, (AMT), Insured: MBIA-IBC, 5.600% 07/01/28 845,000 866,733 Oregon State Housing Finance, Insured: FHA, 5.800% 07/01/09 180,000 181,418 Port of Portland International Airport, Insured: FGIC: Series 12B, 5.250% 07/01/12 1,000,000 1,090,520 Series D, 5.250% 07/01/12 1,750,000 1,906,065 Portland Arena Gas Tax, Insured: FSA: (a) 06/01/16 1,100,000 570,405 (a) 06/01/17 2,320,000 1,125,780 Portland Gas Tax, Series A, Insured FSA, 5.800% 06/01/16 1,640,000 1,743,287 Portland River District Urban Renewal & Redevelopment, Series A, Insured: AMBAC: 5.000% 06/15/17 1,500,000 1,619,370 5.000% 06/15/18 3,070,000 3,293,066 5.000% 06/15/20 2,000,000 2,114,940 Portland Sewer System Revenue, Series A, Refunding, Insured FGIC, 5.000% 06/01/12 4,835,000 5,177,560 Portland Urban Renewal & Redevelopment: Convention Center, Series A, Insured: AMBAC: 5.750% 06/15/17 1,500,000 1,699,380 5.750% 06/15/18 2,050,000 2,322,486 South Park Blocks, Series A, Insured: AMBAC: 5.750% 06/15/17 2,065,000 2,339,480 5.750% 06/15/19 2,580,000 2,922,934 PAR ($) VALUE ($) ------------ ------------- Tri-County Metropolitan Transportation District: Series 1, 5.400% 06/01/19 4,200,000 4,428,018 Series A, 5.000% 09/01/15 1,000,000 1,091,020 Tualatin Hills Park & Recreation District, Insured: FGIC, 5.750% 03/01/14 990,000 1,159,805 Washington County: Clean Water Services Sewer, Series Lien, Insured: MBIA, 5.000% 10/01/13 2,310,000 2,579,462 ------------- Insured Revenue Total 111,964,621 ------------- TOTAL REVENUE BONDS (Cost of $213,317,871) 221,529,018 PRE-REFUNDED BONDS - 10.5% Clackamas County: School District No. 62, 5.375% 06/15/17 1,250,000 1,412,650 School District No. 086, 6.000% 06/15/16 2,350,000 2,684,405 Clackamas County Hospital Facility Authority, Kaiser Permanente, Series A, 5.375% 04/01/14 7,135,000 7,946,892 Josephine County, School District No. 7, Grants Pass, Insured: FGIC, 5.700% 06/01/13 2,000,000 2,194,720 Multnomah County, Series A, Insured: FSA, 5.500% 04/01/19 2,395,000 2,648,750 North Clackamas Parks & Recreation District Facilities, 5.700% 04/01/13 2,920,000 3,299,863 Northern Wasco County, People's Utility District Electric: (a) 02/01/06 610,000 568,935 (a) 02/01/07 585,000 510,822 (a) 02/01/08 610,000 497,717 (a) 02/01/11 500,000 332,840 Oregon State Board of Higher Education, Series A: 5.250% 08/01/14 1,225,000 1,383,160 5.250% 08/01/16 4,550,000 5,137,451 Oregon State City Sewer, 6.500% 10/01/07 500,000 520,590 See Accompanying Notes to Financial Statements. 114 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA OREGON MUNICIPAL BOND FUND PAR ($) VALUE ($) ------------ ------------- PRE-REFUNDED BONDS - (CONTINUED) Oregon State Department of Administrative Services, Lottery Education Project, Series A, Insured: FSA: 5.000% 04/01/14 2,705,000 3,003,767 5.250% 04/01/13 1,600,000 1,791,840 Oregon State Department of Transportation, Highway User Tax, Series A, 5.500% 11/15/16 2,500,000 2,882,700 Salem-Keizer, School District No. 24J: 5.000% 06/01/15 1,000,000 1,102,790 5.000% 06/01/16 1,380,000 1,521,850 Salem Water & Sewer, Insured FSA, 5.300% 06/01/15 1,500,000 1,644,840 Virgin Islands Public Finance Authority, Unrefunded Balance, Series A, 7.300% 10/01/18 1,185,000 1,554,045 Washington County: School District No. 48J, Beaverton: Insured: FGIC: 5.100% 06/01/12 500,000 547,205 5.250% 08/01/10 1,150,000 1,261,228 School District No. 088J, Sherwood, Insured: FSA, 6.100% 06/01/12 185,000 191,407 Unified Sewer Agency, Insured: FGIC, 5.500% 10/01/16 1,250,000 1,357,525 ------------- TOTAL PRE-REFUNDED BONDS (Cost of $42,159,520) 45,997,992 OTHER BONDS - 2.8% Hood River Urban Renewal Agency, 6.250% 12/15/11 1,250,000 1,345,150 Lebanon Urban Renewal Agency: 5.625% 06/01/19 1,000,000 1,057,200 5.750% 06/01/15 1,120,000 1,175,384 6.000% 06/01/20 1,580,000 1,672,904 Medford Urban Renewal, 5.875% 09/01/10 500,000 523,370 Multnomah County, Certificates of Participation, 4.550% 08/01/10 1,000,000 1,066,590 Redmond Urban Renewal Agency: Downtown Area B: 5.650% 06/01/13 720,000 749,419 5.850% 06/01/19 785,000 814,202 South Airport Industrial Area A, 5.700% 06/01/19 650,000 662,097 PAR ($) VALUE ($) ------------ ------------- OTHER BONDS - (CONTINUED) Seaside Urban Renewal Agency, Greater Seaside Urban Renewal, 5.250% 06/01/15 1,000,000 1,037,080 Veneta Urban Renewal Agency: 5.375% 02/15/16 700,000 741,440 5.625% 02/15/21 1,100,000 1,156,397 Wilsonville Limited Tax Improvement, 5.000% 12/01/10 345,000 347,105 ------------- TOTAL OTHER BONDS (Cost of $11,596,624) 12,348,338 U.S. TERRITORIES BONDS - 0.4% Puerto Rico, Series A, 5.000% 07/01/30 1,000,000 1,083,760 Puerto Rico Housing Finance Corp., Multi-Family Mortgage Portfolio A-1, Insured: FHA, 7.500% 04/01/22 805,000 814,145 ------------- TOTAL U.S. TERRITORIES BONDS (Cost of $1,855,134) 1,897,905 SHORT-TERM OBLIGATIONS - 1.9% VARIABLE RATE DEMAND NOTES (e) - 1.9% Farmington, New Mexico, Pollution Control Revenue, Arizona Public Service Company, Series B, 1.350% 09/01/24 300,000 300,000 Idaho Health Facilities Authority Revenue, St. Lukes Regional Medical Center Project, 1.350% 05/01/22 1,500,000 1,500,000 Illinois Health Facilities Authority Revenue, OSF Healthcare System, 1.330% 11/15/27 900,000 900,000 Indiana Health Facility Financing Authority Revenue, Golden Years Homestead, Series A, 1.320% 06/01/25 2,300,000 2,300,000 Jackson County, Mississippi Pollution Control Revenue, Chevron USA, Inc., Project, 1.350% 01/01/23 1,200,000 1,200,000 New York City Municipal Water Finance Authority, Water & Sewer System Revenue, Series C, 1.330% 06/15/24 500,000 500,000 Quad Cities Regulation Economic Development Authority Revenue, Two River YMCA Project, 1.400% 12/01/31 100,000 100,000 See Accompanying Notes to Financial Statements. 115 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA OREGON MUNICIPAL BOND FUND PAR ($) VALUE ($) ------------ ------------- SHORT-TERM OBLIGATIONS - (CONTINUED) VARIABLE RATE DEMAND NOTES (e) - (CONTINUED) Uinta County, Wyoming Pollution Control Revenue, Chevron USA, Inc., Project, 1.350% 12/01/22 1,500,000 1,500,000 ------------- Variable Rate Demand Notes Total 8,300,000 TOTAL SHORT-TERM OBLIGATIONS (Cost of $8,300,000) 8,300,000 TOTAL INVESTMENTS - 99.1% (COST OF $415,547,348) (f) 436,388,010 OTHER ASSETS & LIABILITIES, NET - 0.9% 4,059,970 NET ASSETS - 100.0% 440,447,980 NOTES TO INVESTMENT PORTFOLIO: (a) Zero coupon bond. (b) Security purchased on a delayed delivery basis. (c) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. At August 31, 2004, the value of these securities amounted to $5,150,835, which represents 1.2% of net assets. ACQUISITION ACQUISITION SECURITY DATE COST -------- ------------ ------------- Oregon State Economic Development, Dove Lewis 24 Hour Emergency Animal Hospital, 7.000% 12/01/19 12/11/03 $ 1,380,000 Oregon State Health, Housing, Educational & Cultural Facilities Authority, Goodwill Industries Lane County, Series A, 6.650% 11/15/22 06/18/02 3,855,000 ------------- $ 5,235,000 ============= (d) This issuer is in default of certain debt covenants. Income is not being accrued. (e) Variable rate demand notes. These securities are payable upon demand and are secured by letters of credit or other credit support agreements from banks. The interest rates change periodically and the interest rates shown reflect the rates as of August 31, 2004. (f) Cost for federal income tax purposes is $415,441,114. Columbia Oregon Municipal Bond Fund holds investments that are insured by private insurers who guarantee the payment of principal and interest in the event of default. At August 31, 2004, investments in these securities represented 43.2% of holdings. ACRONYM NAME ------- ---- AMBAC American Municipal Bond Assurance Corp. AMT Alternative Minimum Tax FGIC Federal Guaranty Insurance Corp. FHA Federal Housing Administration FSA Financial Security Assurance Corp. IBC Insured Bond Certificates MBIA Municipal Bond Insurance Association See Accompanying Notes to Financial Statements. 116 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA HIGH YIELD FUND PAR ($) VALUE ($) ------------ ------------- CORPORATE NOTES & BONDS - 91.6% AEROSPACE & DEFENSE - 3.9% K&F Industries, 9.625% 12/15/10 14,645,000 16,255,950 L-3 Communications Corp.: 6.125% 07/15/13 1,375,000 1,364,687 7.625% 06/15/12 30,275,000 32,772,687 TransDigm, Inc., 8.375% 07/15/11 15,275,000 16,115,125 ------------- Aerospace & Defense Total 66,508,449 AMUSEMENT & RECREATION - 4.5% Cinemark USA, Inc., 9.000% 02/01/13 21,740,000 24,185,750 Royal Caribbean Cruises Ltd.: 6.750% 03/15/08 5,325,000 5,564,625 6.875% 12/01/13 6,150,000 6,319,125 8.000% 05/15/10 2,495,000 2,775,687 8.750% 02/02/11 18,890,000 21,817,950 Speedway Motorsports, Inc., 6.750% 06/01/13 16,983,000 17,492,490 ------------- Amusement & Recreation Total 78,155,627 BROADCASTING - 2.0% LIN Television Corp., 6.500% 05/15/13 14,150,000 13,973,125 Sinclair Broadcasting Group, Inc.: 8.000% 03/15/12 12,710,000 13,091,300 8.750% 12/15/11 6,710,000 7,246,800 ------------- Broadcasting Total 34,311,225 CABLE TV - 5.5% DirecTV Holdings LLC, 8.375% 03/15/13 24,260,000 27,595,750 EchoStar DBS Corp., 5.750% 10/01/08 33,925,000 34,094,625 Rogers Cable, Inc.: 6.250% 06/15/13 17,950,000 17,500,712 7.875% 05/01/12 15,350,000 16,578,461 ------------- Cable TV Total 95,769,548 CAPITAL GOODS - 1.8% Kennametal, Inc., 7.200% 06/15/12 15,195,000 16,528,361 Wabtec, 6.875% 07/31/13 14,875,000 14,912,187 ------------- Capital Goods Total 31,440,548 CASINOS & GAMING - 8.1% Harrah's Operating Co., Inc., 7.875% 12/15/05 25,400,000 26,828,750 Kerzner International Ltd., 8.875% 08/15/11 7,700,000 8,450,750 MGM Mirage, Inc.: 6.000% 10/01/09 13,375,000 13,642,500 9.750% 06/01/07 20,050,000 22,330,687 PAR ($) VALUE ($) ------------ ------------- Park Place Entertainment Corp.: 7.875% 03/15/10 150,000 165,750 8.875% 09/15/08 750,000 847,500 9.375% 02/15/07 30,150,000 33,466,500 Station Casinos, Inc.: 6.500% 02/01/14 21,480,000 21,372,600 6.875% 03/01/16 13,415,000 13,381,463 ------------- Casinos & Gaming Total 140,486,500 CHEMICALS - 4.7% Acetex Corp., 10.875% 08/01/09 8,965,000 9,861,500 Airgas, Inc., 9.125% 10/01/11 16,358,000 18,382,303 Equistar Chemicals LP: 10.125% 09/01/08 7,370,000 8,180,700 10.625% 05/01/11 4,805,000 5,381,600 Ethyl Corp., 8.875% 05/01/10 16,400,000 17,589,000 MacDermid, Inc., 9.125% 07/15/11 9,520,000 10,626,700 Nalco Co., 7.750% 11/15/11 (a) 10,170,000 10,805,625 ------------- Chemicals Total 80,827,428 CONSUMER PRODUCTS - 2.9% Hasbro, Inc., 6.150% 07/15/08 17,420,000 18,421,650 K2, Inc., 7.375% 07/01/14 (a) 8,380,000 8,810,900 Scotts Co., 6.625% 11/15/13 21,530,000 22,391,200 ------------- Consumer Products Total 49,623,750 DIVERSIFIED MEDIA - 2.4% Lamar Media Corp., 7.250% 01/01/13 31,203,000 33,075,180 Warner Music Group, 7.375% 04/15/14 (a) 8,405,000 8,362,975 ------------- Diversified Media Total 41,438,155 ENERGY - 10.9% Chesapeake Energy Corp.: 7.500% 09/15/13 10,120,000 10,904,300 8.125% 04/01/11 3,050,000 3,347,375 8.375% 11/01/08 6,460,000 7,057,550 9.000% 08/15/12 8,750,000 9,975,000 Grant Prideco, Inc.: 9.000% 12/15/09 14,995,000 16,644,450 9.625% 12/01/07 12,520,000 14,022,400 Key Energy Services, Inc., 6.375% 05/01/13 4,290,000 4,096,950 Newfield Exploration Co., 6.625% 09/01/14 (a) 13,100,000 13,362,000 Offshore Logistics, Inc., 6.125% 06/15/13 20,800,000 20,592,000 Plains E&P Co., 7.125% 06/15/14 (a) 12,910,000 13,684,600 See Accompanying Notes to Financial Statements. 117 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA HIGH YIELD FUND PAR ($) VALUE ($) ------------ ------------- CORPORATE NOTES & BONDS - (CONTINUED) ENERGY - (CONTINUED) Pogo Producing Co., 8.250% 04/15/11 3,080,000 3,380,300 Pride International, Inc., 7.375% 07/15/14 (a) 14,505,000 15,411,562 Suburban Propane Partners LP, 6.875% 12/15/13 9,675,000 9,675,000 Universal Compression, Inc., 7.250% 05/15/10 16,245,000 16,976,025 Vintage Petroleum, Inc.: 7.875% 05/15/11 7,150,000 7,489,625 8.250% 05/01/12 6,025,000 6,567,250 Williams Companies, Inc.: 7.125% 09/01/11 1,935,000 2,118,825 8.125% 03/15/12 11,845,000 13,621,750 ------------- Energy Total 188,926,962 ENVIRONMENTAL - 2.5% Allied Waste North America, Inc.: 6.375% 04/15/11 10,375,000 10,271,250 6.500% 11/15/10 7,875,000 7,894,688 Series B: 7.375% 04/15/14 13,825,000 13,410,250 9.250% 09/01/12 2,300,000 2,587,500 Synagro Technologies, Inc., 9.500% 04/01/09 8,375,000 8,814,688 ------------- Environmental Total 42,978,376 FOOD, BEVERAGE & TOBACCO - 3.5% Constellation Brands, Inc.: 8.000% 02/15/08 3,750,000 4,134,375 8.125% 01/15/12 17,465,000 19,080,512 8.625% 08/01/06 5,100,000 5,578,125 Cott Beverages, Inc., 8.000% 12/15/11 29,250,000 31,590,000 ------------- Food, Beverage & Tobacco Total 60,383,012 FOOD & DRUG RETAIL - 1.0% Couche-Tard, 7.500% 12/15/13 16,480,000 17,386,400 ------------- Food & Drug Retail Total 17,386,400 HEALTH CARE - 8.1% AmerisourceBergen Corp.: 7.250% 11/15/12 6,630,000 7,094,100 8.125% 09/01/08 17,375,000 19,069,063 Extendicare Health Services, Inc.: 6.875% 05/01/14 1,600,000 1,584,000 9.500% 07/01/10 1,280,000 1,427,200 Fisher Scientific International, Inc., 6.750% 08/15/14 (a) 2,570,000 2,647,100 HCA, Inc.: 6.910% 06/15/05 7,025,000 7,220,716 7.000% 07/01/07 1,000,000 1,071,370 8.750% 09/01/10 7,000,000 8,192,380 PAR ($) VALUE ($) ------------ ------------- Omnicare, Inc.: 6.125% 06/01/13 10,575,000 10,257,750 Series B, 8.125% 03/15/11 14,740,000 15,771,800 Province Healthcare Co., 7.500% 06/01/13 12,800,000 14,240,000 Select Medical Corp.: 7.500% 08/01/13 11,050,000 11,464,375 9.500% 06/15/09 12,625,000 13,729,688 Triad Hospitals, Inc.: 7.000% 05/15/12 24,453,000 25,431,120 7.000% 11/15/13 1,365,000 1,371,825 ------------- Health Care Total 140,572,487 HOMEBUILDERS - 2.9% KB Home: 7.750% 02/01/10 5,150,000 5,510,500 8.625% 12/15/08 6,325,000 7,036,562 9.500% 02/15/11 12,250,000 13,689,375 Toll Brothers, Inc., 8.250% 02/01/11 3,200,000 3,484,000 Toll Corp.: 8.000% 05/01/09 5,765,000 5,995,600 8.250% 12/01/11 12,770,000 14,110,850 ------------- Homebuilders Total 49,826,887 HOTELS - 1.0% ITT Corp., 6.750% 11/15/05 6,055,000 6,289,631 Starwood Hotels & Resorts Worldwide, Inc.: 7.375% 05/01/07 5,300,000 5,743,875 7.875% 05/01/12 5,000,000 5,625,000 ------------- Hotels Total 17,658,506 METALS & MINING - 3.5% Arch Western Finance LLC, 7.500% 07/01/13 (a) 28,790,000 29,797,650 Peabody Energy Corp.: 5.875% 04/15/16 2,775,000 2,650,125 6.875% 03/15/13 26,655,000 27,987,750 ------------- Metals & Mining Total 60,435,525 NON-FOOD & DRUG RETAIL - 1.6% Autonation, Inc., 9.000% 08/01/08 14,230,000 16,257,775 Finlay Fine Jewelry Corp., 8.375% 06/01/12 (a) 4,525,000 4,819,125 Group 1 Automotive, Inc., 8.250% 08/15/13 6,745,000 7,048,525 ------------- Non-Food & Drug Retail Total 28,125,425 PACKAGING - 3.9% Ball Corp.: 6.875% 12/15/12 32,897,000 34,377,365 7.750% 08/01/06 2,850,000 3,049,500 Owens-Brockway Glass Container, 8.875% 02/15/09 7,225,000 7,857,187 See Accompanying Notes to Financial Statements. 118 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA HIGH YIELD FUND PAR ($) VALUE ($) ------------ ------------- CORPORATE NOTES & BONDS - (CONTINUED) PACKAGING - (CONTINUED) Owens-Illinois, Inc., 8.100% 05/15/07 410,000 431,525 Silgan Holdings, Inc., 6.750% 11/15/13 22,380,000 22,380,000 ------------- Packaging Total 68,095,577 PAPER PRODUCTS - 1.5% Smurfit-Stone Container Corp.: 8.250% 10/01/12 4,580,000 4,992,200 8.375% 07/01/12 5,185,000 5,677,575 9.750% 02/01/11 13,875,000 15,505,313 ------------- Paper Products Total 26,175,088 PRINTING & PUBLISHING - 3.5% Dex Media East LLC, 12.125% 11/15/12 13,253,000 16,301,190 Houghton Mifflin Co., 9.875% 02/01/13 8,105,000 8,429,200 R.H. Donnelly Finance Corp.: 8.875% 12/15/10 (a) 1,320,000 1,485,000 10.875% 12/15/12 8,150,000 9,657,750 10.875% 12/15/12(a) 21,445,000 25,412,325 ------------- Printing & Publishing Total 61,285,465 REAL ESTATE INVESTMENT TRUST (REIT) - 1.4% iStar Financial, Inc.: 6.000% 12/15/10 2,400,000 2,454,000 7.000% 03/15/08 7,900,000 8,482,625 8.750% 08/15/08 5,767,000 6,559,962 Series B, 5.125% 04/01/11 7,350,000 7,264,586 ------------- Real Estate Investment Trust (REIT) Total 24,761,173 SERVICES - 5.1% Corrections Corp. of America: 7.500% 05/01/11 29,400,000 30,943,500 9.875% 05/01/09 275,000 306,969 Iron Mountain, Inc.: 7.750% 01/15/15 7,250,000 7,540,000 8.250% 07/01/11 1,120,000 1,163,400 8.625% 04/01/13 24,550,000 26,514,000 United Rentals, Inc.: 7.000% 02/15/14 12,000,000 10,740,000 7.750% 11/15/13 11,215,000 10,429,950 ------------- Services Total 87,637,819 SHIPPING - 1.8% Teekay Shipping Corp., 8.875% 07/15/11 27,626,000 30,802,990 ------------- Shipping Total 30,802,990 STEEL - 0.5% Russel Metals, Inc., 6.375% 03/01/14 8,780,000 8,384,900 ------------- Steel Total 8,384,900 PAR ($) VALUE ($) ------------ ------------- TECHNOLOGY - 1.1% Freescale Semiconductor, Inc., 6.875% 07/15/11 (a) 18,430,000 18,798,600 ------------- Technology Total 18,798,600 TELECOMMUNICATIONS - 2.0% Nextel Communications, Inc.: 7.375% 08/01/15 26,350,000 27,535,750 9.500% 02/01/11 6,250,000 7,062,500 ------------- Telecommunications Total 34,598,250 TOTAL CORPORATE NOTES & BONDS (Cost of $1,545,540,593) 1,585,394,672 SHORT-TERM OBLIGATION - 6.7% Repurchase agreement with State Street Bank & Trust Co., dated 08/31/04, due 09/01/04 at 1.500%, collateralized by U.S. Treasury Notes with various maturities to 05/15/08, market value $118,427,006 (repurchase proceeds $116,101,837) 116,097,000 116,097,000 ------------- TOTAL SHORT-TERM OBLIGATION (Cost of $116,097,000) 116,097,000 TOTAL INVESTMENTS - 98.3% (COST OF $1,661,637,593) (b) 1,701,491,672 OTHER ASSETS & LIABILITIES, NET - 1.7% 29,822,648 NET ASSETS - 100.0% 1,731,314,320 NOTES TO INVESTMENT PORTFOLIO: (a) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2004, these securities amounted to $153,397,462, which represents 8.9% of net assets. (b) Cost for federal income tax purposes is $1,670,205,943. See Accompanying Notes to Financial Statements. 119 INVESTMENT PORTFOLIO ___________________________________________________________ AUGUST 31, 2004 COLUMBIA DAILY INCOME COMPANY PAR ($) VALUE ($) ------------ ------------- U.S. GOVERNMENT AGENCIES - 11.7% Federal Farm Credit Bank (FFCB), 3.650% 10/22/04 2,300,000 2,306,836 Federal Home Loan Bank (FHLB), 3.875% 12/15/04 12,000,000 12,073,290 Federal Home Loan Mortgage Corp. (FHLMC), 1.405% 09/28/04 17,000,000 16,982,083 Federal National Mortgage Association (FNMA): 1.320% 09/01/04 10,000,000 10,000,000 1.540% 10/01/04 7,500,000 7,490,375 Student Loan Marketing Association (SLMA): 1.410% 09/15/04 10,000,000 9,994,517 3.625% 09/30/04 3,700,000 3,706,195 Tennessee Valley Authority, 1.305% 09/09/04 15,000,000 14,995,650 ------------- TOTAL U.S. GOVERNMENT AGENCIES (Cost of $77,548,946) 77,548,946 COMMERCIAL PAPER - 74.2% Abbey National North America LLC, 1.600% 10/28/04 14,000,000 13,964,533 AIG Funding, Inc., 1.570% 11/16/04 8,000,000 7,973,484 American Express Credit Corp., 1.480% 09/08/04 10,000,000 9,997,122 American Honda Finance, 1.500% 09/21/04 14,000,000 13,988,333 Archer-Daniels-Midland Co.: 1.360% 09/01/04 10,000,000 10,000,000 1.530% 10/13/04 4,300,000 4,292,325 Barclays U.S. Funding Corp.: 1.340% 09/09/04 12,000,000 11,996,427 1.540% 09/27/04 3,600,000 3,595,996 BellSouth Corp., 1.510% 09/08/04 (a) 13,000,000 12,996,183 ChevronTexaco Funding Corp.: 1.330% 09/13/04 8,000,000 7,996,453 1.500% 09/24/04 8,500,000 8,491,854 Citicorp: 1.520% 09/27/04 7,000,000 6,992,316 1.520% 09/28/04 7,500,000 7,491,450 Coca-Cola Co.: 1.330% 09/02/04 6,100,000 6,099,775 1.340% 09/02/04 3,800,000 3,799,859 1.480% 09/10/04 7,000,000 6,997,410 Colgate-Palmolive Co., 1.450% 09/07/04 (a) 9,700,000 9,697,656 Deutsche Bank Financial LLC, 1.420% 09/17/04 15,000,000 14,990,533 Eli Lilly & Co., 1.400% 10/04/04 13,900,000 13,882,162 Gannett Co., 1.480% 09/10/04 6,500,000 6,497,595 PAR ($) VALUE ($) ------------ ------------- General Electric Capital Corp., 1.430% 09/21/04 9,500,000 9,492,453 GlaxoSmithKline PLC: 1.460% 09/22/04 (a) 11,400,000 11,390,291 1.650% 11/23/04 (a) 5,000,000 4,980,979 Goldman Sachs Group, Inc., 1.600% 11/08/04 8,000,000 7,975,822 Grainger (W.W.), Inc., 1.500% 09/27/04 13,000,000 12,985,917 HBOS Treasury Services PLC: 1.630% 11/10/04 6,000,000 5,980,983 1.700% 11/19/04 7,200,000 7,173,140 IBM Corp.: 1.430% 09/20/04 7,000,000 6,994,717 1.480% 09/20/04 1,300,000 1,298,985 Merrill Lynch & Co., Inc.: 1.020% 09/20/04 5,000,000 4,997,308 1.510% 10/01/04 7,800,000 7,790,185 MetLife Funding, Inc.: 1.340% 09/08/04 1,100,000 1,099,714 1.520% 10/08/04 4,000,000 3,993,751 1.570% 10/12/04 8,900,000 8,884,086 Minnesota Mining & Manufacturing Co., 1.430% 09/07/04 10,000,000 9,997,617 Morgan Stanley Dean Witter & Co., 1.520% 09/03/04 11,600,000 11,599,021 National Rural Utilities Cooperative Finance Corp., 1.540% 09/21/04 3,500,000 3,497,006 Nestle Capital Corp., 1.500% 10/18/04 15,000,000 14,970,625 PACCAR Financial Corp.: 1.230% 09/03/04 9,000,000 8,999,385 1.480% 10/12/04 4,500,000 4,492,415 Pepsico, Inc., 1.480% 09/01/04 10,000,000 10,000,000 Pfizer, Inc.: 1.030% 09/07/04 9,000,000 8,998,455 1.040% 09/10/04 9,500,000 9,497,530 Private Export Funding Corp., 1.600% 11/15/04 14,000,000 13,953,333 Prudential Funding Corp., 1.470% 09/13/04 10,000,000 9,995,100 Royal Bank of Scotland PLC, 1.450% 09/14/04 13,700,000 13,692,827 Siemens Capital Corp., 1.510% 10/14/04 7,000,000 6,987,375 Societe Generale of North America, Inc., 1.620% 11/24/04 14,000,000 13,947,080 Toyota Motor Credit Co.: 1.520% 09/23/04 12,500,000 12,488,389 1.580% 10/27/04 4,000,000 3,990,169 UBS Finance, Inc., 1.125% 12/23/04 15,000,000 14,947,031 Verizon Network Funding Corp.: 1.490% 09/09/04 10,000,000 9,996,689 1.500% 09/16/04 4,400,000 4,397,250 See Accompanying Notes to Financial Statements. 120 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA DAILY INCOME COMPANY COMMERCIAL PAPER - (CONTINUED) Wal-Mart Stores, Inc., 1.510% 10/05/04 (a) 16,800,000 16,776,041 Wells Fargo & Co., 1.510% 09/16/04 10,100,000 10,093,645 ------------- TOTAL COMMERCIAL PAPER (Cost of $490,096,780) 490,096,780 CORPORATE BONDS - 14.0% AIG SunAmerica Global Financing, 1.725% 11/15/04 (a)(b) 8,000,000 8,002,910 E.I. du Pont de Nemours & Co., 6.750% 10/15/04 14,485,000 14,581,807 General Electric Capital Corp., 1.645% 03/15/05 (b) 7,932,000 7,940,176 Gillette Co., 3.750% 12/01/04 (a) 10,020,000 10,076,959 JPMorgan Chase & Co., 2.000% 05/20/05 (b) 6,000,000 6,013,183 Norwest Financial, Inc., 6.700% 09/22/04 7,500,000 7,522,472 PepsiCo, Inc., 4.500% 09/15/04 4,225,000 4,230,046 Pitney Bowes, Inc., 5.950% 02/01/05 1,350,000 1,372,600 Procter & Gamble Co., 6.600% 12/15/04 14,625,000 14,848,435 US Bank NA, 1.765% 11/05/04 (b) 18,000,000 18,009,608 ------------- TOTAL CORPORATE BONDS (Cost of $92,598,196) 92,598,196 TOTAL INVESTMENTS - 99.9% (COST OF $660,243,922) (c) 660,243,922 OTHER ASSETS & LIABILITIES, NET - 0.1% 869,624 NET ASSETS - 100.0% 661,113,546 NOTES TO INVESTMENT PORTFOLIO: (a) Security exempt from registration under Section 4(2) of the Securities Act of 1933. These securities may only be resold in exempt transactions to qualified buyers. Private resale of these securities to qualified institutional buyers are also exempt from registration pursuant to Rule 144A under the Securities Act of 1933. At August 31, 2004, these securities amounted $73,921,019, which represents 11.2% of net assets. (b) Floating rate note. The interest rate shown reflects the rate as of August 31, 2004. (c) Cost for both financial statement and federal income tax purposes is the same. See Accompanying Notes to Financial Statements. 121 STATEMENTS OF ASSETS AND LIABILITIES ___________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS
COMMON INTERNATIONAL MID CAP SMALL CAP STOCK GROWTH STOCK GROWTH GROWTH FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) FUND ($) - ---------------------------------------------------------------------------------------------------------------------------------- ASSETS Unaffiliated investments, at identified cost (including short-term obligations) 289,420,634 695,856,877 557,030,399 842,645,759 503,034,210 Affiliated investments, at identified cost -- -- -- -- -- ----------- ------------- ------------- ----------- ------------ Total investments, at identified cost 289,420,634 695,856,877 557,030,399 842,645,759 503,034,210 ----------- ------------- ------------- ----------- ------------ Unaffiliated investments, at value 300,511,634 802,881,609 570,312,613 844,876,250 537,463,596 Affiliated investments, at value -- -- -- -- -- Repurchase agreement 10,266,000 4,024,000 28,412,000 23,086,000 6,921,000 ----------- ------------- ------------- ----------- ------------ Total investments, at value 310,777,634 806,905,609 598,724,613 867,962,250 544,384,596 Cash -- 128,006 627 947 541 Foreign currency (cost of $48,999) -- -- 49,167 -- -- Receivable for: Investments sold 736,054 5,556,951 885,098 8,391,238 4,197,797 Capital stock sold 102,046 179,397 579,863 255,088 517,193 Interest 428 168 1,184 962 288 Dividends 461,518 833,348 1,217,846 210,357 103,552 Foreign tax reclaim -- 22,956 279,912 -- -- Expense reimbursement due from Investment Advisor -- -- -- -- -- Deferred compensation plan 1,508 9,029 2,089 9,849 1,560 Other assets -- 380 -- 410 -- ----------- ------------- ------------- ----------- ------------ Total assets 312,079,188 813,635,844 601,740,399 876,831,101 549,205,527 - ---------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Payable to custodian bank 382,268 -- -- 1,674 -- Payable for: Investments purchased on a delayed delivery basis -- -- -- -- -- Investments purchased 869,366 -- 6,757,019 10,780,153 3,550,394 Capital stock redeemed 3,827,648 1,905,590 407,990 2,599,247 2,018,797 Future variation margin -- -- -- -- -- Distributions -- -- -- -- -- Investment advisory fee 160,145 417,079 437,196 649,626 465,433 Transfer agent fee 92,338 209,220 42,762 164,744 75,713 Pricing and bookkeeping fees 12,507 14,011 13,420 13,321 13,239 Directors' fees -- -- 1,115 2,197 793 Audit fee 29,460 31,550 26,010 28,331 26,679 Service and distribution fees 2,188 5,985 14,916 13,030 -- Custody fee 5,500 6,500 59,602 5,697 6,612 Deferred compensation plan 1,508 9,029 2,089 9,849 1,560 Foreign capital gains tax payable -- -- 152,481 -- -- Other liabilities 22,872 57,563 34,532 81,913 30,000 ----------- ------------- ------------- ----------- ------------ Total liabilities 5,405,800 2,656,527 7,949,132 14,349,782 6,189,220 NET ASSETS 306,673,388 810,979,317 593,791,267 862,481,319 543,016,307 - ---------------------------------------------------------------------------------------------------------------------------------- NET ASSETS CONSIST OF Paid-in capital 353,308,124 1,075,808,961 582,376,931 968,695,619 602,006,022 Undistributed (overdistributed) net investment income 773,939 -- 2,274,226 -- -- Accumulated net investment loss -- (4,315) -- (73,873) -- Accumulated net realized gain (loss) (68,765,675) (375,874,061) (32,499,115) (131,456,937) (100,340,101) Unrealized appreciation (depreciation) on: Investments 21,357,000 111,048,732 41,694,214 25,316,491 41,350,386 Foreign currency translations -- -- 14,178 19 -- Foreign capital gains tax -- -- (69,167) -- -- Futures contracts -- -- -- -- -- ----------- ------------- ------------- ----------- ------------ NET ASSETS 306,673,388 810,979,317 593,791,267 862,481,319 543,016,307
REAL ESTATE STRATEGIC SHORT TERM EQUITY TECHNOLOGY INVESTOR BALANCED BOND FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) - ---------------------------------------------------------------------------------------------------------------------------------- ASSETS Unaffiliated investments, at identified cost (including short-term obligations) 656,316,387 33,105,269 355,726,305 477,662,627 518,633,342 Affiliated investments, at identified cost -- -- -- -- 2,291,600 ----------- ----------- ----------- ----------- ----------- Total investments, at identified cost 656,316,387 33,105,269 355,726,305 477,662,627 520,924,942 ----------- ----------- ----------- ----------- ----------- Unaffiliated investments, at value 890,737,609 33,770,364 316,950,978 480,766,930 489,268,528 Affiliated investments, at value -- -- -- -- 2,260,153 Repurchase agreement 43,079,000 1,501,000 91,580,000 15,793,000 31,055,000 ----------- ----------- ----------- ----------- ----------- Total investments, at value 933,816,609 35,271,364 408,530,978 496,559,930 522,583,681 Cash 770 99,721 251,957 192,166 1,262 Foreign currency (cost of $48,999) -- -- -- -- -- Receivable for: Investments sold -- 1,720,630 832,807 173,276,657 1,254,689 Capital stock sold 1,230,217 72,684 2,102,049 413,093 -- Interest 1,795 62 3,816 1,368,990 3,324,435 Dividends 568,968 16,609 385,377 499,169 -- Foreign tax reclaim -- 307 12,730 -- -- Expense reimbursement due from Investment Advisor -- 32,931 -- -- 44,562 Deferred compensation plan 2,263 1,062 10,990 1,638 7,709 Other assets 5,748 -- 227 -- -- ----------- ----------- ----------- ----------- ----------- Total assets 935,626,370 37,215,370 412,130,931 672,311,643 527,216,338 - ---------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Payable to custodian bank -- -- 477,524 -- -- Payable for: Investments purchased on a delayed delivery basis -- -- -- -- -- Investments purchased 9,505,143 1,215,627 1,184,262 169,792,236 -- Capital stock redeemed 1,940,486 106,617 627,811 7,379,085 581,347 Future variation margin -- -- -- -- 67,500 Distributions -- -- -- -- 638,976 Investment advisory fee 561,831 30,963 253,489 216,351 209,898 Transfer agent fee 153,626 23,197 80,556 126,584 82,781 Pricing and bookkeeping fees 13,160 5,434 11,262 18,299 13,152 Directors' fees 1,792 464 1,750 1,420 -- Audit fee 21,451 21,010 26,170 34,460 31,080 Service and distribution fees 22,568 3,130 49,188 8,201 45,417 Custody fee 4,369 4,000 8,135 6,500 4,220 Deferred compensation plan 2,263 1,062 10,990 1,638 7,709 Foreign capital gains tax payable -- -- -- -- -- Other liabilities 76,342 9,061 29,278 26,627 36,071 ----------- ----------- ----------- ----------- ----------- Total liabilities 12,303,031 1,420,565 2,760,415 177,611,401 1,718,151 NET ASSETS 923,323,339 35,794,805 409,370,516 494,700,242 525,498,187 - ---------------------------------------------------------------------------------------------------------------------------------- NET ASSETS CONSIST OF Paid-in capital 549,607,414 36,403,254 353,062,699 542,222,364 525,601,528 Undistributed (overdistributed) net investment income 2,565,892 -- 403,906 1,334,170 293,885 Accumulated net investment loss -- (4,733) -- -- -- Accumulated net realized gain (loss) 93,649,811 (2,769,811) 3,098,857 (67,753,595) (1,975,808) Unrealized appreciation (depreciation) on: Investments 277,500,222 2,166,095 52,804,673 18,897,303 1,658,739 Foreign currency translations -- -- 381 -- -- Foreign capital gains tax -- -- -- -- -- Futures contracts -- -- -- -- (80,157) ----------- ----------- ----------- ----------- ----------- NET ASSETS 923,323,339 35,794,805 409,370,516 494,700,242 525,498,187
FIXED NATONAL OREGON INCOME MUNICIPAL MUNICIPAL DAILY SECURITIES BOND BOND HIGH YIELD INCOME FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) COMPANY ($) - ---------------------------------------------------------------------------------------------------------------------------------- ASSETS Unaffiliated investments, at identified cost (including short-term obligations) 338,874,943 14,399,099 415,547,348 1,661,637,593 660,243,922 Affiliated investments, at identified cost -- -- -- -- -- ----------- ----------- ----------- ------------- ----------- Total investments, at identified cost 338,874,943 14,399,099 415,547,348 1,661,637,593 660,243,922 ----------- ----------- ----------- ------------- ----------- Unaffiliated investments, at value 336,230,379 15,074,617 436,388,010 1,585,394,672 660,243,922 Affiliated investments, at value -- -- -- -- -- Repurchase agreement 9,144,000 -- -- 116,097,000 -- ----------- ----------- ----------- ------------- ----------- Total investments, at value 345,374,379 15,074,617 436,388,010 1,701,491,672 660,243,922 Cash 560 347,513 30,028 571 75,612 Foreign currency (cost of $48,999) -- -- -- -- -- Receivable for: Investments sold 2,776,496 -- 1,068,750 18,177,354 -- Capital stock sold 110,962 1,670 222,319 3,475,118 1,630,285 Interest 2,864,106 170,196 5,061,981 27,951,026 1,228,994 Dividends -- -- -- -- -- Foreign tax reclaim -- -- -- -- -- Expense reimbursement due from Investment Advisor -- 13,157 -- -- -- Deferred compensation plan 1,878 448 1,893 3,502 2,071 Other assets 71,935 198 -- -- 368,538 ----------- ----------- ----------- ------------- ----------- Total assets 351,200,316 15,607,799 442,772,981 1,751,099,243 663,549,422 - ---------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Payable to custodian bank -- -- -- -- -- Payable for: Investments purchased on a delayed delivery basis 5,224,550 -- 1,399,787 -- -- Investments purchased 37,004 733,440 -- 8,597,194 -- Capital stock redeemed 4,317,170 -- 299,608 5,922,391 2,014,249 Future variation margin -- -- -- -- -- Distributions -- 8,416 326,569 3,778,660 -- Investment advisory fee 148,187 6,046 186,958 865,776 278,318 Transfer agent fee 91,846 4,073 32,838 194,385 56,343 Pricing and bookkeeping fees 15,497 6,850 14,873 15,157 13,606 Directors' fees 334 514 4,332 1,739 -- Audit fee 33,230 28,130 28,058 30,900 28,700 Service and distribution fees 9,157 1,543 2,730 283,349 -- Custody fee 4,000 1,172 4,536 5,806 4,200 Deferred compensation plan 1,878 448 1,893 3,502 2,071 Foreign capital gains tax payable -- -- -- -- -- Other liabilities 47,900 5,364 22,819 86,064 38,389 ----------- ----------- ----------- ------------- ----------- Total liabilities 9,930,753 795,996 2,325,001 19,784,923 2,435,876 NET ASSETS 341,269,563 14,811,803 440,447,980 1,731,314,320 661,113,546 - ---------------------------------------------------------------------------------------------------------------------------------- NET ASSETS CONSIST OF Paid-in capital 332,432,216 14,068,144 418,153,690 1,716,319,169 661,113,546 Undistributed (overdistributed) net investment income (766,809) 5,039 129,015 (8,565,037) -- Accumulated net investment loss -- -- -- -- -- Accumulated net realized gain (loss) 3,104,720 63,102 1,324,613 (16,293,891) -- Unrealized appreciation (depreciation) on: Investments 6,499,436 675,518 20,840,662 39,854,079 -- Foreign currency translations -- -- -- -- -- Foreign capital gains tax -- -- -- -- -- Futures contracts -- -- -- -- -- ----------- ----------- ----------- ------------- ----------- NET ASSETS 341,269,563 14,811,803 440,447,980 1,731,314,320 661,113,546
See Accompanying Notes to Financial Statements. Spread 122-123 STATEMENTS OF ASSETS AND LIABILITIES ___________________________________________ August 31, 2004 COLUMBIA FUNDS
COMMON INTERNATIONAL MID CAP SMALL CAP STOCK GROWTH STOCK GROWTH GROWTH FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) FUND ($) - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A Net assets 1,200,760 4,667,723 24,118,642 4,432,306 -- Shares outstanding 66,353 187,196 1,849,706 260,892 -- Net asset value per share (b) 18.10 24.93 13.04 16.99 -- Maximum sales charge 5.75% 5.75% 5.75% 5.75% -- Maximum offering price per share (c) 19.20 26.45 13.84 18.03 -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS B Net assets 2,059,569 2,254,121 10,221,053 5,078,719 -- Shares outstanding 115,162 91,624 797,769 303,127 -- Net asset value and offering price per share (b) 17.88 24.60 12.81 16.75 -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS C Net assets 25,761 198,742 631,698 500,680 -- Shares outstanding 1,441 8,098 49,113 29,822 -- Net asset value and offering price per share (b) 17.88 24.54 12.86 16.79 -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS D Net assets 128,635 166,601 737,642 599,007 -- Shares outstanding 7,196 6,766 57,148 35,720 -- Net asset value and offering price per share (b) 17.88 24.62 12.91 16.77 -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS G Net assets -- 12,995,824 -- 646,565 -- Shares outstanding -- 527,322 -- 38,713 -- Net asset value and offering price per share (b) -- 24.64 -- 16.70 -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS T Net assets -- -- -- 25,236,065 -- Shares outstanding -- -- -- 1,482,193 -- Net asset value per share (b) -- -- -- 17.03 -- Maximum sales charge -- -- -- 5.75% -- Maximum offering price per share (c) -- -- -- 18.07 -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS Z Net assets 303,258,663 790,696,306 558,082,232 825,987,977 543,016,307 Shares outstanding 16,736,667 31,509,450 42,471,114 48,197,981 25,469,254 Net asset value and offering price per share (d) 18.12 25.09 13.14 17.14 21.32
REAL ESTATE STRATEGIC SHORT TERM EQUITY TECHNOLOGY INVESTOR BALANCED BOND FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A Net assets 32,703,369 2,817,533 99,608,221 2,577,205 28,145,505 Shares outstanding 1,277,917 433,379 5,420,896 129,796 3,256,671 Net asset value per share (b) 25.59 6.50 18.37 19.86 8.64 Maximum sales charge 5.75% 5.75% 5.75% 5.75% 4.75% Maximum offering price per share (c) 27.15 6.90 19.49 21.07 9.07 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS B Net assets 11,233,601 2,200,128 22,070,607 7,285,804 25,124,857 Shares outstanding 438,864 343,650 1,214,514 367,449 2,907,169 Net asset value and offering price per share (b) 25.60 6.40 18.17 19.83 8.64 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS C Net assets 2,404,136 487,706 14,821,403 729,833 3,128,427 Shares outstanding 93,988 76,077 815,232 36,808 361,991 Net asset value and offering price per share (b) 25.58 6.41 18.18 19.83 8.64 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS D Net assets 4,058,522 21,346 692,764 360,946 9,808,598 Shares outstanding 158,584 3,320 38,136 18,210 1,134,935 Net asset value and offering price per share (b) 25.59 6.43 18.17 19.82 8.64 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS G Net assets -- -- -- -- 1,056,483 Shares outstanding -- -- -- -- 122,244 Net asset value and offering price per share (b) -- -- -- -- 8.64 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS T Net assets -- -- -- -- 21,159,894 Shares outstanding -- -- -- -- 2,448,392 Net asset value per share (b) -- -- -- -- 8.64 Maximum sales charge -- -- -- -- 4.75% Maximum offering price per share (c) -- -- -- -- 9.07 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS Z Net assets 872,923,711 30,268,092 272,177,521 483,746,454 437,074,423 Shares outstanding 34,095,088 4,622,051 14,773,693 24,382,455 50,573,176 Net asset value and offering price per share (d) 25.60 6.55 18.42 19.84 8.64
FIXED NATONAL OREGON INCOME MUNICIPAL MUNICIPAL DAILY SECURITIES BOND BOND HIGH YIELD INCOME FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) COMPANY ($) - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A Net assets 10,707,262 1,286,487 3,680,414 335,841,493 -- Shares outstanding 793,990 124,940 295,578 38,648,333 -- Net asset value per share (b) 13.49 10.30 12.45 8.69 -- Maximum sales charge 4.75% 4.75% 4.75% 4.75% -- Maximum offering price per share (c) 14.16 10.81 13.07 9.12 -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS B Net assets 4,334,157 762,194 1,190,316 102,038,152 -- Shares outstanding 321,399 74,022 95,596 11,742,379 -- Net asset value and offering price per share (b) 13.49 10.30 12.45 8.69 -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS C Net assets 158,362 363,272 278,214 20,126,336 -- Shares outstanding 11,743 35,280 22,344 2,316,117 -- Net asset value and offering price per share (b) 13.49 10.30 12.45 8.69 -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS D Net assets 1,744,737 432,725 790,326 86,854,375 -- Shares outstanding 129,376 42,025 63,472 9,995,149 -- Net asset value and offering price per share (b) 13.49 10.30 12.45 8.69 -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS G Net assets -- -- -- -- -- Shares outstanding -- -- -- -- -- Net asset value and offering price per share (b) -- -- -- -- -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS T Net assets -- -- -- -- -- Shares outstanding -- -- -- -- -- Net asset value per share (b) -- -- -- -- -- Maximum sales charge -- -- -- -- -- Maximum offering price per share (c) -- -- -- -- -- - ---------------------------------------------------------------------------------------------------------------------------------- CLASS Z Net assets 324,325,045 11,967,125 434,508,710 1,186,453,964 661,113,546 Shares outstanding 24,050,215 1,162,228 34,896,080 136,532,675 661,113,546 Net asset value and offering price per share (d) 13.49 10.30 12.45 8.69 1.00
(a) Class C shares were initially offered on October 13, 2003. (b) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. (c) On sales of $50,000 or more the offering price is reduced. (d) Redemption price per share is equal to net asset value less any applicable redemption fees. See Accompanying Notes to Financial Statements. Spread 124-125 STATEMENTS OF OPERATIONS _______________________________________________________ FOR THE YEAR ENDED AUGUST 31, 2004 COLUMBIA FUNDS
COMMON INTERNATIONAL MID CAP SMALL CAP STOCK GROWTH STOCK GROWTH GROWTH FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) - ---------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME INCOME Dividends 5,071,208 7,898,046 10,502,144 2,938,819 976,524 Dividends from affiliates 133,332 -- -- -- -- Interest 39,093 42,357 225,992 288,115 183,159 Interest from affiliates -- -- -- -- -- Foreign withholding tax (12,834) (92,186) (1,235,663) (28,435) (2,574) ----------- ----------- ----------- ----------- ----------- Total income 5,230,799 7,848,217 9,492,473 3,198,499 1,157,109 - ---------------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment advisory fee 2,366,388 5,482,681 4,953,878 8,813,801 7,019,787 Distribution fee: Class B 12,052 13,582 83,878 38,634 -- Class C 242 779 2,845 2,206 -- Class D 1,049 2,114 5,532 5,635 -- Class G -- 94,563 -- 5,005 -- Service fee: Class A 1,533 12,228 61,658 13,691 -- Class B 4,005 4,527 27,959 12,878 -- Class C 80 260 948 735 -- Class D 348 710 1,834 1,874 -- Class G -- 43,644 -- 2,309 -- Shareholder services fee - Class T -- -- -- 87,984 -- Transfer agent fee: Class A 1,487 11,182 104,768 19,091 -- Class B 4,237 4,495 60,592 22,925 -- Class C 73 234 1,099 829 -- Class D 310 602 3,907 2,410 -- Class G -- 31,562 -- 5,236 -- Class T -- -- -- 78,621 -- Class Z 886,095 1,822,101 594,779 1,636,195 821,652 Pricing and bookkeeping fees 121,476 150,954 136,442 153,692 147,011 Directors' fees 12,074 14,394 9,503 27,370 20,266 Custody fee 35,514 36,169 321,832 35,806 32,301 Audit fee 38,797 47,381 38,483 51,962 33,010 Registration fees 117,159 87,074 96,078 131,817 67,900 Non-recurring costs (See Note 11) 17,852 42,776 27,108 46,903 33,352 Other expenses 42,313 295,807 141,382 337,737 105,945 ----------- ----------- ----------- ----------- ----------- Total Operating Expenses 3,663,084 8,199,819 6,674,505 11,535,346 8,281,224 Interest expense 721 -- -- -- -- ----------- ----------- ----------- ----------- ----------- Total Expenses 3,663,805 8,199,819 6,674,505 11,535,346 8,281,224 Expenses waived/reimbursed by Investment Advisor -- -- (373,733) -- -- Fees waived by Distributor: Class C -- -- -- -- -- Class D -- -- -- -- -- Fees waived by Transfer Agent: Class A -- -- (6,795) (1,011) -- Class B -- -- (12,299) (5,244) -- Class C -- -- (976) (209) -- Class D -- -- (3,670) (606) -- Class G -- -- -- (87) -- Class T -- -- -- (3,364) -- Class Z -- -- (447,801) (483,354) -- Non-recurring costs assumed by Investment Advisor (See Note 11) (17,852) (42,776) (27,108) (46,903) (33,352) Custody earnings credit (166) (149) (833) (1,601) (589) ----------- ----------- ----------- ----------- ----------- Net Expenses 3,645,787 8,156,894 5,801,290 10,992,967 8,247,283 ----------- ----------- ----------- ----------- ----------- Net Investment Income (Loss) 1,585,012 (308,677) 3,691,183 (7,794,468) (7,090,174)
REAL ESTATE STRATEGIC SHORT TERM EQUITY TECHNOLOGY INVESTOR BALANCED BOND FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) - ---------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME INCOME Dividends 42,727,707 118,550 4,402,950 5,067,164 -- Dividends from affiliates -- -- -- 132,304 -- Interest 283,601 16,966 729,746 9,718,261 15,515,851 Interest from affiliates -- -- -- 101,238 128,854 Foreign withholding tax (37,753) (6,658) (118,183) (13,100) -- ----------- ----------- ----------- ----------- ----------- Total income 42,973,555 128,858 5,014,513 15,005,867 15,644,705 - ---------------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment advisory fee 7,214,201 361,947 2,576,915 3,002,434 2,678,339 Distribution fee: Class B 62,850 18,559 78,695 42,507 190,933 Class C 8,738 1,830 33,396 3,270 12,776 Class D 31,895 279 5,589 4,458 116,445 Class G -- -- -- -- 8,592 Service fee: Class A 70,852 4,349 189,017 4,349 74,475 Class B 20,950 6,186 26,135 14,169 63,644 Class C 2,912 609 11,132 1,090 4,260 Class D 10,632 93 1,863 1,486 38,815 Class G -- -- -- -- 1,979 Shareholder services fee - Class T -- -- -- -- 37,561 Transfer agent fee: Class A 37,594 8,287 114,100 3,886 31,977 Class B 12,810 10,432 27,297 11,860 37,754 Class C 1,441 1,345 9,660 909 1,949 Class D 5,662 270 1,366 1,218 13,897 Class G -- -- -- -- 2,984 Class T -- -- -- -- 33,578 Class Z 1,322,014 153,489 429,770 1,137,263 445,738 Pricing and bookkeeping fees 150,060 57,717 113,408 178,067 174,934 Directors' fees 23,682 8,333 10,965 15,765 7,156 Custody fee 32,320 23,614 41,684 42,517 30,935 Audit fee 34,454 31,341 47,500 45,443 45,902 Registration fees 138,591 104,522 112,786 117,058 176,644 Non-recurring costs (See Note 11) 43,675 1,891 17,368 27,135 25,190 Other expenses 312,146 27,628 129,029 89,361 103,455 ----------- ----------- ----------- ----------- ----------- Total Operating Expenses 9,537,479 822,721 3,977,675 4,744,245 4,359,912 Interest expense -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- Total Expenses 9,537,479 822,721 3,977,675 4,744,245 4,359,912 Expenses waived/reimbursed by Investment Advisor -- (191,213) -- -- (263,148) Fees waived by Distributor: Class C -- -- -- -- (10,231) Class D -- -- -- -- (93,156) Fees waived by Transfer Agent: Class A -- -- (6,998) -- -- Class B -- -- (14,150) -- -- Class C -- -- (3,376) -- -- Class D -- -- (906) -- -- Class G -- -- -- -- -- Class T -- -- -- -- -- Class Z -- -- (75,713) -- -- Non-recurring costs assumed by Investment Advisor (See Note 11) (43,675) (1,891) (17,368) (27,135) (25,190) Custody earnings credit (121) (512) (621) (571) (687) ----------- ----------- ----------- ----------- ----------- Net Expenses 9,493,683 629,105 3,858,543 4,716,539 3,967,500 ----------- ----------- ----------- ----------- ----------- Net Investment Income (Loss) 33,479,872 (500,247) 1,155,970 10,289,328 11,677,205
FIXED NATONAL OREGON INCOME MUNICIPAL MUNICIPAL DAILY SECURITIES BOND BOND HIGH YIELD INCOME FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) COMPANY ($) - ---------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME INCOME Dividends -- -- -- -- -- Dividends from affiliates -- -- -- -- -- Interest 19,951,098 659,150 21,880,921 118,202,398 8,381,263 Interest from affiliates -- -- -- -- -- Foreign withholding tax -- -- -- (24,861) -- ----------- ----------- ----------- ----------- ----------- Total income 19,951,098 659,150 21,880,921 118,177,537 8,381,263 - ---------------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment advisory fee 2,099,971 76,297 2,338,697 10,523,463 3,704,497 Distribution fee: Class B 34,061 5,491 9,166 761,891 -- Class C 755 4,423 908 87,485 -- Class D 17,339 3,514 5,927 768,275 -- Class G -- -- -- -- -- Service fee: Class A 22,484 2,286 7,100 675,162 -- Class B 11,353 1,831 3,054 253,964 -- Class C 252 1,469 302 29,162 -- Class D 5,779 1,171 1,970 256,091 -- Class G -- -- -- -- -- Shareholder services fee - Class T -- -- -- -- -- Transfer agent fee: Class A 20,409 1,827 2,164 266,759 -- Class B 10,977 1,437 1,056 116,285 -- Class C 238 940 65 12,135 -- Class D 5,195 686 669 110,131 -- Class G -- -- -- -- -- Class T -- -- -- -- -- Class Z 779,850 18,903 245,256 1,350,600 1,299,719 Pricing and bookkeeping fees 147,656 65,576 182,482 186,141 146,678 Directors' fees 13,762 2,759 20,395 41,438 17,269 Custody fee 22,713 7,968 23,242 46,761 22,573 Audit fee 43,652 40,552 40,880 41,422 34,839 Registration fees 89,281 84,654 121,229 234,619 75,636 Non-recurring costs (See Note 11) 17,352 700 21,237 81,196 -- Other expenses 113,020 15,869 72,722 493,018 155,376 ----------- ----------- ----------- ----------- ----------- Total Operating Expenses 3,456,099 338,353 3,098,521 16,335,998 5,456,587 Interest expense -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- Total Expenses 3,456,099 338,353 3,098,521 16,335,998 5,456,587 Expenses waived/reimbursed by Investment Advisor -- (218,346) -- -- -- Fees waived by Distributor: Class C (152) (2,061) (424) (17,581) -- Class D (3,468) (1,640) (2,766) (153,656) -- Fees waived by Transfer Agent: Class A -- -- -- -- -- Class B -- -- -- -- -- Class C -- -- -- -- -- Class D -- -- -- -- -- Class G -- -- -- -- -- Class T -- -- -- -- -- Class Z -- -- -- -- -- Non-recurring costs assumed by Investment Advisor (See Note 11) (17,352) (700) (21,237) (81,196) -- Custody earnings credit (713) (56) (302) (12,007) (774) ----------- ----------- ----------- ----------- ----------- Net Expenses 3,434,414 115,550 3,073,792 16,071,558 5,455,813 ----------- ----------- ----------- ----------- ----------- Net Investment Income (Loss) 16,516,684 543,600 18,807,129 102,105,979 2,925,450
(a) Class C shares were initially offered on October 13, 2003. See Accompanying Notes to Financial Statements. Spread 126-127 STATEMENTS OF OPERATIONS _______________________________________________________ FOR THE YEAR ENDED AUGUST 31, 2004 COLUMBIA FUNDS
COMMON INTERNATIONAL MID CAP SMALL CAP STOCK GROWTH STOCK GROWTH GROWTH FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) - ---------------------------------------------------------------------------------------------------------------------------------- NETREALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, FOREIGN CAPITAL GAINS TAX AND FUTURES CONTRACTS Net realized gain (loss) on: Unaffiliated investments 75,766,146 90,532,670 31,660,421 136,678,744 108,746,196 Affiliated investments 3,770,605 -- -- -- -- Foreign currency transactions -- -- (1,008,219) (68,420) -- Foreign capital gains tax -- -- (985,510) -- -- Futures contracts -- -- -- -- -- Net realized loss on the disposal of investments purchased/sold in error (See Note 9) -- -- -- -- -- ----------- ----------- ----------- ------------ ------------ Net realized gain 79,536,751 90,532,670 29,666,692 136,610,324 108,746,196 ----------- ----------- ----------- ------------ ------------ Change in net unrealized appreciation/ depreciation on: Investments (53,832,811) (70,015,156) 12,529,973 (178,274,880) (104,998,632) Foreign currency translations -- -- 95,740 19 -- Foreign capital gains tax -- -- 304,088 -- -- Futures contracts -- -- -- -- -- ----------- ----------- ----------- ------------ ------------ Net change in net unrealized appreciation /depreciation (53,832,811) (70,015,156) 12,929,801 (178,274,861) (104,998,632) ----------- ----------- ----------- ------------ ------------ Net Gain (Loss) 25,703,940 20,517,514 42,596,493 (41,664,537) 3,747,564 ----------- ----------- ----------- ------------ ------------ Net Increase (Decrease) Resulting From Operations 27,288,952 20,208,837 46,287,676 (49,459,005) (3,342,610)
REAL ESTATE STRATEGIC SHORT TERM EQUITY TECHNOLOGY INVESTOR BALANCED BOND FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) FUND (a)($) - ---------------------------------------------------------------------------------------------------------------------------------- NETREALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, FOREIGN CAPITAL GAINS TAX AND FUTURES CONTRACTS Net realized gain (loss) on: Unaffiliated investments 103,930,894 3,153,069 32,969,287 78,796,816 669,551 Affiliated investments -- -- -- 3,810,659 -- Foreign currency transactions -- (4,081) (130,171) -- -- Foreign capital gains tax -- -- -- -- -- Futures contracts -- -- -- -- (395,603) Net realized loss on the disposal of investments purchased/sold in error (See Note 9) -- -- -- -- -- ----------- ----------- ----------- ------------ ------------ Net realized gain 103,930,894 3,148,988 32,839,116 82,607,475 273,948 ----------- ----------- ----------- ------------ ------------ Change in net unrealized appreciation/ depreciation on: Investments 86,151,012 (1,040,511) 11,368,896 (57,419,638) 751,495 Foreign currency translations -- -- 457 -- -- Foreign capital gains tax -- -- -- -- -- Futures contracts -- -- -- -- (80,157) ----------- ----------- ----------- ------------ ------------ Net change in net unrealized appreciation /depreciation 86,151,012 (1,040,511) 11,369,353 (57,419,638) 671,338 ----------- ----------- ----------- ------------ ------------ Net Gain (Loss) 190,081,906 2,108,477 44,208,469 25,187,837 945,286 ----------- ----------- ----------- ------------ ------------ Net Increase (Decrease) Resulting From Operations 223,561,778 1,608,230 45,364,439 35,477,165 12,622,491
FIXED NATONAL OREGON INCOME MUNICIPAL MUNICIPAL DAILY SECURITIES BOND BOND HIGH YIELD INCOME FUND (a)($) FUND (a)($) FUND (a)($) FUND (A)($) COMPANY ($) - ---------------------------------------------------------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, FOREIGN CAPITAL GAINS TAX AND FUTURES CONTRACTS Net realized gain (loss) on: Unaffiliated investments 6,873,389 128,356 3,418,754 23,256,561 -- Affiliated investments -- -- -- -- -- Foreign currency transactions -- -- -- -- -- Foreign capital gains tax -- -- -- -- -- Futures contracts -- -- -- -- -- Net realized loss on the disposal of investments purchased/sold in error (See Note 9) -- -- -- -- -- ----------- ----------- ----------- ------------ ------------ Net realized gain 6,873,389 128,356 3,418,754 23,256,561 -- ----------- ----------- ----------- ------------ ------------ Change in net unrealized appreciation/ depreciation on: Investments (509,297) 251,062 9,460,520 23,594,415 -- Foreign currency translations -- -- -- -- -- Foreign capital gains tax -- -- -- -- -- Futures contracts -- -- -- -- -- ----------- ----------- ----------- ------------ ------------ Net change in net unrealized appreciation /depreciation (509,297) 251,062 9,460,520 23,594,415 -- ----------- ----------- ----------- ------------ ------------ Net Gain (Loss) 6,364,092 379,418 12,879,274 46,850,976 -- ----------- ----------- ----------- ------------ ------------ Net Increase (Decrease) Resulting From Operations 22,880,776 923,018 31,686,403 148,956,955 2,925,450
(a) Class C shares were initially offered on October 13, 2003. See Accompanying Notes to Financial Statements. Spread 128-129 STATEMENTS OF CHANGES IN NET ASSETS ____________________________________________ COLUMBIA FUNDS
COMMON STOCK FUND GROWTH FUND ----------------------------------------- ----------------------------------------- YEAR PERIOD YEAR YEAR PERIOD YEAR ENDED ENDED ENDED ENDED ENDED ENDED AUGUST 31, AUGUST 31, DECEMBER 31, AUGUST 31, AUGUST 31, DECEMBER 31, INCREASE (DECREASE) IN NET ASSETS 2004 (a)($) 2003 (b)($) 2002 (c)($) 2004 (a)($) 2003 (b)($) 2002 (d)($) - ---------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) 1,585,012 1,506,437 2,314,001 (308,677) (67,881) (334,512) Net realized gain (loss) on investments, foreign currency transactions and foreign capital gains tax 79,536,751 (10,351,264) (76,671,127) 90,532,670 6,034,740 (234,361,212) Net change in unrealized appreciation /depreciation on investments, foreign currency translations and foreign capital gains tax (53,832,811) 70,348,296 (87,529,297) (70,015,156) 138,988,772 (189,831,805) ------------ ----------- ------------ ------------ ----------- ------------- Net increase (decrease) resulting from operations 27,288,952 61,503,469 (161,886,423) 20,208,837 144,955,631 (424,527,529) - ---------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A (707) -- (24) -- -- -- Class B -- -- (365) -- -- -- Class D -- -- (105) -- -- -- Class Z (2,316,812) -- (2,325,116) -- -- -- Return of capital: Class Z -- -- -- -- -- -- ------------ ----------- ------------ ------------ ----------- ------------- Total distributions to shareholders (2,317,519) -- (2,325,610) -- -- -- - ---------------------------------------------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS (146,922,763) (49,688,127) (100,375,770) (138,965,772) (43,866,493) (72,669,754) ------------ ----------- ------------ ------------ ----------- ------------- REDEMPTION FEES -- -- -- -- -- -- ------------ ----------- ------------ ------------ ----------- ------------- Net increase (decrease) in net assets (121,951,330) 11,815,342 (264,587,803) (118,756,935) 101,089,138 (497,197,283) - ---------------------------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 428,624,718 416,809,376 681,397,179 929,736,252 828,647,114 1,325,844,397 End of period 306,673,388 428,624,718 416,809,376 810,979,317 929,736,252 828,647,114 ------------ ----------- ----------- ----------- ----------- ------------- Undistributed (overdistributed) net investment income (loss) at end of period 773,939 1,506,446 -- -- -- -- Accumulated net investment loss at end of period -- -- -- (4,315) (1,289) --
INTERNATIONAL STOCK FUND MID CAP GROWTH FUND ----------------------------------------- ------------------------------------------ YEAR PERIOD YEAR YEAR PERIOD YEAR ENDED ENDED ENDED ENDED ENDED ENDED AUGUST 31, AUGUST 31, DECEMBER 31, AUGUST 31, AUGUST 31, DECEMBER 31, INCREASE (DECREASE) IN NET ASSETS 2004 (a)($) 2003 (b)($) 2002 (c)($) 2004 (a)($) 2003 (b)($) 2002 (e)($) - ---------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) 3,691,183 1,285,611 (60,403) (7,794,468) (4,889,028) (5,336,228) Net realized gain (loss) on investments, foreign currency transactions and foreign capital gains tax 29,666,692 (4,669,563) (16,450,936) 136,610,324 17,148,448 (89,710,944) Net change in unrealized appreciation /depreciation on investments, foreign currency translations and foreign capital gains tax 12,929,801 32,813,483 (5,145,567) (178,274,861) 179,938,855 (104,900,709) ------------ ----------- ------------ ------------- ------------- ------------ Net increase (decrease) resulting from operations 46,287,676 29,429,531 (21,656,906) (49,459,005) 192,198,275 (199,947,881) - ---------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A -- -- -- -- -- -- Class B -- -- -- -- -- -- Class D -- -- -- -- -- -- Class Z (1,290,808) -- (102,850) -- -- -- Return of capital: Class Z -- -- (403,799) -- -- -- ------------ ----------- ------------ ------------- ------------- ------------ Total distributions to shareholders (1,290,808) -- (506,649) -- -- -- - ---------------------------------------------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS 267,394,781 76,764,211 61,510,684 (127,233,529) 7,917,882 252,934,343 ------------ ----------- ------------ ------------- ------------- ------------ REDEMPTION FEES 68,059 164,843 -- -- -- -- ------------ ----------- ------------ ------------- ------------- ------------ Net increase (decrease) in net assets 312,459,708 106,358,585 39,347,129 (176,692,534) 200,116,157 52,986,462 - ---------------------------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 281,331,559 174,972,974 135,625,845 1,039,173,853 839,057,696 786,071,234 End of period 593,791,267 281,331,559 174,972,974 862,481,319 1,039,173,853 839,057,696 ------------ ----------- ------------ ------------- ------------- ------------ Undistributed (overdistributed) net investment income (loss) at end of period 2,274,226 1,284,980 (14,405) -- -- -- Accumulated net investment loss at end of period -- -- -- (73,873) (2,185) (3,410)
SMALL CAP GROWTH FUND ----------------------------------------- YEAR PERIOD YEAR ENDED ENDED ENDED AUGUST 31, AUGUST 31, DECEMBER 31, INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 (b)($) 2002 ($) - ---------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) (7,090,174) (3,758,177) (5,349,560) Net realized gain (loss) on investments, foreign currency transactions and foreign capital gains tax 108,746,196 29,590,977 (116,601,064) Net change in unrealized appreciation /depreciation on investments, foreign currency translations and foreign capital gains tax (104,998,632) 124,510,064 (70,989,821) ------------ ----------- ------------ Net increase (decrease) resulting from operations (3,342,610) 150,342,864 (192,940,445) - ---------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A -- -- -- Class B -- -- -- Class D -- -- -- Class Z -- -- -- Return of capital: Class Z -- -- -- ------------ ----------- ------------ Total distributions to shareholders -- -- -- - ---------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS (91,256,656) (5,758,359) 68,005,564 ------------ ----------- ------------ REDEMPTION FEES -- -- -- ------------ ----------- ------------ Net increase (decrease) in net assets (94,599,266) 144,584,505 (124,934,881) - ---------------------------------------------------------------------------------------- NET ASSETS Beginning of period 637,615,573 493,031,068 617,965,949 End of period 543,016,307 637,615,573 493,031,068 ------------ ----------- ------------ Undistributed (overdistributed) net investment income (loss) at end of period -- 180,997 180,997 Accumulated net investment loss at end of period -- -- --
(a) Class C shares were initially offered on October 13, 2003. (b) The Fund changed its fiscal year end from December 31 to August 31. (c) Effective November 1, 2002, the Fund began offering four classes of shares: Class A, Class B, Class D and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. (d) Effective November 1, 2002, the Fund began offering five classes of shares: Class A, Class B, Class D, Class G and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. (e) Effective November 1, 2002, the Fund began offering six classes of shares: Class A, Class B, Class D, Class G, Class T and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. See Accompanying Notes to Financial Statements. Spread 130-131 STATEMENTS OF CHANGES IN NET ASSETS ____________________________________________ COLUMBIA FUNDS
REAL ESTATE EQUITY FUND TECHNOLOGY FUND ---------------------------------------- ----------------------------------------- YEAR PERIOD YEAR YEAR PERIOD YEAR ENDED ENDED ENDED ENDED ENDED ENDED AUGUST 31, AUGUST 31, DECEMBER 31, AUGUST 31, AUGUST 31, DECEMBER 31, INCREASE (DECREASE) IN NET ASSETS 2004 (a)($) 2003 (b)($) 2002 (c)($) 2004 (a)($) 2003 (b)($) 2002 (c)($) - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income (loss) 33,479,872 16,618,449 33,395,460 (500,247) (97,458) (122,568) Net realized gain (loss) on investments, foreign currency transactions and futures contracts 103,930,894 8,176,522 (12,684,181) 3,148,988 3,262,715 (4,188,861) Net change in unrealized appreciation /depreciation on investments, foreign currency translations and futures contracts 86,151,012 124,974,925 (5,589,540) (1,040,511) 2,813,873 (748,526) ------------ ----------- ----------- ----------- ----------- ------------ Net increase (decrease) resulting from operations 223,561,778 149,769,896 15,121,739 1,608,230 5,979,130 (5,059,955) - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A (812,573) (64,007) (11,804) -- -- -- Class B (181,510) (26,629) (12,009) -- -- -- Class C (21,166) -- -- -- -- -- Class D (96,766) (18,629) (4,519) -- -- -- Class G -- -- -- -- -- -- Class T -- -- -- -- -- -- Class Z (30,549,898) (11,791,170) (29,889,702) -- -- -- From net realized gains: Class A (191,896) -- -- -- -- -- Class B (55,846) -- -- -- -- -- Class C (4,533) -- -- -- -- -- Class D (37,082) -- -- -- -- -- Class Z (8,007,605) -- -- -- -- -- Return of capital: Class Z -- -- (3,915,328) -- -- -- ------------ ----------- ----------- ----------- ----------- ------------ Total distributions to shareholders (39,958,875) (11,900,435) (33,833,362) -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ NET CAPITAL SHARE TRANSACTIONS (165,633,084) (9,506,449) 174,112,297 12,887,088 7,256,837 2,738,412 ------------ ----------- ----------- ----------- ----------- ------------ Net increase (decrease) in net assets 17,969,819 128,363,012 155,400,674 14,495,318 13,235,967 (2,321,543) - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period 905,353,520 776,990,508 621,589,834 21,299,487 8,063,520 10,385,063 End of period 923,323,339 905,353,520 776,990,508 35,794,805 21,299,487 8,063,520 ------------ ----------- ----------- ----------- ----------- ------------ Undistributed (overdistributed) net investment income at end of period 2,565,892 4,718,014 5,750,071 -- -- -- Accumulated net investment loss at end of period -- -- -- (4,733) -- --
STRATEGIC INVESTOR FUND BALANCED FUND ---------------------------------------- ------------------------------------------ YEAR PERIOD YEAR YEAR PERIOD YEAR ENDED ENDED ENDED ENDED ENDED ENDED AUGUST 31, AUGUST 31, DECEMBER 31, AUGUST 31, AUGUST 31, DECEMBER 31, INCREASE (DECREASE) IN NET ASSETS 2004 (a)($) 2003 (b)($) 2002 (c)($) 2004 (a)($) 2003 (b)($) 2002 (c)($) - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income (loss) 1,155,970 1,290,099 1,880,227 10,289,328 8,623,814 20,794,186 Net realized gain (loss) on investments, foreign currency transactions and futures contracts 32,839,116 1,254,211 (27,776,780) 82,607,475 (2,740,428) (71,176,504) Net change in unrealized appreciation /depreciation on investments, foreign currency translations and futures contracts 11,369,353 47,457,001 (13,657,887) (57,419,638) 58,617,792 (68,893,518) ------------ ----------- ----------- ------------ ----------- ------------ Net increase (decrease) resulting from operations 45,364,439 50,001,311 (39,554,440) 35,477,165 64,501,178 (119,275,836) - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A (258,188) -- -- (23,144) (2,855) (693) Class B -- -- -- (36,893) (8,639) (2,254) Class C -- -- -- (2,894) -- -- Class D -- -- -- (4,198) (2,920) (1,798) Class G -- -- -- -- -- -- Class T -- -- -- -- -- -- Class Z (1,487,644) -- (1,839,312) (10,830,515) (6,954,163) (21,201,650) From net realized gains: Class A -- -- -- -- -- -- Class B -- -- -- -- -- -- Class C -- -- -- -- -- -- Class D -- -- -- -- -- -- Class Z -- -- (376,144) -- -- -- Return of capital: Class Z -- -- -- -- -- -- ------------ ----------- ----------- ------------ ----------- ------------ Total distributions to shareholders (1,745,832) -- (2,215,456) (10,897,644) (6,968,577) (21,206,395) - ------------------------------------------------------------------------------------------------------------------------------------ NET CAPITAL SHARE TRANSACTIONS 74,083,888 (24,174,510) 168,107,411 (175,070,636) (81,831,327) (173,776,980) ------------ ----------- ----------- ------------ ----------- ------------ Net increase (decrease) in net assets 117,702,495 25,826,801 126,337,515 (150,491,115) (24,298,726) (314,259,211) - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period 291,668,021 265,841,220 139,503,705 645,191,357 669,490,083 983,749,294 End of period 409,370,516 291,668,021 265,841,220 494,700,242 645,191,357 669,490,083 ------------ ----------- ----------- ------------ ----------- ------------ Undistributed (overdistributed) net investment income at end of period 403,906 1,354,437 62,338 1,334,170 1,622,249 (355,183) Accumulated net investment loss at end of period -- -- -- -- -- --
SHORT TERM BOND FUND ---------------------------------------- YEAR PERIOD YEAR ENDED ENDED ENDED AUGUST 31, AUGUST 31, DECEMBER 31, INCREASE (DECREASE) IN NET ASSETS 2004 (a)($) 2003 (b)($) 2002 (d)($) - -------------------------------------------------------------------------------------- OPERATIONS Net investment income (loss) 11,677,205 7,314,353 3,936,510 Net realized gain (loss) on investments, foreign currency transactions and futures contracts 273,948 1,411,670 (5,253) Net change in unrealized appreciation /depreciation on investments, foreign currency translations and futures contracts 671,338 (5,882,484) 2,802,185 ------------ ----------- ----------- Net increase (decrease) resulting from operations 12,622,491 2,843,539 6,733,442 - -------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A (587,965) (300,551) (7,886) Class B (312,592) (163,965) (6,548) Class C (32,292) -- -- Class D (283,218) (153,332) (9,865) Class G (18,591) (19,560) (2,198) Class T (518,577) (449,409) (48,546) Class Z (9,814,113) (6,343,155) (3,843,068) From net realized gains: Class A -- -- -- Class B -- -- -- Class C -- -- -- Class D -- -- -- Class Z -- -- (18,783) Return of capital: Class Z -- -- -- ------------ ----------- ----------- Total distributions to shareholders (11,567,348) (7,429,972) (3,936,894) - -------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS (24,733,033) 186,414,680 301,621,677 ------------ ----------- ----------- Net increase (decrease) in net assets (23,677,890) 181,828,247 304,418,225 - -------------------------------------------------------------------------------------- NET ASSETS Beginning of period 549,176,077 367,347,830 62,929,605 End of period 525,498,187 549,176,077 367,347,830 ------------ ----------- ----------- Undistributed (overdistributed) net investment income at end of period 293,885 5,674 (204,761) Accumulated net investment loss at end of period -- -- --
(a) Class C shares were initially offered on October 13, 2003. (b) The Fund changed its fiscal year end from December 31 to August 31. (c) Effective November 1, 2002, the Fund began offering four classes of shares: Class A, Class B, Class D and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. (d) Effective November 1, 2002, the Fund began offering six classes of shares: Class A, Class B, Class D, Class G, Class T and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. See Accompanying Notes to Financial Statements. Spread 132-133 STATEMENTS OF CHANGES IN NET ASSETS ____________________________________________ COLUMBIA FUNDS
FIXED INCOME NATIONAL MUNICIPAL SECURITIES FUND BOND FUND ---------------------------------------- ----------------------------------------- YEAR PERIOD YEAR YEAR PERIOD YEAR ENDED ENDED ENDED ENDED ENDED ENDED AUGUST 31, AUGUST 31, DECEMBER 31, AUGUST 31, AUGUST 31, DECEMBER 31, INCREASE (DECREASE) IN NET ASSETS 2004 (a)($) 2003 (b)($) 2002 (c)($) 2004 (a)($) 2003 (b)($) 2002 (c)($) - ---------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income 16,516,684 13,690,036 24,670,569 543,600 430,023 603,412 Net realized gain (loss) on investments 6,873,389 9,807,289 (2,558,516) 128,356 56,187 88,597 Net change in unrealized appreciation /depreciation on investments (509,297) (17,070,804) 14,601,556 251,062 (330,997) 631,224 ------------ ----------- ----------- ----------- ------------ ----------- Net increase resulting from operations 22,880,776 6,426,521 36,713,609 923,018 155,213 1,323,233 - ---------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Class A (352,163) (81,788) (1,157) (30,673) (6,156) (200) Class B (142,805) (56,382) (2,638) (19,451) (7,532) (232) Class C (3,354) -- -- (17,369) -- -- Class D (76,542) (34,961) (1,013) (14,134) (5,576) (147) Class Z (16,812,198) (14,154,256) (25,339,044) (460,894) (413,051) (598,784) From net realized gains: Class A -- -- -- (6,106) (310) (230) Class B -- -- -- (5,641) (477) (784) Class C -- -- -- (6,127) -- -- Class D -- -- -- (3,786) (337) (220) Class Z -- -- -- (98,282) (12,706) (66,172) ------------ ----------- ----------- ----------- ------------ ----------- Total distributions to shareholders (17,387,062) (14,327,387) (25,343,852) (662,463) (446,145) (666,769) - ---------------------------------------------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS (184,814,748) (21,870,137) 73,248,344 (1,232,294) (584,781) 2,233,945 ------------ ----------- ----------- ----------- ------------ ----------- Net increase (decrease) in net assets (179,321,034) (29,771,003) 84,618,101 (971,739) (875,713) 2,890,409 - ---------------------------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 520,590,597 550,361,600 465,743,499 15,783,542 16,659,255 13,768,846 End of period 341,269,563 520,590,597 550,361,600 14,811,803 15,783,542 16,659,255 ------------ ----------- ----------- ----------- ------------ ----------- Undistributed (overdistributed) net investment income at end of period (766,809) (760,011) (885,594) 5,039 2,584 4,896
OREGON MUNICIPAL BOND FUND HIGH YIELD FUND ---------------------------------------- ------------------------------------------- YEAR PERIOD YEAR YEAR PERIOD YEAR ENDED ENDED ENDED ENDED ENDED ENDED AUGUST 31, AUGUST 31, DECEMBER 31, AUGUST 31, AUGUST 31, DECEMBER 31, INCREASE (DECREASE) IN NET ASSETS 2004 (a)($) 2003 (b)($) 2002 (c)($) 2004 (a)($) 2003 (b)($) 2002 (c)($) - ----------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income 18,807,129 14,184,403 22,413,341 102,105,979 50,179,150 29,377,465 Net realized gain (loss) on investments 3,418,754 3,354,784 3,932,577 23,256,561 2,667,555 (27,771,338) Net change in unrealized appreciation /depreciation on investments 9,460,520 (13,131,352) 17,775,246 23,594,415 7,100,037 9,777,957 ------------ ----------- ----------- ------------- ------------- ------------ Net increase resulting from operations 31,686,403 4,407,835 44,121,164 148,956,955 59,946,742 11,384,084 - ----------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net From net investment income: Class A (105,796) (24,517) (932) (16,842,377) (4,682,562) (111,753) Class B (36,225) (14,008) (1,094) (5,543,127) (2,122,494) (63,166) Class C (3,971) -- -- (651,730) -- -- Class D (26,303) (15,469) (1,673) (5,747,649) (2,591,969) (57,867) Class Z (18,620,689) (14,116,676) (22,348,370) (81,901,552) (44,079,371) (30,110,118) From net realized gains: Class A (28,392) (1,127) (1,987) -- -- -- Class B (15,169) (532) (2,513) -- -- -- Class C (702) -- -- -- -- -- Class D (9,045) (496) (2,990) -- -- -- Class Z (5,411,625) (299,094) (5,015,648) -- -- -- ------------ ----------- ----------- ------------- ------------- ------------ Total distributions to shareholders (24,257,917) (14,471,919) (27,375,207) (110,686,435) (53,476,396) (30,342,904) - ----------------------------------------------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS (56,244,778) (10,834,612) 1,779,138 108,928,738 806,131,939 551,477,756 ------------ ----------- ----------- ------------- ------------- ------------ Net increase (decrease) in net assets (48,816,292) (20,898,696) 18,525,095 147,199,258 812,602,285 532,518,936 - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 489,264,272 510,162,968 491,637,873 1,584,115,062 771,512,777 238,993,841 End of period 440,447,980 489,264,272 510,162,968 1,731,314,320 1,584,115,062 771,512,777 ------------ ----------- ----------- ------------- ------------- ------------ Undistributed (overdistributed) net investment income at end of period 129,015 141,548 131,976 (8,565,037) (3,743,314) (989,027)
DAILY INCOME COMPANY ----------------------------------------------- YEAR PERIOD YEAR ENDED ENDED ENDED AUGUST 31, AUGUST 31, DECEMBER 31, INCREASE (DECREASE) IN NET ASSETS 2004 ($) 2003 (b)($) 2002 ($) - --------------------------------------------------------------------------------------------- OPERATIONS Net investment income 2,925,450 3,560,546 14,142,055 Net realized gain (loss) on investments -- -- -- Net change in unrealized appreciation /depreciation on investments -- -- -- ------------ ------------- ------------- Net increase resulting from operations 2,925,450 3,560,546 14,142,055 - --------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From net From net investment income: Class A -- -- -- Class B -- -- -- Class C -- -- -- Class D -- -- -- Class Z (2,925,450) (3,560,546) (14,142,055) From net realized gains: Class A -- -- -- Class B -- -- -- Class C -- -- -- Class D -- -- -- Class Z -- -- -- ------------ ------------- ------------- Total distributions to shareholders (2,925,450) (3,560,546) (14,142,055) - --------------------------------------------------------------------------------------------- NET CAPITAL SHARE TRANSACTIONS (237,050,335) (237,911,017) (117,460,299) ------------ ------------- ------------- Net increase (decrease) in net assets (237,050,335) (237,911,017) (117,460,299) - --------------------------------------------------------------------------------------------- NET ASSETS Beginning of period 898,163,881 1,136,074,898 1,253,535,197 End of period 661,113,546 898,163,881 1,136,074,898 ------------ ------------- ------------- Undistributed (overdistributed) net investment income at end of period -- -- --
(a) Class C shares were initially offered on October 13, 2003. (b) The Fund changed its fiscal year end from December 31 to August 31. (c) Effective November 1, 2002, the Fund began offering four classes of shares: Class A, Class B, Class D and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. See Accompanying Notes to Financial Statements. Spread 134-135 STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________ COLUMBIA FUNDS
COMMON STOCK FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (c) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 64,115 1,177,263 10,945 170,123 2,138 31,961 Proceeds received in connection with merger -- -- -- -- -- -- Distributions reinvested 36 655 -- -- 2 24 Redemptions (10,766) (202,298) (117) (1,878) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 53,385 975,620 10,828 168,245 2,140 31,985 CLASS B Subscriptions 107,474 1,972,354 36,205 551,074 7,642 117,918 Distributions reinvested -- -- -- -- 25 365 Redemptions (28,529) (521,700) (7,327) (107,471) (328) (5,120) ----------- ------------ ----------- ------------- ----------- ------------ Net increase 78,945 1,450,654 28,878 443,603 7,339 113,163 CLASS C Subscriptions 9,537 173,802 -- -- -- -- Redemptions (8,096) (153,076) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 1,441 20,726 -- -- -- -- CLASS D Subscriptions 1,445 24,548 16,394 259,863 2,972 46,518 Distributions reinvested -- -- -- -- 7 105 Redemptions (808) (14,636) (11,846) (192,430) (968) (14,682) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 637 9,912 4,548 67,433 2,011 31,941 CLASS G Subscriptions -- -- -- -- -- -- Proceeds received in connection with merger -- -- -- -- -- -- Redemptions -- -- -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) -- -- -- -- -- -- CLASS Z Subscriptions 3,255,220 60,420,176 3,346,207 52,008,289 7,624,871 129,705,574* Proceeds received in connection with merger -- -- -- -- -- -- Distributions reinvested 124,008 2,261,915 -- -- 153,392 2,267,130 Redemptions (11,416,152) (212,061,766) (6,523,031) (102,375,697) (13,944,732) (232,525,563) ----------- ------------ ----------- ------------- ----------- ------------ Net decrease (8,036,924) (149,379,675) (3,176,824) (50,367,408) (6,166,469) (100,552,859)
GROWTH FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (d) -------------------------- -------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 60,274 1,566,301 50,514 1,127,877 6,415 135,724 Proceeds received in connection with merger -- -- -- -- 142,906 3,133,045 Distributions reinvested -- -- -- -- -- -- Redemptions (44,945) (1,160,956) (26,317) (600,530) (1,651) (35,026) ----------- ------------ ----------- ------------- ----------- ------------ Net increase 15,329 405,345 24,197 527,347 147,670 3,233,743 CLASS B Subscriptions 68,478 1,760,207 31,960 722,252 5,492 119,511 Distributions reinvested -- -- -- -- -- -- Redemptions (9,246) (238,352) (5,060) (113,169) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 59,232 1,521,855 26,900 609,083 5,492 119,511 CLASS C Subscriptions 12,996 335,297 -- -- -- -- Redemptions (4,898) (126,885) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 8,098 208,412 -- -- -- -- CLASS D Subscriptions 4,931 120,807 13,491 309,866 4,966 105,516 Distributions reinvested -- -- -- -- -- -- Redemptions (10,160) (252,432) (6,462) (148,435) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (5,229) (131,625) 7,029 161,431 4,966 105,516 CLASS G Subscriptions 4,481 115,330 5,008 110,114 780 16,449 Proceeds received in connection with merger -- -- -- -- 668,443 14,636,657 Redemptions (81,959) (2,115,829) (58,288) (1,271,125) (11,143) (235,662) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (77,478) (2,000,499) (53,280) (1,161,011) 658,080 14,417,444 CLASS Z Subscriptions 4,176,203 108,867,109 3,770,779 84,770,150 6,673,385 165,334,435 Proceeds received in connection with merger -- -- -- -- 4,131,819 90,545,496 Distributions reinvested -- -- -- -- 100 2,235 Redemptions (9,500,046) (247,836,369) (5,869,216) (128,773,493) (14,167,826) (346,428,134) ----------- ------------ ----------- ------------- ----------- ------------ Net decrease (5,323,843) (138,969,260) (2,098,437) (44,003,343) (3,362,522) (90,545,968)
* Includes $4,174 of securities received in an in-kind transfer. (a) Class C shares were initially offered on October 13, 2003. (b) The Fund changed its fiscal year end from December 31 to August 31. (c) Effective November 1, 2002, the Fund began offering four classes of shares: Class A, Class B, Class D and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. (d) Effective November 1, 2002, the Fund began offering five classes of shares: Class A, Class B, Class D, Class G and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. See Accompanying Notes to Financial Statements. Spread 136-137 STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________ COLUMBIA FUNDS
INTERNATIONAL STOCK FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (c) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 373,131 4,764,290 179,774 1,838,487 103,222 1,040,525 Proceeds received in connection with merger -- -- -- -- 2,026,408 20,243,813 Redemptions (433,072) (5,595,729) (278,832) (2,814,836) (120,925) (1,215,758) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (59,941) (831,439) (99,058) (976,349) 2,008,705 20,068,580 CLASS B Subscriptions 257,984 3,329,492 117,506 1,216,734 49,073 492,261 Proceeds received in connection with merger -- -- -- -- 1,117,525 11,164,070 Redemptions (378,452) (4,865,635) (289,533) (2,950,070) (76,334) (768,135) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (120,468) (1,536,143) (172,027) (1,733,336) 1,090,264 10,888,196 CLASS C Subscriptions 77,717 997,912 -- -- -- -- Redemptions (28,604) (374,843) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 49,113 623,069 -- -- -- -- CLASS D Subscriptions 8,022 101,833 67,591 669,176 16,230 162,310 Proceeds received in connection with merger -- -- -- -- 56,019 559,632 Redemptions (7,016) (89,891) (65,502) (642,271) (18,196) (181,537) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 1,006 11,942 2,089 26,905 54,053 540,405 CLASS G Subscriptions -- -- -- -- -- -- Proceeds received in connection with merger -- -- -- -- -- -- Redemptions -- -- -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) -- -- -- -- -- -- CLASS T Subscriptions -- -- -- -- -- -- Proceeds received in connection with merger -- -- -- -- -- -- Redemptions -- -- -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) -- -- -- -- -- -- CLASS Z Subscriptions 26,956,809 352,679,563 12,787,173 132,219,531 14,151,430 150,103,257 Proceeds received in connection with merger -- -- -- -- 1,426,094 14,246,687 Distributions reinvested 44,157 563,444 -- -- 48,107 478,672 Redemptions (6,345,590) (84,115,655) (5,233,439) (52,772,540) (12,634,316) (134,815,113) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 20,655,376 269,127,352 7,553,734 79,446,991 2,991,315 30,013,503
MID CAP GROWTH FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (d) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 291,660 5,434,656 389,366 6,472,166 15,672 237,394 Proceeds received in connection with merger -- -- -- -- 68,335 1,049,181 Redemptions (280,956) (5,162,016) (219,073) (3,745,690) (4,112) (61,507) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 10,704 272,640 170,293 2,726,476 79,895 1,225,068 CLASS B Subscriptions 125,421 2,339,336 47,439 745,476 7,078 106,916 Proceeds received in connection with merger -- -- -- -- 230,587 3,540,022 Redemptions (58,231) (1,066,216) (40,673) (637,724) (8,494) (127,352) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 67,190 1,273,120 6,766 107,752 229,171 3,519,586 CLASS C Subscriptions 35,421 677,522 -- -- -- -- Redemptions (5,599) (102,551) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 29,822 574,971 -- -- -- -- CLASS D Subscriptions 3,419 61,969 18,375 281,516 11,403 172,855 Proceeds received in connection with merger -- -- -- -- 18,373 282,040 Redemptions (8,721) (155,931) (6,698) (106,816) (431) (6,374) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (5,302) (93,962) 11,677 174,700 29,345 448,521 CLASS G Subscriptions 1,362 25,257 1,272 19,333 222 3,363 Proceeds received in connection with merger -- -- -- -- 51,696 794,054 Redemptions (7,466) (136,718) (7,460) (114,734) (913) (13,602) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (6,104) (111,461) (6,188) (95,401) 51,005 783,815 CLASS T Subscriptions 26,462 498,501 22,853 357,740 1,181 17,735 Proceeds received in connection with merger -- -- -- -- 1,766,763 27,163,275 Redemptions (195,050) (3,653,424) (127,510) (2,002,189) (12,506) (187,071) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (168,588) (3,154,923) (104,657) (1,644,449) 1,755,438 26,993,939 CLASS Z Subscriptions 6,071,998 114,038,896 15,558,486 243,718,260 23,256,300 377,870,023 Proceeds received in connection with merger -- -- -- -- 16,875,517 259,343,536 Distributions reinvested -- -- -- -- -- -- Redemptions (12,860,265) (240,032,810) (15,158,849) (237,069,456) (25,658,966) (417,250,145) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (6,788,267) (125,993,914) 399,637 6,648,804 14,472,851 219,963,414
(a) Class C shares were initially offered on October 13, 2003. (b) The Fund changed its fiscal year end from December 31 to August 31. (c) Effective November 1, 2002, the Fund began offering four classes of shares: Class A, Class B, Class D and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. (d) Effective November 1, 2002, the Fund began offering six classes of shares: Class A, Class B, Class D, Class G, Class T and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. See Accompanying Notes to Financial Statements. Spread 138-139 STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________ COLUMBIA FUNDS
SMALL CAP GROWTH FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 AUGUST 31, 2003 (a) DECEMBER 31, 2002 -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions -- -- -- -- -- -- Distributions reinvested -- -- -- -- -- -- Redemptions -- -- -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase -- -- -- -- -- -- CLASS B Subscriptions -- -- -- -- -- -- Distributions reinvested -- -- -- -- -- -- Redemptions -- -- -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase -- -- -- -- -- -- CLASS C Subscriptions -- -- -- -- -- -- Distributions reinvested -- -- -- -- -- -- Redemptions -- -- -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase -- -- -- -- -- -- CLASS D Subscriptions -- -- -- -- -- -- Distributions reinvested -- -- -- -- -- -- Redemptions -- -- -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) -- -- -- -- -- -- CLASS Z Subscriptions 10,261,845 240,997,658 8,361,804 154,165,644 19,739,178 396,004,404 Distributions reinvested -- -- -- -- -- -- Redemptions (14,285,853) (332,254,314) (9,108,258) (159,924,003) (17,331,161) (327,998,840) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (4,024,008) (91,256,656) (746,454) (5,758,359) 2,408,017 68,005,564
REAL ESTATE EQUITY FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (b) AUGUST 31, 2003 (a) DECEMBER 31, 2002 (c) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 1,626,030 36,784,752 655,533 12,613,973 50,286 889,637 Distributions reinvested 38,787 907,726 2,966 56,728 614 10,830 Redemptions (974,687) (22,619,991) (121,571) (2,319,879) (41) (701) ----------- ------------ ----------- ------------- ----------- ------------ Net increase 690,130 15,072,487 536,928 10,350,822 50,859 899,766 CLASS B Subscriptions 294,726 6,857,490 178,356 3,330,663 59,855 1,057,426 Distributions reinvested 7,307 170,161 860 16,519 426 7,526 Redemptions (90,228) (2,141,291) (12,411) (241,060) (27) (486) ----------- ------------ ----------- ------------- ----------- ------------ Net increase 211,805 4,886,360 166,805 3,106,122 60,254 1,064,466 CLASS C Subscriptions 106,764 2,516,283 -- -- -- -- Distributions reinvested 954 22,917 -- -- -- -- Redemptions (13,730) (323,033) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 93,988 2,216,167 -- -- -- -- CLASS D Subscriptions 45,881 1,008,069 147,439 2,763,824 20,247 355,423 Distributions reinvested 4,705 107,738 775 14,883 234 4,139 Redemptions (56,804) (1,309,816) (3,893) (76,027) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (6,218) (194,009) 144,321 2,702,680 20,481 359,562 CLASS Z Subscriptions 15,372,264 353,978,184 19,396,080 358,557,734 33,091,005 607,721,107 Distributions reinvested 1,287,979 29,504,145 497,422 9,407,709 1,648,657 30,201,439 Redemptions (24,582,645) (571,096,418) (21,373,984) (393,631,516) (25,701,989) (466,134,043) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (7,922,402) (187,614,089) (1,480,482) (25,666,073) 9,037,673 171,788,503
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class C shares were initially offered on October 13, 2003. (c) Effective November 1, 2002, the Fund began offering four classes of shares: Class A, Class B, Class D and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. See Accompanying Notes to Financial Statements. Spread 140-141 STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________ COLUMBIA FUNDS
TECHNOLOGY FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (c) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 618,899 4,301,075 170,882 795,971 266 1,013 Proceeds received in connection with merger -- -- -- -- -- -- Distributions reinvested -- -- -- -- -- -- Redemptions (249,120) (1,754,239) (107,548) (503,942) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 369,779 2,546,836 63,334 292,029 266 1,013 CLASS B Subscriptions 504,341 3,487,212 256,020 1,267,177 1,777 6,709 Proceeds received in connection with merger -- -- -- -- -- -- Redemptions (373,299) (2,552,196) (45,189) (239,637) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 131,042 935,016 210,831 1,027,540 1,777 6,709 CLASS C Subscriptions 92,300 649,419 -- -- -- -- Redemptions (16,223) (116,780) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 76,077 532,639 -- -- -- -- CLASS D Subscriptions 7,740 48,269 24,865 123,446 263 1,000 Proceeds received in connection with merger -- -- -- -- -- -- Redemptions (6,929) (49,293) (22,619) (115,105) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 811 (1,024) 2,246 8,341 263 1,000 CLASS Z Subscriptions 5,040,767 35,087,433 4,006,292 18,434,013 2,055,133 10,220,887 Proceeds received in connection with merger -- -- -- -- -- -- Distributions reinvested -- -- -- -- -- -- Redemptions (3,732,749) (26,213,812) (2,819,286) (12,505,086) (1,621,025) (7,491,197) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 1,308,018 8,873,621 1,187,006 5,928,927 434,108 2,729,690
STRATEGIC INVESTOR FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (c) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 2,239,525 40,978,091 75,306 1,062,103 16,466 220,586 Proceeds received in connection with merger -- -- -- -- 4,196,653 54,514,520 Distributions reinvested 13,874 239,722 -- -- -- -- Redemptions (602,009) (10,711,424) (383,804) (5,265,019) (135,115) (1,789,207) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 1,651,390 30,506,389 (308,498) (4,202,916) 4,078,004 52,945,899 CLASS B Subscriptions 1,117,349 20,292,528 63,797 901,976 23,766 316,907 Proceeds received in connection with merger -- -- -- -- 163,845 2,128,341 Redemptions (117,595) (2,110,515) (28,440) (390,511) (8,208) (108,351) ----------- ------------ ----------- ------------- ----------- ------------ Net increase 999,754 18,182,013 35,357 511,465 179,403 2,336,897 CLASS C Subscriptions 842,913 15,346,291 -- -- -- -- Redemptions (27,681) (499,929) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 815,232 14,846,362 -- -- -- -- CLASS D Subscriptions 1,168 20,852 27,649 397,532 1,170 15,708 Proceeds received in connection with merger -- -- -- -- 27,645 359,105 Redemptions (7,595) (136,369) (10,199) (149,190) (1,702) (22,407) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (6,427) (115,517) 17,450 248,342 27,113 352,406 CLASS Z Subscriptions 5,588,367 100,270,955 5,892,671 84,681,724 24,026,235 352,586,497 Proceeds received in connection with merger -- -- -- -- 180,824 2,348,913 Distributions reinvested 85,074 1,470,072 -- -- 171,442 2,187,604 Redemptions (5,130,203) (91,076,386) (7,620,153) (105,413,125) (18,027,370) (244,650,805) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 543,238 10,664,641 (1,727,482) (20,731,401) 6,351,131 112,472,209
(a) Class C shares were initially offered on October 13, 2003. (b) The Fund changed its fiscal year end from December 31 to August 31. (c) Effective November 1, 2002, the Fund began offering four classes of shares: Class A, Class B, Class D and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. See Accompanying Notes to Financial Statements. Spread 142-143 STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________ COLUMBIA FUNDS
BALANCED FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (c) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 110,630 2,249,214 33,607 621,075 8,288 147,819 Distributions reinvested 1,059 21,473 155 2,818 38 668 Redemptions (16,827) (342,215) (7,153) (133,619) (1) (20) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 94,862 1,928,472 26,609 490,274 8,325 148,467 CLASS B Subscriptions 254,329 5,127,102 157,057 2,842,073 34,842 622,186 Distributions reinvested 1,523 30,867 424 7,724 118 2,064 Redemptions (63,198) (1,271,030) (17,361) (311,808) (285) (5,115) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 192,654 3,886,939 140,120 2,537,989 34,675 619,135 CLASS C Subscriptions 41,424 839,284 -- -- -- -- Distributions reinvested 136 2,777 -- -- -- -- Redemptions (4,752) (94,839) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 36,808 747,222 -- -- -- -- CLASS D Subscriptions 7,349 141,785 27,277 487,690 25,391 456,181 Distributions reinvested 194 3,858 152 2,764 100 1,738 Redemptions (29,534) (593,961) (12,719) (224,597) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (21,991) (448,318) 14,710 265,857 25,491 457,919 CLASS G Subscriptions -- -- -- -- -- -- Proceeds received in connection with merger -- -- -- -- -- -- Distributions reinvested -- -- -- -- -- -- Redemptions -- -- -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) -- -- -- -- -- -- CLASS T Subscriptions -- -- -- -- -- -- Proceeds received in connection with merger -- -- -- -- -- -- Distributions reinvested -- -- -- -- -- -- Redemptions -- -- -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) -- -- -- -- -- -- CLASS Z Subscriptions 3,762,668 75,662,935 3,932,560 71,002,827 6,801,092 129,567,321 Proceeds received in connection with merger -- -- -- -- -- -- Distributions reinvested 535,817 10,708,630 379,248 6,864,708 1,137,024 20,929,510 Redemptions (13,282,884) (267,556,516) (9,102,129) (162,992,982) (17,367,916) (325,499,332) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (8,984,399) (181,184,951) (4,790,321) (85,125,447) (9,429,800) (175,002,501)
SHORT TERM BOND FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (d) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 2,363,890 20,470,127 4,593,712 40,026,783 648,705 5,597,578 Distributions reinvested 55,629 481,353 23,346 203,076 712 6,168 Redemptions (3,483,902) (30,155,847) (935,142) (8,119,243) (10,279) (88,636) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (1,064,383) (9,204,367) 3,681,916 32,110,616 639,138 5,515,110 CLASS B Subscriptions 1,020,370 8,811,024 2,912,411 25,355,903 724,659 6,252,006 Distributions reinvested 28,513 246,689 15,236 132,630 571 4,943 Redemptions (1,268,886) (10,976,173) (522,269) (4,540,064) (3,436) (29,668) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (220,003) (1,918,460) 2,405,378 20,948,469 721,794 6,227,281 CLASS C Subscriptions 446,619 3,866,656 -- -- -- -- Distributions reinvested 3,243 28,007 -- -- -- -- Redemptions (87,871) (758,972) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 361,991 3,135,691 -- -- -- -- CLASS D Subscriptions 195,345 1,693,396 1,835,008 15,983,699 630,014 5,435,948 Distributions reinvested 25,582 221,473 15,226 132,466 1,027 8,883 Redemptions (1,232,826) (10,651,859) (305,609) (2,657,104) (28,832) (248,791) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (1,011,899) (8,736,990) 1,544,625 13,459,061 602,209 5,196,040 CLASS G Subscriptions 584 5,059 19,116 168,060 8,127 69,466 Proceeds received in connection with merger -- -- -- -- 208,508 1,797,110 Distributions reinvested 2,071 17,922 2,089 18,273 235 2,041 Redemptions (67,631) (585,284) (50,125) (437,235) (730) (6,301) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (64,976) (562,303) (28,920) (250,902) 216,140 1,862,316 CLASS T Subscriptions 49,312 426,415 364,019 3,195,681 63,115 544,886 Proceeds received in connection with merger -- -- -- -- 3,594,178 30,982,225 Distributions reinvested 51,571 446,329 45,992 397,049 5,002 43,369 Redemptions (926,216) (7,999,639) (694,581) (6,031,954) (104,000) (898,480) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (825,333) (7,126,895) (284,570) (2,439,224) 3,558,295 30,672,000 CLASS Z Subscriptions 27,479,655 237,930,286 33,169,321 289,096,535 16,131,131 138,763,864 Proceeds received in connection with merger -- -- -- -- 22,121,411 190,685,846 Distributions reinvested 389,324 3,368,689 312,399 2,717,394 426,395 3,668,146 Redemptions (27,927,420) (241,618,684) (19,471,607) (169,227,269) (9,419,905) (80,968,926) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (58,441) (319,709) 14,010,113 122,586,660 29,259,032 252,148,930
(a) Class C shares were initially offered on October 13, 2003. (b) The Fund changed its fiscal year end from December 31 to August 31. (c) Effective November 1, 2002, the Fund began offering four classes of shares: Class A, Class B, Class D and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. (d) Effective November 1, 2002, the Fund began offering six classes of shares: Class A, Class B, Class D, Class G, Class T and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. See Accompanying Notes to Financial Statements. Spread 144-145 STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________ COLUMBIA FUNDS
FIXED INCOME SECURITIES FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (c) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 428,638 5,773,085 726,952 9,909,718 69,868 939,670 Distributions reinvested 23,362 314,190 4,853 65,705 19 252 Redemptions (220,544) (2,972,153) (239,158) (3,233,766) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 231,456 3,115,122 492,647 6,741,657 69,887 939,922 CLASS B Subscriptions 118,362 1,602,183 262,519 3,564,890 108,490 1,456,255 Distributions reinvested 8,019 107,908 3,019 41,001 148 1,998 Redemptions (135,602) (1,820,197) (43,299) (588,947) (257) (3,454) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (9,221) (110,106) 222,239 3,016,944 108,381 1,454,799 CLASS C Subscriptions 17,216 232,958 -- -- -- -- Distributions reinvested 209 2,809 -- -- -- -- Redemptions (5,682) (76,813) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 11,743 158,954 -- -- -- -- CLASS D Subscriptions 2,595 34,899 226,577 3,084,131 31,506 421,439 Distributions reinvested 3,148 42,410 1,525 20,715 38 510 Redemptions (73,680) (981,085) (62,333) (849,629) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (67,937) (903,776) 165,769 2,255,217 31,544 421,949 CLASS Z Subscriptions 5,273,336 71,044,891 13,907,825 189,047,650 22,424,154 299,097,456 Distributions reinvested 1,165,214 15,695,834 1,009,178 13,708,472 1,948,592 25,971,318 Redemptions (20,329,678) (273,815,667) (17,459,206) (236,640,077) (19,120,878) (254,637,100) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (13,891,128) (187,074,942) (2,542,203) (33,883,955) 5,251,868 70,431,674
NATIONAL MUNICIPAL BOND FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (c) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 99,258 1,025,824 53,632 553,278 6,496 66,135 Distributions reinvested 2,972 30,460 578 5,930 41 425 Redemptions (16,680) (167,045) (21,357) (221,347) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 85,550 889,239 32,853 337,861 6,537 66,560 CLASS B Subscriptions 27,156 280,129 59,020 608,830 21,761 222,588 Distributions reinvested 1,592 16,368 460 4,713 89 906 Redemptions (13,453) (138,405) (7,781) (79,981) (14,822) (150,595) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 15,295 158,092 51,699 533,562 7,028 72,899 CLASS C Subscriptions 79,238 814,330 -- -- -- -- Distributions reinvested 1,646 16,916 -- -- -- -- Redemptions (45,604) (462,894) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 35,280 368,352 -- -- -- -- CLASS D Subscriptions 4,795 49,669 39,862 410,170 8,119 83,038 Distributions reinvested 831 8,544 291 2,986 32 322 Redemptions (7,399) (75,050) (1,214) (12,486) (3,292) (33,443) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (1,773) (16,837) 38,939 400,670 4,859 49,917 CLASS Z Subscriptions 708,002 7,280,818 592,742 6,133,480 1,109,593 11,268,258 Distributions reinvested 45,767 470,822 37,677 387,633 64,411 649,959 Redemptions (1,011,506) (10,382,780) (812,144) (8,377,987) (981,956) (9,873,648) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (257,737) (2,631,140) (181,725) (1,856,874) 192,048 2,044,569
(a) Class C shares were initially offered on October 13, 2003. (b) The Fund changed its fiscal year end from December 31 to August 31. (c) Effective November 1, 2002, the Fund began offering four classes of shares: Class A, Class B, Class D and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. See Accompanying Notes to Financial Statements. Spread 146-147 STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________ COLUMBIA FUNDS
OREGON MUNICIPAL BOND FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (c) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 170,654 2,095,832 143,490 1,801,219 37,901 471,456 Distributions reinvested 6,574 81,626 1,224 15,231 236 2,929 Redemptions (56,206) (688,255) (8,295) (103,112) -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 121,022 1,489,203 136,419 1,713,338 38,137 474,385 CLASS B Subscriptions 35,938 446,223 52,585 657,645 33,682 419,900 Distributions reinvested 2,314 28,769 334 4,158 170 2,114 Redemptions (24,250) (302,376) (1,187) (15,171) (3,990) (49,521) ----------- ------------ ----------- ------------- ----------- ------------ Net increase 14,002 172,616 51,732 646,632 29,862 372,493 CLASS C Subscriptions 22,201 277,202 -- -- -- -- Distributions reinvested 227 2,808 -- -- -- -- Redemptions (84) (1,027) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 22,344 278,983 -- -- -- -- CLASS D Subscriptions 12,020 148,564 51,705 648,502 37,686 472,508 Distributions reinvested 2,010 24,984 628 7,849 109 1,356 Redemptions (7,665) (95,185) (31,042) (389,956) (1,979) (24,640) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) 6,365 78,363 21,291 266,395 35,816 449,224 CLASS Z Subscriptions 3,104,735 38,548,478 10,541,884 131,976,815 13,500,076 167,348,905 Distributions reinvested 1,524,565 18,948,258 910,985 11,381,588 1,896,736 23,528,226 Redemptions (9,361,486) (115,760,679) (12,534,293) (156,819,380) (15,383,205) (190,394,095) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (4,732,186) (58,263,943) (1,081,424) (13,460,977) 13,607 483,036
HIGH YIELD FUND ---------------------------------------------------------------------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 (a) AUGUST 31, 2003 (b) DECEMBER 31, 2002 (c) -------------------------- --------------------------- -------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS A Subscriptions 26,673,537 230,909,589 25,041,610 213,784,547 4,382,301 36,558,214 Distributions reinvested 1,708,530 14,793,686 450,683 3,856,013 10,597 88,687 Redemptions (12,505,103) (108,035,805) (6,784,180) (57,991,328) (329,642) (2,758,792) ----------- ------------ ----------- ------------- ----------- ------------ Net increase 15,876,964 137,667,470 18,708,113 159,649,232 4,063,256 33,888,109 CLASS B Subscriptions 3,063,956 26,566,619 9,063,139 77,330,185 2,007,189 16,716,021 Distributions reinvested 405,219 3,509,869 148,406 1,269,735 3,910 32,718 Redemptions (2,325,212) (20,086,982) (609,559) (5,189,719) (14,669) (122,617) ----------- ------------ ----------- ------------- ----------- ------------ Net increase 1,143,963 9,989,506 8,601,986 73,410,201 1,996,430 16,626,122 CLASS C Subscriptions 2,692,176 23,449,925 -- -- -- -- Distributions reinvested 40,122 346,368 -- -- -- -- Redemptions (416,181) (3,598,943) -- -- -- -- ----------- ------------ ----------- ------------- ----------- ------------ Net increase 2,316,117 20,197,350 -- -- -- -- CLASS D Subscriptions 1,187,729 10,250,062 10,747,325 91,694,699 2,151,932 17,940,183 Distributions reinvested 379,149 3,285,854 172,120 1,472,483 4,089 34,217 Redemptions (3,773,325) (32,589,124) (873,716) (7,476,795) (154) (1,285) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (2,206,447) (19,053,208) 10,045,729 85,690,387 2,155,867 17,973,115 CLASS Z Subscriptions 71,607,065 621,117,899 100,424,297 857,268,253 89,490,322 756,219,396 Distributions reinvested 5,291,757 45,884,199 3,670,269 31,357,503 3,386,949 28,634,236 Redemptions (81,442,188) (706,874,478) (47,029,601) (401,243,637) (35,810,741) (301,863,222) ----------- ------------ ----------- ------------- ----------- ------------ Net increase (decrease) (4,543,366) (39,872,380) 57,064,965 487,382,119 57,066,530 482,990,410
(a) Class C shares were initially offered on October 13, 2003. (b) The Fund changed its fiscal year end from December 31 to August 31. (c) Effective November 1, 2002, the Fund began offering four classes of shares: Class A, Class B, Class D and Class Z shares. Prior to November 1, 2002, the Fund was single class, which was subsequently renamed Class Z shares. See Accompanying Notes to Financial Statements. Spread 148-149 STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY ___________________ COLUMBIA FUNDS
DAILY INCOME COMPANY ------------------------------------------------------------------------------------------------ YEAR ENDED PERIOD ENDED YEAR ENDED AUGUST 31, 2004 AUGUST 31, 2003 (a) DECEMBER 31, 2002 ---------------------------- ---------------------------- -------------------------------- SHARES DOLLARS ($) SHARES DOLLARS ($) SHARES DOLLARS ($) - --------------------------------------------------------------------------------------------------------------------------------- CLASS Z Subscriptions 522,717,108 522,717,108 468,052,097 468,052,097 1,214,530,352 1,214,530,352 Distributions reinvested 2,669,462 2,669,462 4,068,237 4,068,237 14,408,323 14,408,323 Redemptions (762,436,905) (762,436,905) (710,031,351) (710,031,351) (1,346,398,974) (1,346,398,974) ------------ ------------ ------------ ------------ -------------- -------------- Net decrease (237,050,335) (237,050,335) (237,911,017) (237,911,017) (117,460,299) (117,460,299)
(a) The Fund changed its fiscal year end from December 31 to August 31. See Accompanying Notes to Financial Statements. 150 NOTES TO FINANCIAL STATEMENTS __________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS NOTE 1. ORGANIZATION The Columbia Funds are registered under the Investment Company Act of 1940 (the "1940 Act"), as amended, as open-end management investment companies. Information presented in these financial statements pertains to the following Funds (individually referred to as a "Fund", collectively referred to as the "Funds"): Columbia Common Stock Fund Columbia Growth Fund Columbia International Stock Fund Columbia Mid Cap Growth Fund Columbia Small Cap Growth Fund Columbia Real Estate Equity Fund Columbia Technology Fund Columbia Strategic Investor Fund Columbia Balanced Fund Columbia Short Term Bond Fund Columbia Fixed Income Securities Fund Columbia National Municipal Bond Fund Columbia Oregon Municipal Bond Fund Columbia High Yield Fund Columbia Daily Income Company All Funds are diversified except for the Columbia Real Estate Equity Fund, Columbia Technology Fund and Columbia Oregon Municipal Bond Fund, which are non-diversified. INVESTMENT GOALS The Columbia Common Stock Fund seeks capital appreciation by investing primarily in common stocks of large capitalization, well-established companies. The Columbia Growth Fund seeks capital appreciation by investing in stocks of companies expected to experience long-term, above average earnings growth. The Columbia International Stock Fund seeks long-term capital appreciation by investing in stocks issued by companies from at least three countries outside the United States. The Columbia Mid Cap Growth Fund seeks significant capital appreciation by investing in stocks of companies with a market capitalization, at the time of initial purchase, equal to or less than the largest stock in the Russell MidCap Index. The Columbia Small Cap Growth Fund seeks capital appreciation by investing in stocks of companies with a market capitalization, at the time of initial purchase, equal to or less than the largest stock in the S&P SmallCap 600 Index. The Columbia Real Estate Equity Fund seeks capital appreciation and above-average income by investing in stocks of companies principally engaged in the real estate industry, including real estate investment trusts (REITs). The Columbia Technology Fund seeks capital appreciation by investing in stocks of technology companies that may benefit from technological improvements, advancements or developments. The Columbia Strategic Investor Fund seeks long-term growth of capital by using a "value" approach to investing primarily in common stocks. The Columbia Balanced Fund seeks high total return by investing in common stocks and debt securities. The Columbia Short Term Bond Fund seeks a high level of current income consistent with a high degree of principal stability by investing primarily in short-term, investment-grade, fixed income securities. The Columbia Fixed Income Securities Fund seeks a high level of income by investing in a broad range of debt securities with intermediate to long-term maturities. The Columbia National Municipal Bond Fund seeks a high level of income exempt from federal income tax by investing primarily in municipal securities issued by state and local governments, their agencies and authorities, as well as the District of Columbia and U.S. territories and possessions. The Columbia Oregon Municipal Bond Fund seeks a high level of income exempt from federal and Oregon income tax by investing primarily in municipal securities issued by the state of Oregon. The Columbia High Yield Fund seeks a high level of income, with capital appreciation as a secondary goal, by investing in non-investment-grade, corporate debt securities. The Columbia Daily Income Company seeks a high level of income consistent with the maintenance of liquidity and the preservation of capital by investing primarily in high quality money market securities. FUND SHARES Each Fund may issue unlimited shares. Each of the Funds, except the Columbia Growth Fund, Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund, Columbia Short Term Bond Fund and Columbia Daily Income Company, offer five classes of shares: Class A, Class B, Class C, Class D and Class Z. The Columbia Small Cap Growth Fund and Columbia Daily Income Company offer only Class Z shares. The Columbia Growth Fund offers six classes of shares: Class A, Class B, Class C, Class D, Class G and Class Z. The Columbia Mid Cap Growth Fund and Columbia Short Term Bond Fund offer seven classes of shares: 151 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS Class A, Class B, Class C, Class D, Class G, Class T and Class Z. The Class C shares commenced operations effective October 13, 2003 for all Funds except the Columbia Small Cap Growth Fund and Columbia Daily Income Company. Each share class has its own expense structure. Class A and Class T shares are subject to a front-end sales charge based on the amount of initial investment. Class A and Class T shares purchased without an initial sales charge in accounts aggregating $1 million to $25 million at the time of purchase are subject to a 1.00% contingent deferred sales charge ("CDSC") on shares sold within eighteen months of the time of purchase. Class B and Class G shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class B shares will convert to Class A shares in a certain number of years after purchase, depending on the program under which shares were purchased. Class G shares will convert to Class T shares in eight years after purchase. Class C shares are subject to a 1.00% CDSC on shares sold within one year after purchase. Class D shares are subject to a front-end sales charge of 1.00% and a 1.00% CDSC on shares sold within one year after purchase. Effective October 13, 2003, Class D shares are closed to all new investors and new accounts. Existing Class D shareholders will be able to make additional purchases at any time. In addition, the Class D front-end sales charge of 1.00% is waived effective October 13, 2003. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in each Fund's prospectus. Effective October 13, 2003, the Columbia Special Fund, Columbia Small Cap Fund and Columbia Strategic Value Fund were renamed Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund and Columbia Strategic Investor Fund, respectively. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. SECURITY VALUATION Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets. Debt securities generally are valued by a pricing service approved by the Funds' Board of Directors, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Debt securities for which quotations are readily available are valued at an over-the-counter or exchange bid quotation. Certain debt securities, which tend to be more thinly traded and of lesser quality, are priced based on fundamental analysis of the financial condition of the issuer and the estimated value of any collateral. Valuations developed through pricing techniques may vary from the actual amounts realized upon sale of the securities, and the potential variation may be greater for those securities valued using fundamental analysis. Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value. Investments in other investment companies are valued at net asset value. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Foreign securities are generally valued at the last sale price on the foreign exchange or market on which they trade. If any foreign share prices are not readily available as a result of limited share activity, the securities are valued at the last sale price of the local shares in the principal market in which such securities are normally traded. 152 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange ("NYSE"). The values of such securities used in computing the net asset value of the Funds' shares are determined as of such times. Foreign currency exchange rates are generally determined at 2:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the values of such foreign securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE, which would not be reflected in the computation of the Funds' net asset value. If events materially affecting the values of such foreign securities occur and it is determined that market quotations are not reliable, then these foreign securities will be valued at their fair value using procedures approved by the Board of Directors. Investments for which market quotations are not readily available, or quotations which management believes are not appropriate, are valued at fair value under procedures approved by the Board of Directors. The Funds may use a systematic fair valuation model provided by an independent third party to value securities principally traded in foreign markets in order to adjust for possible stale pricing that may occur between the close of the foreign exchanges and the time for fair valuation. If a security is valued at a "fair value," that value is likely to be different from the last quoted market price for the security. Securities in the Columbia Daily Income Company are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. SECURITY TRANSACTIONS Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. FUTURES CONTRACTS Certain Funds may invest in municipal and U.S. Treasury futures contracts. The Funds will invest in these instruments to hedge against the effects of changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions, for duration management, or when the transactions are economically appropriate to the reduction of risk inherent in the management of the Funds and not for trading purposes. The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities, or (3) an inaccurate prediction by Columbia Management Advisors, Inc. of the future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Funds' Statement of Assets and Liabilities at any given time. Upon entering into a futures contract, each Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by the Funds equal to the daily change in the contract value and are recorded as variation margin payable or receivable and offset in unrealized gains or losses. Each Fund also identifies portfolio securities as segregated with the custodian in a separate account in an amount equal to the futures contract. The Funds recognize a realized gain or loss when the contract is closed or expires. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS Forward foreign currency exchange contracts are agreements to exchange one currency for another at a future date at a specified price. These contracts are used to minimize the exposure to foreign exchange rate fluctuations during the period between trade and settlement date of the contracts. Certain Funds may utilize forward foreign currency exchange contracts in connection with the settlement of purchases and sales of securities. Certain Funds may also enter into these contracts to hedge certain other foreign currency denominated assets. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge the Funds' investments against currency fluctuations. Forward currency contracts are valued daily at the current exchange rate of the underlying currency, resulting in unrealized gains (losses) which become realized at the time the foreign currency contracts are closed or 153 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS mature. Realized and unrealized gains (losses) arising from such transactions are included in net realized and unrealized gains (losses) on foreign currency transactions. The use of forward currency contracts does not eliminate fluctuations in the prices of the Funds' portfolio securities. While the maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened, exposure is typically limited to the change in value of the contract (in U.S. dollars) over the period it remains open. The Funds could also be exposed to risk if the counterparties of the contracts are unable to fulfill the terms of the contracts. REPURCHASE AGREEMENTS Each Fund may engage in repurchase agreement transactions with institutions that the Funds' investment advisor has determined are creditworthy. Each Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. Collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon each Fund's ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. DELAYED DELIVERY SECURITIES Certain Funds may trade securities on other than normal settlement terms, including securities purchased or sold on a "when-issued" basis. This may increase the risk if the other party to the transaction fails to deliver and causes the Fund to subsequently invest at less advantageous prices. The Fund identifies cash or liquid portfolio securities as segregated with the custodian in an amount equal to the delayed delivery commitment. INCOME RECOGNITION Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities. Corporate actions and dividend income are recorded on the ex-date, except for certain foreign securities which are recorded as soon after ex-date as the Funds become aware of such, net of non-reclaimable tax withholdings. Awards from class action litigation are recorded as a reduction of cost if the Funds still own the applicable securities on the payment date. If the Funds no longer own the applicable securities, the proceeds are recorded as realized gains. The Funds estimate components of distributions from real estate investment trusts (REITs). Distributions received in excess of income are recorded as a reduction of the cost of the related investments. If the Funds no longer own the applicable securities, any distributions received in excess of income are recorded as realized gains. Effective March 1, 2004, the Strategic Investor Fund adopted the policy to reduce cost of investments for financial statement purposes by the distributions received in excess of income from REITs. The cumulative effect of this accounting change did not impact the net assets of the Fund, but resulted in reclassifications as follows: DECREASE IN UNDISTRIBUTED DECREASE IN COST NET INVESTMENT INCOME ---------------- ------------------------- $ 61,074 $ 61,074 The effect of the change for the year ended August 31, 2004 is as follows: DECREASE IN DECREASE IN COST DIVIDEND INCOME ---------------- --------------- $ 24,216 $ 24,216 FOREIGN CURRENCY TRANSACTIONS The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day's exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes. For financial statement purposes, the Funds do not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments. 154 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS DETERMINATION OF CLASS NET ASSET VALUES All income, expenses (other than class-specific expenses, as shown on the Statements of Operations) and realized and unrealized gains (losses) are allocated to each class of the Funds on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class for the Columbia Short Term Bond Fund, Columbia Fixed Income Securities Fund, Columbia National Municipal Bond Fund, Columbia Oregon Municipal Bond Fund and Columbia High Yield Bond Fund. For all other Funds, income, expenses (other than class-specific expenses, as shown on the Statements of Operations), and realized and unrealized gains (losses), are allocated to each class of a Fund, based on the relative net assets of each class. FEDERAL INCOME TAX STATUS Each Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded. 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 30%. The Funds accrue for such foreign taxes on net realized and unrealized gains at the appropriate rate for each jurisdiction. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income of the Columbia Common Stock Fund, Columbia Growth Fund, Columbia International Stock Fund, Columbia Mid Cap Growth Fund, Columbia Small Cap Growth Fund, Columbia Technology Fund and Columbia Strategic Investor Fund are declared and paid annually. Dividends from net investment income of the Columbia Real Estate Equity Fund and Columbia Balanced Fund are declared and paid quarterly. Dividends from net investment income of the Columbia Short Term Bond Fund, Columbia Fixed Income Securities Fund, Columbia National Municipal Bond Fund, Columbia Oregon Municipal Bond Fund, and Columbia High Yield Fund are declared daily and paid monthly. Dividends from net investment income of the Columbia Daily Income Company are declared daily and paid daily. Net realized capital gains, if any, are distributed at least annually for all Funds. Additional distributions of net investment income and capital gains for each Fund may be made at the discretion of the Board of Directors in accordance with federal income tax regulations. NOTE 3. FEDERAL TAX INFORMATION The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds' capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. For the year ended August 31, 2004, permanent differences resulting primarily from differing treatments for amortization/accretion adjustments, distribution reclassifications, foreign capital gains tax, net operating loss reclassifications, REIT adjustments, market discount reclassification adjustments and foreign currency transactions were identified and reclassified among the components of the Funds' net assets as follows: 155 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS
UNDISTRIBUTED (OVERDISTRIBUTED) OR ACCUMULATED ACCUMULATED NET INVESTMENT NET REALIZED PAID-IN INCOME (LOSS) GAIN (LOSS) CAPITAL --------------------------------------------------- Columbia Common Stock Fund .......... $ -- $ -- $ -- Columbia Growth Fund ................ 305,651 -- (305,651) Columbia International Stock Fund ... (1,411,129) 1,411,129 -- Columbia Mid Cap Growth Fund ........ 7,722,780 68,419 (7,791,199) Columbia Small Cap Growth Fund ...... 6,909,177 200,237 (7,109,414) Columbia Real Estate Equity Fund .... (3,970,081) 9,666,660 (5,696,579) Columbia Technology Fund ............ 495,514 4,082 (499,596) Columbia Strategic Investor Fund .... (299,595) 299,595 -- Columbia Balanced Fund .............. 320,237 (320,237) -- Columbia Short Term Bond Fund ....... 178,354 (178,354) -- Columbia Fixed Income Securities Fund 863,580 (863,580) -- Columbia National Municipal Bond Fund 1,376 (1,375) (1) Columbia Oregon Municipal Bond Fund . (26,678) 26,678 -- Columbia High Yield Fund ............ 3,758,733 (3,758,733) -- Columbia Daily Income Company ....... -- -- --
Net investment income and net realized gains (losses), as disclosed on the Statements of Operations, and net assets were not affected by these reclassifications. The tax character of distributions paid during the year ended August 31, 2004, the period ended August 31, 2003 and the year ended December 31, 2002 was as follows:
YEAR ENDED AUGUST 31, 2004 ---------------------------------------------------------- TAX-EXEMPT ORDINARY LONG-TERM INCOME INCOME* CAPITAL GAINS TOTAL ---------------------------------------------------------- Columbia Common Stock Fund .......... $ -- $ 2,317,519 $ -- $ 2,317,519 Columbia International Stock Fund ... -- 1,290,808 -- 1,290,808 Columbia Real Estate Equity Fund .... -- 32,144,710 7,814,165 39,958,875 Columbia Strategic Investor Fund .... -- 1,745,832 -- 1,745,832 Columbia Balanced Fund .............. -- 10,897,644 -- 10,897,644 Columbia Short Term Bond Fund ....... -- 11,567,348 -- 11,567,348 Columbia Fixed Income Securities Fund -- 17,387,062 -- 17,387,062 Columbia National Municipal Bond Fund 540,162 7,054 115,247 662,463 Columbia Oregon Municipal Bond Fund . 18,792,984 95,636 5,369,297 24,257,917 Columbia High Yield Fund ............ -- 110,686,435 -- 110,686,435 Columbia Daily Income Fund .......... -- 2,925,450 -- 2,925,450
PERIOD ENDED AUGUST 31, 2003 ---------------------------------------------------------- TAX-EXEMPT ORDINARY LONG-TERM INCOME INCOME* CAPITAL GAINS TOTAL ---------------------------------------------------------- Columbia Real Estate Equity Fund .... $ -- $ 11,900,435 $ -- $ 11,900,435 Columbia Balanced Fund .............. -- 6,968,577 -- 6,968,577 Columbia Short Term Bond Fund ....... -- 7,429,972 -- 7,429,972 Columbia Fixed Income Securities Fund -- 14,327,387 -- 14,327,387 Columbia National Municipal Bond Fund 432,316 2,844 10,985 446,145 Columbia Oregon Municipal Bond Fund . 14,166,830 24,229 280,860 14,471,919 Columbia High Yield Fund ............ -- 53,476,396 -- 53,476,396 Columbia Daily Income Company ....... -- 3,560,546 -- 3,560,546
156 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS
YEAR ENDED DECEMBER 31, 2002 -------------------------------------------------------------------------- TAX-EXEMPT ORDINARY LONG-TERM TAX RETURN INCOME INCOME* CAPITAL GAINS OF CAPITAL TOTAL -------------------------------------------------------------------------- Columbia Common Stock Fund ............ $ -- $ 2,325,610 $ -- $ -- $ 2,325,610 Columbia International Stock Fund ..... -- 102,850 -- 403,799 506,649 Columbia Real Estate Equity Fund ...... -- 29,918,034 -- 3,915,328 33,833,362 Columbia Strategic Investor Fund ...... -- 2,143,571 71,885 -- 2,215,456 Columbia Balanced Fund ................ -- 21,206,395 -- -- 21,206,395 Columbia Short Term Bond Fund ......... -- 3,936,894 -- -- 3,936,894 Columbia Fixed Income Securities Fund . -- 25,343,852 -- -- 25,343,852 Columbia National Municipal Bond Fund . 599,360 2,439 64,967 -- 666,769 Columbia Oregon Municipal Bond Fund ... 22,352,069 200,224 4,822,914 -- 27,375,207 Columbia High Yield Fund .............. -- 30,342,904 -- -- 30,342,904 Columbia Daily Income Fund ............ -- 14,142,055 -- -- 14,142,055
* For tax purposes short-term capital gains distribution, if any, are considered ordinary income distributions. As of August 31, 2004, the components of distributable earnings on a tax basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED TAX-EXEMPT ORDINARY LONG-TERM NET UNREALIZED INCOME INCOME CAPITAL GAINS APPRECIATION* ------------------------------------------------------------------- Columbia Common Stock Fund .......... $ -- $ 776,105 $ -- $ 20,173,630 Columbia Growth Fund ................ -- -- -- 100,222,104 Columbia International Stock Fund ... -- 2,317,362 -- 39,872,784 Columbia Mid Cap Growth Fund ........ -- -- -- 23,420,933 Columbia Small Cap Growth Fund ...... -- -- -- 38,875,659 Columbia Real Estate Equity Fund** .. -- 10,982,843 88,123,111 274,609,973 Columbia Technology Fund ............ -- -- -- 1,365,887 Columbia Strategic Investor Fund .... -- 416,865 4,331,771 51,571,760 Columbia Balanced Fund .............. -- 1,643,641 -- 17,021,147 Columbia Short Term Bond Fund ....... -- 767,056 -- 1,827,552 Columbia Fixed Income Securities Fund -- 77,650 3,120,677 5,716,671 Columbia National Municipal Bond Fund 10,530 -- 63,102 679,092 Columbia Oregon Municipal Bond Fund . 524,781 259,694 1,092,335 20,946,896 Columbia High Yield Fund ............ -- 3,783,742 -- 31,285,729 Columbia Daily Income Fund .......... -- 5,169 -- --
* The differences between book-basis and tax-basis net unrealized appreciation are primarily due to deferral of losses from wash sales and amortization/accretion adjustments. ** Amount is estimated as of August 31, 2004. 157 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS Unrealized appreciation and depreciation at August 31, 2004, based on cost of investments for federal income tax purposes, and excluding any unrealized appreciation and depreciation from changes in the value of other assets and liabilities resulting from changes in exchange rates, was:
UNREALIZED UNREALIZED NET UNREALIZED APPRECIATION DEPRECIATION APPRECIATION ---------------------------------------------------- Columbia Common Stock Fund ............. $ 26,118,716 $ (5,945,086) $ 20,173,630 Columbia Growth Fund ................... 127,359,789 (27,137,685) 100,222,104 Columbia International Stock Fund ...... 55,639,502 (15,739,231) 39,900,271 Columbia Mid Cap Growth Fund ........... 68,505,431 (45,084,517) 23,420,914 Columbia Small Cap Growth Fund ......... 82,990,653 (44,114,994) 38,875,659 Columbia Real Estate Equity Fund ....... 282,636,613 (8,026,640) 274,609,973 Columbia Technology Fund ............... 2,971,294 (1,605,407) 1,365,887 Columbia Strategic Investor Fund ....... 55,097,155 (3,525,395) 51,571,760 Columbia Balanced Fund ................. 23,298,282 (6,277,135) 17,021,147 Columbia Short Term Bond Fund .......... 3,195,538 (1,367,986) 1,827,552 Columbia Fixed Income Securities Fund... 6,824,627 (1,107,956) 5,716,671 Columbia National Municipal Bond Fund... 684,523 (5,431) 679,092 Columbia Oregon Municipal Bond Fund .... 24,283,152 (3,336,256) 20,946,896 Columbia High Yield Fund ............... 41,149,475 (9,863,746) 31,285,729
The following capital loss carryforwards, determined as of August 31, 2004, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
YEAR OF EXPIRATION 2006 2007 2008 2009 2010 2011 TOTAL --------- ------------ ------------ ------------ ------------- ------------ ------------- Columbia Common Stock Fund.................. $ -- $ -- $ -- $ -- $ 49,129,624 $ 18,452,682 $ 67,582,306 Columbia Growth Fund ....... -- 12,669,149 7,477,47 97,550,243 201,393,752 43,705,919 362,796,542 Columbia International Stock Fund.................. -- 3,992,699 4,566,169 659,591 12,463,383 9,023,330 30,705,172 Columbia Mid Cap Growth Fund................. -- -- 13,161,549 15,799,915 95,645,403 4,954,493 129,561,360 Columbia Small Cap Growth Fund................. -- -- -- -- 97,865,374 -- 97,865,374 Columbia Technology Fund ... -- -- -- -- 1,969,604 -- 1,969,604 Columbia Balanced Fund ....................... -- -- -- -- 56,019,395 10,165,186 66,184,581 Columbia Short Term Bond Fund................... 256,035 -- 1,103,186 -- -- -- 1,359,221 Columbia High Yield Fund ... -- -- -- -- 16,290,578 -- 16,290,578 Columbia Daily Income Company..................... -- -- -- -- -- 320 320
Of the capital loss carryforwards attributable to Columbia Growth Fund, $20,146,628 ($12,669,149 expiring 08/31/07 and $7,477,479 expiring 08/31/08) remains from the Columbia Growth Fund's merger with Galaxy Large Cap Growth Fund (See Note 12). Of the capital loss carryforwards attributable to Columbia International Stock Fund, $5,920,504 ($3,992,699 expiring 08/31/07 and $1,927,805 expiring 08/31/08) and $3,297,955 ($2,638,364 expiring 08/31/08 and $659,591 expiring 08/31/09) remain from the Columbia International Stock Fund's merger with Liberty Newport International Equity Fund and Stein Roe International Fund, respectively (See Note 12). Of the capital loss carryforwards attributable to Columbia Mid Cap Growth Fund, $6,884,210 ($5,507,368 expiring 08/31/08 and $1,376,842 expiring 158 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS 08/31/09) and $19,700,034 ($7,654,181 expiring 08/31/08 and $12,045,853 expiring 08/31/09) remain from the Columbia Mid Cap Growth Fund's merger with Liberty Mid Cap Growth Fund and Stein Roe Capital Opportunities Fund, respectively (See Note 12). Of the capital loss carryforwards attributable to Columbia Short Term Bond Fund, $1,359,221 ($256,035 expiring 08/31/06 and $1,103,186 expiring 08/31/08) remain from the Columbia Short Term Bond Fund's merger with Galaxy Short Term Bond Fund (See Note 12). The following capital loss carryforwards, determined as of August 31, 2004, have been utilized, as follows: Columbia Common Stock Fund............................... $ 76,184,532 Columbia Growth Fund..................................... 75,408,256 Columbia International Stock Fund........................ 32,541,554 Columbia Mid Cap Growth Fund............................. 134,722,317 Columbia Small Cap Growth Fund........................... 107,502,797 Columbia Real Estate Equity Fund......................... 10,403,064 Columbia Technology Fund................................. 3,844,354 Columbia Strategic Investor Fund......................... 28,018,886 Columbia Balanced Fund................................... 79,618,254 Columbia Short Term Bond Fund............................ 747,167 Columbia Fixed Income Securities Fund.................... 2,593,677 Columbia High Yield Fund................................. 19,398,306 Under current tax rules, certain currency and capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. As of August 31, 2004, post-October currency losses and capital losses attributed to security transactions were deferred to September 1, 2004, as follows: CURRENCY CAPITAL LOSSES LOSSES ----------- --------- Columbia Mid Cap Growth Fund.............. $ 68,420 $ -- Columbia Technology Fund.................. 3,530 -- Columbia Short Term Bond Fund............. -- 344,395 Columbia Daily Income Company ............ -- 381 NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the Funds. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary of FleetBoston Financial Corporation ("FleetBoston"). Effective April 1, 2004, FleetBoston, including the Funds' investment advisor, transfer agent and distributor, was acquired by Bank of America Corporation ("BOA"). The acquisition did not change the way the Funds are managed, the investment personnel assigned to manage the Funds or the fees paid by the Funds. INVESTMENT ADVISORY FEE Columbia provides administrative and other services to the Funds in addition to investment advisory services. Columbia receives a monthly investment advisory fee based on the Fund's average daily net assets at the following annual rates: ANNUAL FEE RATE ------- Columbia Common Stock Fund 0.600% Columbia Small Cap Growth Fund 1.000% Columbia Real Estate Equity Fund 0.750% Columbia Technology Fund 1.000% Columbia Strategic Investor Fund 0.750% Columbia Balanced Fund 0.500% Columbia Short Term Bond Fund 0.500% Columbia Fixed Income Securities Fund 0.500% Columbia National Municipal Bond Fund 0.500% Columbia Oregon Municipal Bond Fund 0.500% Columbia High Yield Fund 0.600% FEES ON FEES ON FEES ON FEES ON AVERAGE AVERAGE AVERAGE AVERAGE NET ASSETS NET ASSETS NET ASSETS NET ASSETS FIRST $200 NEXT $300 NEXT $500 OVER $1 MILLION MILLION MILLION BILLION ---------- ---------- ---------- ---------- Columbia Growth Fund 0.750% 0.625% 0.500% 0.500% Columbia International Stock Fund 1.000% 1.000% 0.950% 0.900% Columbia Mid Cap Growth Fund 1.000% 1.000% 0.750% 0.750% Columbia Daily Income Company 0.500% 0.500% 0.450% 0.400% 159 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS Effective January 1, 2004, Columbia has voluntarily agreed to waive a portion of its investment advisory fee for the Columbia International Stock Fund at an annual rate of 0.10% of the Columbia International Stock Fund's average daily net assets. Columbia, at its discretion, may revise or discontinue this arrangement any time. For the year ended August 31, 2004, the effective investment advisory fee rates for the Columbia Growth Fund, Columbia International Stock Fund, Columbia Mid Cap Growth Fund and Columbia Daily Income Company were 0.60%, 0.92%, 0.87% and 0.48%, respectively. PRICING AND BOOKKEEPING FEES Columbia is responsible for providing pricing and bookkeeping services to the Funds under a pricing, bookkeeping and fund administration agreement. Under a separate agreement (the "Outsourcing Agreement"), Columbia has delegated certain of those functions to State Street Corporation ("State Street"). As a result, Columbia pays the total fees collected to State Street under the Outsourcing Agreement. Under its pricing, bookkeeping and fund administration agreement with the Funds, Columbia receives from each Fund an annual flat financial accounting fee of $25,000, an annual flat financial reporting fee of $19,965 and a monthly financial accounting fee at the annual rate of 0.02% of the average daily net assets of each Fund. The fee for a Fund in any year will not exceed $150,000. Prior to November 1, 2003, Columbia was entitled to receive a monthly pricing and bookkeeping fee at the annual rate of 0.01% of the average daily net assets of each Fund. The fee for a Fund in any year was not less than $25,000 and did not exceed $150,000. The Funds also pay additional fees for pricing services based on the number of securities held by each Fund. For the year ended August 31, 2004, the effective pricing and bookkeeping fee rates for the Funds, inclusive of out-of-pocket expenses, were as follows: Columbia Common Stock Fund 0.031% Columbia Growth Fund 0.016% Columbia International Stock Fund 0.027% Columbia Mid Cap Growth Fund 0.015% Columbia Small Cap Growth Fund 0.021% Columbia Real Estate Equity Fund 0.016% Columbia Technology Fund 0.160% Columbia Strategic Investor Fund 0.033% Columbia Balanced Fund 0.030% Columbia Short Term Bond Fund 0.033% Columbia Fixed Income Securities Fund 0.035% Columbia National Municipal Bond Fund 0.428% Columbia Oregon Municipal Bond Fund 0.039% Columbia High Yield Fund 0.011% Columbia Daily Income Company 0.019% TRANSFER AGENT FEE Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia, provides shareholder services to the Funds. For such services, the Transfer Agent receives a fee per open account, in addition to reimbursement for certain out-of-pocket expenses. The annual charges per open account for the transfer agent fees are as follows: PER OPEN ACCOUNT FEE RATE ---------- Columbia Common Stock Fund $ 28.00 Columbia Growth Fund $ 28.00 Columbia International Stock Fund $ 28.00 Columbia Mid Cap Growth Fund $ 28.00 Columbia Small Cap Growth Fund $ 28.00 Columbia Real Estate Equity Fund $ 28.00 Columbia Technology Fund $ 28.00 Columbia Strategic Investor Fund $ 28.00 Columbia Balanced Fund $ 28.00 Columbia Short Term Bond Fund $ 34.00 Columbia Fixed Income Securities Fund $ 34.00 Columbia National Municipal Bond Fund $ 34.00 Columbia Oregon Municipal Bond Fund $ 34.00 Columbia High Yield Fund $ 34.00 Columbia Daily Income Company $ 33.50 160 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS Prior to November 1, 2003, the Transfer Agent was entitled to receive a transfer agent fee for all Funds' Class Z shares, with the exception of Columbia National Municipal Bond Fund, based on the number of shareholder accounts or a minimum of $1,500 per month. Columbia National Municipal Bond Fund was not subject to the monthly $1,500 fee minimum. For Class A, Class B, Class C, Class D, Class G and Class T shares, the Transfer Agent was entitled to receive a monthly fee at the lower of: 1) the monthly fee for Class Z shares described above as applied to Class A, Class B, Class C, Class D, Class G and Class T shares, or 2) a fee based upon an annual rate of 0.06% of the average daily net assets attributable to Class A, Class B, Class C, Class D, Class G and Class T shares, plus a per transaction fee and a per account fee. The Transfer Agent was also entitled to receive reimbursement for certain out-of-pocket expenses. Effective June 1, 2004, the Transfer Agent has voluntarily agreed to waive a portion of the transfer agent fees for the Columbia International Stock Fund, Columbia Mid Cap Growth Fund and Columbia Strategic Investor Fund at the annual rates of 0.11%, 0.05% and 0.03%, respectively. Prior to June 1, 2004, the Transfer Agent contractually waived transfer agent fees for the Funds based on each class' average daily net assets at the following annual rates: CLASS A CLASS B CLASS C CLASS D CLASS Z ------- ------- ------- ------- ------- Columbia International Stock Fund............. -- 0.11% 0.36% 0.63% 0.09% Columbia Mid Cap Growth Fund............ 0.01% 0.12% 0.09% 0.09% 0.05% Columbia Strategic Investor Fund.......... -- 0.23% 0.15% 0.15% 0.03% Effective October 13, 2003, Liberty Funds Services, Inc. was renamed Columbia Funds Services, Inc. UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES Columbia Funds Distributor, Inc., (the "Distributor"), an affiliate of Columbia, is the principal underwriter of the Funds. For the year ended August 31, 2004, the Distributor has retained net underwriting discounts and CDSC fees as follows:
FRONT-END SALES CHARGE CONTINGENT DEFERRED SALES CHARGE (CDSC) ----------------- ---------------------------------------------------------------- CLASS A CLASS T CLASS A CLASS B CLASS C CLASS D CLASS G CLASS T ------- ------- ------- --------- --------- ------- --------- ------- Columbia Common Stock Fund .......... $ 1,831 $ -- $ -- $ 2,263 $ 68,841 $ -- $ -- $ -- Columbia Growth Fund ....... 4,884 -- 9 3,110 36 321 26,155 -- Columbia International Stock Fund.... 7,709 -- 19 19,916 136 28 -- -- Columbia Mid Cap Growth Fund ........ 8,809 208 -- 13,824 163 121 3,042 -- Columbia Real Estate Equity Fund.... 32,163 -- 25,000 23,451 841 5,486 -- -- Columbia Technology Fund.... 8,021 -- -- 40,537 634 260 -- -- Columbia Strategic Investor Fund.... 93,136 -- 487 26,857 1,231 10 -- -- Columbia Balanced Fund ..... 4,250 -- -- 17,399 226 66 -- -- Columbia Short Term Bond Fund ....... 25,773 -- 47,961 135,786 1,353 19,899 2,079 -- Columbia Fixed Income Securities Fund ............ 4,904 -- 728 27,764 -- 1,530 -- -- Columbia National Municipal Bond Fund ........ 3,550 -- -- 1,512 936 48 -- -- Columbia Oregon Municipal Bond Fund ........ 2,214 -- -- 9,827 -- 819 -- -- Columbia High Yield Fund ... 97,655 -- 66,542 320,253 12,611 70,511 -- --
161 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS The Funds have adopted a 12b-1 plan (the "Plan") which requires the payment of a monthly service and distribution fee to the Distributor based on the average daily net assets of each Fund at the following annual rates:
DISTRIBUTION FEE --------------------------------------------------- CLASS A(a) CLASS B CLASS C CLASS D CLASS G ---------- ------- ------- ------- ------- Columbia Common Stock Fund .......... 0.10% 0.75% 0.75% 0.75% -- Columbia Growth Fund ................ 0.10% 0.75% 0.75% 0.75% 0.65%(b) Columbia International Stock Fund ... -- 0.75% 0.75% 0.75% -- Columbia Mid Cap Growth Fund ........ 0.10% 0.75% 0.75% 0.75% 0.65%(b) Columbia Real Estate Equity Fund .... 0.10% 0.75% 0.75% 0.75% -- Columbia Technology Fund ............ 0.10% 0.75% 0.75% 0.75% -- Columbia Strategic Investor Fund .... -- 0.75% 0.75% 0.75% -- Columbia Balanced Fund .............. 0.10% 0.75% 0.75% 0.75% -- Columbia Short Term Bond Fund ....... 0.10% 0.75% 0.75% 0.75% 0.65%(c) Columbia Fixed Income Securities Fund 0.10% 0.75% 0.75% 0.75% -- Columbia National Municipal Bond Fund 0.10% 0.75% 0.75% 0.75% -- Columbia Oregon Municipal Bond Fund . 0.10% 0.75% 0.75% 0.75% -- Columbia High Yield Fund ............ 0.10% 0.75% 0.75% 0.75% --
SERVICE FEE --------------------------------------------------- CLASS A(a) CLASS B CLASS C CLASS D CLASS G ---------- ------- ------- ------- ------- Columbia Common Stock Fund........... 0.25% 0.25% 0.25% 0.25% -- Columbia Growth Fund................. 0.25% 0.25% 0.25% 0.25% 0.50%(b) Columbia International Stock Fund.... 0.25% 0.25% 0.25% 0.25% -- Columbia Mid Cap Growth Fund......... 0.25% 0.25% 0.25% 0.25% 0.50%(b) Columbia Real Estate Equity Fund..... 0.25% 0.25% 0.25% 0.25% -- Columbia Technology Fund............. 0.25% 0.25% 0.25% 0.25% -- Columbia Strategic Investor Fund..... 0.25% 0.25% 0.25% 0.25% -- Columbia Balanced Fund............... 0.25% 0.25% 0.25% 0.25% -- Columbia Short Term Bond Fund........ 0.25% 0.25% 0.25% 0.25% 0.50%(c) Columbia Fixed Income Securities Fund 0.25% 0.25% 0.25% 0.25% -- Columbia National Municipal Bond Fund 0.25% 0.25% 0.25% 0.25% -- Columbia Oregon Municipal Bond Fund.. 0.25% 0.25% 0.25% 0.25% -- Columbia High Yield Fund............. 0.25% 0.25% 0.25% 0.25% --
(a) The Fund's Board of Directors currently limits payments under the Plan for Class A shares to 0.25% annually of the Class A average daily net assets. (b) The Distributor has contractually agreed to limit a portion of the Class G distribution and service fees so that combined the fee does exceed 0.95% annually of the Class G shares average daily net assets. Of the 0.50% service fee, 0.25% relates to shareholder liaison fees and 0.25% relates to administration support fees. (c) The Distributor has contractually agreed to limit a portion of the Class G distribution and service fees so that combined the fee does exceed 0.80% annually of the Class G shares average daily net assets. Of the 0.50% service fee, 0.25% relates to shareholder liaison fees and 0.25% relates to administration support fees. 162 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS The Distributor has voluntarily agreed to waive a portion of the Class C and Class D distribution and service fees so that combined these fees do not exceed the annual rates on the average daily net assets of Class C and Class D shares of each Fund as follows: Columbia Short Term Bond Fund........................... 0.40% Columbia Fixed Income Securities Fund................... 0.85% Columbia National Municipal Bond Fund................... 0.65% Columbia Oregon Municipal Bond Fund..................... 0.65% Columbia High Yield Fund................................ 0.85% The CDSC and the fees received from the Plan are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares. Effective October 13, 2003, Liberty Funds Distributor, Inc. was renamed Columbia Funds Distributor, Inc. SHAREHOLDER SERVICES FEES The Columbia Mid Cap Growth Fund and Columbia Short Term Bond Fund have adopted shareholder services plans that permit them to pay for certain services provided to Class T shareholders by their financial advisors. The annual service fee may equal up to 0.50% annually for Class T shares, but will not exceed each Fund's net investment income attributable to Class T shares. The Columbia Mid Cap Growth Fund and Columbia Short Term Bond Fund do not intend to pay more than 0.30% and 0.15%, respectively, for annual Class T shareholder services fees. EXPENSE LIMITS AND FEE REIMBURSEMENTS Columbia has agreed to waive advisory fees and reimburse certain expenses to the extent that total expenses (exclusive of distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, if any) exceed 1.65% and 0.65% annually of the average daily net assets for the Columbia Technology Fund and Columbia National Municipal Bond Fund, respectively. These arrangements may be revised or discontinued at any time. Effective June 1, 2004, Columbia has voluntarily agreed to reimburse certain expenses of the Columbia Short Term Bond Fund to the extent that total expenses (exclusive of distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, if any) exceed 0.66% annually of the Fund's average daily net assets. For the period November 1, 2003 through May 31, 2004, Columbia had contractually agreed to maintain this waiver. Prior to November 1, 2003, Columbia voluntarily reimbursed the Columbia Short Term Bond Fund at the annual rate of 0.75% of the Fund's average daily net assets. In addition, prior to November 1, 2003, Columbia or its affiliates reimbursed class specific transfer agency fees for the Columbia Short Term Bond Fund to the extent necessary to prevent total annual operating expenses from exceeding 1.64% and 0.98% for Class G and Class T, respectively. CUSTODY CREDITS Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement. FEES PAID TO OFFICERS AND DIRECTORS The Funds pay no compensation to their officers, all of whom are employees of Columbia or its affiliates. The Funds' Directors may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Funds' assets. OTHER Columbia provides certain services to the Funds related to Sarbanes-Oxley compliance. This amount is included in "Other expenses" on the Statements of Operations. For the year ended August 31, 2004, the Funds paid fees to Columbia for such services as follows: Columbia Common Stock Fund.............................. $ 1,986 Columbia Growth Fund.................................... 2,770 Columbia International Stock Fund....................... 1,769 Columbia Mid Cap Growth Fund............................ 2,942 Columbia Small Cap Growth Fund.......................... 2,315 Columbia Real Estate Equity Fund........................ 2,749 Columbia Technology Fund................................ 1,323 Columbia Strategic Investor Fund........................ 1,756 Columbia Balanced Fund.................................. 2,324 Columbia Short Term Bond Fund........................... 2,154 Columbia Fixed Income Securities Fund................... 2,106 Columbia National Municipal Bond Fund................... 1,311 Columbia Oregon Municipal Bond Fund..................... 2,061 Columbia High Yield Fund................................ 3,849 Columbia Daily Income Company........................... 2,697 163 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS NOTE 5. PORTFOLIO INFORMATION For the year ended August 31, 2004, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were as follows:
U.S. GOVERNMENT OTHER INVESTMENT SECURITIES SECURITIES -------------------------------- ----------------------------------- PURCHASES SALES PURCHASES SALES -------------- -------------- ---------------- ---------------- Columbia Common Stock Fund.................... $ -- $ -- $ 748,533,904 $ 898,454,700 Columbia Growth Fund.......................... -- -- 1,189,053,121 1,328,104,478 Columbia International Stock Fund............. -- -- 682,858,544 421,496,359 Columbia Mid Cap Growth Fund.................. -- -- 1,362,173,016 1,491,785,047 Columbia Small Cap Growth Fund................ -- -- 796,010,547 862,605,809 Columbia Real Estate Equity Fund.............. -- -- 261,518,688 408,631,429 Columbia Technology Fund...................... -- -- 178,041,291 164,791,129 Columbia Strategic Investor Fund.............. -- -- 327,456,872 289,600,245 Columbia Balanced Fund........................ 139,140,733 135,787,335 782,126,138 958,240,858 Columbia Short Term Bond Fund................. 194,582,088 184,325,701 205,085,120 195,350,487 Columbia Fixed Income Securities Fund......... 394,776,942 489,404,884 108,404,310 181,617,760 Columbia National Municipal Bond Fund......... -- -- 3,185,003 5,552,962 Columbia Oregon Municipal Bond Fund........... -- -- 50,097,232 115,372,612 Columbia High Yield Fund...................... -- -- 793,230,400 654,592,723
NOTE 6. OTHER RELATED PARTY TRANSACTIONS During the year ended August 31, 2004, the Columbia Strategic Investor Fund used Fleet Institutional Services ("FIS"), a wholly owned subsidiary of BOA, as a broker. Total commissions paid to FIS during the year were $500. NOTE 7. REDEMPTION FEES The Columbia International Stock Fund imposes a 2.00% redemption fee to shareholders of Class Z shares who redeem shares held for 60 days or less. Redemption fees, which are retained by the Fund, are accounted for as an addition to paid-in capital and are allocated to each class proportionately for purposes of determining the net asset value of each class. Prior to October 9, 2003, redemption fees were recorded as a component of paid-in capital on Class Z shares. For the year ended August 31, 2004, the redemption fees for the Class Z shares of the Fund amounted to $68,059. NOTE 8. LINE OF CREDIT Effective July 23, 2004, the Funds and other affiliated funds began participating in a $350,000,000 credit facility, which is used for temporary or emergency purposes to facilitate portfolio liquidity. Interest is charged to each Fund based on its borrowings. In addition, each Fund has agreed to pay commitment fees on its pro-rata portion of the unutilized line of credit. The commitment fee is included in "Other expenses" on the Statements of Operations. Prior to July 23, 2004, the Funds participated in a $100,000,000 uncommitted line of credit along with the CMG Fund Trust, an affiliated group of funds managed by the investment advisor. The uncommitted line of credit, which was scheduled to expire on July 2, 2004, was extended by the Trust and expired on July 23, 2004. For the year ended August 31, 2004, the average daily loan balance outstanding on days where borrowings existed for the Columbia Common Stock Fund was $17,313,000 at a weighted average interest rate of 1.50%. For the year ended August 31, 2004, the Funds, other than the Columbia Common Stock Fund, did not borrow under these arrangements. 164 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS NOTE 9. OTHER During the year ended August 31, 2004, the Columbia Growth Fund purchased shares of News Corp., Ltd., ADR in error. This position was subsequently sold at a loss of $2,743 and the Fund was reimbursed by Columbia. During the year ended August 31, 2004, the Columbia International Stock Fund purchased shares of Compass Group PLC and foreign currency in error. These positions were subsequently sold at a loss of $763,204 and the Fund was reimbursed by Columbia. NOTE 10. SHARES OF BENEFICIAL INTEREST As of August 31, 2004, the Funds had shareholders that held greater than 5% of the shares outstanding. Subscription and redemption activity of these shareholders may have a material effect on the Funds. The numbers of shareholders greater than 5% and the aggregate percentage of shares outstanding held were as follows: % OF SHARES NUMBER OF OUTSTANDING SHAREHOLDERS HELD ------------ ----------- Columbia Growth Fund........................ 1 10% Columbia International Stock Fund........... 2 62% Columbia Mid Cap Growth Fund................ 1 11% Columbia Real Estate Equity Fund............ 2 22% Columbia Short Term Bond Fund............... 3 60% Columbia National Municipal Bond Fund....................... 1 15% Columbia High Yeild Fund.................... 2 31% NOTE 11. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES FOREIGN SECURITIES There are certain additional risks involved when investing in foreign securities that are not inherent with investments in domestic securities. These risks may involve foreign currency exchange rate fluctuations, adverse political and economic developments and the possible prevention of currency exchange or other foreign governmental laws or restrictions. In addition, the liquidity of foreign securities may be more limited than that of domestic securities. Investments in emerging market countries are subject to additional risk. The risk of foreign investments is typically increased in less developed countries. These countries are also more likely to experience high levels of inflation, deflation or currency devaluation which could hurt their economies and securities markets. GEOGRAPHIC CONCENTRATION The Columbia National Municipal Bond Fund has greater than 5% of its total investments at August 31, 2004 invested in debt obligations issued by the states of Illinois, Oregon and Washington. Also on this date, the Columbia Oregon Municipal Bond Fund has greater than 5% of its total investments invested in debt obligations issued by the state of Oregon. The Funds are also invested in each state's respective political subdivisions, agencies and public authorities to obtain funds for various purposes. These Funds are more susceptible to economic and political factors adversely affecting issuers of each respective specific state's municipal securities than are municipal bond funds that are not concentrated to the same extent in these issuers. HIGH-YIELD SECURITIES Investing in high-yield securities may involve greater credit risk and considerations not typically associated with investing in U.S. Government bonds and other higher quality fixed income securities. These securities are non-investment grade securities, often referred to as "junk bonds." Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high-yield securities may be less liquid due to the extent that there is no established retail secondary market and because of a decline in the value of such securities. INDUSTRY FOCUS The Funds may focus their investments in certain industries, subjecting them to greater risk than a fund that is more diversified. ISSUER FOCUS As non-diversified funds, the Columbia Real Estate Equity Fund, the Columbia Technology Fund and the Columbia Oregon Municipal Bond Fund may invest a greater percentage of its total assets in the securities of fewer issuers than a diversified fund. The Funds may, therefore, have a greater risk of loss from a few issuers than a similar fund that invests more broadly. 165 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS LEGAL PROCEEDINGS Columbia, the Distributor, and certain of their affiliates (collectively, "The Columbia Group") have received information requests and subpoenas from various regulatory and law enforcement authorities in connection with their investigations of late trading and market timing in mutual funds as well as other industry wide issues. The Columbia Group has not uncovered any instances where Columbia or the Distributor were knowingly involved in late trading of mutual fund shares. On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a civil complaint in the United States District Court for the District of Massachusetts against Columbia and the Distributor, alleging that they had violated certain provisions of the federal securities laws in connection with trading activity in mutual fund shares. Also on February 24, 2004, the New York Attorney General ("NYAG") filed a civil complaint in New York Supreme Court, County of New York against Columbia and the Distributor alleging that Columbia and the Distributor had violated certain New York antifraud statutes. If either Columbia or the Distributor is unsuccessful in its defense of these proceedings, it could be barred from serving as an investment advisor or distributor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could prevent Columbia, the Distributor or any company that is an affiliated person of Columbia and the Distributor from serving as an investment advisor or distributor for any registered investment company, including your fund. Your fund has been informed by Columbia and the Distributor that, if these results occur, they will seek exemptive relief from the SEC to permit them to continue to serve as your fund's investment advisor and distributor. There is no assurance that such exemptive relief will be granted. On March 15, 2004, Columbia and the Distributor entered into agreements in principle with the SEC Division of Enforcement and NYAG in settlement of the charges. Under the agreements, Columbia and the Distributor agreed, among other things, to the following conditions: payment of $70 million in disgorgement; payment of $70 million in civil penalties; an order requiring Columbia and the Distributor to cease and desist from violations of the antifraud provisions and other provisions of the federal securities laws; governance changes designed to maintain the independence of the mutual fund boards of trustees and ensure compliance with securities laws and their fiduciary duties; and retention of an independent consultant to review Columbia's and the Distributor's compliance policies and procedures. The agreement requires the final approval of the SEC. In a separate agreement with the NYAG, the Columbia Group and its affiliate Banc of America Capital Management, LLC have agreed to collectively reduce mutual fund fees by $160 million over a five-year period. As a result of these matters or any adverse publicity or other developments resulting from them, there may be increased redemptions or reduced sales of fund shares, which could increase transaction costs or operating expenses, or have other adverse consequences for the funds. In connection with the events described in detail above, various parties have filed suit against certain funds, their Boards and/or FleetBoston (and affiliated entities). More than 300 cases (including those filed against entities unaffiliated with the funds, their Boards and/or FleetBoston and its affiliated entities) have been consolidated in a multi-district proceeding and transferred to the Federal District Court in Maryland. Recently, certain Columbia funds and affiliated entities have been named as defendants in several derivative actions under various sections of the Investment Company Act of 1940, as amended, alleging, among other things, that the fees and expenses paid by those funds are excessive. The funds and the other defendants to these actions, including Columbia and various affiliates, certain other mutual funds advised by Columbia and its affiliates, and various directors of such funds, have denied these allegations and are contesting the plaintiffs' claims. These suits and certain regulatory investigations are ongoing, however, based on currently available information, Columbia believes that these lawsuits are without merit, that the likelihood they will have a material adverse impact on any fund is remote, and that the lawsuits are not likely to materially affect its ability to provide investment management services to its clients, including the funds. 166 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS For the year ended August 31, 2004, Columbia has assumed legal, consulting services and Trustees' fees incurred by the Funds in connection with these matters as follows: Columbia Common Stock Fund............................. $ 17,852 Columbia Growth Fund................................... 42,776 Columbia International Stock Fund...................... 27,108 Columbia Mid Cap Growth Fund........................... 46,903 Columbia Small Cap Growth Fund......................... 33,352 Columbia Real Estate Equity Fund....................... 43,675 Columbia Technology Fund............................... 1,891 Columbia Strategic Investor Fund....................... 17,368 Columbia Balanced Fund................................. 27,135 Columbia Short Term Bond Fund.......................... 25,190 Columbia Fixed Income Securities Fund.................. 17,352 Columbia National Municipal Bond Fund.................. 700 Columbia Oregon Municipal Bond Fund.................... 21,237 Columbia High Yield Fund............................... 81,196 NOTE 12. BUSINESS COMBINATIONS AND MERGERS FUND MERGERS As of the end of business on December 6, 2002, the Galaxy Large Cap Growth Fund merged into the Columbia Growth Fund as follows: NET ASSETS OF THE GALAXY LARGE CAP SHARES GROWTH FUND UNREALIZED ISSUED RECEIVED DEPRECIATION 1 -------------- -------------- --------------- 4,943,168 $ 108,315,198 $ (8,049,749) NET ASSETS NET ASSETS NET ASSETS OF THE GALAXY OF THE OF THE LARGE CAP COLUMBIA COLUMBIA GROWTH FUND GROWTH FUND GROWTH FUND IMMEDIATELY IMMEDIATELY PRIOR TO PRIOR TO AFTER COMBINATION COMBINATION COMBINATION -------------- -------------- --------------- $ 798,985,765 $ 108,315,198 $ 907,300,963 As of the end of business on November 1, 2002, the Stein Roe International Fund ("SRIF") and Liberty Newport International Equity Fund ("LNIEF") merged into the Columbia International Stock Fund as follows: NET ASSETS OF SRIF SHARES AND LNIEF UNREALIZED ISSUED RECEIVED DEPRECIATION 1 -------------- -------------- -------------- SRIF 1,426,029 $ 14,246,030 $ (214,705) LNIF 3,200,017 31,968,17 (948,177) NET ASSETS NET ASSETS OF THE OF THE NET ASSETS COLUMBIA COLUMBIA OF SRIF INTERNATIONAL INTERNATIONAL AND LNIEF STOCK FUND STOCK FUND IMMEDIATELY IMMEDIATELY PRIOR TO PRIOR TO AFTER COMBINATION COMBINATION COMBINATION -------------- -------------- --------------- $ 125,693,014 $ 46,214,202 $ 171,907,216 As of the end of business on November 1, 2002, the Liberty Midcap Growth Fund ("LMCGF"), Galaxy Growth II Fund ("GGIIF") and Stein Roe Capital Opportunities Fund ("SRCOF") merged into the Columbia Mid Cap Growth Fund as follows: NET ASSETS OF LMCGF, GGIIF SHARES AND SRCOF UNREALIZED ISSUED RECEIVED APPRECIATION 1 -------------- -------------- --------------- LMCGF 1,926,436 $ 29,609,516 $ 1,312,196 GGIIF 3,693,522 56,786,294 419,666 SRCOF 13,391,313 205,776,298 4,912,798 NET ASSETS NET ASSETS NET ASSETS OF THE OF THE OF LMCGF, COLUMBIA COLUMBIA GGIIF MID CAP MID CAP AND SRCOF GROWTH FUND GROWTH FUND IMMEDIATELY IMMEDIATELY PRIOR TO PRIOR TO AFTER COMBINATION COMBINATION COMBINATION -------------- -------------- --------------- $ 588,307,694 $ 292,172,108 $ 880,479,802 167 ________________________________________________________________________________ AUGUST 31, 2004 COLUMBIA FUNDS As of the end of business on November 1, 2002, the Liberty Contrarian Fund ("LCF") and Liberty Contrarian Equity Fund ("LCEF") merged into the Columbia Strategic Investor Fund as follows: NET ASSETS OF LCF SHARES AND LCEF UNREALIZED ISSUED RECEIVED DEPRECIATION 1 -------------- -------------- --------------- LCF 249,129 $ 3,236,185 $ (374,279) LCEF 4,319,838 56,114,694 (7,312,321) NET ASSETS NET ASSETS OF THE OF THE NET ASSETS COLUMBIA COLUMBIA OF LCF STRATEGIC STRATEGIC AND LCEF INVESTOR FUND INVESTOR FUND IMMEDIATELY IMMEDIATELY PRIOR TO PRIOR TO AFTER COMBINATION COMBINATION COMBINATION -------------- -------------- --------------- $ 216,528,060 $ 59,350,879 $ 275,878,939 As of the end of business on December 6, 2002, the Galaxy Short Term Bond Fund merged into the Columbia Short Term Bond Fund as follows: NET ASSETS OF THE GALAXY SHORT TERM SHARES BOND FUND UNREALIZED ISSUED RECEIVED APPRECIATION 1 -------------- -------------- --------------- 25,924,097 $ 223,465,181 $ 3,331,362 NET ASSETS NET ASSETS NET ASSETS OF THE OF THE OF THE GALAXY COLUMBIA COLUMBIA SHORT TERM SHORT TERM SHORT TERM BOND FUND BOND FUND BOND FUND IMMEDIATELY IMMEDIATELY PRIOR TO PRIOR TO AFTER COMBINATION COMBINATION COMBINATION -------------- -------------- --------------- $ 125,747,136 $ 223,465,181 $ 349,212,317 1 Unrealized appreciation/depreciation is included in the respective Net Assets Received amounts shown above. NOTE 13. COMPARABILITY OF FINANCIAL STATEMENTS The fiscal year end of the Funds was changed from December 31 to August 31. NOTE 14. PROPOSED REORGANIZATION On October 13, 2004, the Board of Directors approved a proposal to reorganize the Columbia Common Stock Fund and the Columbia Growth Fund, subject to shareholder approval and the satisfaction of certain other conditions. 168 This page intentionally left blank. FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA COMMON STOCK FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 17.22 $ 14.91 $ 15.09 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (c) 0.02 0.01 --(d) Net realized and unrealized gain (loss) on investments 0.89 2.30 (0.11) ------------ ------------ ------------ Total from investment operations 0.91 2.31 (0.11) - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.03) -- (0.07) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 18.10 $ 17.22 $ 14.91 Total return (e) 5.28% 15.49%(f) (0.71)%(f) - --------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 1,201 $ 223 $ 32 Ratio of expenses to average net assets (g) 1.17% 1.40%(h) 1.32%(h) Ratio of net investment income (loss) to average net assets (g) 0.13% 0.08%(h) (0.03)%(h) Portfolio turnover rate 192% 102%(f) 107% - ---------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Rounds to less than $0.01 per share. (e) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS B SHARES 2004 2003 (a) 2002 (b) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 17.12 $ 14.91 $ 15.09 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.12) (0.09) (0.01) Net realized and unrealized gain (loss) on investments 0.88 2.30 (0.12) ------------ ------------ ------------ Total from investment operations 0.76 2.21 (0.13) - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income -- -- (0.05) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.88 $ 17.12 $ 14.91 Total return (d) 4.44% 14.82%(e) (0.84)%(e) - --------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 2,060 $ 620 $ 109 Ratio of expenses to average net assets (f) 1.92% 2.36%(g) 2.07%(g) Ratio of net investment loss to average net assets (f) (0.67)% (0.90)%(g) (0.78)%(g) Portfolio turnover rate 192% 102%(e) 107% - ---------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 170 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA COMMON STOCK FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 17.61 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.11) Net realized and unrealized gain on investments 0.38 ------------ Total from investment operations 0.27 - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 17.88 Total return (c)(d) 1.53% - ------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 26 Ratio of expenses to average net assets (e)(f) 1.95% Ratio of net investment loss to average net assets (e)(f) (0.65)% Portfolio turnover rate 192% - ------------------------------------------------------------------------------ (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 17.11 $ 14.92 $ 15.09 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.11) (0.12) (0.01) Net realized and unrealized gain (loss) on investments 0.88 2.31 (0.11) ------------ ------------ ------------ Total from investment operations 0.77 2.19 (0.12) - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income -- -- (0.05) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.88 $ 17.11 $ 14.92 Total return (d) 4.50% 14.68%(e) (0.77)%(e) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 129 $ 112 $ 30 Ratio of expenses to average net assets (f) 1.92% 2.61%(g) 2.07%(g) Ratio of net investment loss to average net assets (f) (0.59)% (1.09)%(g) (0.78)%(g) Portfolio turnover rate 192% 102%(e) 107% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 171 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA COMMON STOCK FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) ------------ ------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 17.26 $ 14.91 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.08(c) 0.06(c) Net realized and unrealized gain (loss) on investments 0.88 2.29 ------------ ------------ Total from investment operations 0.96 2.35 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS: From net investment income (0.10) -- From net realized gains -- -- ------------ ------------ Total distributions (0.10) -- - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 18.12 $ 17.26 Total return (d) 5.58% 15.76%(e) - ------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 303,259 $ 427,669 Ratio of expenses to average net assets (f) 0.92% 0.94%(g) Ratio of net investment income (loss) to average net assets (f) 0.41% 0.55%(g) Portfolio turnover rate 192% 102%(e) - ------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2002 (b) 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 19.97 $ 24.34 $ 28.90 $ 24.40 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.07(c) 0.07 (0.01) 0.03 Net realized and unrealized gain (loss) on investments (5.05) (4.35) (1.54) 6.25 ------------ ------------ ------------ ------------ Total from investment operations (4.98) (4.28) (1.55) 6.28 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.08) (0.07) -- (0.03) From net realized gains -- (0.02) (3.01) (1.75) ------------ ------------ ------------ ------------ Total distributions (0.08) (0.09) (3.01) (1.78) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 14.91 $ 19.97 $ 24.34 $ 28.90 Total return (d) (24.92)% (17.60)% (5.73)% 25.76% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 416,638 $ 681,397 $ 895,134 $ 959,910 Ratio of expenses to average net assets (f) 0.86% 0.80% 0.75% 0.77% Ratio of net investment income (loss) to average net assets (f) 0.43% 0.32% (0.05)% 0.09% Portfolio turnover rate 107% 114% 104% 97% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 172 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA GROWTH FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 24.61 $ 20.83 $ 21.52 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.07) (0.07) --(d) Net realized and unrealized gain (loss) on investments 0.39 3.85 (0.69) ------------ ------------ ------------ Total from investment operations 0.32 3.78 (0.69) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 24.93 $ 24.61 $ 20.83 Total return (e) 1.30% 18.15%(f) (3.21)%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 4,668 $ 4,229 $ 3,077 Ratio of expenses to average net assets (g) 1.12% 1.33%(h) 1.15%(h) Ratio of net investment loss to average net assets (g) (0.28)% (0.44)%(h) (0.36)%(h) Portfolio turnover rate 130% 110%(f) 165% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Rounds to less than $0.01 per share. (e) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS B SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 24.47 $ 20.82 $ 21.52 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.27) (0.19) (0.03) Net realized and unrealized gain (loss) on investments 0.40 3.84 (0.67) ------------ ------------ ------------ Total from investment operations 0.13 3.65 (0.70) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 24.60 $ 24.47 $ 20.82 Total return (d) 0.53% 17.53%(e) (3.25)%(e) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 2,254 $ 793 $ 114 Ratio of expenses to average net assets (f) 1.87% 2.11%(g) 1.88%(g) Ratio of net investment loss to average net assets (f) (1.04)% (1.27)%(g) (1.09)%(g) Portfolio turnover rate 130% 110%(e) 165% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 173 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA GROWTH FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 24.96 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.23) Net realized and unrealized loss on investments (0.19) ------------ Total from investment operations (0.42) - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 24.54 Total return (c)(d) (1.68)% - ------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 199 Ratio of expenses to average net assets (e)(f) 1.90% Ratio of net investment loss to average net assets (e)(f) (1.01)% Portfolio turnover rate 130% - ------------------------------------------------------------------------------ (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 24.48 $ 20.82 $ 21.52 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.27) (0.17) (0.02) Net realized and unrealized gain (loss) on investments 0.41 3.83 (0.68) ------------ ------------ ------------ Total from investment operations 0.14 3.66 (0.70) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 24.62 $ 24.48 $ 20.82 Total return (d) 0.57% 17.58%(e) (3.25)%(e) - --------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 167 $ 294 $ 103 Ratio of expenses to average net assets (f) 1.87% 2.02%(g) 1.88%(g) Ratio of net investment loss to average net assets (f) (1.04)% (1.15)%(g) (1.09)%(g) Portfolio turnover rate 130% 110%(e) 165% - ---------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 174 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA GROWTH FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS G SHARES 2004 2003 (a) 2002 (b) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 24.49 $ 20.83 $ 21.52 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.25) (0.16) (0.03) Net realized and unrealized gain (loss) on investments 0.40 3.82 (0.66) ------------ ------------ ------------ Total from investment operations 0.15 3.66 (0.69) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 24.64 $ 24.49 $ 20.83 Total return (d) 0.61% 17.57%(e) (3.21)%(e) - --------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 12,996 $ 14,810 $ 13,705 Ratio of expenses to average net assets (f) 1.82% 2.00%(g) 1.83%(g) Ratio of net investment loss to average net assets (f) (0.98)% (1.10)%(g) (1.04)%(g) Portfolio turnover rate 130% 110%(e) 165% - ---------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class G shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 24.70 $ 20.85 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) --(c)(d) --(c)(d) Net realized and unrealized gain (loss) on investments 0.39 3.85 ------------ ------------ Total from investment operations 0.39 3.85 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS: From net investment income -- -- From net realized gains -- -- ------------ ------------ Total distributions -- -- - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 25.09 $ 24.70 Total return (e) 1.58% 18.47%(f) - ------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 790,696 $ 909,611 Ratio of expenses to average net assets (g) 0.87% 0.88%(h) Ratio of net investment income (loss) to average net assets (g) (0.01)% 0.01%(h) Portfolio turnover rate 130% 110%(f) - ------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2002 (b) 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 31.35 $ 40.07 $ 48.91 $ 42.51 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.01)(c) (0.02) (0.08) (0.03) Net realized and unrealized gain (loss) on investments (10.49) (8.55) (3.49) 11.09 ------------ ------------ ------------ ------------ Total from investment operations (10.50) (8.57) (3.57) 11.06 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income -- -- -- --(d) From net realized gains -- (0.15) (5.27) (4.66) ------------ ------------ ------------ ------------ Total distributions -- (0.15) (5.27) (4.66) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 20.85 $ 31.35 $ 40.07 $ 48.91 Total return (e) (33.49)% (21.40)% (7.94)% 26.02% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 811,648 $ 1,325,844 $ 1,919,227 $ 2,160,739 Ratio of expenses to average net assets (g) 0.82% 0.72% 0.65% 0.65% Ratio of net investment income (loss) to average net assets (g) (0.03)% (0.07)% (0.18)% (0.07)% Portfolio turnover rate 165% 122% 114% 118% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Rounds to less than $0.01 per share. (e) Total return at net asset value assuming all distributions reinvested. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 175 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA INTERNATIONAL STOCK FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 11.34 $ 10.05 $ 10.04 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (c) 0.01 0.04 (0.02) Net realized and unrealized gain on investments, foreign currency and foreign capital gains tax 1.69 1.25 0.03 ------------ ------------ ------------ Total from investment operations 1.70 1.29 0.01 - -------------------------------------------------------------------------------------------------------------------- REDEMPTION FEES: Redemption fees added to paid-in capital --(c)(d) -- -- - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.04 $ 11.34 $ 10.05 Total return (e) 14.99%(f) 12.84%(g) 0.10%(g) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 24,119 $ 21,664 $ 20,178 Ratio of expenses to average net assets (h) 1.72% 1.90%(i) 1.86%(i) Ratio of net investment income (loss) to average net assets (h) 0.10% 0.61%(i) (0.39)%(i) Waiver 0.09% -- -- Portfolio turnover rate 90% 43%(g) 96% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Rounds to less than $0.01 per share. (e) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (f) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (g) Not annualized. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS B SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 11.23 $ 10.02 $ 10.04 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.09) (0.03) (0.05) Net realized and unrealized gain on investments, foreign currency and foreign capital gains tax 1.67 1.24 0.03 ------------ ------------ ------------ Total from investment operations 1.58 1.21 (0.02) - -------------------------------------------------------------------------------------------------------------------- REDEMPTION FEES: Redemption fees added to paid-in capital --(c)(d) -- -- - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.81 $ 11.23 $ 10.02 Total return (e)(f) 14.07% 12.08%(g) (0.20)%(g) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 10,221 $ 10,316 $ 10,920 Ratio of expenses to average net assets (h) 2.50% 2.98%(i) 3.64%(i) Ratio of net investment loss to average net assets (h) (0.69)% (0.47)%(i) (2.17)%(i) Waiver 0.18% 0.11%(i) 0.11%(i) Portfolio turnover rate 90% 43%(g) 96% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Rounds to less than $0.01 per share. (e) Total return at net asset value assuming no contingent deferred sales charge. (f) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (g) Not annualized. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. 176 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA INTERNATIONAL STOCK FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 12.27 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.01) Net realized and unrealized gain on investments, foreign currency and foreign capital gains tax 0.60 ------------ Total from investment operations 0.59 - ------------------------------------------------------------------------------ REDEMPTION FEES: Redemption fees added to paid-in capital --(b)(c) - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 12.86 Total return (d)(e)(f) 4.81% - ------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 632 Ratio of expenses to average net assets (g)(h) 2.11% Ratio of net investment loss to average net assets (g)(h) (0.05)% Waiver (h) 0.35% Portfolio turnover rate 90% - ------------------------------------------------------------------------------
(a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Rounds to less than $0.01 per share. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 11.27 $ 10.02 $ 10.04 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (c) (0.04) --(d) (0.04) Net realized and unrealized gain on investments, foreign currency and foreign capital gains tax 1.68 1.25 0.02 - -------------------------------------------------------------------------------------------------------------------- Total from investment operations 1.64 1.25 (0.02) ------------ ------------ ------------ REDEMPTION FEES: Redemption fees added to paid-in capital --(c)(d) -- -- - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.91 $ 11.27 $ 10.02 Total return (e)(f) 14.55% 12.48%(g) (0.20)%(g) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 738 $ 633 $ 542 Ratio of expenses to average net assets (h) 2.10% 2.49%(i) 3.48%(i) Ratio of net investment income (loss) to average net assets (h) (0.27)% 0.02%(i) (2.01)%(i) Waiver 0.57% 0.75%(i) 0.75%(i) Portfolio turnover rate 90% 43%(g) 96% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Rounds to less than $0.01 per share. (e) Total return at net asset value assuming no contingent deferred sales charge. (f) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (g) Not annualized. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. 177 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA INTERNATIONAL STOCK FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 11.40 $ 10.05 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.11(c) 0.07(c) Net realized and unrealized gain (loss) on investments, foreign currency and foreign capital gains tax 1.67 1.27 ------------ ------------ Total from investment operations 1.78 1.34 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS: From net investment income (0.04) -- From net realized gains -- -- Return of capital -- -- ------------ ------------ Total distributions (0.04) -- - ------------------------------------------------------------------------------ REDEMPTION FEES: Redemption fees added to paid-in capital --(c)(d) 0.01(c) - ------------------------------------------------------------------------------ Net asset value, end of period $ 13.14 $ 11.40 Total return (e) 15.65%(f) 13.43%(f)(g) - ------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 558,082 $ 248,718 Ratio of expenses to average net assets (h) 1.10% 1.47%(i) Ratio of net investment income (loss) to average net assets (h) 0.81% 1.03%(i) Waiver 0.18% 0.12%(i) Portfolio turnover rate 90% 43%(g) - ------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2002 (b) 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.03 $ 14.77 $ 22.81 $ 15.45 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) --(c)(d) 0.01 (0.04) (0.05) Net realized and unrealized gain (loss) on investments, foreign currency and foreign capital gains tax (1.94) (2.74) (5.17) 9.00 ------------ ------------ ------------ ------------ Total from investment operations (1.94) (2.73) (5.21) 8.95 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.01) (0.01) -- -- From net realized gains -- -- (2.83) (1.59) Return of capital (0.03) -- -- -- ------------ ------------ ------------ ------------ Total distributions (0.04) (0.01) (2.83) (1.59) - -------------------------------------------------------------------------------------------------------------------- REDEMPTION FEES: Redemption fees added to paid-in capital -- -- -- -- - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.05 $ 12.03 $ 14.77 $ 22.81 Total return (e) (16.10)%(f) (18.47)% (22.64)% 57.93% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 143,332 $ 135,626 $ 175,316 $ 239,223 Ratio of expenses to average net assets (h) 1.49% 1.56% 1.42% 1.48% Ratio of net investment income (loss) to average net assets (h) (0.02)% 0.06% (0.19)% (0.35)% Waiver 0.12% -- -- -- Portfolio turnover rate 96% 130% 112% 94% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Rounds to less than $0.01 per share. (e) Total return at net asset value assuming all distributions reinvested. (f) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced (g) Not annualized. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. 178 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA MID CAP GROWTH FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, Class A Shares 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 18.09 $ 14.77 $ 15.15 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.23) (0.14) (0.02) Net realized and unrealized gain (loss) on investments and foreign currency (0.87) 3.46 (0.36) ------------ ------------ ------------ Total from investment operations (1.10) 3.32 (0.38) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 16.99 $ 18.09 $ 14.77 Total return (d)(e) (6.08)% 22.48%(f) (2.51)%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 4,432 $ 4,525 $ 1,180 Ratio of expenses to average net assets (g) 1.53% 1.60%(h) 1.49%(h) Ratio of net investment loss to average net assets (g) (1.21)% (1.31)%(h) (1.22)%(h) Waiver 0.02% 0.01%(h) 0.01%(h) Portfolio turnover rate 139% 78%(f) 88% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (e) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, Class B Shares 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 17.98 $ 14.76 $ 15.15 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.36) (0.22) (0.04) Net realized and unrealized gain (loss) on investments and foreign currency (0.87) 3.44 (0.35) ------------ ------------ ------------ Total from investment operations (1.23) 3.22 (0.39) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 16.75 $ 17.98 $ 14.76 Total return (d)(e) (6.84)% 21.82%(f) (2.57)%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 5,079 $ 4,242 $ 3,383 Ratio of expenses to average net assets (g) 2.29% 2.36%(h) 2.32%(h) Ratio of net investment loss to average net assets (g) (1.97)% (2.06)%(h) (2.05)%(h) Waiver 0.10% 0.12%(h) 0.12%(h) Portfolio turnover rate 139% 78%(f) 88% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 179 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA MID CAP GROWTH FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - -------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 17.88 - -------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.30) Net realized and unrealized loss on investments and foreign currency (0.79) ------------ Total from investment operations (1.09) - -------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 16.79 Total return (c)(d)(e) (6.10)% - -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 501 Ratio of expenses to average net assets (f)(g) 2.18% Ratio of net investment loss to average net assets (f)(g) (1.83)% Waiver (g) 0.08% Portfolio turnover rate 139% - -------------------------------------------------------------------------------- (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 17.98 $ 14.76 $ 15.15 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.34) (0.21) (0.04) Net realized and unrealized gain (loss) on investments and foreign currency (0.87) 3.43 (0.35) ------------ ------------ ------------ Total from investment operations (1.21) 3.22 (0.39) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 16.77 $ 17.98 $ 14.76 Total return (d)(e) (6.73)% 21.82%(f) (2.57)%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 599 $ 737 $ 433 Ratio of expenses to average net assets (g) 2.19% 2.27%(h) 2.32%(h) Ratio of net investment loss to average net assets (g) (1.87)% (1.97)%(h) (2.05)%(h) Waiver 0.08% 0.09%(h) 0.09%(h) Portfolio turnover rate 139% 78%(f) 88% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 180 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA MID CAP GROWTH FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS G SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 17.98 $ 14.77 $ 15.15 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.41) (0.23) (0.04) Net realized and unrealized gain (loss) on investments and foreign currency (0.87) 3.44 (0.34) ------------ ------------ ------------ Total from investment operations (1.28) 3.21 (0.38) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 16.70 $ 17.98 $ 14.77 Total return (d) (7.12)%(e) 21.73%(f) (2.51)%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 647 $ 806 $ 753 Ratio of expenses to average net assets (g) 2.57% 2.47%(h) 2.35%(h) Ratio of net investment loss to average net assets (g) (2.25)% (2.17)%(h) (2.08)%(h) Waiver 0.01% -- -- Portfolio turnover rate 139% 78%(f) 88% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class G shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS T SHARES 2004 2003 (a) 2002 (b) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 18.12 $ 14.79 $ 15.15 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.22) (0.12) (0.02) Net realized and unrealized gain (loss) on investments and foreign currency (0.87) 3.45 (0.34) ------------ ------------ ------------ Total from investment operations (1.09) 3.33 (0.36) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.03 $ 18.12 $ 14.79 Total return (d) (6.02)%(e) 22.52%(f) (2.38)%(f) - --------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 25,236 $ 29,920 $ 25,966 Ratio of expenses to average net assets (g) 1.50% 1.46%(h) 1.45%(h) Ratio of net investment loss to average net assets (g) (1.19)% (1.16)%(h) (1.18)%(h) Waiver 0.01% -- -- Portfolio turnover rate 139% 78%(f) 88% - ---------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class T shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (e) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 181 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA MID CAP GROWTH FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - -------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 18.17 $ 14.79 - -------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.14)(c) (0.08)(c) Net realized and unrealized gain (loss) on investments and foreign currency (0.89) 3.46 ------------ ------------ Total from investment operations (1.03) 3.38 - -------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net realized gains -- -- - -------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.14 $ 18.17 Total return (d) (5.67)%(e) 22.85%(e)(f) - -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 825,988 $ 998,943 Ratio of expenses to average net assets (g) 1.07% 1.09%(h) Ratio of net investment loss to average net assets (g) (0.75)% (0.80)%(h) Waiver 0.05% 0.05%(h) Portfolio turnover rate 139% 78%(f) - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2003 (b) 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 19.60 $ 25.99 $ 29.93 $ 23.62 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.13)(c) (0.11) (0.10) (0.16) Net realized and unrealized gain (loss) on investments and foreign currency (4.68) (5.35) 4.45 8.74 ------------ ------------ ------------ ------------ Total from investment operations (4.81) (5.46) 4.35 8.58 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net realized gains -- (0.93) (8.29) (2.27) - -------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 14.79 $ 19.60 $ 25.99 $ 29.93 Total return (d) (24.54)%(e) (20.98)% 13.84% 36.33% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 807,342 $ 786,071 $ 1,095,525 $ 918,322 Ratio of expenses to average net assets (g) 1.12% 1.08% 0.99% 1.09% Ratio of net investment loss to average net assets (g) (0.85)% (0.49)% (0.38)% (0.64)% Waiver 0.05% -- -- -- Portfolio turnover rate 88% 186% 169% 135% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested. (e) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 182 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA SMALL CAP GROWTH FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 21.62 $ 16.30 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.24)(c) (0.13)(c) Net realized and unrealized gain (loss) on investments (0.06) 5.45 ------------ ------------ Total from investment operations (0.30) 5.32 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS: From net realized gains -- -- - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 21.32 $ 21.62 Total return (d) (1.39)% 32.64%(e) - ------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 543,016 $ 637,616 Ratio of expenses to average net assets (f) 1.18% 1.28%(g) Ratio of net investment loss to average net assets (f) (1.01)% (1.09)%(g) Portfolio turnover rate 118% 79%(e) - ------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2002 (b) 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 22.20 $ 25.87 $ 27.26 $ 17.43 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.17)(c) (0.13) (0.10) (0.14) Net realized and unrealized gain (loss) on investments (5.73) (3.54) 1.75 10.45 ------------ ------------ ------------ ------------ Total from investment operations (5.90) (3.67) 1.65 10.31 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net realized gains -- -- (3.04) (0.48) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 16.30 $ 22.20 $ 25.87 $ 27.26 Total return (d) (26.58)% (14.19)% 5.85% 59.15% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 493,031 $ 617,966 $ 518,970 $ 290,374 Ratio of expenses to average net assets (f) 1.24% 1.23% 1.22% 1.30% Ratio of net investment loss to average net assets (f) (0.90)% (0.71)% (0.44)% (0.84)% Portfolio turnover rate 109% 129% 145% 188% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 183 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA REAL ESTATE EQUITY FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 21.04 $ 17.80 $ 17.01 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.77 0.36(d) 0.26 Net realized and unrealized gain on investments 4.67 3.11(d) 0.78 ------------ ------------ ------------ Total from investment operations 5.44 3.47 1.04 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.70) (0.23) (0.25) From net realized gains (0.19) -- -- ------------ ------------ ------------ Total distributions (0.89) (0.23) (0.25) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 25.59 $ 21.04 $ 17.80 Total return (e) 26.42% 19.62%(f) 6.10%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 32,703 $ 12,364 $ 905 Ratio of expenses to average net assets (g) 1.20% 1.55%(h) 1.43%(h) Ratio of net investment income to average net assets (g) 3.27% 2.70%(d)(h) 4.81%(h) Portfolio turnover rate 28% 33%(f) 53% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Effective January 1, 2003, the Fund adopted the policy to reduce cost of investments for financial statement purposes by the distributions received in excess of income from Real Estate Investment Trusts. The effect of this change for the eight months ended August 31, 2003 was to decrease the net investment income per share by $0.05, increase net realized and unrealized gain on investments per share by $0.05 and decrease the ratio of net investment income to average net assets from 3.12% to 2.70%. Per share data and ratios for periods prior to August 31, 2003 have not been restated to reflect this change in policy. (e) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, Class B Shares 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 21.03 $ 17.82 $ 17.01 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.58 0.24(d) 0.22 Net realized and unrealized gain on investments 4.70 3.12(d) 0.81 ------------ ------------ ------------ Total from investment operations 5.28 3.36 1.03 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.52) (0.15) (0.22) From net realized gains (0.19) -- -- ------------ ------------ ------------ Total distributions (0.71) (0.15) (0.22) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 25.60 $ 21.03 $ 17.82 Total return (e) 25.53% 18.97%(f) 6.09%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 11,234 $ 4,776 $ 1,074 Ratio of expenses to average net assets (g) 1.98% 2.37%(h) 2.18%(h) Ratio of net investment income to average net assets (g) 2.47% 1.86%(d)(h) 4.06%(h) Portfolio turnover rate 28% 33%(f) 53% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Effective January 1, 2003, the Fund adopted the policy to reduce cost of investments for financial statement purposes by the distributions received in excess of income from Real Estate Investment Trusts. The effect of this change for the eight months ended August 31, 2003 was to decrease the net investment income per share by $0.05, increase net realized and unrealized gain on investments per share by $0.05 and decrease the ratio of net investment income to average net assets from 2.28% to 1.86%. Per share data and ratios for periods prior to August 31, 2003 have not been restated to reflect this change in policy. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 184 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA REAL ESTATE EQUITY FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 21.99 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.41 Net realized and unrealized gain on investments 3.72 ------------ Total from investment operations 4.13 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS: From net investment income (0.35) From net realized gains (0.19) ------------ Total distributions (0.54) - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 25.58 Total return (c)(d) 18.99% - ------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 2,404 Ratio of expenses to average net assets (e)(f) 1.95% Ratio of net investment income to average net assets (e)(f) 1.93% Portfolio turnover rate 28% - ------------------------------------------------------------------------------ (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 21.03 $ 17.82 $ 17.01 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.65 0.27(d) 0.21 Net realized and unrealized gain on investments 4.63 3.10(d) 0.82 ------------ ------------ ------------ Total from investment operations 5.28 3.37 1.03 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.53) (0.16) (0.22) From net realized gains (0.19) -- -- ------------ ------------ ------------ Total distributions (0.72) (0.16) (0.22) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 25.59 $ 21.03 $ 17.82 Total return (e) 25.55% 18.99%(f) 6.09%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 4,059 $ 3,466 $ 365 Ratio of expenses to average net assets (g) 1.96% 2.30%(h) 2.18%(h) Ratio of net investment income to average net assets (g) 2.81% 2.02%(d)(h) 4.06%(h) Portfolio turnover rate 28% 33%(f) 53% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Effective January 1, 2003, the Fund adopted the policy to reduce cost of investments for financial statement purposes by the distributions received in excess of income from Real Estate Investment Trusts. The effect of this change for the eight months ended August 31, 2003 was to decrease the net investment income per share by $0.05, increase net realized and unrealized gain on investments per share by $0.05 and decrease the ratio of net investment income to average net assets from 2.44% to 2.02%. Per share data and ratios for periods prior to August 31, 2003 have not been restated to reflect this change in policy. (e) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 185 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA REAL ESTATE EQUITY FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 21.06 $ 17.81 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.88(c) 0.39(c)(d) Net realized and unrealized gain (loss) on investments 4.62 3.14(d) ------------ ------------ Total from investment operations 5.50 3.53 - ------------------------------------------------------------------------------ LESS DISTRIBUTIONS: From net investment income (0.77) (0.28) From net realized gains (0.19) -- ------------ ------------ Total distributions (0.96) (0.28) - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 25.60 $ 21.06 Total return (e) 26.72% 20.01%(f) - ------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 872,924 $ 884,747 Ratio of expenses to average net assets (g) 0.97% 1.08%(h) Ratio of net investment income to average net assets (g) 3.78% 3.09%(d)(h) Portfolio turnover rate 28% 33%(f) - ------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2002 (b) 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 18.04 $ 17.89 $ 14.57 $ 15.76 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.82(c) 0.79 0.81 0.82 Net realized and unrealized gain (loss) on investments (0.25) 0.15 3.32 (1.19) ------------ ------------ ------------ ------------ Total from investment operations 0.57 0.94 4.13 (0.37) - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.71) (0.72) (0.75) (0.71) From net realized gains (0.09) (0.07) (0.06) (0.11) ------------ ------------ ------------ ------------ Total distributions (0.80) (0.79) (0.81) (0.82) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.81 $ 18.04 $ 17.89 $ 14.57 Total return (e) 3.12% 5.41% 28.84% (2.45)% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 774,646 $ 621,590 $ 436,764 $ 241,716 Ratio of expenses to average net assets (g) 0.94% 0.95% 0.96% 0.99% Ratio of net investment income to average net assets (g) 5.30% 4.65% 5.16% 5.66% Portfolio turnover rate 53% 41% 25% 29% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Effective January 1, 2003, the Fund adopted the policy to reduce cost of investments for financial statement purposes by the distributions received in excess of income from Real Estate Investment Trusts. The effect of this change for the eight months ended August 31, 2003 was to decrease the net investment income per share by $0.05, increase net realized and unrealized gain on investments per share by $0.05 and decrease the ratio of net investment income to average net assets from 3.51% to 3.09%. Per share data and ratios for periods prior to August 31, 2003 have not been restated to reflect this change in policy. (e) Total return at net asset value assuming all distributions reinvested. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 186 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA TECHNOLOGY FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 5.91 $ 3.79 $ 3.82 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.11) (0.04) (0.01) Net realized and unrealized gain (loss) on investments and foreign currency 0.70 2.16 (0.02) ------------ ------------ ------------ Total from investment operations 0.59 2.12 (0.03) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 6.50 $ 5.91 $ 3.79 Total return (d)(e) 9.98% 55.94%(f) (0.79)%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 2,818 $ 376 $ 1 Ratio of expenses to average net assets (g) 1.90% 1.90%(h) 1.76%(h) Ratio of net investment loss to average net assets (g) (1.51)% (1.35)%(h) (1.35)%(h) Reimbursement 0.53% 3.06%(h) 1.24%(h) Portfolio turnover rate 488% 523%(f) 512% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (e) Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS B SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 5.86 $ 3.78 $ 3.82 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.16) (0.07) (0.01) Net realized and unrealized gain (loss) on investments and foreign currency 0.70 2.15 (0.03) ------------ ------------ ------------ Total from investment operations 0.54 2.08 (0.04) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 6.40 $ 5.86 $ 3.78 Total return (d)(e) 9.22% 55.03%(f) (1.05)%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 2,200 $ 1,246 $ 7 Ratio of expenses to average net assets (g) 2.65% 2.65%(h) 2.51%(h) Ratio of net investment loss to average net assets (g) (2.30)% (2.11)%(h) (2.10)%(h) Reimbursement 0.48% 2.40%(h) 1.24%(h) Portfolio turnover rate 488% 523%(f) 512% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 187 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA TECHNOLOGY FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.48 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.14) Net realized and unrealized gain on investments and foreign currency 0.07 ------------ Total from investment operations (0.07) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 6.41 Total return (c)(d)(e) (1.08)% - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 488 Ratio of expenses to average net assets (f)(g) 2.65% Ratio of net investment loss to average net assets (f)(g) (2.18)% Reimbursement (g) 0.68% Portfolio turnover rate 488% - ------------------------------------------------------------------------------- (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 5.88 $ 3.78 $ 3.82 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.16) (0.07) (0.01) Net realized and unrealized gain (loss) on investments and foreign currency 0.71 2.17 (0.03) ------------ ------------ ------------ Total from investment operations 0.55 2.10 (0.04) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 6.43 $ 5.88 $ 3.78 Total return (d)(e) 9.35% 55.56%(f) (1.05)%(f) - --------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 21 $ 15 $ 1 Ratio of expenses to average net assets (g) 2.65% 2.65%(h) 2.51%(h) Ratio of net investment loss to average net assets (g) (2.31)% (2.13)%(h) (2.10)%(h) Reimbursement 0.77% 4.00%(h) 1.24%(h) Portfolio turnover rate 488% 523%(f) 512% - ---------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 188 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA TECHNOLOGY FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - -------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 5.93 $ 3.79 - -------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.09)(d) (0.04)(d) Net realized and unrealized gain (loss) on investments and foreign currency 0.71 2.18 ------------ ------------ Total from investment operations 0.62 2.14 - -------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income -- -- - -------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 6.55 $ 5.93 Total return (e)(f) 10.46% 56.46%(g) - -------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 30,268 $ 19,663 Ratio of expenses to average net assets (h) 1.65% 1.65%(i) Ratio of net investment income (loss) to average net assets(h) (1.30)% (1.19)%(i) Reimbursement 0.53% 2.73%(i) Portfolio turnover rate 488% 523%(g) - --------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, PERIOD ENDED ------------------------------- DECEMBER 31, CLASS Z SHARES 2002 (b) 2001 2000 (c) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 6.13 $ 8.63 $ 10.00 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.06)(d) (0.08) 0.01 Net realized and unrealized gain (loss) on investments and foreign currency (2.28) (2.42) (1.37) ------------ ------------ ------------ Total from investment operations (2.34) (2.50) (1.36) - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income -- -- (0.01) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 3.79 $ 6.13 $ 8.63 Total return (e)(f) (38.17)% (28.97)% (13.78)%(g) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 8,055 $ 10,385 $ 4,327 Ratio of expenses to average net assets (h) 1.65% 1.69% 1.48%(i) Ratio of net investment income (loss) to average net assets(h) (1.24)% (1.26)% 0.99%(i) Reimbursement 1.33% 1.13% 7.49%(i) Portfolio turnover rate 512% 413% 63%(g) - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) The Fund commenced investment operations on October 27, 2000. Per share data, total return and portfolio turnover rate reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested. (f) Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. (g) Not annualized. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. 189 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA STRATEGIC INVESTOR FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 15.95 $ 13.13 $ 12.72 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.03 0.06 0.01 Net realized and unrealized gain on investments and foreign currency 2.46 2.76 0.40 ------------ ------------ ------------ Total from investment operations 2.49 2.82 0.41 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.07) -- -- - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 18.37 $ 15.95 $ 13.13 Total return (d) 15.64%(e) 21.48%(f) 3.22%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 99,608 $ 60,112 $ 53,526 Ratio of expenses to average net assets (g) 1.27% 1.30%(h) 1.21%(h) Ratio of net investment income to average net assets (g) 0.19% 0.60%(h) 0.64%(h) Waiver 0.01% -- -- Portfolio turnover rate 106% 68%(f) 188% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS B SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 15.82 $ 13.10 $ 12.72 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.10) (0.03) (0.01) Net realized and unrealized gain on investments and foreign currency 2.45 2.75 0.39 ------------ ------------ ------------ Total from investment operations 2.35 2.72 0.38 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 18.17 $ 15.82 $ 13.10 Total return (d)(e) 14.85% 20.76%(f) 2.99%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 22,071 $ 3,398 $ 2,350 Ratio of expenses to average net assets (g) 2.02% 2.22%(h) 2.36%(h) Ratio of net investment loss to average net assets (g) (0.57)% (0.33)%(h) (0.51)%(h) Waiver 0.14% 0.23%(h) 0.23%(h) Portfolio turnover rate 106% 68%(f) 188% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 190 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA STRATEGIC INVESTOR FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - ------------------------------------------------------------------------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 16.42 - ------------------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.09) Net realized and unrealized gain on investments and foreign currency 1.85 ------------ Total from investment operations 1.76 - ------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 18.18 Total return (c)(d)(e) 10.72% - ------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 14,821 Ratio of expenses to average net assets (f)(g) 2.05% Ratio of net investment loss to average net assets (f)(g) (0.57)% Waiver (g) 0.07% Portfolio turnover rate 106% - ------------------------------------------------------------------------------ (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 15.81 $ 13.11 $ 12.72 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (c) (0.08) (0.05) (0.01) Net realized and unrealized gain on investments and foreign currency 2.44 2.75 0.40 ------------ ------------ ------------ Total from investment operations 2.36 2.70 0.39 - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 18.17 $ 15.81 $ 13.11 Total return (d)(e) 14.93% 20.59%(f) 3.07%(f) - --------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 693 $ 704 $ 355 Ratio of expenses to average net assets (g) 1.94% 2.34%(h) 2.28%(h) Ratio of net investment loss to average net assets (g) (0.48)% (0.48)%(h) (0.43)%(h) Waiver 0.12% 0.15%(h) 0.15%(h) Portfolio turnover rate 106% 68%(f) 188% - ---------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming no contingent deferred sales charge. (e) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 191 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA STRATEGIC INVESTOR FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - -------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 15.98 $ 13.14 - -------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.08(d) 0.08(d) Net realized and unrealized gain (loss) on investments and foreign currency 2.47 2.76 ------------ ------------ Total from investment operations 2.55 2.84 - -------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.11) -- From net realized gains -- -- ------------ ------------ Total distributions (0.11) -- - -------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 18.42 $ 15.98 Total return (e) 15.98%(f) 21.61%(f)(g) - -------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 272,178 $ 227,454 Ratio of expenses to average net assets (h) 1.02% 1.08%(i) Ratio of net investment income to average net assets (h) 0.44% 0.82%(i) Waiver 0.03% 0.03%(i) Portfolio turnover rate 106% 68%(g) - --------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, PERIOD ENDED ------------------------------- DECEMBER 31, CLASS Z SHARES 2002 (b) 2001 2000 (c) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 14.52 $ 11.23 $ 10.00 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.10(d) 0.05 0.02 Net realized and unrealized gain (loss) on investments and foreign currency (1.35) 3.29 1.23 ------------ ------------ ------------ Total from investment operations (1.25) 3.34 1.25 - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.11) (0.05) (0.02) From net realized gains (0.02) -- -- ------------ ------------ ------------ Total distributions (0.13) (0.05) (0.02) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.14 $ 14.52 $ 11.23 Total return (e) (8.56)%(f) 29.76% 12.25%(f)(g) - --------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 209,610 $ 139,504 $ 9,526 Ratio of expenses to average net assets (h) 1.23% 1.13% 1.34%(i) Ratio of net investment income to average net assets (h) 0.62% 0.71% 1.92%(i) Waiver 0.03% -- 3.97%(i) Portfolio turnover rate 188% 278% 64%(g) - ---------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) The Fund commenced investment operations on October 27, 2000. Per share data, total return and portfolio turnover rate reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Total return at net asset value assuming all distributions reinvested. (f) Had the Investment Advisor not waived a portion of expenses, total return would have been reduced. (g) Not annualized. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. 192 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA BALANCED FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 19.18 $ 17.52 $ 17.58 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.29 0.16 0.03 Net realized and unrealized gain on investments 0.67 1.64 --(d) ------------ ------------ ------------ Total from investment operations 0.96 1.80 0.03 - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.28) (0.14) (0.09) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 19.86 $ 19.18 $ 17.52 Total return (e) 4.99% 10.35%(f) 0.19%(f) - --------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 2,577 $ 670 $ 146 Ratio of expenses to average net assets (g) 1.02% 1.42%(h) 1.17%(h) Ratio of net investment income to average net assets (g) 1.45% 1.32%(h) 2.03%(h) Portfolio turnover rate 158% 110%(f) 98% - ---------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Rounds to less than $0.01 per share. (e) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS B SHARES 2004 2003 (a) 2002 (b) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 19.16 $ 17.52 $ 17.58 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.14 0.07 0.02 Net realized and unrealized gain (loss) on investments 0.66 1.65 (0.01) ------------ ------------ ------------ Total from investment operations 0.80 1.72 0.01 - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.13) (0.08) (0.07) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 19.83 $ 19.16 $ 17.52 Total return (d) 4.17% 9.83%(e) 0.06%(e) - --------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 7,286 $ 3,349 $ 608 Ratio of expenses to average net assets (f) 1.77% 2.17%(g) 1.92%(g) Ratio of net investment income to average net assets (f) 0.71% 0.59%(g) 1.28%(g) Portfolio turnover rate 158% 110%(e) 98% - ---------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 193 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA BALANCED FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - -------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 19.59 - -------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.13 Net realized and unrealized gain on investments 0.23 ------------ Total from investment operations 0.36 - -------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.12) - -------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 19.83 Total return (c)(d) 1.82% - -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 730 Ratio of expenses to average net assets (e)(f) 1.80% Ratio of net investment income to average net assets (e)(f) 0.72% Portfolio turnover rate 158% - -------------------------------------------------------------------------------- (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 19.17 $ 17.51 $ 17.58 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.15 0.11 0.02 Net realized and unrealized gain (loss) on investments 0.65 1.64 (0.02) ------------ ------------ ------------ Total from investment operations 0.80 1.75 -- - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.15) (0.09) (0.07) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 19.82 $ 19.17 $ 17.51 Total return (d) 4.14% 10.01%(e) 0.01%(e) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 361 $ 770 $ 446 Ratio of expenses to average net assets (f) 1.77% 1.87%(g) 1.92%(g) Ratio of net investment income to average net assets (f) 0.74% 0.89%(g) 1.28%(g) Portfolio turnover rate 158% 110%(e) 98% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 194 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA BALANCED FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 19.19 $ 17.51 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.35(c) 0.24(c) Net realized and unrealized gain (loss) on investments 0.66 1.64 ------------ ------------ Total from investment operations 1.01 1.88 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.36) (0.20) From net realized gains -- -- ------------ ------------ Total distributions (0.36) (0.20) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 19.84 $ 19.19 Total return (e) 5.27% 10.81%(f) - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 483,746 $ 640,402 Ratio of expenses to average net assets (g) 0.77% 0.77%(h) Ratio of net investment income to average net assets (g) 1.73% 2.03%(h) Portfolio turnover rate 158% 110%(f) - -------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2002 (b) 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 20.67 $ 22.96 $ 24.72 $ 23.17 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.47(c) 0.57(d) 0.67 0.69 Net realized and unrealized gain (loss) on investments (3.13) (2.27)(d) (0.41) 2.21 ------------ ------------ ------------ ------------ Total from investment operations (2.66) (1.70) 0.26 2.90 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.50) (0.59) (0.68) (0.69) From net realized gains -- -- (1.34) (0.66) ------------ ------------ ------------ ------------ Total distributions (0.50) (0.59) (2.02) (1.35) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.51 $ 20.67 $ 22.96 $ 24.72 Total return (e) (12.97)% (7.40)% 0.82% 12.70% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 668,290 $ 983,749 $ 1,126,854 $ 1,040,940 Ratio of expenses to average net assets (g) 0.70% 0.67% 0.65% 0.66% Ratio of net investment income to average net assets (g) 2.50% 2.70%(d) 2.73% 2.85% Portfolio turnover rate 98% 111% 105% 133% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001 was to decrease net investment income per share by $0.01, decrease net realized and unrealized loss per share by $0.01 and decrease the ratio of net investment income to average net assets from 2.73% to 2.70%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (e) Total return at net asset value assuming all distributions reinvested. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 195 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA SHORT TERM BOND FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.62 $ 8.67 $ 8.63 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.17 0.10 0.04 Net realized and unrealized gain (loss) on investments and futures contracts 0.02 (0.03) 0.04 ------------ ------------ ------------ Total from investment operations 0.19 0.07 0.08 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.17) (0.12) (0.04) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.64 $ 8.62 $ 8.67 Total return (d)(e) 2.25% 0.82%(f) 0.94%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 28,146 $ 37,261 $ 5,543 Ratio of expenses to average net assets (g) 0.91% 1.00%(h) 1.00%(h) Ratio of net investment income to average net assets (g) 2.00% 1.78%(h) 3.53%(h) Reimbursement 0.05% 0.05%(h) 0.02%(h) Portfolio turnover rate 77% 137%(f) 182% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS B SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.62 $ 8.67 $ 8.63 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.11 0.07 0.03 Net realized and unrealized gain (loss) on investments and futures contracts 0.01 (0.04) 0.04 ------------ ------------ ------------ Total from investment operations 0.12 0.03 0.07 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.10) (0.08) (0.03) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.64 $ 8.62 $ 8.67 Total return (d)(e) 1.44% 0.35%(f) 0.77%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 25,125 $ 26,965 $ 6,261 Ratio of expenses to average net assets (g) 1.66% 1.75%(h) 1.75%(h) Ratio of net investment income to average net assets (g) 1.25% 1.16%(h) 2.78%(h) Reimbursement 0.08% 0.15%(h) 0.04%(h) Portfolio turnover rate 77% 137%(f) 182% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 196 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA SHORT TERM BOND FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.67 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.15 Net realized and unrealized loss on investments and futures contracts (0.04) ------------ Total from investment operations 0.11 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.14) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.64 Total return (c)(d)(e) 1.27% - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 3,128 Ratio of expenses to average net assets (f)(g) 1.06% Ratio of net investment income to average net assets (f)(g) 1.88% Reimbursement (g) 0.05% Waiver (g)(h) 0.60% Portfolio turnover rate 77% - ------------------------------------------------------------------------------- (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Had the Investment Advisor/Distributor not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. (h) Amount represents voluntary waivers of service and distribution fees.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.62 $ 8.67 $ 8.63 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.16 0.10 0.04 Net realized and unrealized gain (loss) on investments and futures contracts 0.02 (0.04) 0.04 ------------ ------------ ------------ Total from investment operations 0.18 0.06 0.08 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.16) (0.11) (0.04) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.64 $ 8.62 $ 8.67 Total return (d)(e) 2.08% 0.72%(f) 0.88%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 9,809 $ 18,512 $ 5,223 Ratio of expenses to average net assets (g) 1.06% 1.15%(h) 1.15%(h) Ratio of net investment income to average net assets (g) 1.85% 1.71%(h) 3.38%(h) Reimbursement 0.03% 0.18%(h) 0.04%(h) Waiver (i) 0.60% 0.60%(h) 0.60%(h) Portfolio turnover rate 77% 137%(f) 182% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Had the Investment Advisor/Distributor not waived or reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. (i) Amounts represent voluntary waivers of service and distribution fees. 197 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA SHORT TERM BOND FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS G SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.62 $ 8.67 $ 8.63 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.12 0.09 0.03 Net realized and unrealized gain (loss) on investments and futures contracts 0.02 (0.05) 0.04 ------------ ------------ ------------ Total from investment operations 0.14 0.04 0.07 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.12) (0.09) (0.03) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.64 $ 8.62 $ 8.67 Total return (d)(e) 1.65% 0.47%(f) 0.85%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 1,056 $ 1,614 $ 1,874 Ratio of expenses to average net assets (g) 1.46% 1.55%(h) 1.55%(h) Ratio of net investment income to average net assets (g) 1.44% 1.58%(h) 2.98%(h) Reimbursement 0.16% 0.10%(h) 0.05%(h) Portfolio turnover rate 77% 137%(f) 182% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class G shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Had the Investment Advisor/Distributor not reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS T SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.62 $ 8.67 $ 8.63 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.18 0.13 0.04 Net realized and unrealized gain (loss) on investments and futures contracts 0.02 (0.05) 0.04 ------------ ------------ ------------ Total from investment operations 0.20 0.08 0.08 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.18) (0.13) (0.04) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.64 $ 8.62 $ 8.67 Total return (d)(e) 2.31% 0.93%(f) 0.95%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 21,160 $ 28,230 $ 30,859 Ratio of expenses to average net assets (g) 0.81% 0.90%(h) 0.90%(h) Ratio of net investment income to average net assets (g) 2.10% 2.25%(h) 3.63%(h) Reimbursement 0.05% 0.04%(h) 0.02%(h) Portfolio turnover rate 77% 137%(f) 182% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class T shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Had the Investment Advisor/Distributor not reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 198 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA SHORT TERM BOND FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.62 $ 8.67 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.20(c) 0.14(c) Net realized and unrealized gain (loss) on investments and futures contracts 0.01 (0.05) ------------ ------------ Total from investment operations 0.21 0.09 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.19) (0.14) From net realized gains -- -- ------------ ------------ Total distributions (0.19) (0.14) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.64 $ 8.62 Total return (f) 2.51%(g) 1.06%(g)(h) - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 437,074 $ 436,593 Ratio of expenses to average net assets (i) 0.66% 0.66%(j) Ratio of net investment income to average net assets (i) 2.27% 2.36%(j) Reimbursement 0.05% 0.07%(j) Portfolio turnover rate 52% 137%(h) - -------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2002 (b) 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.55 $ 8.36 $ 8.20 $ 8.39 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.32(c) 0.46(d) 0.42 0.33 Net realized and unrealized gain (loss) on investments and futures contracts 0.14 0.21(d) 0.16 (0.18) ------------ ------------ ------------ ------------ Total from investment operations 0.46 0.67 0.58 0.15 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.34) (0.46) (0.42) (0.33) From net realized gains --(e) (0.02) -- (0.01) ------------ ------------ ------------ ------------ Total distributions (0.34) (0.48) (0.42) (0.34) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.67 $ 8.55 $ 8.36 $ 8.20 Total return (f) 5.56% 8.07%(g) 7.26%(g) 1.80% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 317,588 $ 62,930 $ 35,856 $ 38,072 Ratio of expenses to average net assets (i) 0.67% 0.75% 0.88% 0.91% Ratio of net investment income to average net assets (i) 3.86% 5.29%(d) 5.09% 4.09% Reimbursement -- 0.16% 0.02% -- Portfolio turnover rate 182% 137% 147% 211% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001 was to increase the ratio of net investment income to average net assets from 5.26% to 5.29%. The impact to net investment income and net realized and unrealized gain per share was less than $0.01. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested. (g) Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 199 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA FIXED INCOME SECURITIES FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.34 $ 13.52 $ 13.42 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.50 0.26 0.11 Net realized and unrealized gain (loss) on investments 0.17 (0.14) 0.08 ------------ ------------ ------------ Total from investment operations 0.67 0.12 0.19 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.52) (0.30) (0.09) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.49 $ 13.34 $ 13.52 Total return (d) 5.13% 0.84%(e) 1.41%(e) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 10,707 $ 7,503 $ 945 Ratio of expenses to average net assets (f) 1.05% 1.44%(g) 0.92%(g) Ratio of net investment income to average net assets (f) 3.70% 2.84%(g) 4.78%(g) Portfolio turnover rate 124% 161%(e) 103% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS B SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.34 $ 13.52 $ 13.42 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.40 0.20 0.09 Net realized and unrealized gain (loss) on investments 0.17 (0.15) 0.08 ------------ ------------ ------------ Total from investment operations 0.57 0.05 0.17 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.42) (0.23) (0.07) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.49 $ 13.34 $ 13.52 Total return (d) 4.33% 0.34%(e) 1.27%(e) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 4,334 $ 4,410 $ 1,466 Ratio of expenses to average net assets (f) 1.82% 2.10%(g) 1.71%(g) Ratio of net investment income to average net assets (f) 2.94% 2.22%(g) 3.99%(g) Portfolio turnover rate 124% 161%(e) 103% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 200 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA FIXED INCOME SECURITIES FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.50 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.37 Net realized and unrealized gain on investments 0.02 ------------ Total from investment operations 0.39 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.40) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.49 Total return (c)(d)(e) 2.94% - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 158 Ratio of expenses to average net assets (f)(g) 1.64% Ratio of net investment income to average net assets (f)(g) 3.09% Waiver (g)(h) 0.15% Portfolio turnover rate 124% - ------------------------------------------------------------------------------- (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Had the Distributor not waived a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. (h) Amount represents voluntary waiver of service and distribution fees.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.34 $ 13.52 $ 13.42 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.42 0.22 0.09 Net realized and unrealized gain (loss) on investments 0.17 (0.15) 0.08 ------------ ------------ ------------ Total from investment operations 0.59 0.07 0.17 - --------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.44) (0.25) (0.07) - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.49 $ 13.34 $ 13.52 Total return (d)(e) 4.51% 0.51%(f) 1.30%(f) - --------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 1,745 $ 2,632 $ 427 Ratio of expenses to average net assets (g) 1.65% 1.79%(h) 1.58%(h) Ratio of net investment income to average net assets (g) 3.11% 2.44%(h) 4.12%(h) Waiver (i) 0.15% 0.15%(h) 0.15%(h) Portfolio turnover rate 124% 161%(f) 103% - ---------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Had the Distributor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. (i) Amount represents voluntary waiver of service and distribution fees. 201 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA FIXED INCOME SECURITIES FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.34 $ 13.52 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.53(c) 0.33(c) Net realized and unrealized gain (loss) on investments 0.18 (0.16) ------------ ------------ Total from investment operations 0.71 0.17 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.56) (0.35) From net realized gains -- -- ------------ ------------ Total distributions (0.56) (0.35) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.49 $ 13.34 Total return (f) 5.40% 1.26%(g) - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 324,325 $ 506,046 Ratio of expenses to average net assets (h) 0.80% 0.77%(i) Ratio of net investment income to average net assets (h) 3.96% 3.66%(i) Portfolio turnover rate 124% 161%(g) - -------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2002 (b) 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.22 $ 12.97 $ 12.44 $ 13.42 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.67(c) 0.77(d) 0.82 0.78 Net realized and unrealized gain (loss) on investments 0.31 0.26(d) 0.53 (0.98) ------------ ------------ ------------ ------------ Total from investment operations 0.98 1.03 1.35 (0.20) - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.68) (0.78) (0.82) (0.78) From net realized gains -- -- -- --(e) ------------ ------------ ------------ ------------ Total distributions (0.68) (0.78) (0.82) (0.78) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.52 $ 13.22 $ 12.97 $ 12.44 Total return (f) 7.65% 8.13% 11.27% (1.50)% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 547,524 $ 465,743 $ 378,799 $ 397,147 Ratio of expenses to average net assets (h) 0.67% 0.66% 0.66% 0.64% Ratio of net investment income to average net assets (h) 5.03% 5.83%(d) 6.53% 6.03% Portfolio turnover rate 103% 110% 105% 155% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001 was to decrease net investment income per share by $0.01, increase net realized and unrealized gain per share by $0.01 and decrease the ratio of net investment income to average net assets from 5.92% to 5.83%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (e) Rounds to less than $0.01 per share. (f) Total return at net asset value assuming all distributions reinvested. (g) Not annualized. (h) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (i) Annualized. 202 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA NATIONAL MUNICIPAL BOND FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.11 $ 10.28 $ 10.22 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.34 0.24 0.06 Net realized and unrealized gain (loss) on investments 0.28 (0.16) 0.10 ------------ ------------ ------------ Total from investment operations 0.62 0.08 0.16 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.35) (0.24) (0.06) From net realized gains (0.08) (0.01) (0.04) ------------ ------------ ------------ Total distributions (0.43) (0.25) (0.10) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.30 $ 10.11 $ 10.28 Total return (d)(e) 6.22% 0.75%(f) 1.59%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 1,286 $ 398 $ 67 Ratio of expenses to average net assets (g) 0.90% 0.90%(h) 0.90%(h) Ratio of net investment income to average net assets (g) 3.35% 3.49%(h) 3.85%(h) Reimbursement 1.59% 2.87%(h) 0.56%(h) Portfolio turnover rate 22% 12%(f) 43% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS B SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.11 $ 10.28 $ 10.22 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.27 0.19 0.05 Net realized and unrealized gain (loss) on investments 0.27 (0.16) 0.10 ------------ ------------ ------------ Total from investment operations 0.54 0.03 0.15 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.27) (0.19) (0.05) From net realized gains (0.08) (0.01) (0.04) ------------ ------------ ------------ Total distributions (0.35) (0.20) (0.09) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.30 $ 10.11 $ 10.28 Total return (d)(e) 5.44% 0.25%(f) 1.47%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 762 $ 593 $ 72 Ratio of expenses to average net assets (g) 1.65% 1.65%(h) 1.65%(h) Ratio of net investment income to average net assets (g) 2.67% 2.77%(h) 3.10%(h) Reimbursement 1.51% 2.82%(h) 0.56%(h) Portfolio turnover rate 22% 12%(f) 43% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 203 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA NATIONAL MUNICIPAL BOND FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.26 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.27 Net realized and unrealized gain on investments 0.12 ------------ Total from investment operations 0.39 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.27) From net realized gains (0.08) ------------ Total distributions (0.35) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.30 Total return (c)(d)(e) 3.89% - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 363 Ratio of expenses to average net assets (f)(g) 1.30% Ratio of net investment income to average net assets (f)(g) 2.96% Reimbursement (g) 1.70% Waiver (g)(h) 0.35% Portfolio turnover rate 22% - ------------------------------------------------------------------------------- (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Had the Investment Advisor/Distributor not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. (h) Amount represents voluntary waiver of service and distribution fees.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.11 $ 10.28 $ 10.22 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.31 0.21 0.05 Net realized and unrealized gain (loss) on investments 0.27 (0.16) 0.10 ------------ ------------ ------------ Total from investment operations 0.58 0.05 0.15 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.31) (0.21) (0.05) From net realized gains (0.08) (0.01) (0.04) ------------ ------------ ------------ Total distributions (0.39) (0.22) (0.09) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.30 $ 10.11 $ 10.28 Total return (d)(e) 5.79% 0.47%(f) 1.51%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 433 $ 443 $ 50 Ratio of expenses to average net assets (g) 1.30% 1.30%(h) 1.30%(h) Ratio of net investment income to average net assets (g) 3.02% 3.00%(h) 3.45%(h) Reimbursement 1.43% 2.86%(h) 0.56%(h) Waiver (i) 0.35% 0.35%(h) 0.35%(h) Portfolio turnover rate 22% 12%(f) 43% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Had the Investment Advisor/Distributor not waived or reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. (i) Amounts represent voluntary waiver of service and distribution fees. 204 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA NATIONAL MUNICIPAL BOND FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.11 $ 10.28 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.38(d) 0.27(d) Net realized and unrealized gain (loss) on investments 0.26 (0.17) ------------ ------------ Total from investment operations 0.64 0.10 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.37) (0.26) From net realized gains (0.08) (0.01) ------------ ------------ Total distributions (0.45) (0.27) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.30 $ 10.11 Total return (f)(g) 6.47% 1.00%(h) - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 11,967 $ 14,349 Ratio of expenses to average net assets (i) 0.65% 0.65%(j) Ratio of net investment income to average net assets (i) 3.68% 3.86%(j) Reimbursement 1.40% 1.90%(j) Portfolio turnover rate 22% 12%(h) - -------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, PERIOD ENDED -------------------------------------------------- DECEMBER 31, CLASS Z SHARES 2002 (b) 2001 2000 1999 (c) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.77 $ 9.82 $ 9.28 $ 10.00 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.41(d) 0.44(e) 0.44 0.34 Net realized and unrealized gain (loss) on investments 0.55 (0.03)(e) 0.54 (0.72) ------------ ------------ ------------ ------------ Total from investment operations 0.96 0.41 0.98 (0.38) - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.41) (0.44) (0.44) (0.34) From net realized gains (0.04) (0.02) -- -- ------------ ------------ ------------ ------------ Total distributions (0.45) (0.46) (0.44) (0.34) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.28 $ 9.77 $ 9.82 $ 9.28 Total return (f)(g) 10.04% 4.16% 10.87% (3.93)%(h) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 16,470 $ 13,769 $ 10,898 $ 10,135 Ratio of expenses to average net assets (i) 0.65% 0.65% 0.65% 0.65%(j) Ratio of net investment income to average net assets (i) 4.10% 4.44%(e) 4.68% 4.21%(j) Reimbursement 0.50% 0.66% 0.64% 1.07%(j) Portfolio turnover rate 43% 20% 21% 12%(h) - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) The Fund commenced investment operations on February 10, 1999. Per share data, total return and portfolio turnover rate reflect activity from that date. (d) Per share data was calculated using average shares outstanding during the period. (e) Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001 was to decrease the ratio of net investment income to average net assets from 4.47% to 4.44%. The impact to net investment income and net realized and unrealized loss per share was less than $0.01. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (f) Total return at net asset value assuming all distributions reinvested. (g) Had the Investment Advisor not reimbursed a portion of expenses, total return would have been reduced. (h) Not annualized. (i) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (j) Annualized. 205 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA OREGON MUNICIPAL BOND FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.25 $ 12.50 $ 12.52 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.46 0.29 0.08 Net realized and unrealized gain (loss) on investments 0.34 (0.22) 0.07 ------------ ------------ ------------ Total from investment operations 0.80 0.07 0.15 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.46) (0.31) (0.08) From net realized gains (0.14) (0.01) (0.09) ------------ ------------ ------------ Total distributions (0.60) (0.32) (0.17) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.45 $ 12.25 $ 12.50 Total return (d) 6.68% 0.56%(e) 1.19%(e) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 3,680 $ 2,138 $ 477 Ratio of expenses to average net assets (f) 0.92% 1.16%(g) 0.92%(g) Ratio of net investment income to average net assets (f) 3.73% 3.52%(g) 4.11%(g) Portfolio turnover rate 11% 10%(e) 21% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS B SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.25 $ 12.50 $ 12.52 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.37 0.24 0.06 Net realized and unrealized gain (loss) on investments 0.34 (0.23) 0.08 ------------ ------------ ------------ Total from investment operations 0.71 0.01 0.14 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.37) (0.25) (0.07) From net realized gains (0.14) (0.01) (0.09) ------------ ------------ ------------ Total distributions (0.51) (0.26) (0.16) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.45 $ 12.25 $ 12.50 Total return (d) 5.87% 0.05%(e) 1.10%(e) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 1,190 $ 999 $ 373 Ratio of expenses to average net assets (f) 1.68% 1.86%(g) 1.67%(g) Ratio of net investment income to average net assets (f) 2.97% 2.83%(g) 3.36%(g) Portfolio turnover rate 11% 10%(e) 21% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 206 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA OREGON MUNICIPAL BOND FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.42 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.36 Net realized and unrealized gain on investments 0.18 ------------ Total from investment operations 0.54 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.37) From net realized gains (0.14) ------------ Total distributions (0.51) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.45 Total return (c)(d)(e) 4.41% - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 278 Ratio of expenses to average net assets (f)(g) 1.30% Ratio of net investment income to average net assets (f)(g) 3.28% Waiver (g)(h) 0.35% Portfolio turnover rate 11% - ------------------------------------------------------------------------------- (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Had the Distributor not waived a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. (h) Amount represents voluntary waiver of service and distribution fees.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.25 $ 12.50 $ 12.52 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.41 0.27 0.07 Net realized and unrealized gain (loss) on investments 0.34 (0.23) 0.07 ------------ ------------ ------------ Total from investment operations 0.75 0.04 0.14 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.41) (0.28) (0.07) From net realized gains (0.14) (0.01) (0.09) ------------ ------------ ------------ Total distributions (0.55) (0.29) (0.16) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.45 $ 12.25 $ 12.50 Total return (d)(e) 6.25% 0.32%(f) 1.14%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 790 $ 700 $ 448 Ratio of expenses to average net assets (g) 1.33% 1.43%(h) 1.32%(h) Ratio of net investment income to average net assets (g) 3.34% 3.30%(h) 3.71%(h) Waiver (i) 0.35% 0.35%(h) 0.35%(h) Portfolio turnover rate 11% 10%(f) 21% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Had the Distributor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. (i) Amounts represent voluntary waiver of service and distribution fees. 207 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA OREGON MUNICIPAL BOND FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.25 $ 12.50 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.50(c) 0.34(c) Net realized and unrealized gain (loss) on investments 0.34 (0.23) ------------ ------------ Total from investment operations 0.84 0.11 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.50) (0.35) From net realized gains (0.14) (0.01) ------------ ------------ Total distributions (0.64) (0.36) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.45 $ 12.25 Total return (e) 6.97% 0.83%(f) - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 434,509 $ 485,427 Ratio of expenses to average net assets (g) 0.65% 0.68%(h) Ratio of net investment income to average net assets (g) 4.03% 4.13%(h) Portfolio turnover rate 11% 10%(f) - -------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2002 (b) 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.08 $ 12.13 $ 11.56 $ 12.46 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.55(c) 0.57(d) 0.58 0.56 Net realized and unrealized gain (loss) on investments 0.54 (0.02)(d) 0.58 (0.88) ------------ ------------ ------------ ------------ Total from investment operations 1.09 0.55 1.16 (0.32) - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.55) (0.57) (0.58) (0.56) From net realized gains (0.12) (0.03) (0.01) (0.02) ------------ ------------ ------------ ------------ Total distributions (0.67) (0.60) (0.59) (0.58) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.50 $ 12.08 $ 12.13 $ 11.56 Total return (e) 9.24% 4.55% 10.28% (2.65)% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 508,865 $ 491,638 $ 436,544 $ 409,919 Ratio of expenses to average net assets (g) 0.58% 0.57% 0.58% 0.57% Ratio of net investment income to average net assets (g) 4.45% 4.64%(d) 4.92% 4.64% Portfolio turnover rate 21% 14% 22% 28% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001 was less than $0.01 to net investment income and net realized and unrealized loss per share and less than 0.01% to the ratio of net investment income to average net assets. Per share data and ratios for the periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (e) Total return at net asset value assuming all distributions reinvested. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 208 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA HIGH YIELD FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS A SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.49 $ 8.37 $ 8.17 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.50 0.33 0.09 Net realized and unrealized gain on investments 0.24 0.15 0.20 ------------ ------------ ------------ Total from investment operations 0.74 0.48 0.29 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.54) (0.36) (0.09) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.69 $ 8.49 $ 8.37 Total return (d) 8.90% 5.81%(e) 3.50%(e) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 335,841 $ 193,267 $ 33,992 Ratio of expenses to average net assets (f) 1.01% 1.07%(g) 1.15%(g) Ratio of net investment income to average net assets (f) 5.74% 5.82%(g) 6.46%(g) Portfolio turnover rate 41% 38%(e) 42% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class A shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS B SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.49 $ 8.37 $ 8.17 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.43 0.28 0.07 Net realized and unrealized gain on investments 0.24 0.15 0.20 ------------ ------------ ------------ Total from investment operations 0.67 0.43 0.27 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.47) (0.31) (0.07) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.69 $ 8.49 $ 8.37 Total return (d) 8.07% 5.20%(e) 3.33%(e) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 102,038 $ 89,950 $ 16,701 Ratio of expenses to average net assets (f) 1.77% 1.94%(g) 1.90%(g) Ratio of net investment income to average net assets (f) 4.97% 4.93%(g) 5.71%(g) Portfolio turnover rate 41% 38%(e) 42% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class B shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 209 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA HIGH YIELD FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD PERIOD ENDED AUGUST 31, CLASS C SHARES 2004 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.64 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.39 Net realized and unrealized gain on investments 0.09 ------------ Total from investment operations 0.48 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.43) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.69 Total return (c)(d)(e) 5.65% - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 20,126 Ratio of expenses to average net assets (f)(g) 1.61% Ratio of net investment income to average net assets (f)(g) 5.03% Waiver (g)(h) 0.15% Portfolio turnover rate 41% - ------------------------------------------------------------------------------- (a) Class C shares were initially offered on October 13, 2003. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (d) Had the Distributor not waived a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. (h) Amount represents voluntary waiver of service and distribution fees.
YEAR ENDED PERIOD ENDED PERIOD ENDED AUGUST 31, AUGUST 31, DECEMBER 31, CLASS D SHARES 2004 2003 (a) 2002 (b) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.49 $ 8.37 $ 8.17 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (c) 0.44 0.29 0.07 Net realized and unrealized gain on investments 0.24 0.15 0.20 ------------ ------------ ------------ Total from investment operations 0.68 0.44 0.27 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.48) (0.32) (0.07) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.69 $ 8.49 $ 8.37 Total return (d)(e) 8.23% 5.35%(f) 3.35%(f) - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 86,854 $ 103,559 $ 18,035 Ratio of expenses to average net assets (g) 1.62% 1.73%(h) 1.75%(h) Ratio of net investment income to average net assets (g) 5.12% 5.12%(h) 5.86%(h) Waiver (i) 0.15% 0.15%(h) 0.15%(h) Portfolio turnover rate 41% 38%(f) 42% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) Class D shares were initially offered on November 1, 2002. Per share data and total return reflect activity from that date. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. (e) Had the Distributor not waived a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. (i) Amounts represent voluntary waiver of service and distribution fees. 210 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA HIGH YIELD FUND FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.49 $ 8.37 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.52(c) 0.35(c) Net realized and unrealized gain (loss) on investments 0.24 0.15 ------------ ------------ Total from investment operations 0.76 0.50 - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.56) (0.38) From net realized gains -- -- ------------ ------------ Total distributions (0.56) (0.38) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.69 $ 8.49 Total return (e) 9.16% 6.04%(f) - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 1,186,454 $ 1,197,340 Ratio of expenses to average net assets (g) 0.77% 0.82%(h) Ratio of net investment income to average net assets (g) 5.97% 6.19%(h) Portfolio turnover rate 41% 38%(f) - -------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2002 (b) 2001 2000 1999 ------------ ------------ ------------ ------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 8.87 $ 8.98 $ 9.32 $ 9.84 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.57(c) 0.67(d) 0.75 0.74 Net realized and unrealized gain (loss) on investments (0.48) (0.09)(d) (0.34) (0.51) ------------ ------------ ------------ ------------ Total from investment operations 0.09 0.58 0.41 0.23 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.59) (0.69) (0.75) (0.74) From net realized gains -- -- -- (0.01) ------------ ------------ ------------ ------------ Total distributions (0.59) (0.69) (0.75) (0.75) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.37 $ 8.87 $ 8.98 $ 9.32 Total return (e) 1.17% 6.63% 4.61% 2.38% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 702,785 $ 238,994 $ 97,575 $ 71,678 Ratio of expenses to average net assets (g) 0.77% 0.85% 0.93% 0.91% Ratio of net investment income to average net assets (g) 6.84% 7.47%(d) 8.22% 7.71% Portfolio turnover rate 42% 69% 50% 49% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Effective January 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and accreting discount on all debt securities. The effect of this change for the year ended December 31, 2001 was to decrease net investment income per share by $0.02, decrease net realized and unrealized loss per share by $0.02 and decrease the ratio of net investment income to average net assets from 7.64% to 7.47%. Per share data and ratios for periods prior to December 31, 2001 have not been restated to reflect this change in presentation. (e) Total return at net asset value assuming all distributions reinvested. (f) Not annualized. (g) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (h) Annualized. 211 FINANCIAL HIGHLIGHTS ___________________________________________________________ COLUMBIA DAILY INCOME COMPANY FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD ENDED AUGUST 31, AUGUST 31, CLASS Z SHARES 2004 2003 (a) - ------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 - ------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.004(c) 0.004(c) - ------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.004) (0.004) - ------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 Total return (d) 0.36% 0.40%(e) - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 661,114 $ 898,164 Ratio of expenses to average net assets (f) 0.71% 0.69%(g) Ratio of net investment income to average net assets (f) 0.38% 0.53%(g) - -------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------- CLASS Z SHARES 2002 (b) 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 - -------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.012(c) 0.036 0.058 0.046 - -------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS: From net investment income (0.012) (0.036) (0.058) (0.046) - -------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 Total return (d) 1.17% 3.70% 6.00% 4.71% - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 1,136,075 $ 1,253,535 $ 1,198,151 $ 1,165,289 Ratio of expenses to average net assets (f) 0.60% 0.60% 0.60% 0.64% Ratio of net investment income to average net assets (f) 1.16% 3.61% 5.82% 4.61% - --------------------------------------------------------------------------------------------------------------------
(a) The Fund changed its fiscal year end from December 31 to August 31. (b) On November 1, 2002, the existing Fund shares were renamed Class Z shares. (c) Per share data was calculated using average shares outstanding during the period. (d) Total return at net asset value assuming all distributions reinvested. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 212 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ______________________________________________ COLUMBIA FUNDS TO THE BOARD OF DIRECTORS AND THE SHAREHOLDERS OF: COLUMBIA COMMON STOCK FUND, INC. COLUMBIA GROWTH FUND, INC. COLUMBIA INTERNATIONAL STOCK FUND, INC. COLUMBIA MID CAP GROWTH FUND, INC. (FORMERLY COLUMBIA SPECIAL FUND, INC.) COLUMBIA SMALL CAP GROWTH FUND, INC. (FORMERLY COLUMBIA SMALL CAP FUND, INC.) COLUMBIA REAL ESTATE EQUITY FUND, INC. COLUMBIA TECHNOLOGY FUND, INC. COLUMBIA STRATEGIC INVESTOR FUND, INC. (FORMERLY COLUMBIA STRATEGIC VALUE FUND, INC.) COLUMBIA BALANCED FUND, INC. COLUMBIA SHORT TERM BOND FUND, INC. COLUMBIA FIXED INCOME SECURITIES FUND, INC. COLUMBIA NATIONAL MUNICIPAL BOND FUND, INC. COLUMBIA OREGON MUNICIPAL BOND FUND, INC. COLUMBIA HIGH YIELD FUND, INC. COLUMBIA DAILY INCOME COMPANY In our opinion, the accompanying statements of assets and liabilities, including the investment portfolios, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the above Funds (the "Funds") at August 31, 2004, and the results of their operations, the changes in their net assets, and their financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States), which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Boston, Massachusetts October 18, 2004 213 UNAUDITED INFORMATION __________________________________________________________ COLUMBIA FUNDS FEDERAL INCOME TAX INFORMATION COLUMBIA COMMON STOCK FUND For non-corporate shareholders 100.00%, or the maximum amount allowable under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by the Fund for the period September 1, 2003 to August 31, 2004 may represent qualified dividend income. Final information will be provided in your 2004 1099-Div Form. 100.00% of the ordinary income distributed by the Fund for the year ended August 31, 2004, qualifies for the corporate dividends received deduction. COLUMBIA INTERNATIONAL STOCK FUND Foreign taxes paid during the fiscal year ended August 31, 2004, amounting to $2,221,173 ($0.05 per share) are expected to be passed through to shareholders as 100.00% allowable foreign tax credits on Form 1099-DIV for the year ending December 31, 2004. Gross income derived from sources within foreign countries amounted to $10,502,144 ($0.23 per share) for the fiscal year ended August 31, 2004. For non-corporate shareholders 100.00%, or the maximum amount allowable under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by the Fund for the period September 1, 2003 to August 31, 2004 may represent qualified dividend income. Final information will be provided in your 2004 1099-Div Form. COLUMBIA STRATEGIC INVESTOR FUND For the fiscal year ended August 31, 2004, the Fund designates long-term capital gains of $4,331,771. For non-corporate shareholders 100.00%, or the maximum amount allowable under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by the Fund for the period September 1, 2003 to August 31, 2004 may represent qualified dividend income. Final information will be provided in your 2004 1099-Div Form. 100.00% of the ordinary income distributed by the Fund for the year ended August 31, 2004, qualifies for the corporate dividends received deduction. COLUMBIA BALANCED FUND For non-corporate shareholders 45.69%, or the maximum amount allowable under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by the Fund for the period September 1, 2003 to August 31, 2004 may represent qualified dividend income. Final information will be provided in your 2004 1099-Div Form. 45.50% of the ordinary income distributed by the Fund for the year ended August 31, 2004, qualifies for the corporate dividends received deduction. 214 ________________________________________________________________________________ COLUMBIA FUNDS COLUMBIA FIXED INCOME SECURITIES FUND For the fiscal year ended August 31, 2004, the Fund designates long-term capital gains of $3,120,677. COLUMBIA NATIONAL MUNICIPAL BOND FUND For the fiscal year ended August 31, 2004, the Fund designates long-term capital gains of $178,349. 99.56% of the distributions from net investment income will be treated as exempt income for federal income tax purposes. COLUMBIA OREGON MUNICIPAL BOND FUND For the fiscal year ended August 31, 2004, the Fund designates long-term capital gains of $6,461,631. 100.00% of the distributions from net investment income will be treated as exempt income for federal income tax purposes. 215 TRUSTEES _______________________________________________________________________ COLUMBIA FUNDS The Trustees/Directors serve terms of indefinite duration. The names, addresses and ages of the Trustees/Directors and officers of the Funds in the Columbia Funds Complex, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of portfolios overseen by each Trustee/Director and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the Columbia Funds Complex.
NAME, ADDRESS AND AGE, POSITION WITH FUNDS, PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA YEAR FIRST ELECTED OR APPOINTED TO OFFICE (1) FUNDS COMPLEX OVERSEEN BY TRUSTEE/DIRECTOR, OTHER DIRECTORSHIPS HELD DISINTERESTED TRUSTEES DOUGLAS A. HACKER (Age 48) Executive Vice President - Strategy of United Airlines (airline) since December P.O. Box 66100 2002 (formerly President of UAL Loyalty Services (airline) from September 2001 Chicago, IL 60666 to December 2002; Executive Vice President and Chief Financial Officer of United Trustee (since 1996) Airlines from March 1999 to September 2001; Senior Vice President - Finance from March 1993 to July 1999). Oversees 118, Orbitz, Inc. (on-line travel company) -------------------------------------------------------------------------------- JANET LANGFORD KELLY (Age 46) Adjunct Professor of Law, Northwestern University since September 2004, Private 9534 W. Gull Lake Drive Investor since March 2004 (formerly Chief Administrative Officer and Senior Vice Richland, MI 49083-8530 President, Kmart Holding Corporation (consumer goods), from September 2003 to Trustee (since 1996) March 2004; Executive Vice President - Corporate -Development and Administration, General Counsel and Secretary, Kellogg Company (food manufacturer), from September 1999 to August 2003; Senior Vice President, Secretary and General Counsel, Sara Lee Corporation (branded, packaged, consumer-products manufacturer) from January, 1995 to September 1999). Oversees 118, None -------------------------------------------------------------------------------- RICHARD W. LOWRY (Age 68) Private Investor since August 1987 (formerly Chairman and Chief Executive 10701 Charleston Drive Officer, U.S. Plywood Corporation (building products manufacturer)). Oversees Vero Beach, FL 32963 120 3, None Trustee (since 1995) -------------------------------------------------------------------------------- CHARLES R. NELSON (Age 62) Professor of Economics, University of Washington, since January 1976; Ford and Department of Economics Louisa Van Voorhis Professor of Political Economy, University of Washington, University of Washington since September, 1993 (formerly Director, Institute for Economic Research, Seattle, WA 98195 University of Washington from September 2001 to June 2003) Adjunct Professor of Trustee (since 1981) Statistics, University of Washington, since September 1980; Associate Editor, Journal of Money Credit and Banking, since September 1993; consultant on econometric and statistical matters. Oversees 118, None -------------------------------------------------------------------------------- JOHN J. NEUHAUSER (Age 61) Academic Vice President and Dean of Faculties since August 1999, Boston College 84 College Road (formerly Dean, Boston College School of Management from September 1977 to Chestnut Hill, MA 02467-3838 September 1999). Oversees 121 3,4, Saucony, Inc. (athletic footwear) Trustee (since 1985) -------------------------------------------------------------------------------- PATRICK J. SIMPSON (Age 60) Partner, Perkins Coie L.L.P. (law firm). Oversees 118, None 1120 N.W. Couch Street Tenth Floor Portland, OR 97209-4128 Trustee (since 2000) -------------------------------------------------------------------------------- (1) In December 2000, the boards of each of the former Liberty Funds and former Stein Roe Funds were combined into one board of trustees responsible for the oversight of both fund groups (collectively, the "Liberty Board"). In October 2003, the trustees on the Liberty Board were elected to the boards of the Columbia Funds (the "Columbia Board") and of the CMG Fund Trust (the "CMG Funds Board"); simultaneous with that election, Patrick J. Simpson and Richard L. Woolworth, who had been directors on the Columbia Board and trustees on the CMG Funds Board, were appointed to serve as trustees of the Liberty Board. The date shown is the earliest date on which a trustee/director was elected or appointed to the board of a Fund in the Columbia Funds Complex.
216 ________________________________________________________________________________ COLUMBIA FUNDS
NAME, ADDRESS AND AGE, POSITION WITH FUNDS, PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN YEAR FIRST ELECTED OR APPOINTED TO OFFICE (1) COLUMBIA FUNDS COMPLEX OVERSEEN BY TRUSTEE/DIRECTOR, OTHER DIRECTORSHIPS HELD DISINTERESTED TRUSTEES THOMAS E. STITZEL (Age 68) Business Consultant since 1999 (formerly Professor of Finance from 2208 Tawny Woods Place 1975 to 1999, College of Business, Boise State University); Chartered Boise, ID 83706 Financial Analyst. Oversees 118, None. Trustee (since 1998) -------------------------------------------------------------------------------- THOMAS C. THEOBALD (Age 67) Partner and Senior Advisor, Chicago Growth Partners (private equity 303 W. Madison investing) since September 2004 (formerly Managing Director, Suite 2500 William Blair Capital Partners (private equity investing) from September Chicago, IL 60606 1994 to September 2004). Oversees 118, Anixter International (network Trustee and Chairman of the Board 5 support equipment distributor); Ventas, Inc. (real estate investment (since 1996) trust); Jones Lang LaSalle (real estate management services) and MONY Group (life insurance) -------------------------------------------------------------------------------- ANNE-LEE VERVILLE (Age 59) Retired since 1997 (formerly General Manager, Global Education 359 Stickney Hill Road Industry, IBM Corporation (computer and technology) from 1994 Hopkinton, NH 03229 to 1997). Oversees 119 4, Chairman of the Board of Directors, Enesco Group, Trustee (since 1998) Inc. (designer, importer and distributor of giftware and collectibles) -------------------------------------------------------------------------------- RICHARD L. WOOLWORTH (Age 63) Retired since December 2003 (formerly Chairman and Chief 100 S.W. Market Street #1500 Executive Officer, The Regence Group (regional health insurer); Portland, OR 97207 Chairman and Chief Executive Officer, BlueCross BlueShield of Trustee (since 1991) Oregon; Certified Public Accountant, Arthur Young & Company). Oversees 118, Northwest Natural Gas Co. (natural gas service provider) -------------------------------------------------------------------------------- INTERESTED TRUSTEE WILLIAM E. MAYER 2 (Age 64) Managing Partner, Park Avenue Equity Partners (private equity) 399 Park Avenue since February 1999 (formerly Founding Partner, Development Suite 3204 Capital LLC from November 1996 to February 1999). Oversees New York, NY 10022 120 3, Lee Enterprises (print media), WR Hambrecht + Co. Trustee (since 1994) (financial service provider); First Health (healthcare); Reader's Digest (publishing); OPENFIELD Solutions (retail industry technology provider) -------------------------------------------------------------------------------- (2) Mr. Mayer is an "interested person" (as defined in the Investment Company Act of 1940 (1940 Act)) by reason of his affiliation with WR Hambrecht + Co. (3) Messrs. Lowry, Neuhauser and Mayer also serve as directors/trustees of the Liberty All-Star Funds, currently consisting of 2 funds, which are advised by an affiliate of the Advisor. (4) Mr. Neuhauser and Ms. Verville also serve as disinterested directors of Columbia Management Multi-Strategy Hedge Fund, LLC, which is advised by the Advisor. (5) Mr. Theobald was appointed as Chairman of the Board effective December 10, 2003.
217 OFFICERS _______________________________________________________________________ COLUMBIA FUNDS
NAME, ADDRESS AND AGE, POSITION WITH COLUMBIA FUNDS, YEAR FIRST ELECTED OR APPOINTED TO OFFICE PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS CHRISTOPHER L. WILSON (Age 47) President of the Columbia Funds since October 2004 (formerly President and One Financial Center Chief Executive Officer, CDC IXIS Asset Management Services, Inc. from Boston, MA 02111 September, 1998 to August 2004). President (since 2004) -------------------------------------------------------------------------------- J. KEVIN CONNAUGHTON (Age 40) Treasurer of the Columbia Funds and of the Liberty All-Star Funds since One Financial Center December 2000; Vice President of the Advisor since April 2003 (formerly Boston, MA 02111 President of the Columbia Funds from February 2004 to October 2004; Chief Treasurer (since 2000) Accounting Officer and Controller of the Liberty Funds an Funds from February 1998 to October 2000); Treasurer of the Galaxy Funds since September 2002; Treasurer, Columbia Management Multi-Strategy Hedge Fund, LLC since December 2002 (formerly Vice President of Colonial Management Associates, Inc. from February 1998 to October, 2000). -------------------------------------------------------------------------------- MARY JOAN HOENE (Age 54) Senior Vice President and Chief Compliance Officer of the Columbia Funds since 40 West 57th Street August 2004; Chief Compliance Officer of the Liberty All-Star Funds since New York, NY 10019 August 2004 (formerly Partner, Carter, Ledyard & Milburn LLP from January 2001 Senior Vice President and to August, 2004; Counsel, Carter, Ledyard & Milburn LLP from November 1999 to Chief Compliance Officer December 2000; Vice President and Counsel, Equitable Life Assurance Society of (since 2004) the United States from April 1998 to November 1999). -------------------------------------------------------------------------------- MICHAEL G. CLARKE (Age 34) Chief Accounting Officer of the Columbia Funds and of the Liberty All-Star One Financial Center Funds since October 2004 (formerly Controller of the Columbia Funds and of the Boston, MA 02111 Liberty All-Star Funds from May 2004 to October 2004; Assistant Treasurer from Chief Accounting Officer June 2002 to May 2004; Vice President, Product Strategy & Development of the (since 2004) Liberty Funds Group from February 2001 to June 2002; Assistant Treasurer of the Liberty Funds and -of the Liberty All-Star Funds from August 1999 to February, 2001; Audit Manager, Deloitte & Toche LLP from May 1997 to August 1999). -------------------------------------------------------------------------------- JEFFREY R. COLEMAN (Age 34) Controller of the Columbia Funds and of the Liberty All-Star Funds since One Financial Center October 2004 (formerly Vice President of CDC IXIS Asset Management Services, Boston, MA 02111 Inc. and Deputy Treasurer of the CDC Nvest Funds and Loomis Sayles Funds from Controller (since 2004) February 2003 to September 2004; Assistant Vice President of CDC IXIS -Asset Management Services, Inc. and Assistant Treasurer of the CDC Nvest Funds from August 2000 to February 2003; Tax Manager of PFPC, Inc. from November 1996 to August 2000). -------------------------------------------------------------------------------- DAVID A. ROZENSON (Age 50) Secretary of the Columbia Funds and of the Liberty All-Star Funds since One Financial Center December 2003; Senior Counsel, Bank of America Corporation (formerly Boston, MA 02111 FleetBoston Financial Corporation) since January 1996; Associate General Secretary (since 2003) Counsel, Columbia Management Group since November 2002. --------------------------------------------------------------------------------
218 COLUMBIA FUNDS _________________________________________________________________ COLUMBIA FUNDS ---------------------------------------------------- LARGE GROWTH Columbia Common Stock Columbia Growth Columbia Growth Stock Columbia Large Cap Growth Columbia Tax-Managed Growth Columbia Tax-Managed Growth II Columbia Young Investor ---------------------------------------------------- LARGE VALUE Columbia Disciplined Value Columbia Growth & Income Columbia Large Cap Core Columbia Tax-Managed Value ---------------------------------------------------- MIDCAP GROWTH Columbia Acorn Select Columbia Mid Cap Growth Columbia Tax-Managed Aggressive Growth ---------------------------------------------------- MIDCAP VALUE Columbia Dividend Income Columbia Mid Cap Columbia Strategic Investor ---------------------------------------------------- SMALL GROWTH Columbia Acorn Columbia Acorn USA Columbia Small Company Equity ---------------------------------------------------- SMALL VALUE Columbia Small Cap Columbia Small Cap Value ---------------------------------------------------- BALANCED Columbia Asset Allocation Columbia Balanced Columbia Liberty Fund ---------------------------------------------------- SPECIALTY Columbia Real Estate Equity Columbia Technology Columbia Utilities ---------------------------------------------------- TAXABLE FIXED-INCOME Columbia Contrarian Income Columbia Corporate Bond Columbia Federal Securities Columbia Fixed Income Securities Columbia High Yield Columbia High Yield Opportunities Columbia Income Columbia Intermediate Bond Columbia Intermediate Government Income Columbia Quality Plus Bond Columbia Short Term Bond Columbia Strategic Income ---------------------------------------------------- TAX EXEMPT Columbia High Yield Municipal Columbia Intermediate Tax-Exempt Bond Columbia Managed Municipals Columbia National Municipal Bond Columbia Tax-Exempt Columbia Tax-Exempt Insured 219 ________________________________________________________________________________ COLUMBIA FUNDS ---------------------------------------------------- SINGLE STATE TAX EXEMPT Columbia California Tax-Exempt Columbia Connecticut Intermediate Municipal Bond Columbia Connecticut Tax-Exempt Columbia Florida Intermediate Municipal Bond Columbia Massachusetts Intermediate Municipal Bond Columbia Massachusetts Tax-Exempt Columbia New Jersey Intermediate Municipal Bond Columbia New York Intermediate Municipal Bond Columbia New York Tax-Exempt Columbia Oregon Municipal Bond Columbia Pennsylvania Intermediate Municipal Bond Columbia Rhode Island Intermediate Municipal Bond ---------------------------------------------------- MONEY MARKET Columbia Money Market Columbia Municipal Money Market ---------------------------------------------------- INTERNATIONAL/GLOBAL Columbia Acorn International Columbia Acorn International Select Columbia Europe Columbia Global Equity Columbia International Equity Columbia International Stock Columbia Newport Asia Pacific Columbia Newport Greater China Columbia Newport Tiger ---------------------------------------------------- INDEX Columbia Large Company Index Columbia Small Company Index Columbia U.S. Treasury Index Please consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. Contact us at 800-345-6611 for a prospectus which contains this and other important information about the fund. Read it carefully before you invest. For complete product information on any Columbia fund, visit our website at www.columbiafunds.com. Columbia Management Group and Columbia Management refer collectively to the various investment advisory subsidiaries of Columbia Management Group, including Columbia Management Advisors, Inc., the registered investment advisor, and Columbia Funds Distributor, Inc. 220 This page intentionally left blank. This page intentionally left blank. This page intentionally left blank. This page intentionally left blank. IMPORTANT INFORMATION ABOUT THIS REPORT ________________________________________ COLUMBIA FUNDS TRANSFER AGENT Columbia Funds Services, Inc. P.O. Box 8081 Boston MA 02266-8081 800.345.6611 DISTRIBUTOR Columbia Funds Distributor, Inc. One Financial Center Boston MA 02111 INVESTMENT ADVISOR Columbia Management Advisors, Inc. 100 Federal Street Boston MA 02110 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP 125 High Street Boston MA 02110 The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Columbia Funds. This report may also be used as sales literature when preceded or accompanied by the current prospectus which provides details of sales charges, investment objectives and operating policies of the funds and with the most recent copy of the Columbia Funds Performance Update. A description of the policies and procedures that the fund uses to determine how to vote proxies relating to their portfolio securities and a copy of the fund's voting record are available (i) at www.columbiamanagement.com; (ii) on the Securities and Exchange Commission's website at www.sec.gov and (iii) without charge, upon request, by calling 800-368-0346. 225 [Image of eDelivery] Help your fund reduce printing and postage costs! Elect to get your shareholder reports by electronic delivery. With Columbia's eDelivery program, you receive an e-mail message when your shareholder report becomes available online. If your fund account is registered with Columbia Funds, you can sign up quickly and easily on our website at www.columbiafunds.com. Please note -- if you own your fund shares through a financial institution, contact the institution to see if it offers electronic delivery. If you own your fund shares through a retirement plan, electronic delivery may not be available to you. Columbia Funds Annual Report, August 31, 2004 [EAGLE HEAD LOGO] COLUMBIA FUNDS A MEMBER OF COLUMBIA MANAGEMENT GROUP (C)2004 COLUMBIA FUNDS DISTRIBUTOR, INC. ONE FINANCIAL CENTER, BOSTON, MA 02111-2621 800.426.3750 WWW.COLUMBIAFUNDS.COM COL-02/778S-0904 (10/04) 04/2927 ITEM 2. CODE OF ETHICS. (a) The registrant has, as of the end of the period covered by this report, adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. (b) During the period covered by this report, there were not any amendments to a provision of the code of ethics adopted in 2(a) above. (c) During the period covered by this report, there were not any waivers or implicit waivers to a provision of the code of ethics adopted in 2(a) above. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Trustees has determined that Douglas A. Hacker, Thomas E. Stitzel, Anne-Lee Verville and Richard L. Woolworth, each of whom are members of the registrant's Board of Trustees and Audit Committee, each qualify as an audit committee financial expert. Mr. Hacker, Mr. Stitzel, Ms. Verville and Mr. Woolworth are each independent trustees, as defined in paragraph (a)(2) of this item's instructions and collectively constitute the entire Audit Committee. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) Aggregate Audit Fees billed by the principal accountant for professional services rendered during the fiscal years ended August 31, 2004 and August 31, 2003 are approximately as follows: 2004 2003 $29,300 $26,000 Audit Fees include amounts related to the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. Note that fiscal year 2004 includes the review of a non-routine regulatory filing. (b) Aggregate Audit-Related Fees billed by the principal accountant for professional services rendered during the fiscal years ended August 31, 2004 and August 31, 2003 are approximately as follows: 2004 2003 $3,500 $3,500 Audit-Related Fees include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported in Audit Fees above. In both fiscal years 2004 and 2003, Audit-Related Fees include certain agreed-upon procedures performed for semi-annual shareholder reports. The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. For the registrant, the percentage of Audit-Related services that were approved under the "de minimis" exception during the fiscal years ended August 31, 2004 and August 31, 2003 was zero. The pre-approval requirements for services to the investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal years ended August 31, 2004 and August 31, 2003, there were no Audit-Related Fees that were approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X. The percentage of Audit-Related fees required to be approved under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X that were approved under the "de minimis" exception during the fiscal years ended August 31, 2004 and August 31, 2003 was zero. (c) Aggregate Tax Fees billed by the principal accountant for professional services rendered during the fiscal years ended August 31, 2004 and August 31, 2003 are approximately as follows: 2004 2003 $2,300 $3,700 Tax Fees include amounts for professional services by the principal accountant for tax compliance, tax advice and tax planning. Tax Fees in both fiscal years 2004 and 2003 primarily consist of the review of annual tax returns, while fiscal year 2003 also includes the review of calculations of required shareholder distributions. The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. For the registrant, the percentage of Tax Fees that were approved under the "de minimis" exception during the fiscal years ended August 31, 2004 and August 31, 2003 was zero. The pre-approval requirements for services to the investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal years ended August 31, 2004 and August 31, 2003, there were no Tax Fees that were approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X. The percentage of Tax fees required to be approved under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X that were approved under the "de minimis" exception during the fiscal years ended August 31, 2004 and August 31, 2003 was zero. (d) Aggregate All Other Fees billed by the principal accountant for professional services rendered during the fiscal years ended August 31, 2004 and August 31, 2003 are as follows: 2004 2003 $0 $0 All Other Fees include amounts for products and services provided by the principal accountant, other than the services reported in (a)-(c) above. The "de minimis" exception under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. For the registrant, the percentage of All Other Fees that were approved under the "de minimis" exception during the fiscal years ended August 31, 2004 and August 31, 2003 was zero. The pre-approval requirements for services to the investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X became effective on May 6, 2003. During the fiscal year ended August 31, 2004, All Other Fees that were approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X were approximately $95,000. During the fiscal year ended August 31, 2003, All Other Fees that would have been subject to pre-approval had paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X been applicable at the time the services were provided, were approximately $95,000. For both fiscal years, All Other Fees relate to internal controls reviews of the registrant's transfer agent. The percentage of All Other Fees required to be approved under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X that were approved under the "de minimis" exception during the fiscal years ended August 31, 2004 and August 31, 2003 was zero. (e)(1) AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES I. GENERAL OVERVIEW The Audit Committee of the registrant has adopted a formal policy (the "Policy") which sets forth the procedures and the conditions pursuant to which the Audit Committee will pre-approve (i) all audit and non-audit (including audit related, tax and all other) services provided by the registrant's independent auditor to the registrant and individual funds (collectively "Fund Services"), and (ii) all non-audit services provided by the registrant's independent auditor to the funds' adviser or a control affiliate of the adviser, that relate directly to the funds' operations and financial reporting (collectively "Fund-related Adviser Services"). A "control affiliate" is an entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the funds, and the term "adviser" is deemed to exclude any unaffiliated sub-adviser whose role is primarily portfolio management and is sub-contracted or overseen by another investment adviser. The adviser and control affiliates are collectively referred to as "Adviser Entities." The Audit Committee uses a combination of specific (on a case-by-case basis as potential services are contemplated) and general (pre-determined list of permitted services) pre-approvals. Unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee if it is to be provided by the independent auditor. The Policy does not delegate the Audit Committee's responsibilities to pre-approve services performed by the independent auditor to management. II. GENERAL PROCEDURES On an annual basis, the Fund Treasurer and/or Director of Trustee Administration shall submit to the Audit Committee a schedule of the types of Fund Services and Fund-related Adviser Services that are subject to general pre-approval. These schedules will provide a description of each type of service that is subject to general pre-approval and, where possible, will provide estimated fees for each instance of providing each service. This general pre-approval and related fees (where provided) will generally cover a one-year period (for example, from July 1 through August 31 of the following year). The Audit Committee will review and approve the types of services and review the projected fees for the next one-year period and may add to, or subtract from, the list of general pre-approved services from time to time, based on subsequent determinations. This approval acknowledges that the Audit Committee is in agreement with the specific types of services that the independent auditor will be permitted to perform. The fee amounts will be updated to the extent necessary at other regularly scheduled meetings of the Audit Committee. In addition to the fees for each individual service, the Audit Committee has the authority to implement a fee cap on the aggregate amount of non-audit services provided to an individual fund. If, subsequent to general pre-approval, a fund, its investment adviser or a control affiliate determines that it would like to engage the independent auditor to perform a service that requires pre-approval and that is not included in the general pre-approval list, the specific pre-approval procedure shall be as follows: o A brief written request shall be prepared by management detailing the proposed engagement with explanation as to why the work is proposed to be performed by the independent auditor; o The request should be addressed to the Audit Committee with copies to the Fund Treasurer and/or Director of Trustee Administration; o The Fund Treasurer and/or Director of Trustee Administration will arrange for a discussion of the service to be included on the agenda for the next regularly scheduled Audit Committee meeting, when the Committee will discuss the proposed engagement and approve or deny the request. o If the timing of the project is critical and the project needs to commence before the next regularly scheduled meeting, the Chairperson of the Audit Committee may approve or deny the request on behalf of the Audit Committee, or, in the Chairperson's discretion, determine to call a special meeting of the Audit Committee for the purpose of considering the proposal. Should the Chairperson of the Audit Committee be unavailable, any other member of the Audit Committee may serve as an alternate for the purpose of approving or denying the request. Discussion with the Chairperson (or alternate, if necessary) will be arranged by the Fund Treasurer and/or Director of Trustee Administration. The independent auditor will not commence any such project unless and until specific approval has been given. III. CERTAIN OTHER SERVICES PROVIDED TO ADVISER ENTITIES The Audit Committee recognizes that there are cases where services proposed to be provided by the independent auditor to the adviser or control affiliates are not Fund-related Adviser Services within the meaning of the Policy, but nonetheless may be relevant to the Audit Committee's ongoing evaluation of the auditor's independence and objectivity with respect to its audit services to the funds. As a result, in all cases where an Adviser Entity engages the independent auditor to provide audit or non-audit services that are not Fund Services or Fund-related Adviser Services, were not subject to pre-approval by the Audit Committee, and the projected fees for any such engagement (or the aggregate of all such engagements during the period covered by the Policy) exceeds a pre-determined threshold established by the Audit Committee; the independent auditor, Fund Treasurer and/or Director of Trustee Administration will notify the Audit Committee not later than its next meeting. Such notification shall include a general description of the services provided, the entity that is to be the recipient of such services, the timing of the engagement, the entity's reasons for selecting the independent auditor, and the projected fees. Such information will allow the Audit Committee to consider whether non-audit services provided to the adviser and Adviser Entities, which were not subject to Audit Committee pre-approval, are compatible with maintaining the auditor's independence with respect to the Funds. IV. REPORTING TO THE AUDIT COMMITTEE The Fund Treasurer or Director of Trustee Administration shall report to the Audit Committee at each of its regular meetings regarding all Fund Services or Fund-related Adviser Services initiated since the last such report was rendered, including: o A general description of the services, and o Actual billed and projected fees, and o The means by which such Fund Services or Fund-related Adviser Services were pre-approved by the Audit Committee. In addition, the independent auditor shall report to the Audit Committee annually, and no more than 90 days prior to the filing of audit reports with the SEC, all non-audit services provided to entities in the funds' "investment company complex," as defined by SEC rules, that did not require pre-approval under the Policy. V. AMENDMENTS; ANNUAL APPROVAL BY AUDIT COMMITTEE The Policy may be amended from time to time by the Audit Committee. Prompt notice of any amendments will be provided to the independent auditor, Fund Treasurer and Director of Trustee Administration. The Policy shall be reviewed and approved at least annually by the Audit Committee. ***** (e)(2) This information has been included in items (b)-(d) above. (f) Not applicable. (g) All non-audit fees billed by the registrant's accountant for services rendered to the registrant for the fiscal years ended August 31, 2004 and August 31, 2003 are disclosed in (b)-(d) above. All non-audit fees billed by the registrant's accountant for services rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for the fiscal years ended August 31, 2004 and August 31, 2003 are also disclosed in (b)-(d) above. Such fees were approximately $95,000 and $95,000, respectively. (h) The registrant's Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant's adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant's independence. The Audit Committee determined that the provision of such services is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS The registrant's "Schedule I - 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. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have not been any material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors, since those procedures were last disclosed in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A or this Item. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer, based on their evaluation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant's management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR attached hereto as Exhibit 99.CODE ETH. (a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. (a)(3) Not applicable. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) Columbia Mid Cap Growth Fund, Inc. ----------------------------------------------------------------- By (Signature and Title) /s/ Christopher L. Wilson ----------------------------------------------------- Christopher L. Wilson, President Date October 28, 2004 ------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title) /s/ Christopher L. Wilson ----------------------------------------------------- Christopher L. Wilson, President Date October 28, 2004 ------------------------------------------------------------------------- By (Signature and Title) /s/ J. Kevin Connaughton ----------------------------------------------------- J. Kevin Connaughton, Treasurer Date October 28, 2004 ------------------------------------------------------------------------- EX-99.CODE ETH 2 file002.txt CODE OF ETHICS COLUMBIA MANAGEMENT GROUP FAMILY OF FUNDS CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS I. COVERED OFFICERS/PURPOSE OF THE CODE This Code of Ethics (the "Code") for the investment companies within the Columbia Management Group fund complex (collectively the "Funds" and each, a "Fund") applies to the Funds' Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, and Director of Trustee Administration (the "Covered Officers") for the purpose of promoting: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely and understandable disclosure in reports and documents that a Fund files with, or submits to, the Securities and Exchange Commission ("SEC"), and in other public communications made by a Fund; o compliance with applicable laws and governmental rules and regulations; o the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o accountability for adherence to the Code. Each Covered Officer shall adhere to a high standard of business ethics and shall be sensitive to situations that may give rise to actual or apparent conflicts of interest. II. ADMINISTRATION OF THE CODE The Boards of Trustees and Boards of Directors of the Funds (collectively, the "Board") shall designate an individual to be primarily responsible for the administration of the Code (the "Code Officer"). The Code shall be administered by the Columbia Management Group Compliance Department. In the absence of the Code Officer, his or her designee shall serve as the Code Officer, but only on a temporary basis. Each Fund has designated a chief legal officer (the "Chief Legal Officer") for purposes of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. The Chief Legal Officer of a Fund shall assist the Fund's Code Officer in administration of this Code. The Chief Legal Officer shall be responsible for applying this Code to specific situations in which questions are presented under it (in consultation with Fund counsel, where appropriate) and has the authority to interpret this Code in any particular situation. However, any waivers sought by a Covered Officer must be approved by each Audit Committee of the Funds (collectively, the "Audit Committee"). III. MANAGING CONFLICTS OF INTEREST OVERVIEW. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his/her service to, a Fund. For example, a conflict of interest would arise if a Covered Officer, or a family member, receives improper personal benefits as a result of the Covered Officer's position with a Fund. Certain conflicts of interest arise out of the relationships between Covered Officers and a Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (the "Company Act") and the Investment Advisers Act of 1940 (the "Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with a Fund because of their status as "affiliated persons" of the Fund. A Fund's and its investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of those provisions. This Code does not, and is not intended to, repeat or replace those programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts may arise from, or as a result of, the contractual relationship between a Fund and its investment adviser, administrator, principal underwriter, pricing and bookkeeping agent and/or transfer agent (each, a "Service Provider") of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for a Fund or for a Service Provider, or for both), be involved in establishing policies and implementing decisions that will have different effects on the Service Provider and a Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Fund and the Service Provider and is consistent with the performance by the Covered Officers of their duties as officers of a Fund. In addition, it is recognized by the Board that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions of the Company Act and the Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of a Fund. Each Covered Officer must: o not use personal influence or personal relationships improperly to influence investment decisions or financial reporting by a Fund whereby the Covered Officer or an immediate family member would benefit personally to the detriment of a Fund; and o not cause a Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer or an immediate family member rather than the benefit of the Fund.1. There are some conflict of interest situations that must be approved by the Code Officer, after consultation with the Chief Legal Officer. Those situations include, but are not limited to,: o service as director on the board of any public or private company; o the receipt of any gifts in excess of $100 in the aggregate from a third party that does or seeks to do business with the Funds during any 12-month period; o the receipt of any entertainment from any company with which a Fund has current or prospective business dealings, unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; o any material ownership interest in, or any consulting or employment relationship with, any Fund service providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof; o a direct or indirect material financial interest in commissions, transaction charges or spreads paid by a Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. IV. DISCLOSURE AND COMPLIANCE Each Covered Officer shall: o be familiar with the disclosure requirements generally applicable to the Funds; - ---------------------- 1 For purposes of this Code, personal trading activity of the Covered Officers shall be monitored in accordance with the Columbia Management Group Code of Ethics. Each Covered Officer shall be considered an "Access Person" under such Code. The term "immediate family" shall have the same meaning as provided in such Code. o not knowingly misrepresent, or cause others to misrepresent, facts about any Fund to others, whether within or outside the Fund, including to the Fund's trustees and auditors, and to governmental regulators and self-regulatory organizations; o to the extent appropriate within his/her area of responsibility, consult with other officers and employees of the Funds and the adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and o promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. V. REPORTING AND ACCOUNTABILITY Each Covered Officer must: o upon adoption of the Code (or after becoming a Covered Officer), affirm in writing to the Board that he/she has received, read and understands the Code; o annually affirm to the Board compliance with the requirements of the Code; o not retaliate against any other Covered Officer or any employee of the Funds or their affiliated persons for reports of potential violations that are made in good faith; o notify the Chief Legal Officer and the Code Officer promptly if he/she knows of any violation of this Code; and o respond to the trustee and officer questionnaires circulated periodically in connection with the preparation of disclosure documents for the Funds. The Code Officer shall maintain records of all activities related to this Code. The Funds will follow the procedures set forth below in investigating and enforcing this Code: o The Chief Legal Officer and/or the Code Officer will take all appropriate action to investigate any potential violation reported to him/her; o If, after such investigation, the Chief Legal Officer and the Code Officer believes that no violation has occurred, the Code Officer will notify the person(s) reporting the potential violation, and no further action is required; o Any matter that the Chief Legal Officer and/or the Code Officer believes is a violation will be reported to the Audit Committee; o If the Audit Committee concurs that a violation has occurred, it will inform and make a recommendation to the Board, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to the Chief Executive Officer of Columbia Management Group; or a recommendation to sanction or dismiss the Covered Officer; o The Audit Committee will be responsible for granting waivers in its sole discretion; o Any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. The Chief Legal Officer shall: o report to the Audit Committee quarterly any approvals provided in accordance with Section III of this Code; and o report to the Audit Committee quarterly any violations of, or material issues arising under, this Code. VI. OTHER POLICIES AND PROCEDURES This Code shall be the sole code of ethics adopted by the Funds for the purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other polices or procedures of the Funds or the Funds' Service Providers govern or purport to govern the behavior or activities (including, but not limited to, personal trading activities) of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Funds' and their investment advisers' and principal underwriter's codes of ethics under Rule 17j-1 under the Company Act and any policies and procedures of the Service Providers are separate requirements applicable to the Covered Officers and are not part of this Code. VII. AMENDMENTS All material amendments to this Code must be approved or ratified by the Board, including a majority of independent directors. VIII. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Board, the Covered Officers, the Chief Legal Officer, the Code Officer, outside audit firms and legal counsel to the Funds, and senior management of Columbia Management Group. IX. INTERNAL USE The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Fund, as to any fact, circumstance, or legal conclusion. EX-99.CERT 3 file003.txt CERTIFICATIONS I, Christopher L. Wilson, certify that: 1. I have reviewed this report on Form N-CSR of Columbia Mid Cap Growth Fund, 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) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 28, 2004 /s/ Christopher L. Wilson -------------------------------- Christopher L. Wilson, President I, J. Kevin Connaughton, certify that: 1. I have reviewed this report on Form N-CSR of Columbia Mid Cap Growth Fund, 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) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 28, 2004 /s/ J. Kevin Connaughton ------------------------------- J. Kevin Connaughton, Treasurer EX-99.906CERT 4 file004.txt CERTIFICATIONS CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Certified Shareholder Report of Columbia Mid Cap Growth Fund, Inc. (the "Trust") on Form N-CSR for the period ending August 31, 2004, 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: October 28, 2004 /s/ Christopher L. Wilson -------------------------------- Christopher L. Wilson, President Date: October 28, 2004 /s/ J. Kevin Connaughton -------------------------------- J. Kevin Connaughton, Treasurer A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission (the "Commission") or its staff upon request. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss.1350 and is not being filed as part of the Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----