<PAGE>
[LOGO]
COLUMBIA FUNDS
1998 ANNUAL REPORT
COLUMBIA COMMON STOCK FUND
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COLUMBIA GROWTH FUND
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COLUMBIA INTERNATIONAL STOCK FUND
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COLUMBIA SPECIAL FUND
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COLUMBIA SMALL CAP FUND
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COLUMBIA REAL ESTATE EQUITY FUND
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COLUMBIA BALANCED FUND
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COLUMBIA U.S. GOVERNMENT SECURITIES FUND
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COLUMBIA FIXED INCOME SECURITIES FUND
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COLUMBIA MUNICIPAL BOND FUND
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COLUMBIA HIGH YIELD FUND
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COLUMBIA DAILY INCOME COMPANY
<PAGE>
DEAR COLUMBIA INVESTOR:
We are pleased to present the 1998 Columbia Funds Annual Report. Inside you will
find updated financial information and summaries of each Fund's investment
activity for the year, along with a chart illustrating the growth of a
hypothetical investment, compared to each Fund's industry benchmark.
The "Overview of the Markets" on page one summarizes stock and bond market
activity during 1998. Themes and strategies used during the year to meet the
objectives of each Fund are also described. We hope that you find this
information helpful as you evaluate the performance of your investments.
As always, we appreciate the confidence and trust you have placed in Columbia
Funds, and we look forward to helping you achieve your investment goals in the
months and years to come.
Sincerely,
[SIGNATURE] [SIGNATURE]
John A. Kemp Thomas L. Thomsen
CHAIRMAN AND CHIEF EXECUTIVE OFFICER PRESIDENT AND CHIEF INVESTMENT OFFICER
COLUMBIA FUNDS MANAGEMENT COMPANY COLUMBIA FUNDS MANAGEMENT COMPANY
THE FRONT COVER FEATURES A PHOTOGRAPH OF THE 81-YEAR OLD VISTA
HOUSE, PERCHED ATOP CROWN POINT AT THE MOUTH OF THE COLUMBIA RIVER
GORGE. THE PHOTO WAS TAKEN IN OREGON, LOOKING ACROSS TO WASHINGTON
STATE.
<PAGE>
TABLE OF CONTENTS
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ANNUAL REPORT, DECEMBER 31, 1998
AN OVERVIEW OF THE MARKETS.....................................................1
COLUMBIA COMMON STOCK FUND
Investment Review............................................................3
Financial Highlights........................................................15
Schedule of Investments.....................................................27
Statement of Assets and Liabilities.........................................66
Statement of Operations.....................................................69
Statements of Changes in Net Assets.........................................72
COLUMBIA GROWTH FUND
Investment Review............................................................4
Financial Highlights........................................................16
Schedule of Investments.....................................................29
Statement of Assets and Liabilities.........................................66
Statement of Operations.....................................................69
Statements of Changes in Net Assets.........................................72
COLUMBIA INTERNATIONAL STOCK FUND
Investment Review............................................................5
Financial Highlights........................................................17
Schedule of Investments.....................................................31
Statement of Assets and Liabilities.........................................66
Statement of Operations.....................................................69
Statements of Changes in Net Assets.........................................72
COLUMBIA SPECIAL FUND
Investment Review............................................................6
Financial Highlights........................................................18
Schedule of Investments.....................................................34
Statement of Assets and Liabilities.........................................66
Statement of Operations.....................................................69
Statements of Changes in Net Assets.........................................73
COLUMBIA SMALL CAP FUND
Investment Review............................................................7
Financial Highlights........................................................19
Schedule of Investments.....................................................36
Statement of Assets and Liabilities.........................................67
Statement of Operations.....................................................70
Statements of Changes in Net Assets.........................................73
COLUMBIA REAL ESTATE EQUITY FUND
Investment Review............................................................8
Financial Highlights........................................................20
Schedule of Investments.....................................................39
Statement of Assets and Liabilities.........................................67
Statement of Operations.....................................................70
Statements of Changes in Net Assets.........................................73
COLUMBIA BALANCED FUND
Investment Review............................................................9
Financial Highlights........................................................21
Schedule of Investments.....................................................40
Statement of Assets and Liabilities.........................................67
Statement of Operations.....................................................70
Statements of Changes in Net Assets.........................................74
COLUMBIA U.S. GOVERNMENT SECURITIES FUND
Investment Review...........................................................10
Financial Highlights........................................................22
Schedule of Investments.....................................................46
Statement of Assets and Liabilities.........................................67
Statement of Operations.....................................................70
Statements of Changes in Net Assets.........................................74
COLUMBIA FIXED INCOME SECURITIES FUND
Investment Review...........................................................11
Financial Highlights........................................................23
Schedule of Investments.....................................................47
Statement of Assets and Liabilities.........................................68
Statement of Operations.....................................................71
Statements of Changes in Net Assets.........................................74
COLUMBIA MUNICIPAL BOND FUND
Investment Review...........................................................12
Financial Highlights........................................................24
Schedule of Investments.....................................................51
Statement of Assets and Liabilities.........................................68
Statement of Operations.....................................................71
Statements of Changes in Net Assets.........................................75
COLUMBIA HIGH YIELD FUND
Investment Review...........................................................13
Financial Highlights........................................................25
Schedule of Investments.....................................................59
Statement of Assets and Liabilities.........................................68
Statement of Operations.....................................................71
Statements of Changes in Net Assets.........................................75
COLUMBIA DAILY INCOME COMPANY
Investment Review...........................................................14
Financial Highlights........................................................26
Schedule of Investments.....................................................63
Statement of Assets and Liabilities.........................................68
Statement of Operations.....................................................71
Statements of Changes in Net Assets.........................................75
NOTES TO FINANCIAL STATEMENTS.................................................76
COLUMBIA FUNDS
P.O. BOX 1350
PORTLAND, OR 97207-1350
222-3606
1-800-547-1707
WWW.COLUMBIAFUNDS.COM
<PAGE>
AN OVERVIEW OF THE MARKETS
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A LOOK BACK AT 1998
1998 was an extraordinary year in many respects, most notably in the divergence
of returns among different types of investments. Volatility and uncertainty
characterized the markets, especially in the latter half of the year. Stock
investors took a wild ride as the S&P 500 rose 17.71% in the first half, then
fell 14.46% in the month of August, only to recover the year's gains and finish
up 28.58% for the full year. This marked an unprecedented fourth consecutive
year of greater than 20% returns for U.S. equity markets.
Although market breadth improved in the fourth quarter, the smaller cap Russell
2000 Index ended the year with a loss of 2.55%. International markets generally
performed poorly with the exception of Europe, which rose in anticipation of the
benefits of the impending European Monetary Union.
The bond market proved no exception to this pattern of divergent returns.
Investors' flight to quality pushed yields on 30-year U.S. Treasuries to their
lowest level in 30 years. However, yields on corporate, municipal and
mortgage-backed debt barely budged. The difference between rates on bonds issued
by the Treasury and those issued by corporations or municipalities remains at
historically high levels.
YIELD SPREAD: THE DIFFERENCE BETWEEN
CORPORATES AND TREASURIES*
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTEREST RATE %
<S> <C>
1/5/90 110
1/12/90 105
1/19/90 105
1/26/90 100
2/2/90 100
2/9/90 100
2/16/60 100
2/23/90 100
3/2/90 100
3/9/90 95
3/16/90 95
3/23/90 95
3/30/90 90
4/6/90 90
4/13/90 90
4/20/90 90
4/27/90 90
5/4/90 90
5/11/90 90
5/18/90 90
5/25/90 90
6/1/90 90
6/8/90 90
6/15/90 90
6/22/90 90
6/26/90 90
7/6/90 90
7/13/90 90
7/20/90 90
7/27/90 90
8/3/90 90
8/10/90 90
8/17/90 90
8/24/90 90
8/31/90 90
9/7/90 90
9/14/90 90
9/21/90 90
9/28/90 100
10/5/90 110
10/12/90 110
10/19/90 115
10/26/90 120
11/2/90 120
11/9/90 120
11/16/90 125
11/23/90 125
11/30/90 125
12/7/90 120
12/14/90 120
12/21/90 120
12/28/90 120
1/4/91 120
1/11/91 120
1/18/91 120
1/25/91 120
2/1/91 115
2/8/91 115
2/15/91 115
2/22/91 110
3/1/91 100
3/8/91 100
3/15/91 95
3/22/91 95
3/29/91 90
4/5/91 90
4/12/91 90
4/19/91 90
4/26/91 90
5/3/91 90
5/10/91 90
5/17/91 90
5/24/91 90
5/31/91 85
6/7/91 85
6/14/91 85
6/21/91 85
6/28/91 85
7/5/91 90
7/12/91 90
7/19/91 90
7/26/91 90
8/2/91 90
8/9/91 90
8/16/91 90
8/23/91 90
8/30/91 90
9/6/91 90
9/13/91 90
9/20/91 90
9/27/91 95
10/4/91 95
10/11/91 95
10/18/91 90
10/25/91 90
11/1/91 90
11/8/91 85
11/15/91 85
11/22/91 85
11/29/91 85
12/6/91 85
12/13/91 85
12/20/91 85
12/27/91 85
1/3/92 85
1/10/92 80
1/17/92 80
1/24/92 80
1/31/92 75
2/7/92 75
2/14/92 70
2/21/92 70
2/28/92 70
3/6/92 70
3/13/92 70
3/20/92 70
3/27/92 73
4/3/92 75
4/10/92 75
4/17/92 78
4/24/92 78
5/1/92 77
5/8/92 69
5/15/92 65
5/22/92 65
5/29/92 65
6/5/92 68
6/12/92 65
6/19/92 65
6/26/92 65
7/3/92 65
7/10/92 64
7/17/92 64
7/24/92 65
7/31/92 67
8/7/92 67
8/14/92 72
8/21/92 75
8/28/92 75
9/4/92 76
9/11/92 76
9/18/92 78
9/25/92 80
10/2/92 77
10/9/92 87
10/16/92 87
10/23/92 87
10/30/92 84
11/6/92 84
11/13/92 81
11/20/92 77
11/27/92 77
12/4/92 76
12/11/92 76
12/18/92 76
12/25/92 76
1/1/93 76
1/8/93 73
1/15/93 71
1/22/93 70
1/29/93 70
2/5/93 70
2/12/93 70
2/19/93 67
2/26/93 67
3/5/93 65
3/12/93 65
3/19/93 66
3/26/93 66
4/2/93 66
4/9/93 67
4/16/93 68
4/23/93 65
4/30/93 65
5/10/93 65
5/17/93 65
5/24/93 65
5/31/93 65
6/7/93 65
6/14/93 65
6/21/93 63
6/28/93 63
7/6/93 63
7/12/93 63
7/19/93 63
7/26/93 62
8/2/93 62
8/9/93 62
8/16/93 60
8/23/93 60
8/30/93 60
9/6/93 62
9/13/93 62
9/20/93 63
9/27/93 65
10/4/93 65
10/11/93 65
10/18/93 65
10/25/93 65
11/1/93 63
11/8/93 63
11/15/93 63
11/22/93 63
11/29/93 63
12/6/93 62
12/13/93 61
12/20/93 61
12/27/93 61
1/3/94 61
1/10/94 57
1/17/94 57
1/24/94 55
1/31/94 53
2/7/94 53
2/14/94 53
2/21/94 53
2/28/94 55
3/7/94 55
3/14/94 57
3/21/94 59
3/28/94 59
4/4/94 59
4/11/94 61
4/18/94 62
4/25/94 62
5/2/94 62
5/9/94 65
5/16/94 65
5/23/94 65
5/30/94 65
6/6/94 65
6/13/94 62
6/20/94 62
6/27/94 58
7/4/94 58
7/11/94 58
7/18/94 58
7/25/94 56
8/1/94 56
8/8/94 56
8/15/94 56
8/22/94 53
8/29/94 53
9/5/94 53
9/12/94 53
9/19/94 52
9/26/94 52
10/3/94 56
10/10/94 56
10/17/94 56
10/24/94 56
10/31/94 56
11/7/94 56
11/14/94 56
11/21/94 59
11/28/94 60
12/5/94 60
12/12/94 63
12/19/94 63
12/26/94 63
1/3/95 63
1/9/95 63
1/16/95 63
1/23/95 60
1/30/95 60
2/6/95 58
2/13/95 58
2/20/95 57
2/27/95 57
3/6/95 57
3/13/95 56
3/20/95 56
3/27/95 56
4/3/95 56
4/10/95 56
4/17/95 54
4/24/95 53
5/1/95 53
5/8/95 49
5/15/95 47
5/22/95 47
5/30/95 52
6/5/95 56
6/12/95 62
6/19/95 62
6/26/95 62
7/3/95 62
7/10/95 62
7/24/95 62
7/31/95 57
8/7/95 57
8/14/95 57
8/21/95 57
8/28/95 56
9/4/95 56
9/11/95 56
9/18/95 58
9/25/95 58
10/2/95 57
10/9/95 57
10/16/95 57
10/23/95 57
10/30/95 62
11/6/95 64
11/13/95 64
11/20/95 64
11/27/95 64
12/4/95 58
12/11/95 58
12/18/95 57
1/2/96 57
1/8/96 55
1/15/96 55
1/22/96 55
1/29/96 55
2/5/96 54
2/12/96 52
2/19/96 52
2/26/96 52
3/4/96 52
3/11/96 52
3/25/96 52
4/1/96 52
4/8/96 52
4/15/96 55
4/22/96 54
4/29/96 51
5/6/96 51
5/13/96 50
5/20/96 50
5/27/96 50
6/3/96 50
6/10/96 50
6/17/96 50
6/24/96 50
7/1/96 50
7/8/96 50
7/15/96 50
7/22/96 50
7/29/96 50
8/12/96 50
9/3/96 50
9/9/96 50
9/16/96 50
9/23/96 50
9/30/96 50
10/7/96 50
10/14/96 50
10/21/96 50
10/28/96 50
11/4/96 50
11/11/96 48
11/18/96 48
11/25/96 50
12/2/96 50
12/9/96 52
12/16/96 53
12/30/96 53
1/6/97 53
1/13/97 52
1/20/97 52
1/27/97 50
2/3/97 50
2/10/97 50
2/17/97 50
2/24/97 49
3/3/97 48
3/10/97 48
3/17/97 52
3/24/97 52
3/31/97 55
4/14/97 55
4/21/97 55
4/28/97 56
5/5/97 58
5/12/97 58
5/19/97 56
5/26/97 54
6/2/97 54
6/9/97 51
6/16/97 51
6/23/97 51
7/7/97 51
7/14/97 51
7/21/97 51
7/28/97 50
8/4/97 50
8/11/97 50
8/18/97 54
8/25/97 56
9/1/97 56
9/8/97 58
9/15/97 58
9/29/97 58
10/6/97 58
10/13/97 59
10/20/97 59
10/27/97 64
11/3/97 72
11/10/97 72
11/17/97 72
11/24/97 70
12/1/97 68
12/8/97 66
12/15/97 66
12/22/97 70
12/29/97 70
1/5/98 70
1/12/98 70
1/20/98 74
1/26/98 74
2/2/98 75
2/9/98 75
2/17/98 70
2/23/98 70
3/2/98 70
3/9/98 67
3/16/98 67
3/23/98 68
3/30/98 68
4/10/98 68
4/17/98 67
4/24/98 67
5/1/98 67
5/8/98 67
5/15/98 68
5/22/98 68
5/29/98 71
6/5/98 75
6/12/98 83
6/19/98 83
6/26/98 84
7/6/98 84
7/20/98 84
7/27/98 84
8/10/98 88
8/17/98 92
8/24/98 96
8/31/98 114
9/8/98 112
9/14/98 112
9/21/98 112
9/28/98 112
10/5/98 112
10/12/98 125
10/19/98 130
10/26/98 130
11/2/98 125
11/9/98 113
11/16/98 110
11/23/98 100
11/30/98 100
12/4/98 108
12/11/98 112
Source - Columbia Management Company
</TABLE>
* 10-Year A-rated Industrial Bonds versus 10-Year Treasury Bonds: the
higher the plot points, the greater the differences in yields.
In order to calm financial markets and head off the effects of a slower world
economy on the U.S., the Federal Reserve lowered short-term interest rates by a
total of .75% in three steps during late 1998, leading the markets to stage a
spectacular recovery. Technology and Internet stocks, pharmaceutical companies,
consumer retailers and communications names were among the best performing
sectors in 1998, while commodity, real estate, oils and basic industry stocks
lagged for the year.
MARKET OUTLOOK
The outlook for the U.S. economy seems to be more dependent than ever on
developments overseas, and conditions in many regions around the world are a
cause for concern. While it seems clear that world growth is slowing, it is
still difficult to judge how this will affect the domestic economy. It appears
likely that there will be continued pressure on U.S. corporate profits stemming
from overseas activity in 1999.
We expect U.S. economic growth to slow from the rapid pace of previous years.
However, after the concerted efforts of the Federal Reserve and other central
banks worldwide to reduce rates, we do not anticipate a recession. These easing
actions have steadied financial markets so that share prices have recovered,
credit spreads have stabilized and new issue activity has resumed.
Buoyed by low interest rates, consumer spending has grown faster than income
recently, generating a negative savings rate. Such strong growth in demand seems
unsustainable and consumers may be quick to cut back if their expectations are
deflated. Given these concerns, Wall Street earnings estimates for 1999 seem
optimistic. The present benign inflation environment, however, leaves the Fed
ample room to adjust rates down to reassure investors and refuel consumption.
1
<PAGE>
AN OVERVIEW OF THE MARKETS
- --------------------------------------------------------------------------------
ANALYSTS' 1999 EARNINGS ESTIMATES
MAY BE OPTIMISTIC
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
(% CHANGE)
<S> <C>
1994
Q1 16.50%
Q2 15.10%
Q3 19.80%
Q4 21.50%
1995
Q1 22.50%
Q2 22.00%
Q3 19.50%
Q4 13.20%
1996
Q1 10.40%
Q2 11.50%
Q3 9.70%
Q4 14.20%
1997
Q1 15.80%
Q2 11.70%
Q3 13.00%
Q4 10.30%
1998
Q1 5.00%
Q2 5.10%
Q3 (7.70%)
Q4 est. (1.50%)
1999 est.
Q1 7.20%
Q2 12.00%
Q3 23.70%
Q4 23.80%
Source: I/B/E/S
Inc.
</TABLE>
INVESTMENT STRATEGY
Throughout 1998, a narrow universe of growth stocks saw strong price gains,
while the broader market lagged, due to ongoing concerns about profit growth.
For example, 10 companies in the S&P 500 Index accounted for 43% of its gain.
Expectations for moderating growth in the U.S. and around the world lead us to
emphasize companies with strong records of delivering solid earnings gains in a
more difficult environment. We expect that divergence in earnings and profit
growth prospects among various sectors could lead to a continuing gap between
the best and worst performing groups over the coming months.
Columbia's focus remains on stocks we expect to be favorably influenced by such
investment themes as "Aging of America" and "Technology Age." While we believe
the long-term trends underlying the themes remain in place, we are taking a more
selective investment approach to groups within the themes. To this end, we are
concentrating on industries we expect to benefit from growth in secular
spending, which can continue to expand even in a downturn. Therefore, the Funds
are positioned with strong weightings in technology, communications and
pharmaceutical stocks.
Given our expectations for slower growth, we expect interest rates to remain
stable or trend lower. It seems unlikely that the Fed will take action to raise
or lower its key rate in the near term until conditions in the U.S. and overseas
become clearer. Inflation seems to be under control, and the U.S. budget surplus
continues to reduce the government's demand for new funds. In this environment,
both nominal and real yields (real yields are interest rates minus inflation) on
bonds look particularly attractive.
So that you may evaluate how the Columbia Funds performed given this economic
and financial market backdrop, the following pages contain discussions of the
Funds' investment activity during 1998, along with graphs illustrating the
growth of $10,000 over various time periods. Each Fund compares its performance
to a relevant benchmark. Unlike the Funds, however, these benchmark indices are
not actively managed and have no operating expenses, portfolio transaction costs
or cash flows.
Thank you for your investment in Columbia Funds. We appreciate your confidence
and look forward to serving your investment needs in the years to come.
THE INVESTMENT TEAM
COLUMBIA FUNDS
FEBRUARY 1999
2
<PAGE>
INVESTMENT REVIEW
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[LOGO]
- ---------------------------------------------
---------------------------------------------
-- COLUMBIA COMMON STOCK FUND --
--------------------------------
In a volatile year for the stock market, Columbia Common Stock Fund returned
26.28% for the 12 months through December 31, 1998. Much of the Fund's
performance can be attributed to its gain of 23.30% in a very strong fourth
quarter.
Throughout the year, the Fund benefited from a focus on larger capitalization
names that offered higher than average earnings potential. We bypassed cyclical
issues (stocks that rise quickly when the economy is on the upswing and fall
when the economy turns down) and trimmed holdings in REITs and electric and gas
utilities. Our continued focus on retail and domestic consumer stocks benefited
the portfolio in the fourth quarter, as a series of three Federal Reserve Board
short-term interest rate cuts from September 29 to November 17 renewed consumer
confidence.
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Microsoft Corp. 4.6
General Electric Co. 4.0
Pfizer, Inc. 3.5
Tyco International Ltd. 3.1
Warner-Lambert Co. 2.7
Bristol-Myers Squibb Co. 2.7
IBM Corp. 2.6
MCI Worldcom, Inc. 2.6
Dayton-Hudson Corp. 2.4
Philip Morris Cos., Inc. 2.4
</TABLE>
As of December 31, 1998
An emphasis on certain investment themes also played a large role in stock
selection, including "The Aging of America," which hinges on opportunities
resulting from the aging U.S. population, "Technology Age," which focuses on the
increased creation, distribution and manipulation of information and
"Value-Added Consolidators," a study of companies that can accelerate earnings
growth through synergistic acquisitions. We expect to continue emphasizing "The
Aging of America" and "Technology Age" through 1999.
SECTORS OF EMPHASIS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Technology 21.4
Health Care 16.6
Finance 14.3
Consumer Non-Durables 10.1
Food & Household Products 8.6
</TABLE>
As of December 31, 1998
Looking forward, we anticipate continuing low inflation, with earnings growth
remaining difficult. With this in mind, we continue to favor reasonably valued,
domestic-oriented companies that offer more dependable earnings growth
prospects.
Emphasizing large, established companies, the Fund currently has a median market
capitalization of $29.4 billion and is well diversified with 70 holdings in the
portfolio at year-end.
GROWTH OF $10,000 SINCE INCEPTION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
<S> <C> <C>
CCSF S&P 500
1 Year 26.28% 28.58%
5 Years 20.60% 24.07%
Since Inception 19.19% 19.95%
COLUMBIA COMMON
STOCK FUND S&P 500
10/1/91 $10,000.00 $10,000.00
12/31/91 $11,025.00 $10,838.00
12/31/92 $12,126.40 $11,663.86
12/31/93 $14,119.98 $12,839.57
12/31/94 $14,410.85 $13,009.05
12/31/95 $18,855.15 $17,897.86
12/31/96 $22,760.06 $22,007.21
12/31/97 $28,534.28 $29,348.81
12/31/98 $36,028.00 $37,736.00
Past Performance is not predictive of future results.
</TABLE>
3
<PAGE>
INVESTMENT REVIEW
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[LOGO]
- -------------------------------------------------
-------------------------------------------------
-- COLUMBIA GROWTH FUND --
--------------------------
Columbia Growth Fund gained 30.34% for the year ended December 31, 1998,
outperforming the S&P 500, which returned 28.58% for the same period. In a
volatile year for the stock market, the Fund maintained its focus on stocks with
dependable earnings growth. Throughout the year, investment themes also shaped
stock selection, as we targeted issues poised to profit from the aging of
America and technological advances around the world. This led to an emphasis in
health care and segments of technology and financial stocks.
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Microsoft Corp. 4.5
Cisco Systems, Inc. 4.0
Abercrombie & Fitch Co. 3.4
General Electric Co. 3.2
Pfizer, Inc. 3.2
Tyco International Ltd. 3.0
Bristol-Myers Squibb Co. 2.8
Warner-Lambert Co. 2.7
MCI Worldcom, Inc. 2.5
Safeway, Inc. 2.3
</TABLE>
As of December 31, 1998
With consumer spending and economic growth healthy in the first quarter of the
year, the Fund benefited from increased exposure to domestic and consumer
issues. By the third quarter, however, fears escalated that consumer spending
would wane as individuals saw their wealth decrease with the sharp decline in
stock prices. Concerns about a slowdown in spending depressed the Fund's
consumer-oriented holdings, such as retail, radio broadcasting and cruise lines.
We anticipated the Federal Reserve Board would adopt more stimulative policies,
so we maintained and then increased our exposure to these consumer issues.
Responding to fears of an economic slowdown, the Fed lowered rates three times
between September 29 and November 17. This, combined with news of fiscal policy
changes in Brazil and Japan, rekindled consumer and investor confidence. In the
fourth quarter, the Fund's consumer issues advanced sharply, and we further
increased exposure to this sector, while purchasing more technology stocks and
other higher growth issues. Much of the Fund's one-year return can be attributed
to its 25.59% gain in the fourth quarter.
SECTORS OF EMPHASIS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Technology 21.3
Health 20.0
Consumer Non-Durables 14.0
Finance 13.0
Food and Household Products 8.1
</TABLE>
As of December 31, 1998
Despite the trend of strong consumer spending, we believe that growth of U.S.
corporate earnings and world economies will slow. Accordingly, we will continue
to emphasize issues that offer dependable earnings growth in a slowing economy.
GROWTH OF $10,000 OVER 20 YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
<S> <C> <C>
CGF S&P 500
1 Year 30.34% 28.58%
5 Years 21.32% 24.07%
10 Years 18.73% 19.21%
20 Years 18.90% 17.71%
COLUMBIA GROWTH FUND S&P 500
12/31/78 $10,000.00 $10,000.00
12/31/79 $14,057.00 $11,835.00
12/31/80 $19,662.93 $15,663.62
12/31/81 $18,996.36 $14,888.27
12/31/82 $27,841.06 $18,089.25
12/31/83 $33,815.75 $22,144.86
12/31/84 $31,928.84 $23,508.99
12/31/85 $42,168.41 $30,928.42
12/31/86 $45,086.47 $36,693.48
12/31/87 $51,732.21 $38,627.23
12/31/88 $57,324.46 $45,020.03
12/31/89 $74,000.15 $59,250.86
12/31/90 $71,550.75 $57,443.71
12/31/91 $96,064.03 $74,946.81
12/31/92 $107,418.80 $80,657.76
12/31/93 $121,393.99 $88,788.06
12/31/94 $120,629.20 $89,960.06
12/31/95 $160,412.72 $123,767.05
12/31/96 $193,778.56 $152,183.97
12/31/97 $244,781.08 $202,952.54
12/31/98 $319,144.00 $260,920.00
Past Performance is not predictive of future results.
</TABLE>
4
<PAGE>
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
[LOGO]
- ------------------------------------------
------------------------------------------
-- COLUMBIA INTERNATIONAL STOCK FUND --
---------------------------------------
Columbia International Stock Fund returned 12.83% for the 12 months ended
December 31, 1998. Throughout the year, positions in such growth areas as
telecommunications and technology benefited perfor-mance, and we continue to
favor them, along with pharmaceuticals.
Despite a strong start, international markets suffered throughout the year, due
to the continuing Asian currency crisis and a stalled Japanese economy.
Europe, however, proved to be a bright spot. As European nations geared up to
join the European Monetary Union (EMU), the entire region benefited from low
interest rates and disciplined fiscal policies.
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Aegon NV 3.6
Equant NV 3.3
Mannesmann AG 2.9
Glaxo Wellcome plc 2.5
SmithKline Beecham plc 2.4
British Telecommunications plc 2.2
Novartis AG 2.2
Unicredito Italiano S.p.A 2.2
Compass Group plc 2.1
Shimamura Co., Ltd. 1.9
</TABLE>
As of December 31, 1998
During the first two quarters, the Fund's emphasis on Japanese exporters hurt
performance. This was offset somewhat as the Fund began to take greater
advantage of favorable investment opportunities in Europe, significantly
increasing its exposure to the United Kingdom, France, Germany and Spain.
Despite healthy economic activity in the region, European stock markets were
affected by world turmoil, as several markets posted declines in the third
quarter. The continued troubles in Southeast Asia, stagnation/deflation in Japan
and news of troubles in Russia caused investors around the world to shun risk.
Latin American countries, and Brazil in particular, felt pressure to devalue
currencies.
Sentiment improved in the fourth quarter when Brazil implemented a fiscal reform
program and the International Monetary Fund agreed to provide a $41 billion
assistance package. While a low exposure to Japan was appropriate for much of
the year, the Fund increased its exposure as the yen strengthened against the
dollar in October. Although we had reduced our position in financial stocks at
the end of the third quarter, the financial stocks we retained in the portfolio
rebounded strongly when the markets recovered.
COUNTRIES OF EMPHASIS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Japan 23.3
United Kingdom 18.0
France 10.0
Netherlands 8.1
Switzerland 7.1
Germany 6.4
Italy 4.8
Spain 4.4
</TABLE>
As of December 31, 1998
Looking forward, it is clear that world growth rates are slowing. We will
continue to favor European markets we believe still offer considerable
opportunity. Japan could surprise the markets with new reform initiatives.
However, with consensus opinion calling for continued recession, the outlook in
Japan remains uncertain.
GROWTH OF $10,000 SINCE INCEPTION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
<S> <C> <C> <C>
MSCI FT/S&P
CISF EAFE EURO-PAC
1 Year 12.83% 20.33% 19.31%
5 Years 8.50% 9.51% 8.75%
Since Inception 11.79% 11.76% 10.96%
COLUMBIA
INTERNATIONAL MSCI FT/S&P
STOCK FUND EAFE EURO-PAC
10/1/92 $10,000 $10,000 $10,000
12/31/92 $10,060 $9,623 $9,628
12/31/93 $13,417 $12,794 $12,665
12/31/94 $13,086 $13,825 $13,822
12/31/95 $13,760 $15,422 $15,290
12/31/96 $16,042 $16,403 $16,180
12/31/97 $17,882 $16,740 $16,144
12/31/98 $20,175 $20,147 $19,261
Past Performance is not predictive of future results.
The MSCI EAFE Index will replace the FT/S&P Euro-Pac as the International
Fund's benchmark index because the MSCI EAFE Index is a more commonly
recognized index for international funds.
</TABLE>
5
<PAGE>
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
[LOGO]
- -------------------------------------------------
-------------------------------------------------
-- COLUMBIA SPECIAL FUND --
---------------------------
The Special Fund returned 16.64% for the 12 months ended December 31, 1998.
Small and mid-cap stocks struggled throughout the year, as risk-averse investors
focused on a narrow group of large cap stocks. However, smaller stocks rebounded
when the Federal Reserve Board delivered a series of three short-term interest
rate cuts between September 29 and November 17, and investor confidence was
rekindled.
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
American Stores Co. 4.6
Meyer (Fred), Inc. 4.4
ResMed, Inc. 3.7
Bed, Bath & Beyond, Inc. 3.0
Abercrombie & Fitch Co. 2.7
McKesson Corp. 2.4
Flserv, Inc. 2.3
Williams-Sonoma, Inc. 2.3
Service Corporation Int'l. 2.1
Cardinal Health, Inc. 2.1
</TABLE>
As of December 31, 1998
Throughout the year, the Fund focused on domestic companies with relatively
reliable growth rates. Consumer non-durables, business and consumer services,
and certain health care companies benefited performance. In trading activity
during the first half, a favorable housing market led us to increase our
emphasis on products for the home. Water-related companies were also added to
the portfolio, as trends to upgrade the quality of municipal water systems
became evident. Although we began the year with a below-market weighting in
technology, we significantly increased our exposure late in the third quarter
and throughout the fourth quarter.
REITs lagged throughout the year, so they were entirely eliminated from the
portfolio in the first half. Weightings were also reduced in
economically-sensitive industries such as metals, machinery, transportation and
energy. Grocery stocks performed very well during the year, but we reduced our
weighting in the fourth quarter, along with cash levels, as we increased
holdings in radio, finance, information technology and health care.
SECTORS OF EMPHASIS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Business & Consumer
Services 26.3
Health Care 21.0
Consumer Non-Durables 17.2
Food & Household Products 14.4
</TABLE>
As of December 31, 1998
Looking forward, we believe the mid-cap sector is well positioned to benefit
from broadening of the very narrow market returns of the last few years. Mid-cap
stocks currently provide attractive growth prospects and valuations compared to
large cap stocks.
GROWTH OF $10,000 OVER 10 YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
<S> <C> <C> <C>
CSF S&P MIDCAP 400 RUSSELL 2000
1 Year 16.64% 19.11% (2.55%)
5 Year 14.51% 18.84% 11.87%
10 years 16.83% 19.30% 12.92%
COLUMBIA SPECIAL FUND S&P MIDCAP 400 RUSSELL 2000
12/31/88 $10,000 $10,000 $10,000
12/31/89 $13,192 $13,555 $11,626
12/31/90 $11,558 $12,861 $9,358
12/31/91 $17,389 $19,306 $13,673
12/31/92 $19,772 $21,607 $16,190
12/31/93 $24,058 $24,621 $19,246
12/31/94 $24,609 $23,735 $18,896
12/31/95 $31,876 $31,078 $24,272
12/31/96 $36,043 $37,042 $28,275
12/31/97 $40,598 $49,003 $34,597
12/31/98 $47,359 $58,376 $33,718
Past Performance is not predictive of future results.
The S&P MidCap 400 will replace the Russell 2000 as the
Special Fund's benchmark index because the MidCap Index
is more representative of the types of stocks held by the
Fund.
</TABLE>
6
<PAGE>
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
[LOGO]
- ------------------------------------------------
------------------------------------------------
-- COLUMBIA SMALL CAP FUND --
-----------------------------
Columbia Small Cap Fund returned 4.69% for the year ended December 31, 1998,
compared to -2.55% for the Russell 2000 Stock Index for the same period. At the
start of the year, small cap stocks reached new highs, led by companies tied to
the robust U.S. economy. The Fund benefited from an emphasis on consumer
cyclicals, such as restaurants and providers of leisure products and services,
along with certain technology issues. Performance was also helped by less
exposure to energy and energy services, as falling oil prices weighed heavily on
companies in that sector.
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Pathogenesis Corp. 2.1
Ciber, Inc. 2.1
Transaction Systems Architects, Inc.
(Class A) 2.0
Williams-Sonoma, Inc. 2.0
Cerner Corp. 1.9
Bed, Bath & Beyond, Inc. 1.9
Nova Corp. 1.9
Sterling Commerce, Inc. 1.8
Ames Department Stores, Inc. 1.6
Action Performance Cos., Inc. 1.6
</TABLE>
As of December 31, 1998
Concerns about the global outlook and its potential impact on corporate earnings
put pressure on the market by the third quarter. In turn, the Fund reduced
exposure to economically-sensitive areas, such as office furniture, auto parts,
semiconductor, capital equipment and construction stocks. Financial stocks were
also reduced due to concerns that their earnings growth would slow.
Following three short-term interest rate cuts by the Federal Reserve Board, the
stock market rebounded sharply in the fourth quarter -- further evidence of its
extreme volatility during the year. Small stocks led the charge, and the Fund
erased its negative return by gaining 17.54% in the quarter. Cash levels were
reduced to buy stocks in education, specialty retailing and information
technology consulting sectors.
SECTORS OF EMPHASIS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Technology 25.7
Business & Consumer Services 19.0
Health Care 18.6
Consumer Non-Durables 16.4
</TABLE>
As of December 31, 1998
In this uncertain environment, we will continue to seek companies capable of
delivering above-average earnings growth over the long term. Interestingly, 1998
marked the fifth straight year of underperformance for small cap stocks relative
to the S&P 500, and their relative valuations are at all time lows. Opportunity
exists, but a reduced level of risk aversion on the part of investors, combined
with superior earnings growth prospects for smaller companies, is needed to
spark a significant broadening of the market.
GROWTH OF $10,000 SINCE INCEPTION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
<S> <C> <C>
CSCF RUSSELL 2000
1 Year 4.69% (2.55%)
Since Inception 20.64% 10.85%
COLUMBIA
SMALL CAP
FUND RUSSELL 2000
10/1/96 $10,000 $10,000
12/31/96 $10,762 $10,520
12/31/97 $14,432 $12,872
12/31/98 $15,110 $12,544
Past Performance is not predictive of future results.
</TABLE>
7
<PAGE>
INVESTMENT REVIEW
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[LOGO]
- ------------------------------------------
------------------------------------------
-- COLUMBIA REAL ESTATE EQUITY FUND --
--------------------------------------
After posting two consecutive years of high double-digit returns, Columbia Real
Estate Equity Fund returned -12.33% for the 12 months ended December 31, 1998.
The Fund significantly outperformed its benchmark, the NAREIT Index, which
returned -17.51% for the same period.
REITs generally stumbled throughout 1998 as investors' perception about real
estate shifted sharply from previous years. Fears of overbuilding and increasing
vacancy rates, for instance, led investors to lower their expectations about
future growth of REITs. Cash flows consequently slowed and trading multiples
declined.
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Equity Office Properties Trust 5.6
Simon Property Group, Inc. 5.5
Apartment Investment & Mgmt. Co. (Class A) 5.2
Public Storage, Inc. 4.5
New Plan Excel Realty Trust Inc. 3.9
Cabot Industrial Trust 3.7
Mack-Cali Realty Corp. 3.6
Spieker Properties, Inc. 3.6
Vornado Realty Trust 3.3
General Growth Properties, Inc. 3.3
</TABLE>
As of December 31, 1998
During this difficult year, the more defensive REIT sectors -- industrial,
retail, residential and health care -- received greater emphasis by investors,
and our significant weightings in all but healthcare helped relative
performance. The Fund also benefited from a below-market weighting in the
lodging sector, which performed poorly all year. Although the office sector was
also a laggard, we maintained our office holdings, as we expect this sector to
improve over time, due to its prospects for internal growth and industry
consolidation.
Although growth rates of REITs are declining from their previously high
double-digit pace to a high single-digit pace, this trend has already been
discounted by investors in current valuations of REIT stocks. Therefore, we
anticipate that continued but slow REIT growth in 1999 and projected dividend
yields above 7% will provide a foundation for better performance in the REIT
market going forward.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Apartments 15.8%
Community Centers 12.3%
Industrial 30.3%
Lodging 2.2%
Manufactured Homes 2.6%
Office 15.7%
Shopping Malls 10.1%
Other 5.4%
Cash 5.6%
as of December 31, 1998
</TABLE>
As always, the Fund continues to seek capital appreciation and above-average
current income by investing in the equity securities of companies in the real
estate industry, providing investors with diversification opportunity in their
portfolios.
GROWTH OF $10,000 SINCE INCEPTION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
<S> <C> <C>
CREF NAREIT
1 Year (12.33%) (17.51%)
Since Inception 13.01% 9.46%
NATIONAL
COLUMBIA ASSOCIATION
REAL ESTATE OF REAL
EQUITY FUND ESTATE TRUSTS
4/1/94 $10,000 $10,000
12/31/94 $10,176 $9,978
12/31/95 $11,892 $11,502
12/31/96 $16,446 $15,558
12/31/97 $20,515 $18,710
12/31/98 $17,984 $15,433
Past Performance is not predictive of future results.
</TABLE>
8
<PAGE>
INVESTMENT REVIEW
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[LOGO]
- ------------------------------------------------
------------------------------------------------
-- COLUMBIA BALANCED FUND --
----------------------------
Columbia Balanced Fund returned 20.07% for the year ended December 31, 1998.
Throughout this time, the Fund's asset allocation was almost evenly distributed
between stocks and bonds, with 54.5% of the portfolio at year-end attributed to
stocks, 44.0% to fixed income and 1.5% to cash.
On the equity side of the portfolio, we focused on larger capitalization stocks
with dependable earnings growth. Early in the year, we trimmed holdings in REITs
and electric and gas utilities, as these sectors showed signs of trouble. Our
continued focus on retail and consumer stocks benefited the Fund in the fourth
quarter, as a series of three interest rate cuts from September 29 to November
17 renewed consumer confidence.
TOP TEN STOCK HOLDINGS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Microsoft Corp. 2.5
General Electric Co. 2.4
Pfizer, Inc. 2.2
Tyco International Ltd. 1.7
Bristol-Myers Squibb Co. 1.6
MCI Worldcom, Inc. 1.5
Warner-Lambert Co. 1.5
IBM Corp. 1.3
Freddie Mac 1.3
Safeway, Inc. 1.3
</TABLE>
As of December 31, 1998
An emphasis on certain investment themes also played a large role in stock
selection, including "The Aging of America," "Technology Age" and "Value-Added
Consolidators."
On the bond side of the portfolio, falling interest rates, supported by low
inflation and moderating economic growth, contributed to price appreciation of
bonds. However, prices on most bonds, including corporate and mortgage-backed
securities such as those held by the Fund, did not go up as much as U.S.
Treasuries. In the second half of the year, mortgage-backed bonds were increased
along with corporates to take advantage of upside price potential.
We believe the U.S. economy and corporate earnings remain vulnerable to a
worldwide economic slowdown. Although we do not anticipate a recession in 1999,
we will continue to emphasize stocks that offer dependable earnings growth in a
slowing economy. A change in monetary policy appears to be on hold for the
immediate future. We believe the Federal Reserve Board will wait for
deteriorating global economic conditions before easing again, which should keep
bond yields relatively stable in the meantime.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Common Stocks 54.5%
Fixed Income 44.0%
Cash 1.5%
as of December 31, 1998
</TABLE>
GROWTH OF $10,000 SINCE INCEPTION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
<S> <C> <C> <C>
CBF S&P 500 LEHMAN AGGREGATE
1 Year 20.07% 28.58% 8.69%
5 Years 14.82% 24.07% 7.27%
Since Inception 14.35% 19.95% 8.05%
COLUMBIA
BALANCED FUND S&P 500 LEHMAN AGGREGATE
10/1/91 $10,000 $10,000 $10,000
12/31/91 $10,780 $10,838 $10,507
12/31/92 $11,738 $11,664 $11,285
12/31/93 $13,337 $12,840 $12,385
12/31/94 $13,350 $13,009 $12,023
12/31/95 $16,699 $17,898 $14,244
12/31/96 $18,666 $22,007 $14,761
12/31/97 $22,164 $29,349 $16,185
12/31/98 $26,608 $37,736 $17,594
Past Performance is not predictive of future results.
</TABLE>
9
<PAGE>
INVESTMENT REVIEW
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[LOGO]
- -------------------------------------------
-------------------------------------------
-- U.S. GOVERNMENT SECURITIES FUND --
-------------------------------------
The U.S. Government Securities Fund returned 6.43% for the year ended December
31, 1998. This rate of return compares very favorably to inflation as measured
by the Consumer Price Index, which increased only 1.6% for the year.
For most of the year, interest rates across the yield curve declined. Worldwide
economic turmoil sparked a flight to U.S. Treasuries, driving their yields down,
and the Fund benefited from price appreciation. Low rates on Treasuries were
further supported by a budget surplus, which reduces the Treasury's need to
issue new bonds. Additionally, the Fund benefited from low inflation and
moderating economic growth.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Treasury/Agency Obligations 97.4%
Cash 2.6%
as of December 31, 1998
</TABLE>
The flight to quality trend that occurred for most of the year reversed somewhat
in the fourth quarter. A series of three Federal Reserve Board short-term
interest rate cuts between September 29 and November 17 rekindled consumer and
investor confidence. As investors moved money away from U.S. Treasuries into
other asset categories, Treasury prices declined and short-term Treasury yields
rose approximately 0.25% in the period.
PORTFOLIO HIGHLIGHTS
<TABLE>
<S> <C>
Current Yield 3.77%
</TABLE>
Based on the 30 days ended Dec. 31, 1998
<TABLE>
<S> <C>
Weighted Averages
Duration 1.83 years
Maturity 2.15 years
</TABLE>
As of December 31, 1998
Looking forward, we expect low inflation and moderating economic growth, which
should provide a solid foundation for bond market returns. As always, the Fund
seeks preservation of capital and income by investing in direct obligations of
the U.S. Government. These securities include Treasury bills, notes and bonds
all having a maturity of three years or less.
GROWTH OF $10,000 OVER 10 YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
<S> <C> <C>
CUSG MERRILL 1-3
1 Year 6.43% 6.99%
5 Years 5.19% 5.99%
10 Years 6.90% 7.37%
COLUMBIA MERRILL
U.S. LYNCH CONSUMER
GOVERNMENT 1-3 PRICE
SECURITIES TREASURY INDEX
FUND INDEX (INFLATION)
12/31/88 $10,000 $10,000 $10,000
12/31/89 $10,963 $11,087 $10,460
12/31/90 $11,981 $12,166 $11,098
12/31/91 $13,506 $13,587 $11,442
12/31/92 $14,290 $14,443 $11,774
12/31/93 $15,135 $15,224 $12,092
12/31/94 $15,130 $15,311 $12,418
12/31/95 $16,675 $16,995 $12,729
12/31/96 $17,317 $17,841 $13,149
12/31/97 $18,314 $19,030 $13,372
12/31/98 $19,493 $20,359 $13,586
Past Performance is not predictive of future results.
</TABLE>
10
<PAGE>
INVESTMENT REVIEW
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[LOGO]
- --------------------------------------------------------------------------------
-- COLUMBIA FIXED INCOME SECURITIES FUND --
-----------------------------------------------------------
The Fund returned 7.44% for the year ended December 31, 1998. Worldwide economic
turmoil led investors to U.S. Treasuries, sparking the so-called "flight to
quality" during the second half of the year. As the demand for Treasuries
increased, yields on 30-year Treasuries fell to historical levels.
Falling interest rates, supported by low inflation and moderating economic
growth, contributed to price appreciation of bonds. However, prices on most
bonds, including corporate and mortgage-backed securities, such as those held by
the Fund, did not go up as much as prices on U.S. Treasuries.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
Collateralized Mortgage Obligations 45.3%
Corporate Bonds 30.2%
Treasury/Agency Obligations 11.7%
Mortgage Pass-Throughs 7.3%
Asset Backed Securities 3.8%
Cash 1.7%
</TABLE>
Since bonds are selected for the Fund's portfolio based on interest rate trends
and the liquidity of various instruments under prevailing market conditions, the
Fund rotated away from mortgage-backed securities early in the year to protect
against prepayment risk (when homeowners refinance their current mortgages to
obtain lower rates).
Later, mortgage-backed bonds, along with corporates, were increased to take
advantage of upside price potential and maintain an attractive yield in the
portfolio.
Responding to fears of economic slowdown, the Federal Reserve Board eased
short-term interest rates three times between September 29 and November 17. The
bond market fully anticipated these reductions, so interest rates reached a low
on October 5 and then rose for the remainder of the year.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO QUALITY
<S> <C>
Treasury/Agency Obligations 53.2%
Aaa 18.2%
Aa 2.3%
A 10.7%
Baa 13.4%
Ba 1.9%
B 0.3%
As of December 31, 1998
As rated by Moody's Investor Services
</TABLE>
The Fed appears to be on hold for the immediate future. We believe they will
wait for deteriorating global economic conditions before easing again, keeping
rates relatively stable in the meantime. At present, we continue to emphasize
high quality fixed income securities, and we are maintaining the Fund's average
maturity and duration at 6.13 and 4.86 years, respectively, in line with the
Lehman Aggregate Index, the Fund's benchmark.
GROWTH OF $10,000 OVER 10 YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
<S> <C> <C> <C>
CFIS LEHMAN AGGREGATE
1 Year 7.44% 8.69%
5 Years 6.93% 7.27%
10 Years 9.21% 9.26%
COLUMBIA
FIXED CONSUMER
INCOME PRICE
SECURITIES LEHMAN INDEX
FUND AGGREGATE (INFLATION)
12/31/1988 $10,000 $10,000 $10,000
12/31/1989 $11,435 $11,453 $10,460
12/31/1990 $12,384 $12,479 $11,098
12/31/1991 $14,470 $14,476 $11,442
12/31/1992 $15,626 $15,547 $11,774
12/31/1993 $17,262 $17,063 $12,092
12/31/1994 $16,682 $16,565 $12,418
12/31/1995 $19,836 $19,624 $12,729
12/31/1996 $20,505 $20,337 $13,149
12/31/1997 $22,465 $22,299 $13,372
12/31/1998 $24,135 $24,241 $13,586
Past Performance is not predictive of future results.
</TABLE>
11
<PAGE>
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
[LOGO]
- --------------------------------------------
--------------------------------------------
-- COLUMBIA MUNICIPAL BOND FUND --
----------------------------------
Columbia Municipal Bond Fund returned 5.58% for the year ended December 31,
1998. Throughout the period, supply of new municipal debt increased sub-
stantially on a national level as municipalities refinanced existing debt to
take advantage of lower interest rates. 1998 was the second largest year ever
for new municipal issues. Cash flows into municipal bonds increased as investors
sought a safe haven from the tremendous volatility in financial markets.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
<S> <C>
State of Oregon General Obligations 7.3%
Oregon General Obligation Bonds 15.6%
Oregon Revenue Bonds 19.6%
Oregon Other Bonds 2.9%
Oregon Insured General Obligation Bonds 17.4%
Other Bonds 6.6%
Oregon Insured Revenue Bonds 22.2%
Oregon Pre-Refunded Bonds 5.9%
Cash 2.5%
As of December 31, 1998
</TABLE>
In contrast, Oregon bond offerings remained fairly light in 1998, while a
generally healthy economy and increased income growth led to solid demand for
Oregon municipal bonds. This strong demand and muted supply of Oregon municipal
bonds kept their prices high compared to other states.
In October, long-term municipal bond yields briefly reached their lowest levels
in 10 years. Treasury yields, however, dropped more dramatically on a relative
basis, and the yield on 30-year Treasuries nearly matched the yield on 30-year
municipal bonds. Even though yields on these bonds rose somewhat later in the
year, the difference between the two yields remains historically narrow. Since
municipal bonds earn income free of federal and some state taxes, the yields
available on municipals seem attractive compared to taxable alternatives.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO QUALITY
<S> <C>
Aaa 56.0%
Aa 21.0%
A 16.0%
Baa 1.6%
Not Rated 5.4%
as of December 31, 1998
as rated by Moody's Investors Services, Inc.
</TABLE>
The Fund maintains an average maturity between 7 and 10 years, maintains a high
average credit quality and is broadly diversified across issuers within Oregon.
We remain committed to providing shareholders with high, after-tax returns and a
low level of both volatility and risk.
GROWTH OF $10,000 OVER 10 YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
<S> <C> <C>
CMBF Lehman G.O.
1 Year 5.58% 6.67%
5 Years 5.25% 6.12%
10 Years 7.08% 7.92%
Columbia Lehman Consumer
Municipal General Price
Bond Obligation Index
Fund Bond (Inflation)
6/30/88 $10,000 $10,000 $10,000
6/30/89 $10,895 $11,011 $10,460
6/30/90 $11,646 $11,756 $11,098
6/30/91 $13,012 $13,097 $11,442
6/30/92 $13,852 $14,245 $11,774
6/30/93 $15,339 $15,916 $12,092
6/30/94 $14,621 $15,171 $12,418
6/30/95 $16,690 $17,623 $12,729
6/30/96 $17,319 $18,458 $13,149
6/30/97 $18,767 $20,083 $13,372
6/30/98 $19,814 $21,426 $13,586
Past Performance is not predictive of future results.
</TABLE>
12
<PAGE>
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
[LOGO]
- -----------------------------------------------
-----------------------------------------------
-- COLUMBIA HIGH YIELD FUND --
------------------------------
Columbia High Yield Fund returned 6.26% for the year ended December 31, 1998.
After a strong first quarter, high yield bonds struggled in the second and third
quarters, as the supply of high yield bonds exceeded demand, and renewed
concerns about the Asian crisis prompted a worldwide flight to higher quality
bonds. Because of the Fund's focus on higher quality "junk bonds," however, the
Fund significantly outperformed its peers, as evidenced by the one-year return
of -0.08% posted by the Lipper High Yield Bond Fund Index, the Fund's benchmark.
SECTORS OF EMPHASIS
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
Entertainment & Media 22.4%
Services & Publishing 10.0%
Manufacturing 9.6%
Telecommunications 8.8%
Health Care 7.4%
</TABLE>
As of December 31, 1998
Responding to concerns of a worldwide economic slowdown, the Federal Reserve
Board eased interest rates a total of three times between September 29 and
November 17. The ensuing bond market rally helped to narrow the historically
high yield spreads that had developed between Treasuries and other bonds
throughout the third quarter. As yield spreads narrowed, the price of high yield
bonds increased near year-end.
In trading activity during the year, we increased holdings in cable TV
companies, hospital operators and food and beverage containers. Holdings in the
specialty retailing sector were reduced because of our concerns that consumer
spending might slow in 1999.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO QUALITY
<S> <C>
Ba 42.8%
B 55.7%
Baa 1.5%
as of December 31, 1998
As rated by Moody's Investor Services, Inc.
</TABLE>
Although they have begun to narrow, the yield spreads between U.S. Treasuries
and high yield bonds are still wider than average. Since we do not anticipate a
recession in the near term, we believe the high yield market offers good
relative value compared to other bond issues.
GROWTH OF $10,000 SINCE INCEPTION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31,1998
<S> <C> <C> <C>
CHYF SALOMON BB LIPPER HYBF
1 Year 6.26% 8.05% (0.08%)
5 years 9.11% 9.94% 7.63%
Since Inception 8.80% 9.73% 8.17%
COLUMBIA LIPPER HIGH
HIGH YIELD YIELD BOND
FUND FUND INDEX SALOMON BB
10/1/93 $10,000 $10,000 $10,000
12/31/93 $10,112 $10,498 $10,185
12/31/94 $10,019 $10,113 $10,048
12/31/95 $11,935 $11,870 $12,321
12/31/96 $13,060 $13,410 $13,429
12/31/97 $14,719 $15,177 $15,142
12/31/98 $15,639 $15,163 $16,361
Past Performance is not predictive of future results.
</TABLE>
13
<PAGE>
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
[LOGO]
- --------------------------------------------
--------------------------------------------
-- COLUMBIA DAILY INCOME COMPANY --
-----------------------------------
Columbia Daily Income Company returned 5.09% for the year ended December 31,
1998.
Although short-term interest rates remained fairly stable for much of the year,
the Federal Reserve Board lowered short-term interest rates on three separate
occasions between September 29 and November 17 by a total of 0.75%. Money market
rates fell as a result, with the Fund's 7-day average yield declining from 5.21%
on January 1, 1998 to 4.63% on December 31, 1998.
PORTFOLIO HIGHLIGHTS
<TABLE>
<S> <C>
Current Yield 4.64%
Compound Yield 4.74%
Based on the 7 days ended December 31, 1998
Weighted Average Maturity 39.0 days
As of December 31, 1998
</TABLE>
The year was characterized by stronger than expected economic growth and
gradually declining inflation. 1998's 4.1% Gross Domestic Product growth, for
instance, compares to a slightly less robust pace of 3.8% for 1997. The 1.6%
rate of inflation for 1998, measured by the Consumer Price Index, trended
modestly lower, as the 1997 CPI was measured at 1.7%.
We anticipate that the economy will slow in 1999, but will still grow at a
comfortable level. With this in mind, we believe the Fed will remain on the
sidelines for awhile, opting not to adjust monetary policy unless global
economic conditions deteriorate.
THE YEAR WAS CHARACTERIZED BY STRONGER THAN EXPECTED ECONOMIC
GROWTH AND GRADUALLY DECLINING INFLATION.
[LOGO]
As always, the Fund invests only in high quality, short-term debt instruments
with an average maturity of 30 to 50 days, providing a very liquid, low risk
investment. The Fund seeks to provide the highest level of income available that
is consistent with the maintenance of liquidity and preservation of capital by
investing in various money market instruments. These include commercial paper,
U.S. Treasury bills, U.S. Government agency discount notes and certificates of
deposit.
GROWTH OF $10,000 OVER 10 YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
<S> <C> <C>
CDIC CPI
1 Year 5.09% 1.60%
5 Years 4.87% 2.36%
10 Years 5.23% 3.11%
COLUMBIA CONSUMER
DAILY PRICE
INCOME INDEX
COMPANY (INFLATION)
12/31/88 $10,000 $10,000
12/31/89 $10,889 $10,460
12/31/90 $11,743 $11,098
12/31/91 $12,407 $11,442
12/31/92 $12,811 $11,774
12/31/93 $13,132 $12,092
12/31/94 $13,615 $12,418
12/31/95 $14,363 $12,729
12/31/96 $15,075 $13,149
12/31/97 $15,846 $13,372
12/31/98 $16,653 $13,586
Past Performance is not predictive of future results.
</TABLE>
14
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR
[LOGO]
- ---- ----
-- COLUMBIA COMMON STOCK FUND, INC. --
--------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $22.02 $19.26 $18.59 $15.16 $15.29
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................ 0.09 0.29 0.25 0.26 0.27
Net gains on securities (both
realized and unrealized)............ 5.68 4.58 3.61 4.38 0.04
- ----------------------------------------------------------------------------------------------
Total from investment operations.... 5.77 4.87 3.86 4.64 0.31
- ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income.............................. (0.13 ) (0.27 ) (0.23 ) (0.26 ) (0.25 )
Distributions from capital gains..... (3.26 ) (1.84 ) (2.96 ) (0.95 ) (0.19 )
- ----------------------------------------------------------------------------------------------
Total distributions................. (3.39 ) (2.11 ) (3.19 ) (1.21 ) (0.44 )
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $24.40 $22.02 $19.26 $18.59 $15.16
- ----------------------------------------------------------------------------------------------
TOTAL RETURN........................... 26.28% 25.37% 20.71% 30.84% 2.06%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands)............................ $797,147 $783,906 $536,760 $358,523 $124,263
Ratio of expenses to average net
assets................................ 0.80% 0.77% 0.76% 0.80% 0.84%
Ratio of net investment income to
average net assets.................... 0.56% 1.37% 1.32% 1.68% 1.82%
Portfolio turnover rate................ 140.74% 90.23% 111.39% 75.36% 64.21%
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
15
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR
[LOGO]
- ---- ----
-- COLUMBIA GROWTH FUND, INC. --
--------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $34.34 $30.74 $29.84 $24.84 $26.38
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................ 0.03 0.19 0.19 0.31 0.29
Net gains or (losses) on securities
(both realized and unrealized)...... 10.39 7.90 6.04 7.86 (0.46 )
- ----------------------------------------------------------------------------------------------------
Total from investment operations.... 10.42 8.09 6.23 8.17 (0.17 )
- ----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income.............................. (0.08 ) (0.17 ) (0.17 ) (0.29 ) (0.26 )
Distributions from capital gains..... (2.17 ) (4.32 ) (5.16 ) (2.88 ) (1.11 )
- ----------------------------------------------------------------------------------------------------
Total distributions................. (2.25 ) (4.49 ) (5.33 ) (3.17 ) (1.37 )
- ----------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $42.51 $34.34 $30.74 $29.84 $24.84
- ----------------------------------------------------------------------------------------------------
TOTAL RETURN........................... 30.34% 26.32% 20.80% 32.98% -0.63%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands)............................ $1,753,024 $1,324,918 $1,064,100 $848,731 $591,694
Ratio of expenses to average net
assets................................ 0.68% 0.71% 0.71% 0.75% 0.81%
Ratio of net investment income to
average net assets.................... 0.21% 0.55% 0.63% 1.14% 1.12%
Portfolio turnover rate................ 105.25% 95.67% 75.49% 94.73% 79.28%
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
16
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR
[LOGO]
- ---- ----
-- COLUMBIA INTERNATIONAL STOCK FUND, INC. --
---------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $13.70 $13.86 $13.07 $12.43 $12.96
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)......... 0.00 * 0.03 0.03 0.02 (0.02 )
Net gains or (losses) on securities
(both realized and unrealized) and
foreign currency transactions....... 1.76 1.56 2.13 0.62 (0.30 )
- ----------------------------------------------------------------------------------------------
Total from investment operations.... 1.76 1.59 2.16 0.64 (0.32 )
- ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income.............................. -- -- (0.23 ) -- --
Distributions from capital gains..... (0.01 ) (1.75 ) (1.14 ) -- (0.21 )
- ----------------------------------------------------------------------------------------------
Total distributions................. (0.01 ) (1.75 ) (1.37 ) -- (0.21 )
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $15.45 $13.70 $13.86 $13.07 $12.43
- ----------------------------------------------------------------------------------------------
TOTAL RETURN........................... 12.83% 11.47% 16.59% 5.15% -2.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands)............................ $134,193 $146,281 $125,510 $100,873 $118,484
Ratio of expenses to average net
assets................................ 1.56% 1.62% 1.54% 1.54% 1.52%
Ratio of net investment income (loss)
to average net assets................. (0.02)% 0.19% 0.22% 0.15% (0.21)%
Portfolio turnover rate................ 74.15% 121.53% 129.40% 156.09% 138.79%
</TABLE>
* Amount represents less than $0.01 per share.
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
17
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR
[LOGO]
- ---- ----
-- COLUMBIA SPECIAL FUND, INC. --
---------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $20.26 $19.85 $21.44 $18.69 $19.51
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)......... (0.03 ) 0.01 (0.06 ) 0.03 0.08
Net gains on securities (both
realized and unrealized)............ 3.40 2.50 2.85 5.45 0.36
- ----------------------------------------------------------------------------------------------------
Total from investment operations.... 3.37 2.51 2.79 5.48 0.44
- ----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income.............................. (0.01 ) -- -- (0.02 ) (0.07 )
Distributions from capital gains..... 0.00 * (2.10 ) (4.38 ) (2.71 ) (1.19 )
- ----------------------------------------------------------------------------------------------------
Total distributions................. (0.01 ) (2.10 ) (4.38 ) (2.73 ) (1.26 )
- ----------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $23.62 $20.26 $19.85 $21.44 $18.69
- ----------------------------------------------------------------------------------------------------
TOTAL RETURN........................... 16.64% 12.64% 13.07% 29.53% 2.29%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands)............................ $969,359 $1,249,718 $1,585,284 $1,384,415 $889,526
Ratio of expenses to average net
assets................................ 1.03% 0.98% 0.94% 0.98% 1.05%
Ratio of net investment income (loss)
to average net assets................. (0.09)% 0.04% (0.29)% 0.16% 0.40%
Portfolio turnover rate................ 135.29% 166.46% 150.07% 182.99% 178.91%
</TABLE>
* Amount represents less than $0.01 per share
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
18
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
[LOGO]
- ---- ----
-- COLUMBIA SMALL CAP FUND, INC. --
-----------------------------------
<TABLE>
<CAPTION>
1998 1997 1996(1)
----- ----- -------
<S> <C> <C> <C>
- ------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $16.65 $12.99 $12.00
- ------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)......... (0.09 ) (0.08 ) 0.00 *
Net gains on securities (both
realized and unrealized)............ 0.87 4.51 0.99
- ------------------------------------------------------------------------
Total from investment operations.... 0.78 4.43 0.99
- ------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from capital gains..... 0.00 * (0.77 ) --
- ------------------------------------------------------------------------
Total distributions................. -- (0.77 ) --
- ------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $17.43 $16.65 $12.99
- ------------------------------------------------------------------------
TOTAL RETURN........................... 4.69% 34.10% 7.62% (2)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................ $160,472 $96,431 $21,061
Ratio of expenses to average net
assets................................ 1.34% 1.46% 1.61%
Ratio of net investment loss to average
net assets............................ (0.68)% (0.81)% 0.00%
Portfolio turnover rate................ 157.73% 171.75% 32.57%
</TABLE>
* Amount represents less than $0.01 per share
(1) From inception of operations on September 11, 1996. Ratios and portfolio
turnover rates are annualized.
(2) Not annualized.
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
19
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
[LOGO]
- ---- ----
-- COLUMBIA REAL ESTATE EQUITY FUND, INC. --
--------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994(1)
----- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $18.80 $16.16 $12.71 $11.72 $12.00
- ------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................ 0.75 0.79 0.77 0.78 0.49
Net gains or (losses) on securities
(both realized and unrealized)...... (3.04 ) 3.15 3.94 1.12 (0.27 )
- ------------------------------------------------------------------------------------------
Total from investment operations.... (2.29 ) 3.94 4.71 1.90 0.22
- ------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income.............................. (0.66 ) (0.62 ) (0.52 ) (0.49 ) (0.32 )
Distributions from capital gains..... -- (0.51 ) (0.53 ) (0.14 ) --
Returns of capital................... (0.09 ) (0.17 ) (0.21 ) (0.28 ) (0.18 )
- ------------------------------------------------------------------------------------------
Total distributions................. (0.75 ) (1.30 ) (1.26 ) (0.91 ) (0.50 )
- ------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $15.76 $18.80 $16.16 $12.71 $11.72
- ------------------------------------------------------------------------------------------
TOTAL RETURN........................... -12.33% 24.74% 38.30% 16.86% 1.76% (2)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................ $164,172 $151,554 $68,073 $21,587 $17,402
Ratio of expenses to average net
assets................................ 1.01% 1.02% 1.06% 1.18% 1.14%
Ratio of net investment income to
average net assets.................... 4.60% 4.87% 6.23% 6.71% 6.28%
Portfolio turnover rate................ 5.62% 33.55% 45.82% 53.91% 7.61%
</TABLE>
(1) From inception of operations on March 16, 1994. Ratios and portfolio
turnover rates are annualized.
(2) Not annualized.
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
20
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR
[LOGO]
- ---- ----
-- COLUMBIA BALANCED FUND, INC. --
----------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $21.42 $20.32 $20.08 $17.28 $17.91
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................ 0.72 0.84 0.76 0.73 0.65
Net gains or (losses) on securities
(both realized and unrealized)...... 3.52 2.92 1.58 3.54 (0.64 )
- ----------------------------------------------------------------------------------------------
Total from investment operations.... 4.24 3.76 2.34 4.27 0.01
- ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income.............................. (0.73 ) (0.83 ) (0.76 ) (0.73 ) (0.64 )
Distributions from capital gains..... (1.76 ) (1.83 ) (1.34 ) (0.74 ) --
- ----------------------------------------------------------------------------------------------
Total distributions................. (2.49 ) (2.66 ) (2.10 ) (1.47 ) (0.64 )
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $23.17 $21.42 $20.32 $20.08 $17.28
- ----------------------------------------------------------------------------------------------
TOTAL RETURN........................... 20.07% 18.74% 11.78% 25.08% 0.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands)............................ $975,381 $792,378 $672,593 $486,767 $249,670
Ratio of expenses to average net
assets................................ 0.67% 0.68% 0.66% 0.69% 0.72%
Ratio of net investment income to
average net assets.................... 3.22% 3.83% 3.82% 4.05% 3.82%
Portfolio turnover rate................ 127.57% 148.91% 133.21% 108.04% 98.48%
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
21
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR
[LOGO]
- ---- ----
-- COLUMBIA U.S. GOVERNMENT SECURITIES FUND, INC. --
----------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $8.29 $8.24 $8.34 $7.99 $8.36
- -----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................ 0.38 0.41 0.41 0.45 0.37
Net gains or (losses) on securities
(both realized and unrealized)...... 0.14 0.05 (0.10 ) 0.35 (0.37 )
- -----------------------------------------------------------------------------------------
Total from investment operations.... 0.52 0.46 0.31 0.80 --
- -----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income.............................. (0.38 ) (0.41 ) (0.41 ) (0.45 ) (0.37 )
Distributions from capital gains..... (0.04 ) -- -- -- --
- -----------------------------------------------------------------------------------------
Total distributions................. (0.42 ) (0.41 ) (0.41 ) (0.45 ) (0.37 )
- -----------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $8.39 $8.29 $8.24 $8.34 $7.99
- -----------------------------------------------------------------------------------------
TOTAL RETURN........................... 6.43% 5.76% 3.85% 10.21% -0.03%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands)............................ $40,578 $37,837 $40,776 $41,842 $33,512
Ratio of expenses to average net
assets................................ 0.89% 0.87% 0.80% 0.79% 0.81%
Ratio of net investment income to
average net assets.................... 4.55% 4.99% 4.99% 5.45% 4.51%
Portfolio turnover rate................ 182.46% 184.43% 179.38% 253.17% 253.80%
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
22
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR
[LOGO]
- ---- ----
-- COLUMBIA FIXED INCOME SECURITIES FUND, INC. --
-------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $13.41 $13.08 $13.51 $12.16 $13.44
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................ 0.83 0.85 0.85 0.88 0.83
Net gains or (losses) on securities
(both realized and unrealized)...... 0.14 0.36 (0.43 ) 1.35 (1.28 )
- ----------------------------------------------------------------------------------------------
Total from investment operations.... 0.97 1.21 0.42 2.23 (0.45 )
- ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income.............................. (0.83 ) (0.85 ) (0.85 ) (0.88 ) (0.83 )
Distributions from capital gains..... (0.13 ) (0.03 ) -- -- --
- ----------------------------------------------------------------------------------------------
Total distributions................. (0.96 ) (0.88 ) (0.85 ) (0.88 ) (0.83 )
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $13.42 $13.41 $13.08 $13.51 $12.16
- ----------------------------------------------------------------------------------------------
TOTAL RETURN........................... 7.44% 9.56% 3.37% 18.91% -3.36%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands)............................ $422,330 $381,333 $356,421 $316,259 $252,090
Ratio of expenses to average net
assets................................ 0.65% 0.66% 0.64% 0.65% 0.66%
Ratio of net investment income to
average net assets.................... 6.15% 6.43% 6.53% 6.80% 6.53%
Portfolio turnover rate................ 107.06% 196.28% 178.25% 137.41% 139.81%
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
23
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR
[LOGO]
- ---- ----
-- COLUMBIA MUNICIPAL BOND FUND, INC. --
----------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $12.47 $12.15 $12.37 $11.48 $12.71
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................ 0.58 0.60 0.61 0.63 0.64
Net gains or (losses) on securities
(both realized and unrealized)...... 0.10 0.39 (0.16 ) 0.96 (1.23 )
- ----------------------------------------------------------------------------------------------
Total from investment operations.... 0.68 0.99 0.45 1.59 (0.59 )
- ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income.............................. (0.58 ) (0.60 ) (0.61 ) (0.63 ) (0.64 )
Distributions from capital gains..... (0.11 ) (0.07 ) (0.06 ) (0.07 ) --
- ----------------------------------------------------------------------------------------------
Total distributions................. (0.69 ) (0.67 ) (0.67 ) (0.70 ) (0.64 )
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $12.46 $12.47 $12.15 $12.37 $11.48
- ----------------------------------------------------------------------------------------------
TOTAL RETURN........................... 5.58% 8.36% 3.77% 14.15% -4.68%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands)............................ $462,809 $409,148 $375,667 $383,796 $339,817
Ratio of expenses to average net
assets................................ 0.58% 0.57% 0.56% 0.57% 0.57%
Ratio of net investment income to
average net assets.................... 4.60% 4.87% 5.00% 5.22% 5.36%
Portfolio turnover rate................ 16.50% 16.88% 19.03% 21.45% 19.40%
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
24
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR
[LOGO]
- ---- ----
-- COLUMBIA HIGH YIELD FUND, INC. --
------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $10.04 $9.94 $9.88 $9.04 $9.94
- ----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................ 0.76 0.81 0.81 0.82 0.80
Net gains or (losses) on securities
(both realized and unrealized)...... (0.15 ) 0.40 0.07 0.84 (0.90 )
- ----------------------------------------------------------------------------------------
Total from investment operations.... 0.61 1.21 0.88 1.66 (0.10 )
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income.............................. (0.76 ) (0.81 ) (0.81 ) (0.82 ) (0.80 )
Distributions from capital gains..... (0.05 ) (0.30 ) (0.01 ) -- --
- ----------------------------------------------------------------------------------------
Total distributions................. (0.81 ) (1.11 ) (0.82 ) (0.82 ) (0.80 )
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $9.84 $10.04 $9.94 $9.88 $9.04
- ----------------------------------------------------------------------------------------
TOTAL RETURN........................... 6.26% 12.70% 9.43% 19.12% -0.92%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands)............................ $57,524 $39,278 $28,818 $23,471 $12,834
Ratio of expenses to average net
assets................................ 0.95% 1.00% 0.93% 1.00% 1.00%
Ratio of net investment income to
average net assets.................... 7.52% 8.05% 8.29% 8.62% 8.69%
Portfolio turnover rate................ 79.22% 124.23% 62.27% 51.60% 36.67%
Ratio of expenses to average net assets
before voluntary reimbursement........ 0.95% 1.02% 1.00% 1.06% 1.19%
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
25
<PAGE>
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR
[LOGO]
- ---- ----
-- COLUMBIA DAILY INCOME COMPANY --
-----------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................. 0.050 0.050 0.048 0.053 0.036
- ---------------------------------------------------------------------------------------------------
Total from investment operations..... 0.050 0.050 0.048 0.053 0.036
- ---------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income............................... (0.050 ) (0.050 ) (0.048 ) (0.053 ) (0.036 )
- ---------------------------------------------------------------------------------------------------
Total distributions.................. (0.050 ) (0.050 ) (0.048 ) (0.053 ) (0.036 )
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN............................ 5.09% 5.11% 4.96% 5.49% 3.68%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in
thousands)............................. $1,109,141 $1,169,096 $889,800 $800,656 $730,067
Ratio of expenses to average net
assets................................. 0.62% 0.63% 0.62% 0.64% 0.70%
Ratio of net investment income to
average net assets..................... 4.97% 4.99% 4.84% 5.34% 3.68%
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
26
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
[LOGO]
- --------------------- ---------------------
-- COLUMBIA COMMON STOCK FUND, INC. --
------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
DECEMBER 31, 1998 AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
COMMON STOCKS (98.7%)
BASIC INDUSTRIES & MANUFACTURING (7.9%)
BUILDING & FORESTRY PRODUCTS (0.3%)
CHAMPION INTERNATIONAL CORP...... 60,500 $ 2,450,250
-------------
MACHINERY CAPITAL SPENDING (7.6%)
EMERSON ELECTRIC CO.............. 54,500 3,409,656
GENERAL ELECTRIC CO.............. 315,000 32,149,688
TYCO INTERNATIONAL LTD........... 326,908 24,661,122
-------------
60,220,466
-------------
TOTAL BASIC INDUSTRIES &
MANUFACTURING..................... 62,670,716
-------------
BUSINESS & CONSUMER SERVICES (5.2%)
MEDIA & ENTERTAINMENT (4.1%)
*CLEAR CHANNEL COMMUNICATIONS,
INC............................. 269,300 14,676,850
COMCAST CORP. (CLASS A
SPECIAL)........................ 107,500 6,308,906
*INFINITY BROADCASTING CORP.
(CLASS A)....................... 302,400 8,278,200
*TELE-COMMUNICATIONS, INC. TCI
VENTURES GROUP (SERIES A)....... 152,700 3,597,994
-------------
32,861,950
-------------
POLLUTION CONTROL (1.1%)
WASTE MANAGEMENT, INC............ 186,305 8,686,470
-------------
TOTAL BUSINESS & CONSUMER
SERVICES.......................... 41,548,420
-------------
CONSUMER CYCLICAL (11.0%)
CONSUMER DURABLE (0.9%)
FEDERAL-MOGUL CORP............... 114,000 6,783,000
-------------
CONSUMER NON-DURABLE (10.1%)
*BED, BATH & BEYOND, INC.......... 147,900 5,047,088
CARNIVAL CORP.................... 199,300 9,566,400
*CONSOLIDATED STORES CORP......... 427,900 8,638,231
DAYTON-HUDSON CORP............... 356,000 19,313,000
*FEDERATED DEPARTMENT STORES,
INC............................. 211,900 9,230,894
HOME DEPOT, INC. (THE)........... 116,500 7,128,344
LOWE'S COS., INC................. 325,500 16,661,531
*OFFICE DEPOT, INC................ 135,500 5,005,031
-------------
80,590,519
-------------
TOTAL CONSUMER CYCLICAL............ 87,373,519
-------------
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
CONSUMER STAPLES (25.2%)
FOOD & HOUSEHOLD PRODUCTS (8.6%)
AVON PRODUCTS, INC............... 246,500 $ 10,907,625
GILLETTE CO...................... 93,000 4,493,063
*MEYER (FRED), INC................ 182,300 10,983,575
PHILLIP MORRIS COS., INC......... 360,400 19,281,400
*SAFEWAY, INC..................... 312,000 19,012,500
WALGREEN CO...................... 69,700 4,081,806
-------------
68,759,969
-------------
HEALTH (16.6%)
AMERICAN HOME PRODUCTS CORP...... 255,900 14,410,369
*BOSTON SCIENTIFIC CORP........... 376,000 10,081,500
BRISTOL-MYERS SQUIBB CO.......... 159,200 21,302,950
CARDINAL HEALTH, INC............. 154,550 11,726,481
GUIDANT CORP..................... 87,300 9,624,825
PFIZER, INC...................... 225,100 28,235,981
SCHERING-PLOUGH CORP............. 278,000 15,359,500
WARNER-LAMBERT CO................ 287,900 21,646,481
-------------
132,388,087
-------------
TOTAL CONSUMER STAPLES............. 201,148,056
-------------
ENERGY (5.4%)
AMOCO CORP....................... 113,400 6,846,525
*CONOCO, INC. (CLASS A)........... 247,300 5,162,387
EXXON CORP....................... 189,500 13,857,188
MOBIL CORP....................... 136,600 11,901,275
ROYAL DUTCH PETROLEUM CO......... 61,400 2,939,525
TEXACO, INC...................... 48,800 2,580,300
-------------
TOTAL ENERGY....................... 43,287,200
-------------
FINANCIAL (14.3%)
ALLSTATE CORP.................... 308,800 11,927,400
AMERICAN EXPRESS CO.............. 100,900 10,317,025
AMERICAN GENERAL CORP............ 131,200 10,233,600
BANK ONE CORP.................... 105,228 5,373,205
BANKAMERICA CORP................. 181,300 10,900,663
CHASE MANHATTAN CORP............. 100,900 6,867,506
CITIGROUP, INC................... 160,500 7,944,750
FANNIE MAE....................... 260,000 19,240,000
FIRST UNION CORP................. 201,700 12,265,881
MELLON BANK CORP................. 132,300 9,095,625
TRAVELERS PROPERTY CASUALTY CORP.
(CLASS A)....................... 97,400 3,019,400
U.S. BANCORP..................... 201,132 7,140,186
-------------
TOTAL FINANCIAL.................... 114,325,241
-------------
</TABLE>
27
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
[LOGO]
- --------------------- ---------------------
-- COLUMBIA COMMON STOCK FUND, INC. --
------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
TECHNOLOGY (21.4%)
*AMERICA ONLINE, INC.............. 107,000 $ 15,488,250
*ASCEND COMMUNICATIONS, INC....... 115,900 7,620,425
AUTOMATIC DATA PROCESSING, INC... 142,000 11,386,625
*CISCO SYSTEMS, INC............... 121,800 11,304,563
*COMPUTER SCIENCES CORP........... 219,200 14,124,700
*DELL COMPUTER CORP............... 104,200 7,626,137
*GATEWAY 2000, INC................ 176,800 9,049,950
INTEL CORP....................... 120,400 14,274,925
INTERNATIONAL BUSINESS MACHINES
CORP............................ 113,600 20,987,600
LUCENT TECHNOLOGIES, INC......... 76,200 8,382,000
*MICROSOFT CORP................... 263,000 36,474,813
*TELLABS, INC..................... 158,800 10,887,725
*XILINX, INC...................... 39,500 2,572,437
-------------
TOTAL TECHNOLOGY................... 170,180,150
-------------
UTILITIES (8.3%)
COMMUNICATIONS (7.6%)
ALLTEL CORP...................... 120,700 7,219,369
AT&T CORP........................ 43,000 3,235,750
BELL ATLANTIC CORP............... 138,100 7,845,806
*MCI WORLDCOM, INC................ 287,702 20,642,619
SBC COMMUNICATIONS, INC.......... 274,600 14,725,425
*TELE-COMMUNICATIONS, INC. TCI
GROUP (SERIES A)................ 125,000 6,914,062
-------------
60,583,031
-------------
ELECTRIC & GAS (0.7%)
IDACORP, INC..................... 152,900 5,533,069
-------------
TOTAL UTILITIES.................... 66,116,100
-------------
TOTAL COMMON STOCKS
(COST $558,815,836)............... 786,649,402
-------------
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
REPURCHASE AGREEMENT (0.3%)
J.P. MORGAN SECURITIES, INC.
4.970% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $2,189,048.
COLLATERALIZED BY
U.S. TREASURY BILLS
DUE 06/24/1999,
U.S. TREASURY BONDS
6.500% DUE 11/15/2026,
U.S. TREASURY NOTES 5.375%
DUE 06/30/2000 TO 07/31/2000.
(COST $2,188,750)................. $2,188,750 $ 2,188,750
-------------
TOTAL INVESTMENTS (99.0%)
(COST $561,004,586)................... 788,838,152
RECEIVABLES LESS LIABILITIES (1.0%).... 8,308,413
-------------
NET ASSETS (100.0%).................... $ 797,146,565
-------------
-------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
* Non-income producing.
See Notes to Financial Statements.
28
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
[LOGO]
- ------------------------- -------------------------
-- COLUMBIA GROWTH FUND, INC. --
------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
DECEMBER 31, 1998 AMOUNT VALUE(1)
------------ ---------------
<S> <C> <C>
COMMON STOCKS (98.7%)
BASIC INDUSTRIES & MANUFACTURING (6.7%)
MACHINERY CAPITAL SPENDING
EMERSON ELECTRIC CO.............. 136,000 $ 8,508,500
GENERAL ELECTRIC CO.............. 547,800 55,909,837
TYCO INTERNATIONAL LTD........... 700,000 52,806,250
---------------
TOTAL BASIC INDUSTRIES &
MANUFACTURING..................... 117,224,587
---------------
BUSINESS & CONSUMER SERVICES (8.7%)
SERVICES & PUBLISHING (3.6%)
*CERIDIAN CORP.................... 275,000 19,198,438
*FISERV, INC...................... 400,750 20,613,578
SERVICE CORPORATION INT'L........ 287,600 10,946,775
SERVICEMASTER CO................. 573,750 12,658,359
---------------
63,417,150
---------------
MEDIA & ENTERTAINMENT (3.9%)
*CHANCELLOR MEDIA CORP............ 225,600 10,800,600
*CLEAR CHANNEL COMMUNICATIONS,
INC............................. 394,000 21,473,000
COMCAST CORP. (CLASS A
SPECIAL)........................ 201,800 11,843,137
*INFINITY BROADCASTING CORP.
(CLASS A)....................... 650,300 17,801,963
*JACOR COMMUNICATIONS, INC........ 100,000 6,437,500
---------------
68,356,200
---------------
POLLUTION CONTROL (1.2%)
WASTE MANAGEMENT, INC............ 449,275 20,947,447
---------------
TOTAL BUSINESS & CONSUMER
SERVICES.......................... 152,720,797
---------------
CONSUMER CYCLICAL (15.3%)
CONSUMER DURABLE (1.3%)
FEDERAL-MOGUL CORP............... 400,000 23,800,000
---------------
CONSUMER NON-DURABLE (14.0%)
*ABERCROMBIE & FITCH CO........... 830,834 58,781,506
*BED, BATH & BEYOND, INC.......... 330,800 11,288,550
CARNIVAL CORP.................... 455,000 21,840,000
*CONSOLIDATED STORES CORP......... 929,800 18,770,338
DAYTON-HUDSON CORP............... 623,100 33,803,175
*FEDERATED DEPARTMENT STORES,
INC............................. 500,000 21,781,250
LOWE'S COS., INC................. 600,000 30,712,500
ROYAL CARIBBEAN CRUISES LTD...... 400,000 14,800,000
TANDY CORP....................... 317,000 13,056,437
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------ ---------------
<S> <C> <C>
WAL-MART STORES, INC............. 100,000 $ 8,143,750
WARNACO GROUP, INC. (CLASS A).... 492,800 12,443,200
---------------
245,420,706
---------------
TOTAL CONSUMER CYCLICAL............ 269,220,706
---------------
CONSUMER STAPLES (28.1%)
FOOD & HOUSEHOLD PRODUCTS (8.1%)
AVON PRODUCTS, INC............... 523,800 23,178,150
GILLETTE CO...................... 293,900 14,199,044
*MEYER (FRED), INC................ 400,400 24,124,100
RITE AID CORP.................... 577,950 28,644,647
*SAFEWAY, INC..................... 655,400 39,938,437
WALGREEN CO...................... 190,400 11,150,300
---------------
141,234,678
---------------
HEALTH (20.0%)
ALLEGIANCE CORP.................. 300,000 13,987,500
AMERICAN HOME PRODUCTS CORP...... 545,800 30,735,363
*BOSTON SCIENTIFIC CORP........... 1,468,800 39,382,200
BRISTOL-MYERS SQUIBB CO.......... 363,000 48,573,938
CARDINAL HEALTH, INC............. 450,150 34,155,131
GUIDANT CORP..................... 212,800 23,461,200
HBO & CO......................... 100,000 2,862,500
MCKESSON CORP.................... 425,800 33,664,812
PFIZER, INC...................... 441,100 55,330,481
SCHERING-PLOUGH CORP............. 373,600 20,641,400
WARNER-LAMBERT CO................ 636,000 47,819,250
---------------
350,613,775
---------------
TOTAL CONSUMER STAPLES............. 491,848,453
---------------
FINANCIAL (13.0%)
ALLSTATE CORP.................... 544,400 21,027,450
AMERICAN GENERAL CORP............ 300,000 23,400,000
AMERICAN INTERNATIONAL GROUP,
INC............................. 186,337 18,004,813
BANKAMERICA CORP................. 563,712 33,893,184
CIT GROUP, INC. (CLASS A)........ 600,000 19,087,500
FANNIE MAE....................... 356,800 26,403,200
FIRST UNION CORP................. 383,800 23,339,837
FREDDIE MAC...................... 250,700 16,154,481
MELLON BANK CORP................. 247,200 16,995,000
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO................... 300,000 21,300,000
SUNAMERICA, INC.................. 100,000 8,112,500
---------------
TOTAL FINANCIAL.................... 227,717,965
---------------
</TABLE>
29
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
[LOGO]
- ------------------------- -------------------------
-- COLUMBIA GROWTH FUND, INC. --
------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------ ---------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
TECHNOLOGY (21.3%)
*AMERICA ONLINE, INC.............. 235,500 $ 34,088,625
*ASCEND COMMUNICATIONS, INC....... 203,400 13,373,550
*CISCO SYSTEMS, INC............... 761,050 70,634,953
COMPAQ COMPUTER CORP............. 400,800 16,808,550
*COMPUTER SCIENCES CORP........... 533,200 34,358,075
*DELL COMPUTER CORP............... 200,400 14,666,775
*EMC CORP......................... 300,300 25,525,500
*GATEWAY 2000, INC................ 392,100 20,070,619
INTEL CORP....................... 240,100 28,466,856
LUCENT TECHNOLOGIES, INC......... 175,000 19,250,000
*MICROSOFT CORP................... 562,600 78,025,588
*TELLABS, INC..................... 264,100 18,107,356
---------------
TOTAL TECHNOLOGY................... 373,376,447
---------------
UTILITIES (5.6%)
COMMUNICATIONS
ALLTEL CORP...................... 300,000 17,943,750
AT&T CORP........................ 174,300 13,116,075
*MCI WORLDCOM, INC................ 600,000 43,050,000
SBC COMMUNICATIONS, INC.......... 200,300 10,741,088
*TELE-COMMUNICATIONS, INC. TCI
GROUP (SERIES A)................ 228,900 12,661,031
---------------
TOTAL UTILITIES.................... 97,511,944
---------------
TOTAL COMMON STOCKS
(COST $1,103,730,738)............. 1,729,620,899
---------------
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------ ---------------
<S> <C> <C>
REPURCHASE AGREEMENT (1.5%)
J.P. MORGAN SECURITIES, INC.
4.970% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $26,913,239.
COLLATERALIZED BY
U.S. TREASURY BILLS
DUE 06/24/1999,
U.S. TREASURY BONDS
6.500% DUE 11/15/2026,
U.S. TREASURY NOTES 5.375% DUE
06/30/2000 TO 07/31/2000.
(COST $26,909,575)................ $26,909,575 $ 26,909,575
---------------
TOTAL INVESTMENTS (100.2%)
(COST $1,130,640,313)................. 1,756,530,474
RECEIVABLES LESS LIABILITIES (-0.2%)... (3,506,933)
---------------
NET ASSETS (100.0%).................... $ 1,753,023,541
---------------
---------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
* Non-income producing.
See Notes to Financial Statements.
30
<PAGE>
SCHEDULE OF INVESTMENTS
-----------------------------------------------------------------
[LOGO]
- ------------------ ------------------
-- COLUMBIA INTERNATIONAL STOCK FUND, INC. --
------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
DECEMBER 31, 1998 AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
COMMON STOCKS (93.6%)
BELGIUM (0.7%)
*LERNOUT & HAUSPIE SPEECH PRODUCTS
NV (BUSINESS SERVICES)............ 27,000 $ 880,875
-------------
BRAZIL (0.2%)
CIA TECIDOS DO NORTE DE MINAS SA
(TEXTILES)........................ 1,973,067 233,528
-------------
CANADA (1.9%)
*DANIER LEATHER, INC. (RETAIL)...... 47,800 275,421
*NEWBRIDGE NETWORKS CORP. (OFFICE
EQUIP/COMP/COMM).................. 15,000 455,096
NORTHERN TELECOM LTD. (OFFICE
EQUIP/COMP/COMM).................. 14,000 698,204
*POCO PETROLEUMS LTD. (OIL)......... 42,000 350,013
SHAW COMMUNICATIONS, INC. (CLASS B)
(MEDIA)........................... 32,000 772,946
-------------
2,551,680
-------------
CHILE (0.4%)
DISTRIBUCION Y SERVICIO D&S SA, ADR
(RETAIL).......................... 50,000 575,000
-------------
FINLAND (2.7%)
FINNLINES OYJ (TRANSPORTATION)..... 17,000 731,935
HARTWALL OYJ ABP (SERIES A)
(FOOD/BEVERAGES).................. 10,000 162,938
MERITANORDBANKEN OYJ (BANKS)....... 280,000 1,780,661
TIETO CORP. (CLASS B) (BUSINESS
SERVICES)......................... 16,200 726,287
YIT-YHTYMA OYJ (CONSTRUCTION/
BUILDING MATERIALS)............... 31,400 272,866
-------------
3,674,687
-------------
FRANCE (9.6%)
*ALSTOM SA (ELECTRICAL EQUIPMENT)... 20,000 469,029
AXA-UAP SA (INSURANCE)............. 9,000 1,305,047
BANQUE NATIONALE DE PARIS
(BANKS)........................... 8,000 659,075
CAP GEMINI SA (BUSINESS SERVICES).. 4,000 642,319
ESTABLISSEMENTS ECONOMIQUES DU
CASION GUICHARD-PERRACHON SA
(RETAIL).......................... 6,500 677,228
CIE DE SAINT GOBAIN SA
(CONSTRUCTION/BUILDING
MATERIALS)........................ 4,184 590,972
FRANCE TELECOM SA, ADR
(UTILITIES/COMMUNICATION)......... 26,000 2,052,375
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
PARIBAS SA (BANKS)................. 6,000 $ 521,697
RENAULT SA (AUTOMOBILES)........... 50,000 2,246,685
SCHNEIDER SA (ELECTRICAL
EQUIPMENT)........................ 13,000 788,936
SODEXHO ALLIANCE SA (BUSINESS
SERVICES)......................... 4,000 895,094
SYNTHELABO SA (PHARMACEUTICALS).... 3,600 762,405
VIVENDI (UTILITIES)................ 4,700 1,220,013
-------------
12,830,875
-------------
GERMANY (5.2%)
ALLIANZ AG (INSURANCE)............. 3,088 1,132,837
MANNESMANN AG (MACHINERY/ CAPITAL
SPENDING)......................... 34,000 3,899,073
RWE AG (DIVERSIFIED INDS./
MANUFACTURING).................... 12,000 657,451
VOLKSWAGEN AG (AUTOMOBILES)........ 16,150 1,289,654
-------------
6,979,015
-------------
HONG KONG (0.5%)
CHEUNG KONG (HOLDINGS) LTD. (REAL
ESTATE)........................... 86,000 618,883
-------------
HUNGARY (0.1%)
GEDEON RICHTER LTD., GDR
(PHARMACEUTICALS)................. 4,000 170,600
-------------
INDIA (1.0%)
BANK OF BARODA LTD. (BANKS)........ 500 584
INFOSYS TECHNOLOGIES LTD. (BUSINESS
SERVICES)......................... 15,200 1,058,223
MAHINDRA & MAHINDRA LTD.
(AUTOMOBILES)..................... 70,000 271,796
-------------
1,330,603
-------------
IRELAND (1.7%)
BANK OF IRELAND PLC (BANKS)........ 65,000 1,448,875
IRISH LIFE PLC (INSURANCE)......... 87,500 824,520
-------------
2,273,395
-------------
ITALY (4.8%)
ALLEANZA ASSICURAZIONI S.P.A
(INSURANCE)....................... 58,300 825,588
ASSICURAZIONI GENERALI S.P.A
(INSURANCE)....................... 17,600 736,494
TELECOM ITALIA S.P.A, ADR
(UTILITIES/COMMUNICATION)......... 22,800 1,983,600
UNICREDITO ITALIANO S.P.A
(BANKS)........................... 488,500 2,901,861
-------------
6,447,543
-------------
</TABLE>
31
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- ------------------ ------------------
-- COLUMBIA INTERNATIONAL STOCK FUND, INC. --
------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
JAPAN (23.3%)
BANYU PHARMACEUTICAL CO., LTD.
(PHARMACEUTICALS)................. 65,000 $ 1,210,143
BRIDGESTONE CORP. (AUTOMOBILES).... 32,000 727,681
FANCL CORP. (HEALTH/PERSONAL
CARE)............................. 13,000 1,116,789
HIROSE ELECTRIC CO., LTD.
(ELECTRONICS)..................... 21,000 1,472,651
ITO-YOKADO CO., LTD. (RETAIL)...... 16,000 1,120,601
KAO CORP. (FOOD/BEVERAGES)......... 65,000 1,469,459
KEYENCE CORP. (ELECTRONICS)........ 4,600 566,861
KOMATSU LTD. (MACHINERY/ CAPITAL
SPENDING)......................... 143,000 751,787
MABUCHI MOTOR CO., LTD. (ELECTRICAL
EQUIPMENT)........................ 16,000 1,226,987
NIDEC CORP. (ELECTRICAL
EQUIPMENT)........................ 5,500 674,355
NINTENDO CO., LTD.
(ENTERTAINMENT/LEISURE)........... 10,000 970,774
NIPPON TELEGRAPH & TELEPHONE CORP.
(UTILITIES/ COMMUNICATION)........ 161 1,244,647
NOMURA SECURITIES CO., LTD., THE
(FINANCIAL SERVICES).............. 152,000 1,327,345
NTT DATA CORP. (BUSINESS
SERVICES)......................... 160 795,769
OJI PAPER CO., LTD. (FORESTRY/
PAPER PRODUCTS)................... 130,000 676,527
OLYMPUS OPTICAL CO., LTD.
(ELECTRONICS)..................... 130,000 1,497,119
PIONEER ELECTRONIC CORP.
(ELECTRONICS)..................... 35,000 588,005
RYOHIN KEIKAKU CO., LTD. (RETAIL).. 7,000 933,982
SANWA BANK LTD., THE (BANKS)....... 118,000 911,180
SEKISUI HOUSE, LTD.
(CONSTRUCTION/BUILDING
MATERIALS)........................ 112,000 1,186,560
SHIMAMURA CO., LTD. (RETAIL)....... 57,000 2,607,525
SONY CORP. (ELECTRONICS)........... 16,000 1,167,411
SUMITOMO BANK LTD., THE (BANKS).... 100,000 1,028,400
SUMITOMO REALTY & DEVELOPMENT CO.,
LTD. (RETAIL)..................... 190,000 618,192
TAKEDA CHEMICAL INDS., LTD.
(PHARMACEUTICALS)................. 41,000 1,581,165
TOKIO MARINE & FIRE INSURANCE CO.,
LTD., THE (INSURANCE)............. 130,000 1,555,898
TORAY INDUSTRIES, INC.
(CHEMICALS)....................... 65,000 339,993
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
TOSHIBA CORP. (ELECTRONICS)........ 94,000 $ 560,850
TOYOTA MOTOR CORP. (AUTOMOBILES)... 50,000 1,360,857
-------------
31,289,513
-------------
NETHERLANDS (8.1%)
ABN AMRO HOLDING NV (BANKS)........ 32,524 684,564
AEGON NV (INSURANCE)............... 39,000 4,792,219
*EQUANT NV (BUSINESS SERVICES)...... 65,000 4,407,813
LAURUS NV (RETAIL)................. 27,224 687,611
VENDEX NV (RETAIL)................. 13,178 320,204
-------------
10,892,411
-------------
NORWAY (0.5%)
*PETROLEUM GEO-SERVICES ASA, ADR
(OTHER ENERGY).................... 41,000 645,750
-------------
POLAND (0.1%)
*MOSTOSTAL-WARSZAWA SA, GDR
(CONSTRUCTION/BUILDING
MATERIALS)........................ 34,800 167,040
-------------
SPAIN (4.4%)
DRAGADOS Y CONSTRUCCIONES SA
(CONSTRUCTION/BUILDING
MATERIALS)........................ 59,000 2,177,762
METROVACESA SA (REAL ESTATE)....... 35,000 1,052,288
TELEFONICA SA, ADR (UTILITIES/
COMMUNICATION).................... 10,253 1,388,000
*TELEPIZZA SA (RESTAURANTS)......... 130,000 1,238,608
-------------
5,856,658
-------------
SWEDEN (2.7%)
ASSA ABLOY AB (CLASS B)
(DIVERSIFIED INDS./
MANUFACTURING).................... 23,000 879,645
BILSPEDITION TRANSPORT & LOGISTICS
(BTL) AB (TRANSPORTATION)......... 86,000 339,521
MUNTERS AB (DIVERSIFIED CONSUMER
MANUFACTURING).................... 100,000 863,607
SKANDIA INSURANCE CO., LTD.
(INSURANCE)....................... 101,000 1,545,116
-------------
3,627,889
-------------
SWITZERLAND (7.1%)
CREDIT SUISSE GROUP (REGISTERED)
(BANKS)........................... 6,500 1,017,487
*GRETAG IMAGING GROUP (REGISTERED)
(MACHINERY/ CAPITAL SPENDING)..... 7,000 601,391
NOVARTIS AG (BEARER)
(PHARMACEUTICALS)................. 1,500 2,948,710
</TABLE>
32
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-- COLUMBIA INTERNATIONAL STOCK FUND, INC. --
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
ROCHE HOLDING AG (GENUSSSCHEINE)
(PHARMACEUTICALS)................. 150 $ 1,830,384
*SAIA-BURGESS ELECTRONICS AG
(REGISTERED) (ELECTRONICS)........ 2,700 668,374
UBS AG (REGISTERED) (BANKS)........ 2,000 614,497
ZURICH ALLIED AG (REGISTERED)
(INSURANCE)....................... 2,500 1,851,135
-------------
9,531,978
-------------
THAILAND (0.6%)
*BANGKOK BANK PUBLIC CO., LTD.
(FOREIGN) (BANKS)................. 160,000 330,270
*KING POWER INTERNATIONAL GROUP CO.,
LTD. (RETAIL)..................... 88,000 220,000
*THAI FARMERS BANK PUBLIC CO., LTD.
(FOREIGN) (BANKS)................. 175,000 308,252
-------------
858,522
-------------
UNITED KINGDOM (18.0%)
BARCLAYS PLC (BANKS)............... 50,639 1,091,921
BRITISH AEROSPACE PLC
(AEROSPACE/DEFENSE)............... 240,924 2,042,327
BRITISH SKY BROADCASTING GROUP PLC
(MEDIA)........................... 105,000 797,501
BRITISH TELECOMMUNICATIONS PLC
(UTILITIES/COMMUNICATION)......... 200,000 3,013,141
COMPASS GROUP PLC
(ENTERTAINMENT/LEISURE)........... 250,000 2,863,815
GLAXO WELLCOME PLC
(PHARMACEUTICALS)................. 98,000 3,371,922
GRANADA GROUP PLC
(ENTERTAINMENT/LEISURE)........... 60,975 1,077,908
HAYS PLC (BUSINESS SERVICES)....... 100,000 877,654
NEXT PLC (RETAIL).................. 80,000 657,533
PEARSON PLC (MEDIA)................ 70,000 1,389,439
SELECT APPOINTMENTS HOLDINGS PLC
(BUSINESS SERVICES)............... 54,000 557,040
SMITHKLINE BEECHAM PLC
(PHARMACEUTICALS)................. 231,762 3,239,086
VODAFONE GROUP PLC (UTILITIES/
COMMUNICATION).................... 120,308 1,953,643
WPP GROUP PLC (MEDIA).............. 200,000 1,217,069
-------------
24,149,999
-------------
TOTAL COMMON STOCKS
(COST $92,140,397)................ 125,586,444
-------------
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
PREFERRED STOCKS (1.3%)
BRAZIL (0.1%)
DIXIE TOGA SA (DIVERSIFIED CONSUMER
GOODS/SERVICES)................... 437,500 $ 119,496
EMPRESA NACIONAL DE COMERCIO REDITO
E PARTICIPACOES SA (TEXTILES)..... 1,195,000 1,187
-------------
120,683
-------------
GERMANY (1.2%)
PORSCHE AG (AUTOMOBILES)........... 700 1,597,095
-------------
TOTAL PREFERRED STOCKS
(COST $1,091,140)................. 1,717,778
-------------
WARRANT (0.4%)
FRANCE
*VIVENDI (05/02/2001) (UTILITIES)
(COST $129,829)................... 220,000 571,070
-------------
TOTAL INVESTMENTS, EXCLUDING
TEMPORARY CASH INVESTMENT
(COST $93,361,366)................ 127,875,292
-------------
REPURCHASE AGREEMENT (3.9%)
J.P. MORGAN SECURITIES, INC.
4.970% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $5,240,984
COLLATERALIZED BY
U.S. TREASURY BILLS
DUE 06/24/1999,
U.S. TREASURY BONDS
6.500% DUE 11/15/2026,
U.S. TREASURY NOTES
5.375% DUE 06/30/2000 TO
07/31/2000.
(COST $5,240,270)................. $5,240,270 5,240,270
-------------
TOTAL INVESTMENTS (99.2%)
(COST $98,601,636).................... 133,115,562
CASH AND RECEIVABLES LESS LIABILITIES
(0.8%)................................ 1,077,438
-------------
NET ASSETS (100%)...................... $ 134,193,000
-------------
-------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
* Non-income producing.
See Notes to Financial Statements.
33
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
DECEMBER 31,1998 AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
COMMON STOCKS (97.7%)
BASIC INDUSTRIES & MANUFACTURING (2.2%)
BUILDING & FORESTRY PRODUCTS
LONGVIEW FIBRE CO................ 1,450,000 $ 16,765,625
SOUTHDOWN, INC................... 80,000 4,735,000
-------------
TOTAL BASIC INDUSTRIES &
MANUFACTURING..................... 21,500,625
-------------
BUSINESS & CONSUMER SERVICES (26.3%)
SERVICES & PUBLISHING (16.8%)
*APOLLO GROUP, INC................ 450,000 15,243,750
*CERIDIAN CORP.................... 214,500 14,974,781
*CSG SYSTEMS INTERNATIONAL,
INC............................. 120,000 9,480,000
ECOLAB, INC...................... 374,000 13,534,125
*FISERV, INC...................... 434,100 22,329,019
MEREDITH CORP.................... 117,000 4,431,375
*ROMAC INTERNATIONAL, INC......... 465,000 10,346,250
SERVICE CORPORATION INT'L........ 545,000 20,744,063
SERVICEMASTER CO................. 675,000 14,892,187
*STERLING COMMERCE, INC........... 403,000 18,135,000
UNITOG CO........................ 323,000 9,286,250
*YOUNG & RUBICAM, INC............. 280,000 9,065,000
-------------
162,461,800
-------------
MEDIA & ENTERTAINMENT (6.7%)
*CHANCELLOR MEDIA CORP............ 250,000 11,968,750
*INFINITY BROADCASTING CORP.
(CLASS A)....................... 354,100 9,693,487
*JACOR COMMUNICATIONS, INC........ 220,000 14,162,500
*MEDIAONE GROUP, INC.............. 200,000 9,400,000
*UNIVISION COMMUNICATIONS, INC.
(CLASS A)....................... 550,000 19,903,125
-------------
65,127,862
-------------
POLLUTION CONTROL (2.8%)
*ALLIED WASTE INDUSTRIES, INC..... 224,000 5,292,000
*AQUA ALLIANCE, INC. (CLASS A).... 1,663,300 3,430,556
*CUNO, INC........................ 360,000 5,850,000
*ESCO ELECTRONICS CORP............ 228,700 2,072,594
WASTE MANAGEMENT, INC............ 233,300 10,877,613
-------------
27,522,763
-------------
TOTAL BUSINESS & CONSUMER
SERVICES.......................... 255,112,425
-------------
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
CONSUMER CYCLICAL (18.1%)
CONSUMER DURABLE (0.9%)
*FURNITURE BRANDS INTERNATIONAL,
INC............................. 300,000 $ 8,175,000
-------------
CONSUMER NON-DURABLE (17.2%)
*ABERCROMBIE & FITCH CO........... 375,000 26,531,250
*ANNTAYLOR STORES CORP............ 479,000 18,890,562
*BED, BATH & BEYOND, INC.......... 858,000 29,279,250
*BRINKER INTERNATIONAL, INC....... 381,300 11,010,038
*CONSOLIDATED STORES CORP......... 362,700 7,322,006
*HELEN OF TROY LTD................ 240,000 3,525,000
*OUTBACK STEAKHOUSE, INC.......... 303,000 12,082,125
*PAPA JOHN'S INTERNATIONAL,
INC............................. 418,000 18,444,250
*VANS, INC........................ 515,000 3,540,625
*WESTPOINT STEVENS, INC........... 450,000 14,203,125
*WILLIAMS-SONOMA, INC............. 550,000 22,171,875
-------------
167,000,106
-------------
TOTAL CONSUMER CYCLICAL............ 175,175,106
-------------
CONSUMER STAPLES (35.4%)
FOOD & HOUSEHOLD PRODUCTS (14.4%)
AMERICAN STORES CO............... 1,215,000 44,879,062
HANNAFORD BROTHERS CO............ 155,000 8,215,000
*KROGER CO........................ 282,500 17,091,250
*MEYER (FRED), INC................ 700,000 42,175,000
*SAFEWAY, INC..................... 250,000 15,234,375
*WHOLE FOODS MARKET, INC.......... 247,000 11,948,625
-------------
139,543,312
-------------
HEALTH (21.0%)
*AMERICAN ONCOLOGY RESOURCES,
INC............................. 750,000 10,921,875
CARDINAL HEALTH, INC............. 270,000 20,486,250
*CHIRON CORP...................... 200,000 5,237,500
*CYTYC CORP....................... 510,000 13,132,500
*ELAN CORP. PLC ADR............... 182,000 12,660,375
*HEALTHSOUTH CORP................. 550,000 8,490,625
*INHALE THERAPEUTIC SYSTEMS,
INC............................. 184,100 6,075,300
MCKESSON CORP.................... 297,000 23,481,563
OMNICARE, INC.................... 200,000 6,950,000
*PAREXEL INTERNATIONAL CORP....... 300,000 7,500,000
+*RESMED, INC...................... 786,000 35,664,750
*SEROLOGICALS CORP................ 525,000 15,750,000
</TABLE>
34
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
*SHIRE PHARMACEUTICALS GROUP PLC
ADR............................. 250,000 $ 5,062,500
*TRANSKARYOTIC THERAPIES, INC..... 200,000 5,075,000
UNITED HEALTHCARE CORP........... 200,000 8,612,500
*WATSON PHARMACEUTICALS, INC...... 290,000 18,233,750
-------------
203,334,488
-------------
TOTAL CONSUMER STAPLES............. 342,877,800
-------------
FINANCIAL (2.8%)
AMERICAN BANKERS INSURANCE GROUP,
INC............................. 165,000 7,981,875
CIT GROUP, INC. (CLASS A)........ 300,000 9,543,750
FINOVA GROUP, INC................ 180,000 9,708,750
-------------
TOTAL FINANCIAL.................... 27,234,375
-------------
TECHNOLOGY (10.7%)
*3COM CORP........................ 400,000 17,925,000
*ALTERA CORP...................... 250,000 15,218,750
*ASCEND COMMUNICATIONS, INC....... 230,000 15,122,500
*CADENCE DESIGN SYSTEMS, INC...... 300,000 8,925,000
*FLEXTRONICS INTERNATIONAL LTD.... 71,100 6,087,938
*MAXTOR CORP...................... 340,000 4,760,000
*QLOGIC CORP...................... 55,000 7,198,125
*SEAGATE TECHNOLOGY, INC.......... 331,250 10,020,312
*SYNOPSYS, INC.................... 220,000 11,935,000
*TRANSACTION SYSTEMS ARCHITECTS,
INC. (CLASS A).................. 142,300 7,115,000
-------------
TOTAL TECHNOLOGY................... 104,307,625
-------------
UTILITIES (2.2%)
COMMUNICATIONS (1.5%)
COMSAT CORP...................... 400,000 14,400,000
-------------
ELECTRIC & GAS (0.7%)
UNITED WATER RESOURCES, INC...... 279,700 6,695,319
-------------
TOTAL UTILITIES.................... 21,095,319
-------------
TOTAL COMMON STOCKS
(COST $658,662,979)............... 947,303,275
-------------
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
WARRANTS (0.0%)
*AQUA ALLIANCE, INC. (03/11/2001)
(COST $272,842)................... 330,140 $ 225,105
-------------
TOTAL INVESTMENTS, EXCLUDING
TEMPORARY CASH INVESTMENT
(COST $658,935,821)............... 947,528,380
-------------
REPURCHASE AGREEMENT (2.4%)
J.P. MORGAN SECURITIES, INC.
4.970% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $23,240,363.
COLLATERALIZED BY
U.S. TREASURY BILLS
DUE 06/24/1999,
U.S. TREASURY BONDS
6.500% DUE 11/15/2026,
U.S. TREASURY NOTES 5.375%
DUE 06/30/2000 TO 07/31/2000.
(COST $23,237,199)................ $23,237,199 23,237,199
-------------
TOTAL INVESTMENTS (100.1%)
(COST 682,173,020).................... 970,765,579
RECEIVABLES LESS LIABILITIES (-0.1%)... (1,406,688)
-------------
NET ASSETS (100.0%).................... $ 969,358,891
-------------
-------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
* Non-income producing.
+ Affiliated issuer
See Notes to Financial Statements.
35
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
DECEMBER 31, 1998 AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
COMMON STOCKS (94.6%)
BASIC INDUSTRIES & MANUFACTURING (1.2%)
BUILDING & FORESTRY PRODUCTS (1.0%)
MARTIN MARIETTA MATERIALS,
INC............................. 12,800 $ 796,000
SOUTHDOWN, INC. ................. 13,200 781,275
-------------
1,577,275
-------------
MACHINERY CAPITAL SPENDING (0.2%)
GRACO, INC. ..................... 13,200 389,400
-------------
TOTAL BASIC INDUSTRIES &
MANUFACTURING..................... 1,966,675
-------------
BUSINESS & CONSUMER SERVICES (19.0%)
SERVICES & PUBLISHING (18.0%)
*ADVO, INC........................ 68,300 1,801,412
*AMBASSADORS INTERNATIONAL,
INC............................. 50,000 737,500
*APOLLO GROUP, INC. .............. 62,800 2,127,350
*ASYMETRIX LEARNING SYSTEMS,
INC............................. 40,300 176,313
*FAMILY GOLF CENTERS, INC......... 115,550 2,282,112
G & K SERVICES, INC. (CLASS A)... 26,800 1,427,100
*GLOBAL VACATION GROUP, INC....... 124,200 1,071,225
*ITT EDUCATIONAL SERVICES, INC.... 62,000 2,108,000
NATIONAL DATA CORP............... 44,000 2,142,250
*NOVA CORP........................ 87,275 3,027,352
*PROFESSIONAL DETAILING, INC...... 58,770 1,660,252
*PROFIT RECOVERY GROUP
INTERNATIONAL, INC.............. 19,400 726,288
*ROMAC INTERNATIONAL, INC......... 71,500 1,590,875
*SCHEIN (HENRY), INC.............. 43,500 1,946,625
SELECT APPOINTMENTS HOLDINGS PLC
ADR............................. 44,700 961,050
*STERLING COMMERCE, INC........... 63,200 2,844,000
*SYLVAN LEARNING SYSTEMS, INC..... 74,900 2,284,450
-------------
28,914,154
-------------
POLLUTION CONTROL (1.0%)
*ALLIED WASTE INDUSTRIES, INC..... 33,500 791,437
*CASELLA WASTE SYSTEMS, INC. ..... 19,000 705,375
-------------
1,496,812
-------------
TOTAL BUSINESS & CONSUMER
SERVICES.......................... 30,410,966
-------------
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
CONSUMER CYCLICAL (20.6%)
CONSUMER DURABLE (4.2%)
*CHAMPION ENTERPRISES, INC........ 47,300 $ 1,294,837
ETHAN ALLEN INTERIORS, INC....... 37,600 1,541,600
*MODTECH, INC..................... 70,000 1,067,500
*TOWER AUTOMOTIVE, INC............ 75,600 1,885,275
WATSCO, INC...................... 53,250 891,938
-------------
6,681,150
-------------
CONSUMER NON-DURABLE (16.4%)
*ACTION PERFORMANCE COS., INC..... 72,300 2,557,613
*AMES DEPARTMENT STORES, INC...... 96,500 2,605,500
*BED, BATH & BEYOND, INC. ........ 89,100 3,040,537
*BUILDING MATERIALS HOLDING
CORP............................ 101,300 1,228,262
*CEC ENTERTAINMENT, INC........... 36,000 999,000
CKE RESTAURANTS, INC............. 67,848 1,997,276
*CAVANAUGHS HOSPITALITY CORP...... 39,600 425,700
*COLUMBIA SPORTSWEAR CO........... 32,000 540,000
*COST PLUS, INC. ................. 43,600 1,367,950
*HELEN OF TROY LTD................ 107,500 1,578,906
*HOLLYWOOD ENTERTAINMENT CORP..... 90,300 2,460,675
*OMEGA PROTEIN CORP............... 13,000 131,625
*QUIKSILVER, INC.................. 59,100 1,773,000
*TIMBERLAND CO. (CLASS A)......... 27,700 1,262,081
*WET SEAL, INC. (CLASS A)......... 42,900 1,295,044
*WILLIAMS-SONOMA, INC............. 78,200 3,152,438
-------------
26,415,607
-------------
TOTAL CONSUMER CYCLICAL............ 33,096,757
-------------
CONSUMER STAPLES (21.8%)
FOOD & HOUSEHOLD PRODUCTS (3.2%)
*AURORA FOODS, INC................ 89,200 1,767,275
*FRESH DEL MONTE PRODUCE, INC..... 62,000 1,344,625
*U.S. FOODSERVICE, INC. .......... 17,000 833,000
*WHOLE FOODS MARKET, INC.......... 27,000 1,306,125
-------------
5,251,025
-------------
HEALTH (18.6%)
*AMERICAN ONCOLOGY RESOURCES,
INC............................. 110,000 1,601,875
*ANESTA CORP...................... 45,000 1,198,125
*BALANCE BAR CO. ................. 54,700 588,025
*BARR LABORATORIES, INC........... 23,000 1,104,000
</TABLE>
36
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- ------------------------ ------------------------
-- COLUMBIA SMALL CAP FUND, INC. --
------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
*BIOMATRIX, INC................... 3,700 $ 215,525
*CARDIAC PATHWAYS CORP............ 95,000 403,750
*COVANCE, INC..................... 66,000 1,922,250
*HEALTHCARE RECOVERIES, INC....... 62,500 1,062,500
*ICON PUBLIC LTD. CO. ADR......... 28,800 964,800
*IDEXX LABORATORIES, INC.......... 88,000 2,367,750
*INHALE THERAPEUTIC SYSTEMS,
INC............................. 25,700 848,100
*INTELLIGENT POLYMERS LTD. (UNITS
- EACH UNIT CONSISTS OF 1 SHARE
& 1 WARRANT).................... 33,000 924,000
JONES PHARMA, INC................ 60,800 2,219,200
*LIGAND PHARMACEUTICALS, INC.
(CLASS B)....................... 73,897 859,053
*OXFORD HEALTH PLANS, INC......... 100,000 1,487,500
*PAREXEL INTERNATIONAL CORP....... 73,000 1,825,000
*PATHOGENESIS CORP................ 57,700 3,346,600
*PHYSICIAN RELIANCE NETWORK,
INC............................. 52,000 682,500
*PROTEIN DESIGN LABS, INC......... 89,700 2,085,525
*QUORUM HEALTH GROUP, INC......... 48,600 628,762
*SPIROS DEVELOPMENT CORP. II, INC.
(UNITS - 1 CALLABLE COMMON SHARE
OF SPIROS & 1 WARRANT OF DURABLE
PHARMACEUTICALS)................ 30,000 268,125
*TRANSKARYOTIC THERAPIES, INC. ... 60,000 1,522,500
*UNIVERSAL HEALTH SERVICES, INC.
(CLASS B)....................... 32,500 1,685,938
-------------
29,811,403
-------------
TOTAL CONSUMER STAPLES............. 35,062,428
-------------
ENERGY (2.3%)
DOMESTIC & INTERNATIONAL INTEGRATED (0.7%)
*TESORO PETROLEUM CORP............ 46,500 563,812
WESTERN GAS RESOURCES, INC....... 107,800 619,850
-------------
1,183,662
-------------
ENERGY SERVICES (1.6%)
*HANOVER COMPRESSOR CO............ 84,700 2,175,731
*NEWPARK RESOURCES, INC........... 45,000 306,563
-------------
2,482,294
-------------
TOTAL ENERGY....................... 3,665,956
-------------
FINANCIAL (1.2%)
NORTH FORK BANCORP, INC.......... 44,150 1,056,841
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
STIRLING COOKE BROWN HOLDINGS
LTD............................. 47,900 $ 832,262
-------------
TOTAL FINANCIAL.................... 1,889,103
-------------
TECHNOLOGY (25.7%)
*ACXIOM CORP. .................... 79,600 2,467,600
*AMERICAN MANAGEMENT SYSTEMS,
INC............................. 59,200 2,368,000
*ARTESYN TECHNOLOGIES, INC. ...... 25,000 350,000
*AXENT TECHNOLOGIES, INC.......... 65,800 2,011,012
*CERNER CORP...................... 115,800 3,097,650
*CIBER, INC....................... 119,200 3,330,150
*COMPUTER NETWORK TECHNOLOGY
CORP............................ 27,500 343,750
*COM21, INC. ..................... 58,800 1,234,800
*ENGINEERING ANIMATION, INC....... 42,600 2,300,400
*FLEXTRONICS INTERNATIONAL LTD.... 22,700 1,943,688
*FORE SYSTEMS, INC................ 100,000 1,831,250
*HMT TECHNOLOGY CORP.............. 152,500 1,953,906
*HNC SOFTWARE, INC................ 51,000 2,062,312
*MICROS SYSTEMS, INC.............. 39,200 1,288,700
*PEERLESS SYSTEMS CORP............ 40,700 345,950
*PEREGRINE SYSTEMS, INC........... 34,600 1,604,575
*POWERWAVE TECHNOLOGIES, INC...... 78,500 1,462,063
*QLOGIC CORP...................... 1,800 235,575
*RADISYS CORP..................... 10,000 300,000
*SAVILLE SYSTEMS PLC ADR.......... 104,000 1,976,000
*TRANSACTION SYSTEMS ARCHITECTS,
INC. (CLASS A).................. 64,900 3,245,000
*TRANSITION SYSTEMS, INC. ........ 35,000 525,000
*VISIO CORP....................... 67,000 2,449,688
*XIRCOM, INC...................... 72,300 2,458,200
-------------
TOTAL TECHNOLOGY................... 41,185,269
-------------
TRANSPORTATION (0.9%)
EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC................. 33,300 1,398,600
-------------
UTILITIES (1.9%)
COMMUNICATIONS
COMSAT CORP...................... 68,800 2,476,800
*PACIFIC GATEWAY EXCHANGE, INC.... 13,300 639,231
-------------
TOTAL UTILITIES.................... 3,116,031
-------------
TOTAL COMMON STOCKS
(COST $125,925,226)............... 151,791,785
-------------
</TABLE>
37
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-- COLUMBIA SMALL CAP FUND, INC. --
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
PREFERRED STOCKS (0.4%)
CONVERTIBLES
REAL ESTATE INVESTMENT TRUSTS
*APARTMENT INVESTMENT & MANAGEMENT
CO. (CLASS E) (COST $699,589)..... 15,720 $ 581,640
TOTAL INVESTMENTS, EXCLUDING
TEMPORARY CASH INVESTMENTS
(COST $126,624,815) 152,373,425
-------------
REPURCHASE AGREEMENTS (8.2%)
J.P. MORGAN SECURITIES, INC.
4.970% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $6,739,386.
COLLATERALIZED BY
U.S. TREASURY BILLS
DUE 06/24/1999,
U.S. TREASURY BONDS
6.500% DUE 11/15/2026,
U.S. TREASURY NOTES 5.375%
DUE 06/30/2000 TO 07/31/2000...... $6,738,468 6,738,468
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
MERRILL LYNCH
4.917% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $6,500,876.
COLLATERALIZED BY
U.S. TREASURY STRIPS
DUE 11/15/2014 TO 11/15/2024...... $6,500,000 $ 6,500,000
-------------
TOTAL REPURCHASE AGREEMENTS
(COST $13,238,468)................ 13,238,468
-------------
TOTAL INVESTMENTS (103.2%)
(COST $139,863,283)................... 165,611,893
RECEIVABLES LESS LIABILITIES (-3.2%)... (5,139,686)
-------------
NET ASSETS (100%)...................... $ 160,472,207
-------------
-------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
* Non-income producing.
See Notes to Financial Statements.
38
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-- COLUMBIA REAL ESTATE EQUITY FUND, INC. --
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
DECEMBER 31, 1998 AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
COMMON STOCKS (94.4%)
REAL ESTATE INVESTMENT TRUSTS
APARTMENTS (15.8%)
APARTMENT INVESTMENT & MANAGEMENT
CO. (CLASS A)..................... 230,000 $ 8,553,125
ARCHSTONE COMMUNITIES TRUST........ 256,171 5,187,463
AVALONBAY COMMUNITIES, INC......... 126,464 4,331,392
COLONIAL PROPERTIES TRUST.......... 156,100 4,156,162
EQUITY RESIDENTIAL PROPERTIES
TRUST............................. 91,003 3,679,934
-------------
25,908,076
-------------
COMMUNITY CENTERS (12.3%)
*EXCEL LEGACY CORP.................. 142,100 568,400
KIMCO REALTY CORP.................. 114,400 4,540,250
NEW PLAN EXCEL REALTY TRUST, INC... 290,520 6,445,913
PAN PACIFIC RETAIL PROPERTIES,
INC............................... 152,200 3,034,487
*VORNADO OPERATING, INC............. 8,095 65,266
VORNADO REALTY TRUST............... 161,900 5,464,125
-------------
20,118,441
-------------
INDUSTRIAL (30.3%)
ALEXANDRIA REAL ESTATE EQUITIES,
INC............................... 149,500 4,625,156
CABOT INDUSTRIAL TRUST............. 300,000 6,131,250
DUKE REALTY INVESTMENTS, INC....... 215,000 4,998,750
FIRST INDUSTRIAL REALTY TRUST,
INC............................... 155,500 4,169,344
LIBERTY PROPERTY TRUST............. 186,700 4,597,487
PROLOGIS TRUST..................... 194,145 4,028,509
PUBLIC STORAGE, INC................ 274,100 7,417,831
SHURGARD STORAGE CENTERS, INC.
(CLASS A)......................... 123,900 3,198,169
SPIEKER PROPERTIES, INC............ 168,500 5,834,313
STORAGE TRUST REALTY............... 51,200 1,196,800
TRINET CORPORATE REALTY TRUST,
INC............................... 131,000 3,504,250
-------------
49,701,859
-------------
LODGING (2.2%)
STARWOOD HOTELS & RESORTS TRUST.... 160,200 3,634,538
-------------
MANUFACTURED HOMES (2.6%)
MANUFACTURED HOME COMMUNITIES,
INC............................... 170,400 4,270,650
-------------
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
OFFICE (15.7%)
BOSTON PROPERTIES, INC............. 137,000 $ 4,178,500
EQUITY OFFICE PROPERTIES TRUST..... 386,318 9,271,632
MACK-CALI REALTY CORP.............. 189,400 5,847,725
PRENTISS PROPERTIES TRUST.......... 135,000 3,012,188
RECKSON ASSOCIATES REALTY CORP..... 156,800 3,479,000
*RECKSON SERVICE INDUSTRIES, INC.... 12,544 51,681
-------------
25,840,726
-------------
OTHER (5.4%)
CAPITAL AUTOMOTIVE................. 165,000 2,454,375
*CATELLUS DEVELOPMENT CORP.......... 261,900 3,748,444
*SECURITY CAPITAL GROUP, INC. (CLASS
B)................................ 202,900 2,751,831
-------------
8,954,650
-------------
SHOPPING MALLS (10.1%)
GENERAL GROWTH PROPERTIES, INC..... 143,000 5,416,125
MACERICH CO. (THE)................. 83,300 2,134,562
SIMON PROPERTY GROUP, INC.......... 314,256 8,956,296
-------------
16,506,983
-------------
TOTAL COMMON STOCKS
(COST $157,255,085)............... 154,935,923
-------------
REPURCHASE AGREEMENT (4.4%)
J.P. MORGAN SECURITIES, INC.
4.970% DATED 12/31/1998, DUE
01/04/1999 IN THE AMOUNT OF
$7,186,172. COLLATERALIZED BY U.S.
TREASURY BILLS DUE 06/24/1999, U.S.
TREASURY BONDS 6.500% DUE
11/15/2026, U.S. TREASURY NOTES
5.375% DUE 06/30/2000 TO 07/31/2000.
(COST $7,185,194)................... $7,185,194 7,185,194
-------------
TOTAL INVESTMENTS (98.8%)
(COST $164,440,279)................... 162,121,117
RECEIVABLES LESS LIABILITIES (1.2%).... 2,051,237
-------------
NET ASSETS (100.0%).................... $ 164,172,354
-------------
-------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
* Non-income producing.
See Notes to Financial Statements.
39
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-- COLUMBIA BALANCED FUND, INC. --
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
DECEMBER 31, 1998 AMOUNT VALUE(1)
------------- -------------
<S> <C> <C>
COMMON STOCKS (54.5%)
BASIC INDUSTRIES & MANUFACTURING (4.5%)
BUILDING & FORESTRY PRODUCTS (0.1%)
CHAMPION INTERNATIONAL CORP...... 32,900 $ 1,332,450
-------------
MACHINERY CAPITAL SPENDING (4.4%)
EMERSON ELECTRIC CO.............. 38,500 2,408,656
GENERAL ELECTRIC CO.............. 228,700 23,341,694
TYCO INTERNATIONAL LTD........... 221,326 16,696,280
-------------
42,446,630
-------------
TOTAL BASIC INDUSTRIES &
MANUFACTURING..................... 43,779,080
-------------
BUSINESS & CONSUMER SERVICES (3.0%)
MEDIA & ENTERTAINMENT (2.3%)
*CLEAR CHANNEL COMMUNICATIONS,
INC............................. 181,600 9,897,200
COMCAST CORP. (CLASS A
SPECIAL)........................ 72,900 4,278,319
*INFINITY BROADCASTING CORP.
(CLASS A)....................... 208,400 5,704,950
*TELE-COMMUNICATIONS, INC.........
TCI VENTURES GROUP (SERIES A).... 103,700 2,443,431
-------------
22,323,900
-------------
POLLUTION CONTROL (0.7%)
WASTE MANAGEMENT, INC............ 152,600 7,114,975
-------------
TOTAL BUSINESS & CONSUMER
SERVICES.......................... 29,438,875
-------------
CONSUMER CYCLICAL (5.7%)
CONSUMER DURABLE (0.5%)
FEDERAL-MOGUL CORP............... 86,100 5,122,950
-------------
CONSUMER NON-DURABLE (5.2%)
*BED, BATH & BEYOND, INC.......... 104,000 3,549,000
CARNIVAL CORP.................... 135,200 6,489,600
*CONSOLIDATED STORES CORP......... 294,300 5,941,181
DAYTON-HUDSON CORP............... 200,300 10,866,275
*FEDERATED DEPARTMENT STORES,
INC............................. 135,700 5,911,431
HOME DEPOT, INC. (THE)........... 78,900 4,827,694
LOWE'S COS., INC................. 195,000 9,981,563
*OFFICE DEPOT, INC................ 91,900 3,394,556
-------------
50,961,300
-------------
TOTAL CONSUMER CYCLICAL............ 56,084,250
-------------
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------- -------------
<S> <C> <C>
CONSUMER STAPLES (14.4%)
FOOD & HOUSEHOLD PRODUCTS (4.7%)
AVON PRODUCTS, INC............... 190,100 $ 8,411,925
GILLETTE CO...................... 63,500 3,067,844
*MEYER (FRED), INC................ 124,300 7,489,075
PHILLIP MORRIS COS., INC......... 215,700 11,539,950
*SAFEWAY, INC..................... 203,200 12,382,500
WALGREEN CO...................... 49,400 2,892,987
-------------
45,784,281
-------------
HEALTH (9.7%)
AMERICAN HOME PRODUCTS CORP...... 154,000 8,672,125
*BOSTON SCIENTIFIC CORP........... 277,600 7,443,150
BRISTOL-MYERS SQUIBB CO.......... 119,400 15,977,212
CARDINAL HEALTH, INC............. 107,850 8,183,119
GUIDANT CORP..................... 63,700 7,022,925
PFIZER, INC...................... 170,400 21,374,550
SCHERING-PLOUGH CORP............. 198,600 10,972,650
WARNER-LAMBERT CO................ 198,500 14,924,719
-------------
94,570,450
-------------
TOTAL CONSUMER STAPLES............. 140,354,731
-------------
ENERGY (3.0%)
AMOCO CORP....................... 76,800 4,636,800
*CONOCO, INC. (CLASS A)........... 129,100 2,694,962
ELF AQUITANE ADR................. 45,000 2,548,125
EXXON CORP....................... 127,700 9,338,063
MOBIL CORP....................... 76,800 6,691,200
ROYAL DUTCH PETROLEUM CO......... 34,200 1,637,325
TEXACO, INC...................... 33,700 1,781,888
-------------
TOTAL ENERGY....................... 29,328,363
-------------
FINANCIAL (7.6%)
ALLSTATE CORP.................... 225,200 8,698,350
AMERICAN GENERAL CORP............ 88,600 6,910,800
BANK ONE CORP.................... 131,318 6,705,425
BANKAMERICA CORP................. 122,400 7,359,300
CHASE MANHATTAN CORP............. 79,200 5,390,550
CHUBB CORP....................... 31,900 2,069,513
CITIGROUP, INC................... 76,250 3,774,375
FREDDIE MAC...................... 199,100 12,829,506
FIRST UNION CORP................. 154,900 9,419,856
MELLON BANK CORP................. 96,900 6,661,875
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO................... 38,500 2,733,500
</TABLE>
40
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- ------------------------ ------------------------
-- COLUMBIA BALANCED FUND, INC. --
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------- -------------
<S> <C> <C>
TRAVELERS PROPERTY CASUALTY CORP.
(CLASS A)....................... 60,200 $ 1,866,200
-------------
TOTAL FINANCIAL.................... 74,419,250
-------------
TECHNOLOGY (11.4%)
*AMERICA ONLINE, INC................ 72,300 10,465,425
*ASCEND COMMUNICATIONS, INC......... 78,400 5,154,800
*CISCO SYSTEMS, INC................. 82,275 7,636,148
COMPAQ COMPUTER CORP............... 71,600 3,002,725
*COMPUTER SCIENCES CORP............. 161,900 10,432,432
*DELL COMPUTER CORP................. 100,300 7,340,706
*GATEWAY 2000, INC.................. 120,400 6,162,975
INTEL CORP......................... 81,600 9,674,700
INTERNATIONAL BUSINESS MACHINES
CORP.............................. 70,200 12,969,450
LUCENT TECHNOLOGIES, INC........... 32,400 3,564,000
*MICROSOFT CORP..................... 178,000 24,686,375
*TELLABS, INC....................... 107,300 7,356,756
*XILINX, INC........................ 39,800 2,591,975
-------------
TOTAL TECHNOLOGY................... 111,038,467
-------------
UTILITIES (4.9%)
COMMUNICATIONS (4.5%)
AT&T CORP........................ 29,300 2,204,825
ALLTEL CORP...................... 81,900 4,898,644
BELL ATLANTIC CORP............... 93,500 5,311,969
*MCI WORLDCOM, INC................ 208,958 14,992,736
SBC COMMUNICATIONS, INC.......... 185,600 9,952,800
*TELE-COMMUNICATIONS, INC. TCI
GROUP (SERIES A)................ 115,300 6,377,531
-------------
43,738,505
-------------
ELECTRIC & GAS (0.4%)
DUKE ENERGY CORP................. 54,600 3,497,813
-------------
TOTAL UTILITIES.................... 47,236,318
-------------
TOTAL COMMON STOCKS
(COST $377,528,286)............... 531,679,334
-------------
BONDS (44.0%)
U.S. GOVERNMENT SECURITIES (22.0%)
U.S. TREASURY NOTES & BONDS (8.0%)
U.S. TREASURY BONDS
8.125% 08/15/2019................ $ 19,765,000 26,377,005
7.625% 11/15/2022................ 11,075,000 14,371,540
U.S. TREASURY NOTES
6.875% 08/31/1999................ 7,960,000 8,071,941
6.125% 12/31/2001................ 3,500,000 3,641,096
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------- -------------
<S> <C> <C>
7.000% 07/15/2006................ $ 21,975,000 $ 25,078,969
-------------
77,540,551
-------------
U.S. AGENCY BONDS (0.4%)
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
6.000% 05/15/2008................ 4,000,000 4,222,480
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) (1.4%)
6.000% 11/15/2028 - 12/15/2028..... 13,669,931 13,550,319
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA II) (1.3%)
6.000% 11/20/2028 - 12/20/2028..... 12,903,101 12,705,555
-------------
FEDERAL HOUSING ADMINISTRATION (FHA) (0.3%)
FHA INSURED PROJECT POOL #55
7.430% 04/01/2022.................. 1,630,132 1,713,743
-------------
FHA INSURED PROJECT POOL #53-43077
9.125% 07/25/2033.................. 1,094,515 1,146,505
-------------
2,860,248
-------------
AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS (10.6%)
GNMA (0.9%)
GNMA GTD. REMIC PASS THRU SECS.
REMIC TR. 1997-4 CL. B
7.000% 08/20/2026.............. 3,785,459 3,870,707
GNMA GTD. REMIC PASS THRU SECS.
REMIC TR. 1997-4 CL. C
7.000% 03/20/2027.............. 3,877,000 3,952,989
GNMA GTD. REMIC PASS THRU SECS.
REMIC TR. 1998-1 CL. A
7.000% 01/20/2028.............. 1,090,000 1,111,103
-------------
8,934,799
-------------
FNMA (5.3%)
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. G97-3 CL. VB
7.000% 08/20/2006.............. 760,000 792,706
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-G5 CL. VA
7.500% 07/17/2012.............. 5,700,000 5,931,534
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-74 CL. D
7.500% 09/20/2023.............. 2,486,944 2,528,983
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1994-10 CL. UU
6.500% 01/25/2024.............. 1,774,000 1,786,031
</TABLE>
41
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-- COLUMBIA BALANCED FUND, INC. --
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------- -------------
<S> <C> <C>
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1994-43 CL. E
6.500% 02/25/2024.............. $ 2,620,171 $ 2,624,232
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-G4 CL. C
7.500% 06/17/2024.............. 7,820,000 7,978,574
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-G1 CL. B
7.500% 06/20/2024.............. 4,680,000 4,854,440
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-27 CL. B
7.000% 02/18/2025.............. 3,020,000 3,047,268
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-17 CL. PE
7.000% 01/18/2026.............. 1,870,000 1,935,985
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-63 CL. PH
7.000% 07/18/2026.............. 8,290,000 8,768,658
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1998-61 CL. PK
6.000% 12/25/2026.............. 4,670,000 4,664,202
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1998-63 CL. PG
6.000% 03/25/2027.............. 2,478,000 2,474,916
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-39 CL. B
7.500% 05/17/2027.............. 1,530,000 1,566,296
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-68 CL. PJ
7.000% 10/18/2027.............. 3,000,000 3,094,980
-------------
52,048,805
-------------
FHLMC (4.3%)
FHLMC GNMA MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES G40 CL. N
6.500% 05/17/2021................ 7,180,000 7,227,510
FHLMC GNMA MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES G62 CL. B
7.500% 05/20/2024................ 4,066,000 4,145,694
FHLMC MULTICLASS MTG. PARTN. CTFS.
GTD. SERIES 1933 CL. VC
7.550% 03/15/2012................ 2,950,000 3,091,954
FHLMC MULTICLASS MTG. PARTN. CTFS.
GTD. SERIES 2065 CL. PG
6.000% 04/15/2021................ $ 490,000 $ 494,743
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------- -------------
<S> <C> <C>
FHLMC MULTICLASS MTG. PARTN. CTFS.
GTD. SERIES 1543 CL. XN
7.000% 07/15/2023................ 5,617,000 5,927,608
FHLMC MULTICLASS MTG. PARTN. CTFS.
GTD. SERIES 1763 CL. H
8.250% 07/15/2023................ 130,000 135,102
FHLMC MULTICLASS MTG. PARTN. CTFS.
GTD. SERIES 1895 CL. B
7.500% 12/15/2023................ 3,940,000 4,009,935
FHLMC MULTICLASS MTG. PARTN. CTFS.
GTD. SERIES 1904 CL. C
7.250% 08/15/2024................ 3,490,000 3,553,358
FHLMC MULTICLASS MTG. PARTN. CTFS.
GTD. SERIES 1910 CL. D
8.000% 11/15/2024................ 2,043,000 2,097,480
FHLMC MULTICLASS MTG. PARTN. CTFS.
GTD. SERIES 1995 CL. A
7.500% 08/20/2027................ 7,350,000 7,597,960
FHLMC MULTICLASS MTG. PARTN. CTFS.
GTD. SERIES 2116 CL. VC
6.000% 01/15/2029................ 4,210,000 4,078,437
-------------
42,359,781
-------------
OTHER AGENCY COLLATERALIZED MORTGAGE OBLIGATION (0.1%)
PUERTO RICO HOUSING FINANCE CORP.
SERIES A CL. 4
9.000% 07/20/2017................ 357,612 357,612
-------------
TOTAL U.S. GOVERNMENT SECURITIES
(COST $209,300,337)............... 214,580,150
-------------
CORPORATE BONDS (11.7%)
INDUSTRIAL (8.8%)
BASIC INDUSTRY & MANUFACTURING (1.3%)
ALUMINUM CO. OF AMERICA SERIES B
6.500% 06/15/2018.............. 4,150,000 4,185,400
CATERPILLAR FINANCIAL SERVICES
CORP. MEDIUM TERM NOTES
5.800% 03/15/2000.............. 3,890,000 3,912,834
TYCO INTERNATIONAL GROUP S.A.
6.250% 06/15/2003.............. $ 4,500,000 $ 4,546,035
-------------
12,644,269
-------------
</TABLE>
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------- -------------
<S> <C> <C>
BUSINESS & CONSUMER SERVICES (1.6%)
ALLIED WASTE NORTH AMERICA, INC.
(144A)
7.625% 01/01/2006................ 1,000,000 1,010,000
COMCAST CORP.
9.500% 01/15/2008................ 2,140,000 2,238,825
JONES INTERCABLE, INC.
8.875% 04/01/2007................ 1,435,000 1,528,275
LENFEST COMMUNICATIONS, INC.
8.375% 11/01/2005................ 650,000 702,000
SERVICE CORP. INTERNATIONAL
6.300% 03/15/2003................ 5,000,000 5,048,250
USA WASTE SERVICES, INC.
6.125% 07/15/2001................ 4,450,000 4,477,590
USA NETWORKS, INC. (144A)
6.750% 11/15/2005................ 1,000,000 996,140
-------------
16,001,080
-------------
CONSUMER CYCLICAL (1.6%)
ECKERD CORP.
9.250% 02/15/2004................ 4,000,000 4,198,760
HILTON HOTELS CORP.
7.375% 06/01/2002................ 3,500,000 3,560,865
WAL-MART STORES, INC.
5.650% 02/01/2000................ 7,375,000 7,406,860
-------------
15,166,485
-------------
CONSUMER STAPLES (2.2%)
AETNA SERVICES, INC.
7.625% 08/15/2026................ 3,650,000 3,750,849
AMERICAN HOME PRODUCTS CORP.
7.700% 02/15/2000................ 2,975,000 3,058,300
AMGEN, INC.
8.125% 04/01/2097................ 2,550,000 3,071,858
COCA-COLA ENTERPRISES, INC.
6.750% 01/15/2038................ 4,150,000 4,274,666
PHILIP MORRIS COS., INC.
6.150% 03/15/2000................ 5,600,000 5,646,480
WESTPOINT STEVENS, INC.
7.875% 06/15/2005................ $ 1,575,000 $ 1,598,625
-------------
21,400,778
-------------
ENERGY (1.6%)
GULF CANADA RESOURCES LTD.
9.625% 07/01/2005................ 2,500,000 2,475,000
K N ENERGY, INC.
6.650% 03/01/2005................ 4,075,000 4,117,502
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------- -------------
<S> <C> <C>
OCCIDENTAL PETROLEUM CORP.
6.400% 04/01/2003................ 5,000,000 4,920,850
7.375% 11/15/2008................ 4,150,000 4,226,526
-------------
15,739,878
-------------
TRANSPORTATION (0.5%)
ALLIED HOLDING, INC. SERIES B
8.625% 10/01/2007................ 500,000 507,500
CANADIAN NATIONAL RAILWAY CO.
6.450% 07/15/2006................ 675,000 696,040
FEDERAL EXPRESS CORP. PASS THRU
TRUST SERIES 1997-1C
7.650% 01/15/2014................ 2,167,837 2,290,254
TEEKAY SHIPPING CORP. GTD. 1ST PFD.
SHIP. MTG. NOTES
8.320% 02/01/2008................ 1,000,000 990,000
-------------
4,483,794
-------------
FINANCIAL (2.8%)
FINANCE (0.9%)
BEAR STEARNS COS., INC. MEDIUM
TERM NOTES
5.404% 10/10/2000.............. 3,825,000 3,792,105
HARTFORD LIFE, INC.
7.650% 06/15/2027.............. 2,555,000 2,846,730
MORGAN STANLEY DEAN WITTER
DISCOVER CO. MEDIUM TERM NOTES
5.750% 02/15/2001.............. 2,100,000 2,107,896
-------------
8,746,731
-------------
BANKS-DOMESTIC (0.5%)
FIRST SECURITY CORP.
5.875% 11/01/2003.............. 1,325,000 1,321,317
MELLON FINANCIAL CO.
5.750% 11/15/2003.............. 3,725,000 3,750,814
-------------
5,072,131
-------------
BANKS-FOREIGN (0.4%)
ABN AMRO BANK N. V. CHICAGO
7.250% 05/31/2005.............. $ 3,575,000 $ 3,827,860
-------------
REAL ESTATE INVESTMENT TRUSTS (1.0%)
SECURITY CAPITAL INDUSTRIAL TRUST
MEDIUM TERM NOTES
7.810% 02/01/2015.............. 3,250,000 3,173,690
SIMON PROPERTY GROUP L.P.
6.625% 06/15/2003.............. 4,475,000 4,399,551
</TABLE>
43
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------- -------------
<S> <C> <C>
SPIEKER PROPERTIES L.P.
6.900% 01/15/2004.............. 2,450,000 2,446,546
-------------
10,019,787
-------------
UTILITY (0.1%)
TELECOMMUNICATIONS
WORLDCOM, INC.
8.875% 01/15/2006.............. 1,000,000 1,092,970
-------------
TOTAL CORPORATE BONDS
(COST $113,049,889)............... 114,195,763
-------------
OTHER SECURITIZED LOANS (10.0%)
ASSET BACKED SECURITIES (2.5%)
CITYSCAPE HOME EQUITY LOAN TRUST
SERIES 1997-B CL. A-7
7.410% 05/25/2028.............. 4,150,000 4,344,788
IMC HOME EQUITY LOAN TRUST SERIES
1997-3 CL. A-6
7.520% 08/20/2028.............. 2,310,000 2,398,739
THE MONEY STORE RESIDENTIAL TRUST
SERIES 1997-II CL. A-4
7.385% 03/15/2029.............. 2,702,000 2,845,471
NEW CENTURY HOME EQUITY LOAN
TRUST SERIES 1997-NC5 CL. A-5
7.130% 10/25/2028.............. 11,760,000 12,323,786
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC SERIES
1996-LB2 CL. A-8
7.800% 10/25/2026.............. 2,650,000 2,839,793
-------------
24,752,577
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS (7.0%)
BEAR STEARNS MORTGAGE SECURITIES,
INC. SERIES 1996-2 CL. A-1
6.119% 01/25/2025.............. 4,029,476 4,072,278
BEAR STEARNS MORTGAGE SECURITIES,
INC. SERIES 1996-8 CL. A-9
7.600% 11/25/2027.............. $ 4,338,054 $ 4,331,243
CMC SECURITIES CORP. IV SERIES
1997-2 CL. IA-12
7.250% 11/25/2027.............. 6,675,000 6,962,243
DLJ MORTGAGE ACCEPTANCE CORP.
SERIES 1998-2 CL. II-A-8
6.80% 06/25/2028............... 3,720,000 3,820,492
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------- -------------
<S> <C> <C>
FIRST ALLIANCE MORTGAGE TRUST
SERIES 1996-1 CL. A-1
7.340% 06/20/2027.............. 1,123,778 1,140,005
FIRST UNION RESIDENTIAL
SECURITIZATION TRANSACTIONS,
INC. SERIES 1998-A CL. A-3
7.000% 08/25/2028.............. 1,510,000 1,548,989
GE CAPITAL MORTGAGE SERVICES,
INC. SERIES 1997-8 CL. A-6
7.250% 10/25/2027.............. 2,525,000 2,532,878
HEADLANDS MORTGAGE SECURITIES,
INC. SERIES 1997-3 CL. 1-A-6
7.000% 07/25/2027.............. 5,240,000 5,369,594
INDEPENDENT NATIONAL MORTGAGE
CORP. SERIES 1996-D CL. A4
7.000% 05/25/2026.............. 1,905,000 1,913,296
MORTGAGE OBLIGATION STRUCTURED
TRUST (144A) SERIES 1993-1 CL.
B1
10.640% 10/25/2018............. 2,223,996 2,298,700
NORWEST ASSET SECURITIES CORP.
SERIES 1997-16 CL. A-2
6.750% 10/25/2027.............. 7,015,900 7,080,341
NORWEST ASSET SECURITIES CORP.
SERIES 1998-32 CL. A-1
6.000% 12/25/2028.............. 12,552,035 12,409,745
PNC MORTGAGE SECURITIES CORP.
SERIES 1997-4 CL. 2PP-2
7.500% 07/25/2027.............. 2,750,000 2,909,064
PNC MORTGAGE SECURITIES CORP.
SERIES 1997-4 CL. 2PP-4
7.250% 07/25/2027.............. 3,930,736 3,969,002
RESIDENTIAL FUNDING MORTGAGE
SECURITIES I, INC. SERIES
1997-S7 CL. A-3
7.500% 05/25/2027.............. $ 3,171,000 $ 3,239,916
SACO I, INC. (144A) SERIES 1995-1
CL. A
6.054% 9/25/2024............... 2,596,304 2,596,290
</TABLE>
44
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<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE(1)
------------- -------------
<S> <C> <C>
STRUCTURED ASSET MORTGAGE
INVESTMENTS, INC. SERIES 1998-8
CL. 1-8-A
7.000% 07/25/2028.............. 1,634,000 1,705,037
-------------
67,899,113
-------------
COMMERCIAL MORTGAGE BACKED SECURITIES (0.5%)
COMMERCIAL CAPITAL ACCESS ONE, INC.
SERIES 3 CL. A-2
6.615% 11/15/2028................ 5,000,000 5,059,000
-------------
TOTAL OTHER SECURITIZED LOANS
(COST $95,523,793)................ 97,710,690
-------------
MUNICIPAL BONDS (0.3%)
TAXABLE BONDS
CHICAGO IL. TAX INCREMENT TAXABLE
ALLOCATION CENTRAL LOOP B
6.375% 06/01/2003.............. 2,250,000 2,331,562
-------------
TOTAL BONDS
(COST $420,201,555)............... 428,818,165
-------------
TOTAL INVESTMENTS, EXCLUDING
TEMPORARY CASH INVESTMENT
(COST $797,729,841)............... 960,497,499
-------------
REPURCHASE AGREEMENT (0.2%)
J.P. MORGAN SECURITIES, INC.
4.970% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $2,336,514.
COLLATERALIZED BY
U.S TREASURY BILLS
DUE 06/24/1999,
U.S TREASURY BONDS
6.500% DUE 11/15/2026,
U.S. TREASURY NOTES
5.375% DUE 06/30/2000 TO
07/31/2000.
(COST $2,336,196)................. $ 2,336,196 $ 2,336,196
-------------
TOTAL INVESTMENTS (98.7%)
(COST $800,066,037)................... 962,833,695
RECEIVABLES LESS LIABILITIES (1.3%).... 12,547,063
-------------
NET ASSETS (100.0%).................... $ 975,380,758
-------------
-------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
* Non-income producing.
See Notes to Financial Statements.
45
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<TABLE>
<CAPTION>
PRINCIPAL
DECEMBER 31, 1998 AMOUNT VALUE(1)
------------ ------------
<S> <C> <C>
U.S. TREASURY NOTES (97.4%)
6.875% 08/31/1999................ $ 9,950,000 $ 10,089,927
6.375% 03/31/2001................ 10,750,000 11,143,052
6.625% 06/30/2001................ 4,150,000 4,343,237
6.375% 09/30/2001................ 13,350,000 13,936,145
------------
TOTAL U.S. TREASURY NOTES
(COST $39,239,616)................ 39,512,361
REPURCHASE AGREEMENT (1.6%)
J.P. MORGAN SECURITIES, INC.
4.970% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $674,668.
COLLATERALIZED BY
U.S. TREASURY BILLS
DUE 06/24/1999,
U.S. TREASURY BONDS
6.500% DUE 11/15/2026,
U.S. TREASURY NOTES
5.375% DUE 06/30/2000 TO
07/31/2000.
(COST $674,576)................... 674,576 674,576
------------
TOTAL INVESTMENTS (99.0%)
(COST $39,914,192).................... 40,186,937
RECEIVABLES LESS LIABILITIES (1.0%).... 390,929
------------
NET ASSETS (100.0%).................... $ 40,577,866
------------
------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
See Notes to Financial Statements.
46
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<TABLE>
<CAPTION>
PRINCIPAL
DECEMBER 31, 1998 AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES (52.3%)
U.S. TREASURY NOTES & BONDS (10.7%)
U.S. TREASURY BONDS
8.875% 08/15/2017................ $ 8,560,000 $ 12,053,550
8.125% 08/15/2019................ 21,080,000 28,131,913
7.625% 11/15/2022................ 2,350,000 3,049,492
U.S. TREASURY NOTES
7.000% 07/15/2006................ 1,800,000 2,054,250
-------------
45,289,205
-------------
U.S. AGENCY BONDS (1.0%)
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
6.000% 05/15/2008................ 4,000,000 4,222,480
-------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA) (2.0%)
6.000% 06/15/2028 - 11/15/2028... 6,850,223 6,790,283
6.500% 10/15/2028................ 1,732,879 1,751,291
-------------
8,541,574
-------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA II) (4.5%)
6.000% 12/20/2028................ 13,048,200 12,848,432
6.500% 09/20/2028 - 10/20/2028... 6,089,187 6,117,715
-------------
18,966,147
-------------
FEDERAL HOUSING ADMINISTRATION (FHA) (0.8%)
FHA INSURED PROJECT POOL #051-11078
8.350% 04/01/2030................ 2,203,769 2,392,989
FHA INSURED PROJECT POOL #092-35499
8.450% 11/15/2031................ 785,362 814,813
-------------
3,207,802
-------------
AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS (33.3%)
GNMA (3.8%)
GNMA GTD. REMIC PASS THRU SECS.
REMIC TR. 1996-15 CL. B
7.500% 08/20/2020.............. 2,450,075 2,464,800
GNMA GTD. REMIC PASS THRU SECS.
REMIC TR. 1996-23 CL. C
7.500% 12/20/2022.............. 3,607,000 3,726,801
GNMA GTD. REMIC PASS THRU SECS.
REMIC TR. 1997-2 CL. K
7.500% 01/20/2024.............. 2,410,000 2,498,734
GNMA GTD. REMIC PASS THRU SECS.
REMIC TR. 1998-1 CL. A
7.000% 01/20/2028.............. 2,050,000 2,089,688
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
GNMA GTD. REMIC PASS THRU SECS.
REMIC TR. 1998-9 CL. B
6.850% 12/20/2025.............. $ 2,260,000 $ 2,293,629
GNMA GTD. REMIC PASS THRU SECS.
REMIC TR. 1998-20 CL. B
7.000% 3/20/2026............... 2,996,000 3,080,442
-------------
16,154,094
-------------
FNMA (21.5%)
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1994-10 CL. KC
6.500% 10/25/2010.............. 1,941,125 1,995,108
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-G1 CL. B
7.500% 06/20/2024.............. 7,760,000 8,049,243
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-17 CL. PE
7.000% 01/18/2026.............. 3,980,000 4,120,438
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-24 CL. YL
7.000% 04/18/2027.............. 3,406,000 3,463,404
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-G4 CL. B
7.500% 02/17/2021.............. 1,900,000 1,919,027
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-G4 CL. C
7.500% 06/17/2024.............. 7,693,000 7,848,999
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-39 CL. B
7.500% 05/17/2027.............. 2,673,000 2,736,412
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-38 CL. G
7.500% 05/17/2026.............. 1,628,584 1,644,243
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-38 CL. H
7.500% 05/17/2027.............. 1,766,000 1,815,054
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-43 CL. B
7.500% 08/18/2025.............. 10,000,000 10,277,462
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-44 CL. PG
7.000% 02/18/2024.............. 4,120,000 4,266,295
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-G5 CL. VD
7.250% 04/17/2010.............. 3,600,000 3,709,116
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-63 CL. PH
7.000% 07/18/2026.............. 7,540,000 7,975,354
</TABLE>
47
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES (CONTINUED)
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-75 CL. B
6.500% 09/18/2026.............. $ 3,070,660 $ 3,126,564
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1997-74 CL. D
7.500% 09/20/2023.............. 3,831,963 3,896,737
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1998-49 CL. TD
6.250% 12/18/2023.............. 5,950,000 6,035,858
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1998-44 CL. VB
6.500% 05/18/2009.............. 4,552,730 4,666,947
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1998-44 CL. VC
6.500% 11/18/2015.............. 4,127,564 4,229,647
FNMA GTD. REMIC PASS THRU CTF.
REMIC TR. 1998-61 CL. PK
6.000% 12/25/2026.............. 8,860,000 8,848,999
-------------
90,624,907
-------------
FHLMC (7.9%)
FHLMC MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES 1558 CL. C
6.500% 07/15/2023.............. 2,141,000 2,186,972
FHLMC MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES 1995 CL. A
7.500% 08/20/2027.............. 3,300,000 3,411,329
FHLMC MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES 2068 CL. CL
6.500% 03/15/2026.............. 4,016,000 4,118,434
FHLMC MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES 2065 CL. PB
6.250% 01/15/2024.............. 1,050,000 1,064,694
FHLMC MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES 2065 CL. PG
6.000% 04/15/2021.............. 740,000 747,163
FHLMC MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES 2091 CL. PF
6.000% 02/15/2027.............. 4,172,000 4,173,791
FHLMC MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES 1617 CL. PJ
6.200% 01/15/2023.............. 4,030,000 4,080,287
FHLMC MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES 1763 CL. H
8.250% 07/15/2023.............. 692,000 719,161
FHLMC GNMA MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES G40 CL. N
6.500% 05/17/2021.............. 4,700,000 4,731,100
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
FHLMC MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES 1910 CL. D
8.000% 11/15/2024.............. $ 2,020,000 $ 2,073,866
FHLMC MULTICLASS MTG. PARTN.
CTFS. GTD. SERIES 2116 CL. VC
6.000% 01/15/2029.............. 6,280,000 6,083,750
-------------
33,390,547
-------------
OTHER AGENCY COLLATERALIZED
MORTGAGE OBLIGATIONS (0.1%)
PUERTO RICO HOUSING FINANCE CORP.
SERIES A CL. 4
9.000% 07/20/2017.............. 647,568 647,568
-------------
TOTAL U.S. GOVERNMENT SECURITIES
(COST $214,343,299)............... 221,044,324
-------------
CORPORATE BONDS (30.2%)
INDUSTRIAL (16.0%)
BASIC INDUSTRY & MANUFACTURING (5.1%)
FOSTER WHEELER CORP.
6.750% 11/15/2005.............. 3,025,000 2,831,461
GENERAL ELECTRIC CAPITAL CORP.
MEDIUM TERM NOTES
6.350% 09/15/2001.............. 3,200,000 3,296,064
ICI WILMINGTON, INC.
7.050% 09/15/2007.............. 3,805,000 3,897,994
PRECISION CASTPARTS CORP.
6.750% 12/15/2007.............. 1,650,000 1,682,406
RAYTHEON CO.
5.700% 11/01/2003.............. 3,875,000 3,869,342
TYCO INTERNATIONAL GROUP S.A.
6.125% 06/15/2001.............. 500,000 504,815
6.250% 06/15/2003.............. 5,575,000 5,632,032
-------------
21,714,114
-------------
BUSINESS & CONSUMER SERVICES (0.7%)
HERITAGE MEDIA CORP.
8.750% 02/15/2006.............. 1,250,000 1,312,500
HOLLINGER INTERNATIONAL
PUBLISHING, INC.
8.625% 03/15/2005.............. 300,000 316,500
LENFEST COMMUNICATIONS, INC.
8.375% 11/01/2005.............. 1,350,000 1,458,000
-------------
3,087,000
-------------
CONSUMER CYCLICAL (3.0%)
GENERAL MOTORS ACCEPTANCE CORP.
MEDIUM TERM NOTES
5.330% 10/20/2000.............. 4,000,000 3,999,200
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
CORPORATE BONDS (CONTINUED)
HILTON HOTELS CORP.
7.375% 06/01/2002.............. $ 4,000,000 $ 4,069,560
SEARS ROEBUCK ACCEPTANCE CORP.
MEDIUM TERM NOTES
6.400% 10/11/2000.............. 4,525,000 4,600,432
-------------
12,669,192
-------------
CONSUMER STAPLES (4.7%)
AETNA SERVICES, INC.
7.625% 08/15/2026.............. 5,000,000 5,138,150
COCA-COLA ENTERPRISES, INC.
6.750% 01/15/2038.............. 3,850,000 3,965,654
NABISCO, INC.
6.000% 02/15/2001.............. 1,875,000 1,852,725
6.700% 06/15/2002.............. 3,750,000 3,750,150
PROCTER & GAMBLE CO.
5.250% 09/15/2003.............. 3,965,000 3,964,762
TENET HEALTHCARE CORP.
8.625% 12/01/2003.............. 990,000 1,037,025
-------------
19,708,466
-------------
ENERGY (1.0%)
GULF CANADA RESOURCES LTD.
9.625% 07/01/2005.............. 1,250,000 1,237,500
NOBLE AFFILIATES, INC.
7.250% 08/01/2097.............. 2,825,000 2,628,352
-------------
3,865,852
-------------
TRANSPORTATION (1.5%)
FEDERAL EXPRESS CORP. PASS THRU
TRUST SERIES 1997-1C
7.650% 01/15/2014.............. 2,266,375 2,394,357
FEDERAL EXPRESS CORP. PASS THRU
TRUST SERIES 1998-1B
6.845% 01/15/2019.............. 4,025,000 4,130,938
-------------
6,525,295
-------------
FINANCIAL (8.2%)
FINANCE (1.2%)
EQUITABLE COS., INC.
9.000% 12/15/2004.............. 905,000 1,047,447
GOLDMAN SACHS GROUP L.P. (144A)
7.200% 03/01/2007.............. 3,700,000 3,948,196
-------------
4,995,643
-------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
BANKS-DOMESTIC (3.3%)
AMSOUTH BANK N.A. BIRMINGHAM
6.450% 02/01/2018.............. $ 3,100,000 $ 3,229,394
BANKAMERICA CORP.
5.313% 02/20/2002.............. 3,500,000 3,471,460
FIRST BANK SYSTEM, INC.
5.625% 11/26/2010.............. 7,230,000 7,197,899
-------------
13,898,753
-------------
BANKS-FOREIGN (0.4%)
SWISS BANK CORP. N.Y.
7.250% 09/01/2006.............. 1,825,000 1,971,675
-------------
REAL ESTATE INVESTMENT TRUSTS (3.3%)
EOP OPERATING L.P.
6.376% 02/15/2002.............. 3,925,000 3,888,811
HEALTH CARE PROPERTY INVESTMENTS,
INC.
6.500% 02/15/2006.............. 6,400,000 5,894,016
SIMON PROPERTY GROUP L.P.
6.625% 06/15/2003.............. 4,150,000 4,080,031
-------------
13,862,858
-------------
UTILITIES (4.6%)
ELECTRIC (1.6%)
CALENERGY, INC.
9.875% 06/30/2003.............. 1,000,000 1,119,840
NIAGARA MOHAWK POWER CORP. SERIES
D
7.250% 10/01/2002.............. 1,950,000 1,971,918
NORTHERN INDIANA PUBLIC SERVICE
CO. MEDIUM TERM NOTES
6.750% 06/01/2000.............. 2,500,000 2,552,275
6.900% 06/01/2000.............. 1,250,000 1,278,638
-------------
6,922,671
-------------
TELECOMMUNICATIONS (2.3%)
FLAG LTD.
8.250% 01/30/2008.............. 500,000 490,000
MCI COMMUNICATIONS CORP.
6.125% 04/15/2002.............. 4,755,000 4,827,371
US WEST CAPITAL FUNDING, INC.
6.875% 07/15/2028.............. 3,250,000 3,470,773
WORLDCOM, INC.
8.875% 01/15/2006.............. 900,000 983,673
-------------
9,771,817
-------------
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
CORPORATE BONDS (CONTINUED)
OTHER (0.7%)
ENRON CORP.
6.950% 07/15/2028.............. $ 2,850,000 $ 2,835,579
-------------
YANKEE (1.4%)
AFRICAN DEVELOPMENT BANK MEDIUM
TERM NOTES
8.625% 05/01/2001................ 5,300,000 5,728,240
-------------
TOTAL CORPORATE BONDS
(COST $126,547,770)............... 127,557,155
-------------
OTHER SECURITIZED LOANS (15.8%)
ASSET BACKED SECURITIES (3.8%)
EMPIRE FUNDING HOME LOAN OWNER
TRUST SERIES 1997-2 CL. A-5
7.960% 09/25/2023................ 2,946,000 3,113,491
IMC HOME EQUITY LOAN TRUST SERIES
1997-3 CL. A-6
7.520% 08/20/2028................ 2,520,000 2,616,806
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC. SERIES
1996-LB2 CL. A-8
7.800% 10/25/2026................ 1,000,000 1,071,620
SAXON ASSET SECURITIES CO. SERIES
1996-1 CL. A-2
8.060% 09/25/2027................ 6,265,000 6,568,476
STRUCTURED ASSET SECURITIES CORP.
SERIES 1997-4 CL. 2-A2
7.000% 12/25/2027................ 2,430,680 2,489,637
-------------
15,860,030
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS (10.7%)
BEAR STEARNS MORTGAGE SECURITIES,
INC. SERIES 1996-2 CL. A-1
6.119% 1/25/2025................. 3,879,258 3,920,464
CMC SECURITIES CORP. IV SERIES
1997-2 CL. IA-12
7.250% 11/25/2027................ 3,150,000 3,285,553
DLJ MORTGAGE ACCEPTANCE CORP.
SERIES 1998-2 CL. II-A-8
6.80% 06/25/2028................. 4,370,000 4,488,051
GE CAPITAL MORTGAGE SERVICES, INC.
SERIES 1997-8 CL. A-6
7.250% 10/25/2027................ 2,495,000 2,502,785
MORTGAGE OBLIGATION STRUCTURED
TRUST (144A) SERIES 1993-1 CL. B1
10.642% 10/25/2018............... 1,696,096 1,753,068
NORWEST ASSET SECURITIES CORP.
SERIES 1997-16 CL. A-2
6.750% 10/25/2027................ 14,140,000 14,269,876
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
------------ -------------
<S> <C> <C>
NORWEST ASSET SECURITIES CORP.
SERIES 1998-32 CL. A-1
6.000% 12/25/2028................ $ 7,259,610 $ 7,177,315
PNC MORTGAGE SECURITIES CORP.
SERIES 1997-4 CL. 2PP-2
7.500% 07/25/2027................ 3,035,000 3,210,549
PNC MORTGAGE SECURITIES CORP.
SERIES 1997-4 CL. 2PP-4
7.250% 07/25/2027................ 1,253,242 1,265,442
RESIDENTIAL FUNDING MORTGAGE
SECURITIES, INC. SERIES 1993-S45
CL. A-10
8.000% 12/25/2023................ 1,176,268 1,189,865
STRUCTURED ASSET MORTGAGE
INVESTMENTS, INC. SERIES 1998-8
CL. 1-8-A
7.000% 07/25/2028................ 2,000,000 2,086,948
-------------
45,149,916
-------------
COMMERCIAL MORTGAGE BACKED SECURITIES (1.3%)
COMMERCIAL CAPITAL ACCESS ONE, INC.
SERIES 3 CL. A-2
6.615% 11/15/2028................ 5,600,000 5,666,080
-------------
TOTAL OTHER SECURITIZED LOANS
(COST $65,058,576)................ 66,676,026
-------------
TOTAL INVESTMENTS, EXCLUDING
TEMPORARY CASH INVESTMENT
(COST $405,960,645)............... 415,277,505
-------------
REPURCHASE AGREEMENT (2.9%)
J.P. MORGAN SECURITIES, INC.
4.970% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $12,154,499.
COLLATERALIZED BY
U.S TREASURY BILLS
DUE 06/24/1999,
U.S TREASURY BONDS
6.500% DUE 11/15/2026,
U.S. TREASURY NOTES
5.375% DUE 06/30/2000 TO
07/31/2000
(COST $12,152,844)................ 12,152,844 12,152,844
-------------
TOTAL INVESTMENTS (101.2%)
(COST $418,113,489)................... 427,430,349
RECEIVABLES LESS LIABILITIES (-1.2%)... (5,100,218)
-------------
NET ASSETS (100.0%).................... $ 422,330,131
-------------
-------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
See Notes to Financial Statements.
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<TABLE>
<CAPTION>
PRINCIPAL
DECEMBER 31, 1998 AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
GENERAL OBLIGATION BONDS (40.3%)
STATE OF OREGON GENERAL OBLIGATION (7.3%)
BOARD OF HIGHER EDUCATION
BACCALAUREATE-D
4.875% 08/01/2019................ $2,000,000 $ 1,990,000
BOARD OF HIGHER EDUCATION DEFERRED
INTEREST SERIES A
0.000% 08/01/2014................ 450,000 216,563
BOARD OF HIGHER EDUCATION REFUNDING
SERIES B
6.250% 10/15/2012................ 740,000 797,350
ELDERLY & DISABLED HOUSING
REFUNDING SERIES B
6.250% 08/01/2013................ 1,000,000 1,091,250
POLLUTION CONTROL SERIES C
5.625% 06/01/2013................ 1,595,000 1,614,937
5.900% 06/01/2014................ 2,485,000 2,525,381
VETERANS' WELFARE
11.000% 12/01/2000................ 865,000 982,856
0.000% 07/01/2001................ 1,200,000 1,093,500
9.000% 04/01/2002................ 900,000 1,041,750
6.000% 08/01/2002................ 2,000,000 2,150,000
6.000% 02/01/2004................ 720,000 790,200
9.000% 04/01/2004................ 280,000 346,150
9.000% 04/01/2005................ 1,060,000 1,352,825
8.250% 07/01/2005................ 520,000 646,750
9.000% 10/01/2005................ 1,640,000 2,125,686
7.250% 01/01/2007................ 1,485,000 1,793,137
9.200% 04/01/2007................ 2,390,000 3,211,563
8.250% 07/01/2007................ 540,000 693,900
9.200% 10/01/2007................ 1,250,000 1,701,563
7.300% 01/01/2008................ 255,000 313,650
8.000% 01/01/2008................ 1,220,000 1,560,075
7.300% 07/01/2008................ 1,125,000 1,397,813
8.000% 07/01/2008................ 580,000 749,650
9.200% 10/01/2008................ 250,000 348,437
5.850% 10/01/2015................ 1,015,000 1,110,156
5.200% 10/01/2018................ 2,000,000 2,025,000
-------------
33,670,142
-------------
OREGON GENERAL OBLIGATION (15.6%)
CLACKAMAS & WASHINGTON COUNTIES
SCHOOL DISTRICT #3JT WEST
LINN-WILSONVILLE
5.875% 10/01/2009................ 2,550,000 2,741,250
CLACKAMAS COMMUNITY COLLEGE
DISTRICT
5.250% 12/01/2009................ 1,270,000 1,370,012
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
CLACKAMAS COUNTY SCHOOL DISTRICT
#7J LAKE OSWEGO SERIES A
5.300% 06/15/2005................ $1,000,000 $ 1,065,000
5.500% 06/15/2006................ 1,000,000 1,075,000
5.700% 06/15/2010................ 2,735,000 2,923,031
DESCHUTES COUNTY ADMINISTRATIVE
SCHOOL DISTRICT #1 BEND-LAPINE
0.000% 02/01/2000................ 1,175,000 1,131,960
0.000% 02/01/2001................ 1,135,000 1,049,875
0.000% 02/01/2002................ 1,445,000 1,282,437
DESCHUTES COUNTY ADMINISTRATIVE
SCHOOL DISTRICT #1
5.000% 12/01/2017................ 1,500,000 1,518,750
EUGENE PUBLIC SAFETY FACILITIES
6.000% 06/01/2005................ 850,000 946,687
5.625% 06/01/2013................ 1,295,000 1,395,362
JACKSON COUNTY SCHOOL DISTRICT
#549C MEDFORD
5.375% 06/01/2012................ 1,200,000 1,254,000
LANE COUNTY AREA EDUCATION DISTRICT
LANE COMMUNITY COLLEGE
5.300% 06/01/2007................ 1,000,000 1,083,750
4.850% 06/01/2008................ 4,080,000 4,299,300
5.000% 06/01/2009................ 1,000,000 1,063,750
LANE COUNTY SCHOOL DISTRICT #4J
EUGENE
0.000% 01/01/2003................ 1,345,000 1,151,656
0.000% 01/01/2005................ 1,395,000 1,093,331
LANE COUNTY SCHOOL DISTRICT #4J
EUGENE REFUNDING SERIES A
0.000% 07/01/2001................ 2,015,000 1,838,688
0.000% 07/01/2003................ 1,480,000 1,241,350
0.000% 07/01/2005................ 2,325,000 1,787,344
METRO OPEN SPACES PROGRAM SERIES C
5.100% 09/01/2009................ 2,375,000 2,499,688
METRO WASHINGTON PARK ZOO SERIES A
5.250% 01/15/2009................ 1,040,000 1,115,400
5.300% 01/15/2011................ 1,000,000 1,062,500
MULTNOMAH COUNTY PUBLIC
IMPROVEMENTS
5.250% 10/01/2013................ 1,800,000 1,865,250
MULTNOMAH COUNTY SCHOOL DISTRICT
#40 DAVID DOUGLAS
7.100% 06/01/2002................ 880,000 973,500
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
OREGON GENERAL OBLIGATION (CONTINUED)
MULTNOMAH COUNTY SCHOOL DISTRICT #7
REYNOLDS
5.250% 06/01/2011................ $1,500,000 $ 1,580,625
MULTNOMAH-CLACKAMAS COUNTIES SCHOOL
DISTRICT #10JT GRESHAM
5.250% 06/01/2017................ 1,620,000 1,660,500
PORT OF PORTLAND SERIES A
0.000% 03/01/2007................ 3,000,000 2,137,500
PORTLAND COMMUNITY COLLEGE DISTRICT
0.000% 07/01/2007................ 2,025,000 1,420,031
PORTLAND PUBLIC IMPROVEMENTS SERIES
A
5.750% 06/01/2014................ 1,855,000 1,931,519
PORTLAND RECREATIONAL FACILITIES
IMPROVEMENTS SERIES A
5.750% 06/01/2012................ 1,370,000 1,477,888
5.750% 06/01/2013................ 1,345,000 1,450,919
5.750% 06/01/2015................ 1,155,000 1,245,956
PORTLAND RECREATIONAL FACILITIES
IMPROVEMENTS SERIES B
5.500% 06/01/2009................ 2,115,000 2,276,269
5.750% 06/01/2014................ 1,750,000 1,887,813
5.750% 06/01/2015................ 2,955,000 3,187,706
TRI-COUNTY METROPOLITAN
TRANSPORTATION DISTRICT LIGHT RAIL
EXTENSION SERIES A
6.000% 07/01/2012................ 3,495,000 3,735,281
WASHINGTON & CLACKAMAS COUNTIES
SCHOOL DISTRICT #23J TIGARD
REFUNDING
5.400% 01/01/2010................ 1,720,000 1,806,000
WASHINGTON COUNTY DEFERRED
INTEREST-OPERATIONS YARD
FACILITIES OBLIGATION
0.000% 06/01/2003................ 1,000,000 833,750
WASHINGTON COUNTY REFUNDING
6.200% 12/01/2007................ 1,500,000 1,588,125
WASHINGTON COUNTY SCHOOL DISTRICT
#48J BEAVERTON SERIES B
6.150% 06/01/2008................ 1,010,000 1,041,563
WASHINGTON COUNTY SCHOOL DISTRICT
#48J BEAVERTON SERIES C
7.800% 06/01/2003................ 1,200,000 1,389,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
WASHINGTON, MULTNOMAH & YAMHILL
COUNTIES SCHOOL DISTRICT #1J
5.000% 11/01/2011................ $1,100,000 $ 1,155,000
WILSONVILLE LIMITED TAX IMPROVEMENT
5.000% 12/01/2020................ 1,325,000 1,326,656
-------------
71,960,972
-------------
OREGON INSURED GENERAL OBLIGATION (17.4%)
CENTRAL OREGON COMMUNITY
5.800% 06/01/2007................ 760,000 817,950
CHEMEKETA COMMUNITY COLLEGE
DISTRICT REFUNDING
5.500% 06/01/2010................ 1,610,000 1,771,000
CHEMEKETA COMMUNITY COLLEGE
DISTRICT SERIES B
5.600% 06/01/2014................ 1,180,000 1,267,143
CLACKAMAS & WASHINGTON COUNTIES
SCHOOL DISTRICT #3JT
5.750% 06/01/2010................ 590,000 660,800
CLACKAMAS COUNTY SCHOOL DISTRICT
#12 NORTH CLACKAMAS
4.100% 06/01/2008................ 670,000 667,487
5.250% 12/01/1999................ 2,750,000 2,842,812
CLATSOP COUNTY ADMINISTRATIVE
SCHOOL DISTRICT #10
5.875% 07/01/2012................ 630,000 658,350
CROOK COUNTY SCHOOL DISTRICT
4.900% 02/01/2009................ 1,165,000 1,194,125
DESCHUTES & JEFFERSON COUNTIES
SCHOOL DISTRICT #2J REDMOND
REFUNDING
5.600% 06/01/2009................ 1,000,000 1,047,500
HOOD RIVER COUNTY SCHOOL DISTRICT
5.650% 06/01/2008................ 1,020,000 1,087,575
JOSEPHINE COUNTY SCHOOL DISTRICT #7
GRANTS PASS
5.700% 06/01/2013................ 2,000,000 2,147,500
KLAMATH COUNTY
5.100% 06/01/2008................ 1,015,000 1,088,587
5.150% 06/01/2009................ 700,000 748,125
LANE COUNTY SCHOOL DISTRICT #1
PLEASANT HILL
5.350% 12/01/2012................ 650,000 684,125
5.450% 12/01/2013................ 725,000 762,156
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
OREGON INSURED GENERAL OBLIGATION (CONTINUED)
LANE COUNTY SCHOOL DISTRICT #19
SPRINGFIELD REFUNDING
5.250% 10/15/2006................ $1,340,000 $ 1,443,850
6.000% 10/15/2012................ 740,000 837,125
6.000% 10/15/2014................ 1,310,000 1,504,863
LANE COUNTY SCHOOL DISTRICT #52
BETHEL
6.250% 12/01/2007................ 580,000 664,100
6.400% 12/01/2009................ 750,000 857,812
LINCOLN COUNTY SCHOOL DISTRICT
6.000% 06/15/2006................ 900,000 1,011,375
6.000% 06/15/2007................ 1,855,000 2,103,106
6.000% 06/15/2008................ 1,450,000 1,656,625
6.000% 06/15/2009................ 3,465,000 3,950,100
5.600% 06/15/2010................ 3,480,000 3,832,350
5.250% 06/15/2012................ 3,815,000 4,024,825
MALHEUR COUNTY SCHOOL DISTRICT #26
NYSSA
5.750% 06/01/2015................ 1,910,000 2,029,375
MARION COUNTY CERTIFICATES OF
PARTICIPATION COURTHOUSE SQUARE
PROJECT-SERIES A
4.45% 06/01/2010................. 430,000 430,000
MARION COUNTY SCHOOL DISTRICT #103C
WOODBURN SERIES B
0.000% 11/01/2006................ 2,000,000 1,452,500
0.000% 11/01/2007................ 2,000,000 1,390,000
0.000% 11/01/2009................ 2,500,000 1,581,250
0.000% 11/01/2011................ 2,210,000 1,262,463
MILWAUKIE, OR
4.650% 06/01/2009................ 405,000 415,631
4.750% 06/01/2010................ 425,000 439,344
4.850% 06/01/2011................ 340,000 350,625
MORROW COUNTY SCHOOL DISTRICT
6.000% 06/01/2006................ 880,000 987,800
MULTNOMAH COUNTY SCHOOL DISTRICT #3
PARKROSE
5.400% 12/01/2005................ 1,010,000 1,081,963
5.700% 12/01/2008................ 1,330,000 1,438,063
5.700% 12/01/2009................ 1,970,000 2,112,825
5.500% 12/01/2010................ 895,000 945,344
5.500% 12/01/2011................ 1,000,000 1,055,000
NORTHERN OREGON CORRECTIONS
5.250% 09/15/2012................ 1,000,000 1,047,500
5.300% 09/15/2013................ 1,000,000 1,048,750
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
PORTLAND COMMUNITY COLLEGE DISTRICT
5.000% 07/01/2011................ $2,000,000 $ 2,085,000
SALEM PEDESTRIAN SAFETY
IMPROVEMENTS
5.400% 05/01/2009................ 1,000,000 1,060,000
TILLAMOOK COUNTY
6.250% 01/01/2014................ 960,000 1,064,400
5.700% 01/15/2016................ 700,000 744,625
UMATILLA COUNTY SCHOOL DISTRICT #6R
UMATILLA
5.080% 06/15/2018................ 1,455,000 1,458,638
UMATILLA COUNTY SCHOOL DISTRICT #8R
HERMISTON
4.400% 12/01/2011................ 1,000,000 987,500
UMATILLA COUNTY SCHOOL DISTRICT
#16R PENDLETON
4.650% 07/01/2010................ 1,660,000 1,689,050
WASHINGTON COUNTY SCHOOL DISTRICT
#13
5.350% 06/01/2011................ 355,000 376,300
5.350% 06/01/2012................ 440,000 464,750
5.400% 06/01/2013................ 485,000 531,681
WASHINGTON COUNTY SCHOOL DISTRICT
#15
5.250% 06/01/2009................ 2,150,000 2,303,188
WASHINGTON COUNTY SCHOOL DISTRICT
#15 FOREST GROVE
5.125% 06/01/2010................ 1,000,000 1,072,500
WASHINGTON COUNTY SCHOOL DISTRICT
#48J BEAVERTON SERIES A
5.200% 12/01/2009................ 1,740,000 1,831,350
WASHINGTON COUNTY SCHOOL DISTRICT
#88J SHERWOOD
6.100% 06/01/2012................ 185,000 204,194
YAMHILL COUNTY SCHOOL DISTRICT #29J
NEWBERG
5.750% 06/01/2009................ 2,000,000 2,225,000
5.750% 06/01/2011................ 2,280,000 2,545,050
YAMHILL COUNTY SCHOOL DISTRICT #40
6.000% 06/01/2009................ 500,000 566,875
5.350% 06/01/2010................ 500,000 535,625
5.600% 06/01/2016................ 500,000 527,500
-------------
80,673,025
-------------
TOTAL GENERAL OBLIGATION BONDS
(COST $175,830,009)............... 186,304,139
-------------
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
REVENUE BONDS (41.8%)
OREGON REVENUE (19.6%)
ALBANY HOSPITAL FACILITY AUTHORITY
MENNONITE HOME
5.625% 10/01/2017................ $ 375,000 $ 382,500
BENTON COUNTY HOSPITAL FACILITIES
AUTHORITY REFUNDING SAMARITAN
HEALTH SERVICES PROJECT
4.300% 10/01/2006................ 230,000 229,137
4.400% 10/01/2007................ 220,000 220,000
4.800% 10/01/2011................ 245,000 245,000
5.200% 10/01/2017................ 1,895,000 1,895,000
5.125% 10/01/2028................ 3,000,000 2,957,670
CLACKAMAS COUNTY HOSPITAL FACILITY
AUTHORITY ROBISON JEWISH HOME
PROJECT
6.250% 10/01/2021................ 2,000,000 2,015,100
CLACKAMAS COUNTY HOSPITAL FACILITY
AUTHORITY WILLAMETTE VIEW, INC.
PROJECT
6.000% 11/01/2008................ 670,000 719,412
CLACKAMAS COUNTY HOSPITAL FACILITY
AUTHORITY ODD FELLOWS HOME-SERIES
A
5.500% 09/15/2008................ 1,750,000 1,750,000
5.875% 09/15/2021................ 1,400,000 1,398,250
CLACKAMAS COUNTY HOSPITAL FACILITY
AUTHORITY GNMA COLLATERAL JENNINGS
LODGE
7.500% 10/20/2031................ 1,030,000 1,089,225
CLACKAMAS COUNTY HOSPITAL FACILITY
KAISER PERMANENTE SERIES A
5.375% 04/01/2014................ 1,770,000 1,836,375
CLACKAMAS COUNTY HOUSING AUTHORITY
MULTIFAMILY HOUSING EASTON RIDGE
SERIES A
5.800% 12/01/2016................ 2,255,000 2,359,294
DESCHUTES COUNTY HOSPITAL FACILITY
AUTHORITY
5.750% 01/01/2009................ 1,670,000 1,791,075
DESCHUTES VALLEY WATER DISTRICT
5.875% 09/01/2005................ 3,420,000 3,732,075
EUGENE ELECTRIC UTILITY REFUNDING
5.800% 08/01/2008................ 1,435,000 1,508,544
5.800% 08/01/2009................ 1,300,000 1,361,750
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
6.000% 08/01/2011................ 1,375,000 1,445,469
GRESHAM SEWER
5.350% 06/01/2006................ $ 860,000 $ 912,675
GRESHAM STORMWATER
6.100% 10/01/2009................ 1,115,000 1,222,319
HILLSBORO HOSPITAL FACILITY
AUTHORITY TUALITY HEALTHCARE
5.750% 10/01/2012................ 3,795,000 4,010,594
LEBANON WASTEWATER REFUNDING
5.750% 06/01/2011................ 1,225,000 1,289,312
NORTH CLACKAMAS PARKS & RECREATION
DISTRICT RECREATIONAL FACILITIES
5.700% 04/01/2013................ 2,910,000 3,055,500
NORTHERN WASCO COUNTY PEOPLE'S
UTILITY DISTRICT ELECTRIC
0.000% 02/01/2006................ 610,000 437,675
0.000% 02/01/2007................ 585,000 390,487
0.000% 02/01/2008................ 610,000 378,200
0.000% 02/01/2011................ 500,000 248,750
OREGON HEALTH, HOUSING, EDUCATIONAL
& CULTURAL FACILITIES AUTHORITY
REED COLLEGE PROJECT SERIES A
5.300% 07/01/2011................ 500,000 516,875
OREGON HEALTH, HOUSING, EDUCATIONAL
& CULTURAL FACILITIES AUTHORITY
GOODWILL INDUSTRIES LANE COUNTY
SERIES A
6.650% 11/15/2022................ 4,300,000 4,294,625
OREGON HEALTH, HOUSING, EDUCATIONAL
& CULTURAL FACILITIES
AUTHORITY/AQUARIUM
4.750% 10/01/2008................ 1,550,000 1,530,625
4.900% 10/01/2009................ 670,000 658,275
OREGON HEALTH, HOUSING, EDUCATIONAL
& CULTURAL FACILITIES AUTHORITY
LINFIELD COLLEGE PROJECT-SERIES A
4.550% 10/01/2008................ 525,000 522,375
4.650% 10/01/2009................ 555,000 552,225
OREGON HOUSING & COMMUNITY SERVICES
DEPARTMENT HOUSING FINANCE
ASSISTED INSURED MULTI-UNIT B
6.800% 07/01/2013................ 8,270,000 8,724,850
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
OREGON REVENUE (CONTINUED)
OREGON HOUSING & COMMUNITY SERVICES
DEPARTMENT MORTGAGE SINGLE-FAMILY
MORTGAGE PROGRAM SERIES A
4.850% 07/01/2010................ $ 310,000 $ 316,200
5.100% 07/01/2014................ 430,000 436,987
6.800% 07/01/2016................ 1,930,000 2,050,625
OREGON HOUSING & COMMUNITY SERVICES
DEPARTMENT MORTGAGE SINGLE-FAMILY
MORTGAGE PROGRAM SERIES D
6.700% 07/01/2013................ 1,000,000 1,047,500
OREGON HOUSING & COMMUNITY SERVICES
DEPARTMENT MORTGAGE SINGLE-FAMILY
MORTGAGE PROGRAM SERIES E
6.750% 07/01/2016................ 55,000 54,931
OREGON HOUSING FINANCIAL REVENUE
5.800% 07/01/2009................ 390,000 391,919
PORT OF ST. HELENS POLLUTION
CONTROL PORTLAND GENERAL ELECTRIC
CO.-SERIES A
4.800% 04/01/2010................ 4,165,000 4,201,444
PORT OF ST. HELENS POLLUTION
CONTROL PORTLAND GENERAL ELECTRIC
CO.-SERIES B
4.800% 06/01/2010................ 2,000,000 2,017,500
PORTLAND HOUSING AUTHORITY
MULTIFAMILY HOUSING-SENIOR
LIEN-CIVIC APARTMENTS-SERIES A
5.600% 01/01/2018................ 1,240,000 1,297,350
PORTLAND HOUSING AUTHORITY
REF-POOLED HOUSING-SERIES A
4.500% 01/01/2009................ 660,000 657,525
5.000% 01/01/2019................ 5,540,000 5,519,225
5.100% 01/01/2027................ 3,000,000 2,992,470
PORTLAND HYDROELECTRIC POWER
6.800% 10/01/2004................ 465,000 468,478
PORTLAND PARKING REFUNDING
6.375% 10/01/2012................ 1,700,000 1,755,250
PORTLAND WATER SYSTEM
5.250% 08/01/2013................ 2,000,000 2,062,500
5.000% 08/01/2017................ 3,685,000 3,712,638
PRINEVILLE SEWER FIRST LIEN
6.500% 07/01/2004................ 500,000 543,125
6.800% 07/01/2012................ 1,050,000 1,164,188
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
REEDSPORT WATER
7.000% 10/01/2014................ $ 520,000 $ 586,950
SALEM HOSPITAL FACILITY AUTHORITY
5.000% 08/15/2018................ 2,000,000 1,975,000
SHERIDAN WATER REVENUE REFUNDING
5.350% 04/01/2018................ 300,000 301,875
SOUTH FORK WATER BOARD FIRST LIEN
5.450% 02/01/2014................ 1,300,000 1,337,375
-------------
90,572,293
-------------
OREGON INSURED REVENUE (22.2%)
CLACKAMAS COUNTY HEALTH FACILITY
AUTHORITY REVENUE REFUNDING
ADVENTIST HEALTH A
6.350% 03/01/2009................ 1,500,000 1,620,000
EMERALD PEOPLES UTILITIES DISTRICT
7.200% 11/01/2006................ 480,000 579,600
7.350% 11/01/2010................ 2,160,000 2,764,800
7.350% 11/01/2011................ 2,000,000 2,577,500
7.350% 11/01/2012................ 2,490,000 3,193,425
7.350% 11/01/2013................ 2,675,000 3,457,437
EUGENE ELECTRIC UTILITY SYSTEM-
SERIES B
4.550% 08/01/2010................ 600,000 603,000
4.650% 08/01/2011................ 625,000 627,344
5.000% 08/01/2018................ 1,000,000 997,500
5.000% 08/01/2023................ 500,000 496,250
EUGENE ELECTRIC UTILITY REFUNDING
4.700% 08/01/2008................ 1,225,000 1,270,937
MARION COUNTY CERTIFICATES OF
PARTICIPATION COURTHOUSE SQUARE
PROJECT-SERIES A
4.650% 06/01/2012................ 355,000 355,000
5.000% 06/01/2023................ 1,000,000 992,500
MEDFORD HOSPITAL FACILITIES
AUTHORITY ASANTE HEALTH
SYSTEM-SERIES B
5.125% 08/15/2028................ 7,000,000 7,045,010
MULTNOMAH COUNTY EDUCATIONAL
FACILITIES UNIVERSITY OF PORTLAND
PROJECT
5.000% 04/01/2018................ 1,530,000 1,535,737
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
OREGON INSURED REVENUE (CONTINUED)
ONTARIO OREGON CATHOLIC HEALTH HOLY
ROSARY MEDICAL CENTER
5.500% 11/15/2012................ $1,500,000 $ 1,612,500
OREGON DEPARTMENT OF ADMINISTRATIVE
SERVICES CERTIFICATES
PARTICIPATION SERIES A
5.375% 11/01/2004................ 1,500,000 1,612,500
5.250% 05/01/2008................ 4,950,000 5,302,688
5.300% 05/01/2008................ 750,000 811,875
5.250% 11/01/2009................ 2,460,000 2,613,750
5.700% 05/01/2015................ 1,000,000 1,080,000
5.375% 11/01/2016................ 4,695,000 4,876,931
OREGON DEPARTMENT OF ADMINISTRATIVE
SERVICES CERTIFICATES
PARTICIPATION SERIES B
5.500% 11/01/2011................ 1,635,000 1,753,538
5.000% 11/01/2013................ 1,000,000 1,026,250
5.000% 11/01/2014................ 500,000 508,750
OREGON DEPARTMENT OF ADMINISTRATIVE
SERVICES CERTIFICATES
PARTICIPATION SERIES C
5.500% 05/01/2011................ 2,000,000 2,137,500
5.750% 05/01/2017................ 2,000,000 2,160,000
OREGON DEPARTMENT OF GENERAL
SERVICES CERTIFICATES
PARTICIPATION SERIES C
5.800% 03/01/2015................ 840,000 880,950
OREGON HEALTH SCIENCES UNIVERSITY
SERIES A
0.000% 07/01/2009................ 1,530,000 975,375
0.000% 08/01/2012................ 1,315,000 698,594
0.000% 07/01/2014................ 2,495,000 1,175,769
0.000% 07/01/2015................ 4,325,000 1,924,625
OREGON HEALTH SCIENCES UNIVERSITY
SERIES B
4.875% 07/01/2007................ 1,695,000 1,779,750
OREGON HEALTH, HOUSING, EDUCATIONAL
& CULTURAL FACILITIES AUTHORITY
LEWIS & CLARK COLLEGE
6.000% 10/01/2013................ 965,000 1,068,738
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
PORT OF PORTLAND AIRPORT
REFUNDING-PORTLAND INTERNATIONAL
AIRPORT-SERIES 12B
5.250% 07/01/2012................ $1,720,000 $ 1,816,750
PORT OF PORTLAND AIRPORT REVENUE
PORTLAND INTERNATIONAL AIRPORT
SERIES 7-A
6.500% 07/01/2004................ 500,000 536,250
6.750% 07/01/2015................ 3,470,000 3,738,925
PORT OF PORTLAND AIRPORT REVENUE
SERIES 9-A
5.500% 07/01/2006................ 500,000 526,875
PORTLAND ARENA GAS TAX REVENUE
0.000% 06/01/2016................ 1,100,000 412,500
0.000% 06/01/2017................ 2,320,000 812,000
PORTLAND GAS TAX REVENUE SERIES A
5.800% 06/01/2016................ 1,625,000 1,752,969
PORTLAND SEWER SYSTEM SERIES A
4.500% 06/01/2014................ 410,000 402,825
4.500% 06/01/2015................ 510,000 493,425
PORTLAND SEWER SYSTEM REVENUE
SERIES A
5.000% 06/01/2009................ 1,075,000 1,131,438
SALEM WATER & SEWER
6.000% 06/01/2005................ 1,080,000 1,202,850
TUALATIN HILLS PARK & RECREATION
DISTRICT
5.750% 03/01/2014................ 990,000 1,106,325
TUALATIN VALLEY WATER DISTRICT
5.000% 06/01/2018................ 2,045,000 2,055,225
WASHINGTON COUNTY UNIFIED SEWER
AGENCY
5.500% 10/01/2016................ 1,500,000 1,586,250
WASHINGTON COUNTY UNIFIED SEWER
AGENCY SERIES A
0.000% 10/01/2003................ 1,975,000 1,646,656
0.000% 10/01/2005................ 5,230,000 3,987,875
0.000% 10/01/2007................ 4,835,000 3,354,281
5.750% 10/01/2009................ 3,350,000 3,781,312
5.750% 10/01/2010................ 2,000,000 2,257,500
5.750% 10/01/2011................ 1,825,000 2,064,531
5.400% 10/01/2012................ 520,000 553,800
5.750% 10/01/2012................ 2,000,000 2,262,500
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
OREGON INSURED REVENUE (CONTINUED)
WASHINGTON COUNTY UNIFIED SEWER
AGENCY UNREFUNDED SERIES A
5.900% 10/01/2006................ $1,050,000 $ 1,147,125
WESTERN LANE HOSPITAL DISTRICT
FACILITY AUTHORITY REVENUE
REFUNDING SISTERS ST. JOSEPH PEACE
5.625% 08/01/2007................ 2,080,000 2,261,584
-------------
103,007,894
-------------
TOTAL REVENUE BONDS
(COST $185,390,263)............... 193,580,187
-------------
PRE-REFUNDED BONDS (5.9%)
BOARD OF HIGHER EDUCATION SERIES A
5.900% 08/01/2018................ 1,000,000 1,133,750
CHEMEKETA COMMUNITY COLLEGE
DISTRICT
5.950% 06/01/2016................ 1,600,000 1,798,000
CLACKAMAS COUNTY HOSPITAL FACILITY
AUTHORITY ELDERLY HOUSING
WILLAMETTE VIEW INCOME PROJECT
7.000% 11/15/2011................ 470,000 521,700
CLACKAMAS COUNTY SCHOOL DISTRICT #1
6.300% 07/01/2003................ 700,000 744,625
CLACKAMAS COUNTY SCHOOL DISTRICT
#115 GLADSTONE
6.150% 06/01/2014................ 1,200,000 1,353,000
EUGENE ELECTRIC UTILITY SERIES C
5.750% 08/01/2016................ 1,055,000 1,160,500
LANE COUNTY SCHOOL DISTRICT #19
SPRINGFIELD
6.150% 10/15/2009................ 1,500,000 1,689,375
MULTNOMAH COUNTY EDUCATIONAL
FACILITIES UNIVERSITY OF PORTLAND
PROJECT
6.000% 04/01/2014................ 1,375,000 1,521,094
MULTNOMAH-CLACKAMAS COUNTIES SCHOOL
DISTRICT #51JT RIVERDALE
5.750% 06/01/2016................ 2,270,000 2,428,900
OREGON CITY SEWER
6.500% 10/01/2007................ 500,000 558,125
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
PORTLAND SEWER SYSTEM REVENUE
SERIES A
6.050% 06/01/2009................ $ 535,000 $ 595,187
6.200% 06/01/2012................ 4,000,000 4,475,000
TUALATIN HILLS PARK & RECREATION
DISTRICT
5.700% 03/01/2009................ 1,340,000 1,462,275
5.750% 03/01/2010................ 730,000 799,350
UMATILLA COUNTY SCHOOL DISTRICT #8R
HERMISTON
6.000% 12/01/2010................ 695,000 773,188
WASHINGTON COUNTY SCHOOL DISTRICT
#88J SHERWOOD
6.100% 06/01/2012................ 815,000 913,240
YAMHILL COUNTY SCHOOL DISTRICT #29J
NEWBERG
5.500% 06/01/2010................ 1,405,000 1,513,888
6.100% 06/01/2011................ 3,355,000 3,736,631
-------------
TOTAL PRE-REFUNDED BONDS
(COST $24,595,113)................ 27,177,828
-------------
OREGON OTHER BONDS (2.9%)
GRANTS PASS URBAN RENEWAL AGENCY
TAX INCREMENT
6.125% 08/01/2012................ 755,000 776,706
HOOD RIVER URBAN RENEWAL AGENCY
6.250% 12/15/2011................ 1,250,000 1,373,437
LANE COUNTY SCHOOL DISTRICT #4J
EUGENE CERTIFICATES
6.900% 10/01/2000................ 500,000 529,375
LEBANON SPECIAL OBLIGATION REVENUE
REFUNDING LEASE WATER
5.400% 10/01/2013................ 755,000 776,706
MEDFORD URBAN RENEWAL AGENCY TAX
REVENUE
5.875% 09/01/2010................ 500,000 532,500
MULTNOMAH COUNTY CERTIFICATE
PARTICIPATION
4.550% 08/01/2010................ 1,725,000 1,733,625
NEWBERG CERTIFICATES PARTICIPATION
6.000% 12/01/1999................ 390,000 397,387
6.100% 12/01/2000................ 410,000 425,887
6.200% 12/01/2001................ 410,000 433,063
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
OREGON OTHER BONDS (CONTINUED)
PORTLAND AIRPORT WAY URBAN RENEWAL
& REDEVELOPMENT TAX INCREMENT
SERIES C
5.900% 06/01/2006................ $ 860,000 $ 922,350
PORTLAND BUILDING REFUNDING SERIES
A
4.750% 04/01/2007................ 2,000,000 2,047,500
PORTLAND URBAN RENEWAL &
REDEVELOPMENT REFUNDING, DOWNTOWN
WATERFRONT SERIES L
6.000% 06/01/2002................ 1,170,000 1,246,050
6.400% 06/01/2008................ 2,085,000 2,238,769
-------------
TOTAL OREGON OTHER BONDS
(COST $12,701,269)................ 13,433,355
-------------
U.S. TERRITORIES BONDS (6.6%)
GUAM GOVERNMENT LIMITED OBLIGATION
INFRASTRUCTURE IMPROVEMENT-SERIES
A
5.000% 11/01/2017................ 3,000,000 3,037,500
PUERTO RICO COMMONWEALTH AQUEDUCT &
SEWER AUTHORITY REVENUE SERIES A
9.000% 07/01/2009................ 6,135,000 7,676,419
PUERTO RICO COMMONWEALTH AQUEDUCT &
SEWER AUTHORITY
5.200% 07/01/2008................ 1,000,000 1,082,500
PUERTO RICO COMMONWEALTH
INFRASTRUCTURE FINANCING AUTHORITY
5.000% 07/01/2013................ 1,750,000 1,795,937
PUERTO RICO COMMONWEALTH PUBLIC
BUILDINGS AUTHORITY REVENUE SERIES
B
5.000% 07/01/2013................ 3,130,000 3,212,163
PUERTO RICO COMMONWEALTH PUBLIC
IMPROVEMENTS
6.250% 07/01/2009................ 3,000,000 3,528,750
6.250% 07/01/2013................ 1,000,000 1,190,000
PUERTO RICO COMMONWEALTH
6.250% 07/01/2008................ 1,000,000 1,165,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- -------------
<S> <C> <C>
PUERTO RICO ELECTRIC POWER
AUTHORITY
5.000% 07/01/2010................ $2,425,000 $ 2,570,500
PUERTO RICO HOUSING BANK & FINANCE
AGENCY SINGLE FAMILY MORTGAGE
REVENUE FHA HOMEOWNERSHIP 5TH
PORTFOLIO
7.500% 12/01/2015................ 610,000 643,550
PUERTO RICO HOUSING FINANCE CORP.
MULTI FAMILY MORTGAGE REVENUE
PORTFOLIO A-1
7.500% 04/01/2022................ 1,425,000 1,481,074
PUERTO RICO HOUSING FINANCE CORP.
SINGLE FAMILY MORTGAGE REVENUE
PORTFOLIO 1 SERIES B
7.500% 10/15/2012................ 1,040,000 1,088,568
PUERTO RICO HOUSING FINANCE CORP.
SINGLE FAMILY MORTGAGE REVENUE
PORTFOLIO 1 SERIES C
6.750% 10/15/2013................ 710,000 750,825
VIRGIN ISLANDS PUBLIC FINANCE
AUTHORITY REVENUE UNREFUNDED
BALANCE SERIES A
7.300% 10/01/2018................ 1,185,000 1,519,762
-------------
TOTAL US TERRITORIES BONDS
(COST $28,921,719)................ 30,742,548
-------------
TOTAL INVESTMENTS, EXCLUDING
TEMPORARY CASH INVESTMENTS
(COST $427,438,373)............... 451,238,057
-------------
TAX-EXEMPT MONEY MARKET INVESTMENT (1.6%)
SEI TAX EXEMPT TRUST (COST
$7,375,062)..................... 7,375,062 7,375,062
-------------
TOTAL INVESTMENTS (99.1%)
(COST $434,813,435)................... 458,613,119
RECEIVABLES LESS LIABILITIES (0.9%).... 4,195,604
-------------
TOTAL NET ASSETS (100.0%).............. $ 462,808,723
-------------
-------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
See Notes to Financial Statements.
58
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<TABLE>
<CAPTION>
PRINCIPAL
DECEMBER 31, 1998 AMOUNT VALUE(1)
----------- ------------
<S> <C> <C>
CORPORATE BONDS (89.6%)
INDUSTRIAL (75.0%)
BASIC INDUSTRY & MANUFACTURING (11.0%)
MANUFACTURING (9.6%)
AVIATION SALES CO.
SENIOR SUBORDINATED NOTES
8.125% 02/15/2008.............. $1,000,000 $ 990,000
BALL CORP. (144A)
SENIOR NOTES
7.750% 08/01/2006.............. 1,000,000 1,050,000
SILGAN HOLDINGS, INC.
SENIOR SUBORDINATED DEBENTURES
9.000% 06/01/2009.............. 500,000 506,250
TITAN WHEEL INTERNATIONAL, INC.
SENIOR SUBORDINATED NOTES
8.750% 04/01/2007.............. 1,000,000 950,000
UNISYS CORP.
SENIOR NOTES
11.750% 10/15/2004............. 900,000 1,044,000
WYMAN-GORDON CO.
SENIOR NOTES
8.000% 12/15/2007.............. 990,000 985,050
------------
5,525,300
------------
METALS/MINING (1.4%)
RYERSON TULL, INC.
NOTES
8.500% 07/15/2001.............. 750,000 777,180
------------
TOTAL BASIC INDUSTRY &
MANUFACTURING..................... 6,302,480
------------
BUSINESS & CONSUMER SERVICES (32.4%)
SERVICES & PUBLISHING (10.0%)
ALLIED WASTE NORTH AMERICA, INC.
(144A)
SENIOR NOTES
7.625% 01/01/2006.............. 1,000,000 1,010,000
IRON MOUNTAIN, INC.
SENIOR SUBORDINATED NOTES
10.125% 10/01/2006............. 750,000 813,750
PROTECTION ONE ALARM MONITORING,
INC. (144A)
SENIOR NOTES
7.375% 08/15/2005.............. 1,000,000 1,005,860
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- ------------
<S> <C> <C>
RENTAL SERVICE CORP.
SENIOR SUBORDINATED NOTES
9.000% 05/15/2008.............. $1,250,000 $ 1,218,750
UNITED STATIONERS SUPPLY CO.
SENIOR SUBORDINATED NOTES
8.375% 04/15/2008.............. 735,000 733,163
WORLD COLOR PRESS, INC. (144A)
SENIOR SUBORDINATED NOTES
8.375% 11/15/2008.............. 1,000,000 1,000,000
------------
5,781,523
------------
ENTERTAINMENT & MEDIA (22.4%)
ADELPHIA COMMUNICATIONS CORP.
SENIOR NOTES, SERIES B
10.500% 07/15/2004............. 1,000,000 1,095,000
CINEMARK USA, INC.
SENIOR SUBORDINATED NOTES,
SERIES B
9.625% 08/01/2008.............. 1,000,000 1,047,500
COMCAST CORP.
SENIOR SUBORDINATED DEBENTURES
9.500% 01/15/2008.............. 1,000,000 1,046,180
HERITAGE MEDIA CORP.
SENIOR SUBORDINATED NOTES
8.750% 02/15/2006.............. 750,000 787,500
HOLLINGER INTERNATIONAL
PUBLISHING, INC.
SENIOR NOTES
8.625% 03/15/2005.............. 1,000,000 1,055,000
JACOR COMMUNICATIONS CO.
SENIOR SUBORDINATED NOTES,
SERIES B
8.750% 06/15/2007.............. 1,000,000 1,085,000
JONES INTERCABLE, INC.
SENIOR NOTES
8.875% 04/01/2007.............. 700,000 745,500
7.625% 04/15/2008.............. 300,000 306,000
LAMAR ADVERTISING CO.
SENIOR SUBORDINATED NOTES
9.625% 12/01/2006.............. 1,250,000 1,350,000
LENFEST COMMUNICATIONS, INC.
SENIOR NOTES
8.375% 11/01/2005.............. 450,000 486,000
OUTDOOR SYSTEMS, INC.
SENIOR SUBORDINATED NOTES
9.375% 10/15/2006.............. 685,000 739,800
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- ------------
<S> <C> <C>
SFX BROADCASTING, INC.
SENIOR SUBORDINATED NOTES,
SERIES B
10.750% 05/15/2006............. $ 531,000 $ 589,410
SINCLAIR BROADCAST GROUP, INC.
SENIOR SUBORDINATED NOTES
8.750% 12/15/2007.............. 750,000 757,500
USA NETWORKS, INC. (144A)
SENIOR NOTES
6.750% 11/15/2005.............. 1,000,000 996,140
YOUNG BROADCASTING, INC.
SENIOR SUBORDINATED NOTES,
SERIES B
10.125% 02/15/2005............. 750,000 785,625
------------
12,872,155
------------
TOTAL BUSINESS & CONSUMER
SERVICES.......................... 18,653,678
------------
CONSUMER CYCLICAL (13.0%)
AUTO & AUTO PARTS (3.6%)
FEDERAL MOGUL CORP.
NOTES
7.750% 07/01/2006.............. 1,000,000 1,015,440
HAYES WHEELS INTERNATIONAL, INC.
SENIOR SUBORDINATED NOTES,
SERIES B
9.125% 07/15/2007.............. 1,000,000 1,042,500
------------
2,057,940
------------
HOTELS & GAMING (2.2%)
RIO HOTEL & CASINO, INC.
SENIOR SUBORDINATED NOTES
9.500% 04/15/2007.............. 450,000 501,750
STATION CASINOS, INC.
SENIOR SUBORDINATED NOTES
9.625% 06/01/2003.............. 740,000 766,788
------------
1,268,538
------------
HOUSING RELATED (3.5%)
NORTEK, INC. (144A)
SENIOR NOTES
8.875% 08/01/2008.............. 1,000,000 1,015,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- ------------
<S> <C> <C>
WEBB (DEL) CORP.
SENIOR SUBORDINATED DEBENTURES
9.375% 05/01/2009.............. $1,000,000 $ 981,250
------------
1,996,250
------------
RETAIL (3.7%)
MAXIM GROUP, INC.
SENIOR SUBORDINATED NOTES,
SERIES B
9.250% 10/15/2007.............. 1,000,000 980,000
SPECIALTY RETAILERS, INC.
SENIOR NOTES, SERIES B
8.500% 07/15/2005.............. 500,000 435,000
ZALE CORP.
SENIOR NOTES, SERIES B
8.500% 10/01/2007.............. 750,000 727,500
------------
2,142,500
------------
TOTAL CONSUMER CYCLICAL............ 7,465,228
------------
CONSUMER STAPLES (10.0%)
FOOD/BEVERAGE/TOBACCO (0.8%)
PURINA MILLS, INC.
SENIOR SUBORDINATED NOTES
9.000% 03/15/2010.............. 450,000 443,250
------------
HEALTH CARE (7.4%)
CONMED CORP.
SENIOR SUBORDINATED NOTES
9.000% 03/15/2008.............. 1,000,000 1,010,000
HEALTHSOUTH CORP.
SENIOR SUBORDINATED NOTES
9.500% 04/01/2001.............. 1,000,000 1,031,850
QUORUM HEALTH GROUP, INC.
SENIOR SUBORDINATED NOTES
8.750% 11/01/2005.............. 1,000,000 955,000
TENET HEALTHCARE CORP. (144A)
SENIOR SUBORDINATED NOTES
8.125% 12/01/2008.............. 1,250,000 1,281,250
------------
4,278,100
------------
OTHER (1.8%)
WESTPOINT STEVENS, INC.
SENIOR NOTES
7.875% 06/15/2005.............. 1,000,000 1,015,000
------------
TOTAL CONSUMER STAPLES............. 5,736,350
------------
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- ------------
<S> <C> <C>
ENERGY (6.3%)
GULF CANADA RESOURCES LTD.
SENIOR SUBORDINATED DEBENTURES
9.625% 07/01/2005................ $ 750,000 $ 742,500
NEWPARK RESOURCES, INC.
SENIOR SUBORDINATED NOTES, SERIES
B
8.625% 12/15/2007................ 1,000,000 950,000
NUEVO ENERGY CO.
SENIOR SUBORDINATED NOTES
9.500% 04/15/2006............... 900,000 877,500
SANTA FE ENERGY RESOURCE, INC.
SENIOR SUBORDINATED DEBENTURES
11.000% 05/15/2004............... 1,000,000 1,050,000
------------
TOTAL ENERGY....................... 3,620,000
------------
TRANSPORTATION (2.3%)
ALLIED HOLDING, INC.
SENIOR NOTES, SERIES B
8.625% 10/01/2007................ 500,000 507,500
TEEKAY SHIPPING CORP.
GTD. 1ST PFD. SHIP. MTG. NOTES
8.320% 02/01/2008................ 850,000 841,500
------------
TOTAL TRANSPORTATION............... 1,349,000
------------
TOTAL INDUSTRIAL................... 43,126,736
------------
UTILITIES (14.6%)
ELECTRIC (5.8%)
AES CORP.
SENIOR SUBORDINATED NOTES
10.250% 07/15/2006............... 800,000 864,000
AES CORP.
SENIOR SUBORDINATED EXCHANGE NOTES
8.375% 08/15/2007............... 500,000 503,750
CMS ENERGY X-TRAS (144A)
PASS THRU TRUST I
SENIOR UNSECURED NOTES
7.000% 01/15/2005............... 1,000,000 991,450
CALENERGY, INC.
SENIOR SECURED NOTES
9.875% 06/30/2003................ 850,000 951,864
------------
3,311,064
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- ------------
<S> <C> <C>
TELECOMMUNICATIONS (8.8%)
FLAG LTD.
SENIOR NOTES
8.250% 01/30/2008................ $1,000,000 $ 980,000
LEVEL 3 COMMUNICATIONS, INC. (144A)
SENIOR DISCOUNT NOTES
STEP-UP COUPON
0.000% TO 12/01/2003, THEN
10.500% TO 12/01/2008........... 2,050,000 1,178,750
METROMEDIA FIBER NETWORK, INC.
(144A)
SENIOR NOTES
10.000% 11/15/2008............... 1,000,000 1,025,000
NEXTLINK COMMUNICATIONS, INC.
SENIOR DISCOUNT NOTES
STEP-UP COUPON
0.000% TO 04/15/2003, THEN 9.450%
TO 04/15/2008................... 1,000,000 575,000
NEXTLINK COMMUNICATIONS, INC.
(144A)
SENIOR NOTES
10.750% 11/15/2008............... 500,000 511,250
PAGING NETWORK, INC.
SENIOR SUBORDINATED NOTES
10.000% 10/15/2008............... 850,000 813,875
------------
5,083,875
------------
TOTAL UTILITIES.................... 8,394,939
------------
TOTAL CORPORATE BONDS
(COST $51,359,035)................ 51,521,675
------------
REPURCHASE AGREEMENTS (7.2%)
J.P. MORGAN SECURITIES, INC.
4.970% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $1,965,773.
COLLATERALIZED BY
U.S TREASURY BILLS
DUE 06/24/1999,
U.S TREASURY BONDS
6.500% DUE 11/15/2026,
U.S. TREASURY NOTES
5.375% DUE 06/30/2000 TO
07/31/2000.......................... 1,965,505 1,965,505
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
----------- ------------
<S> <C> <C>
MERRILL LYNCH
4.917% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $2,200,296.
COLLATERALIZED BY
U.S. TREASURY STRIPS
DUE 11/15/2014 TO 11/15/2024........ $2,200,000 $ 2,200,000
------------
TOTAL REPURCHASE AGREEMENTS
(COST $4,165,505)................. 4,165,505
------------
TOTAL INVESTMENTS (96.8%)
(COST $55,524,540).................... 55,687,180
RECEIVABLES LESS LIABILITIES (3.2%).... 1,836,653
------------
NET ASSETS (100.0%).................... $ 57,523,833
------------
------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
See Notes to Financial Statements.
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<TABLE>
<CAPTION>
PRINCIPAL
DECEMBER 31, 1998 AMOUNT VALUE(1)
------------ ---------------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES (2.7%)
FEDERAL HOME LOAN BANK
4.800% 10/13/1999................ $10,000,000 $ 10,000,760
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
4.800% 04/02/1999................ 20,000,000 19,754,666
---------------
TOTAL U.S. GOVERNMENT SECURITIES
(COST $29,755,426)................ 29,755,426
---------------
COMMERCIAL PAPER (95.1%)
AIR PRODUCTS & CHEMICALS, INC.
5.220% 01/29/1999................ 13,000,000 12,945,335
5.070% 02/05/1999................ 5,000,000 4,974,650
ALUMINUM CO. OF AMERICA
5.150% 02/24/1999................ 17,000,000 16,866,243
AMERICAN EXPRESS CREDIT CORP.
5.250% 01/06/1999................ 10,000,000 9,991,250
6.000% 01/07/1999................ 13,300,000 13,284,483
AMERICAN GENERAL FINANCE CORP.
5.790% 01/07/1999................ 7,000,000 6,992,119
5.230% 02/16/1999................ 12,000,000 11,918,063
5.200% 03/05/1999................ 7,000,000 6,935,289
5.110% 03/09/1999................ 6,000,000 5,942,087
5.060% 04/23/1999................ 8,000,000 7,872,938
ARCHER DANIELS MIDLAND CO.
5.350% 01/14/1999................ 15,000,000 14,968,792
5.130% 02/23/1999................ 4,500,000 4,465,372
5.000% 04/06/1999................ 8,000,000 7,893,333
5.000% 04/09/1999................ 8,000,000 7,890,000
AVCO FINANCIAL SERVICES, INC.
5.080% 03/12/1999................ 10,900,000 10,790,794
BANK OF AMERICA, FSB
5.040% 01/25/1999................ 6,000,000 5,979,000
5.050% 02/04/1999................ 12,000,000 11,941,083
BANKAMERICA CORP.
5.200% 01/08/1999................ 10,000,000 9,988,445
5.120% 01/12/1999................ 10,000,000 9,982,933
5.060% 01/21/1999................ 10,000,000 9,970,483
5.080% 02/03/1999................ 10,000,000 9,952,022
BARCLAYS U.S. FUNDING CORP.
7.500% 01/04/1999................ 10,000,000 9,991,667
5.040% 02/18/1999................ 12,000,000 11,917,680
CIT GROUP HOLDINGS, INC.
5.330% 01/28/1999................ 10,000,000 9,958,544
5.280% 01/29/1999................ 12,000,000 11,948,960
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
------------ ---------------
<S> <C> <C>
5.280% 02/12/1999................ $ 9,000,000 $ 8,943,240
5.020% 04/06/1999................ 9,000,000 8,879,520
CATERPILLAR FINANCIAL SERVICES
CORP.
5.350% 01/04/1999................ 11,200,000 11,193,342
5.150% 02/26/1999................ 12,250,000 12,150,112
5.200% 03/10/1999................ 12,000,000 11,880,400
CHEVRON TRANSPORT CORP.
5.060% 02/05/1999................ 13,000,000 12,934,220
5.240% 02/17/1999................ 10,000,000 9,930,133
5.130% 03/11/1999................ 15,000,000 14,850,375
CLOROX CO.
5.100% 02/16/1999................ 10,000,000 9,933,417
5.200% 02/25/1999................ 10,000,000 9,919,111
COMMERCIAL CREDIT CO.
5.090% 01/25/1999................ 9,000,000 8,968,188
5.150% 02/01/1999................ 8,300,000 8,262,004
5.160% 02/11/1999................ 11,000,000 10,933,780
5.150% 02/23/1999................ 8,000,000 7,938,200
DEERE, JOHN & CO.
5.260% 01/05/1999................ 12,000,000 11,991,233
5.200% 01/19/1999................ 15,000,000 14,958,833
5.280% 01/22/1999................ 9,500,000 9,469,347
DONNELLEY (R.R.) & SONS
5.250% 01/04/1999................ 7,500,000 7,495,625
DUPONT (E.I.) DE NEMOURS & CO.
5.030% 02/12/1999................ 10,000,000 9,939,919
EASTMAN KODAK CO.
5.500% 01/14/1999................ 5,200,000 5,188,878
5.100% 02/17/1999................ 10,000,000 9,932,000
EXXON ASSET MANAGEMENT
5.430% 01/08/1999................ 9,000,000 8,989,140
6.000% 01/08/1999................ 9,000,000 8,988,000
FORD MOTOR CREDIT CO.
5.480% 01/06/1999................ 8,000,000 7,992,693
5.010% 01/27/1999................ 8,500,000 8,468,061
5.030% 01/28/1999................ 5,000,000 4,980,439
5.180% 02/18/1999................ 10,000,000 9,929,495
GTE FUNDING, INC.
5.170% 02/01/1999................ 12,000,000 11,944,747
5.160% 02/08/1999................ 15,000,000 14,916,150
5.180% 02/18/1999................ 6,600,000 6,553,466
5.150% 02/22/1999................ 7,000,000 6,946,926
GENERAL ELECTRIC CAPITAL CORP.
5.230% 02/05/1999................ 5,700,000 5,670,189
5.170% 02/08/1999................ 8,000,000 7,955,193
5.000% 04/26/1999................ 6,000,000 5,903,333
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
------------ ---------------
<S> <C> <C>
COMMERCIAL PAPER (CONTINUED)
GENERAL ELECTRIC CAPITAL SERVICES
5.500% 02/04/1999................ $10,500,000 $ 10,443,854
GENERAL MOTORS ACCEPTANCE CORP.
5.110% 01/15/1999................ 8,000,000 7,982,967
5.330% 01/22/1999................ 5,000,000 4,983,714
5.060% 02/25/1999................ 8,000,000 7,937,031
HOUSEHOLD FINANCE CORP.
5.390% 01/07/1999................ 10,000,000 9,989,520
5.170% 01/11/1999................ 11,000,000 10,982,623
5.150% 01/29/1999................ 10,000,000 9,958,514
5.200% 02/11/1999................ 10,000,000 9,939,333
IDAHO POWER CO.
5.700% 01/07/1999................ 4,000,000 3,995,567
ILLINOIS TOOL WORKS, INC.
5.070% 01/19/1999................ 6,500,000 6,482,607
MERRILL LYNCH & CO., INC.
5.420% 01/13/1999................ 10,000,000 9,980,428
5.370% 01/15/1999................ 10,000,000 9,977,625
5.500% 01/25/1999................ 10,000,000 9,961,806
5.190% 01/26/1999................ 10,000,000 9,962,517
METLIFE FUNDING, INC.
5.400% 01/14/1999................ 7,000,000 6,985,300
5.250% 01/22/1999................ 12,800,000 12,758,933
5.250% 02/10/1999................ 10,000,000 9,940,208
MORGAN STANLEY GROUP, INC.
5.390% 01/06/1999................ 9,000,000 8,991,915
5.380% 01/11/1999................ 14,700,000 14,675,835
NALCO CHEMICAL CO.
5.060% 03/22/1999................ 5,000,000 4,943,075
5.030% 05/17/1999................ 14,000,000 13,732,013
4.900% 05/21/1999................ 12,000,000 11,769,700
4.850% 06/18/1999................ 10,000,000 9,772,319
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORP.
5.330% 01/15/1999................ 5,000,000 4,988,896
5.230% 01/22/1999................ 5,000,000 4,984,020
5.330% 01/28/1999................ 7,000,000 6,970,981
5.050% 02/04/1999................ 5,000,000 4,975,451
5.040% 03/19/1999................ 8,000,000 7,912,640
NORWEST FINANCIAL, INC.
5.030% 02/01/1999................ 8,000,000 7,964,231
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
------------ ---------------
<S> <C> <C>
5.030% 02/02/1999................ $13,000,000 $ 12,940,059
5.170% 02/19/1999................ 10,000,000 9,928,195
5.180% 02/22/1999................ 9,000,000 8,931,365
PACIFICORP
5.070% 01/20/1999................ 15,000,000 14,957,750
5.050% 01/26/1999................ 9,000,000 8,967,175
5.100% 01/27/1999................ 10,000,000 9,961,750
5.120% 02/09/1999................ 7,000,000 6,960,178
PEPSICO, INC.
5.300% 02/02/1999................ 10,500,000 10,448,988
PRIVATE EXPORT FUNDING CORP.
5.110% 01/29/1999................ 2,000,000 1,991,767
5.200% 02/12/1999................ 5,000,000 4,968,945
PRUDENTIAL FUNDING CORP.
5.280% 01/12/1999................ 10,300,000 10,281,872
5.310% 01/21/1999................ 10,000,000 9,969,025
5.230% 02/10/1999................ 13,600,000 13,518,993
ROCKWELL INTERNATIONAL
5.170% 02/09/1999................ 7,700,000 7,655,768
5.220% 02/23/1999................ 13,000,000 12,898,210
TEXACO, INC.
5.200% 01/20/1999................ 10,000,000 9,971,111
USAA CAPITAL CORP.
5.160% 02/03/1999................ 9,925,000 9,876,632
5.150% 02/17/1999................ 5,900,000 5,859,487
U.S. BANCORP
5.200% 01/04/1999................ 9,700,000 9,694,396
WASHINGTON GAS LIGHT CO.
5.350% 01/13/1999................ 5,000,000 4,990,340
WASHINGTON POST CO.
5.250% 02/19/1999................ 14,000,000 13,897,917
WEYERHAUSER REAL ESTATE
5.200% 01/19/1999................ 8,200,000 8,177,928
5.200% 01/27/1999................ 11,700,000 11,654,370
5.200% 01/28/1999................ 12,400,000 12,349,849
---------------
TOTAL COMMERCIAL PAPER
(COST $1,055,086,967)............. 1,055,086,967
---------------
TOTAL INVESTMENTS, EXCLUDING TEMPORARY
CASH INVESTMENT
(COST $1,084,842,393)................. 1,084,842,393
</TABLE>
64
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE(1)
------------ ---------------
<S> <C> <C>
REPURCHASE AGREEMENT (1.4%)
J.P. MORGAN SECURITIES, INC.
4.970% DATED 12/31/1998,
DUE 01/04/1999 IN THE
AMOUNT OF $15,765,768.
COLLATERALIZED BY U.S. TREASURY
BILLS
DUE 06/24/1999,
U.S. TREASURY BONDS
6.500% DUE 11/15/2026,
U.S. TREASURY NOTES
5.375% DUE 06/30/2000 TO
07/31/2000.
(COST $15,763,621)................ $15,763,621 $ 15,763,621
---------------
TOTAL INVESTMENTS (99.2%)
(COST $1,100,606,014, INCLUDING
$6,709,072 ACCRUED INTEREST
RECEIVABLE)........................... 1,100,606,014
CASH AND RECEIVABLES LESS LIABILITIES
(0.8%)................................ 8,535,197
---------------
NET ASSETS (100.0%).................... $ 1,109,141,211
---------------
---------------
</TABLE>
(1) See Note 1 of Notes to Financial Statements.
See Notes to Financial Statements.
65
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
-----------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA COLUMBIA COLUMBIA
COMMON STOCK GROWTH INTERNATIONAL STOCK SPECIAL
December 31, 1998 FUND, INC. FUND, INC. FUND, INC. FUND, INC.
------------- --------------- ------------------- ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at identified cost............. $558,815,836 $ 1,103,730,738 $ 93,361,366 $ 658,935,821
- --------------------------------------------- ------------- --------------- ------------------- ---------------
Investments at value....................... $786,649,402 $ 1,729,620,899 $127,875,292 $ 947,528,380
Temporary cash investments, at cost........ 2,188,750 26,909,575 5,240,270 23,237,199
Cash....................................... -- -- 59,091 --
Cash denominated in foreign currencies
(cost $1,219,595)......................... -- -- 1,210,187 --
Receivable for:
Interest................................. 70,672 121,175 31,070 107,147
Dividends................................ 417,237 656,083 177,132 232,828
Investments sold......................... 20,686,208 5,705,743 1,783,145 10,267,969
Capital stock sold....................... 784,832 3,786,805 103,233 1,403,698
------------- --------------- ------------------- ---------------
Total assets............................... 810,797,101 1,766,800,280 136,479,420 982,777,221
------------- --------------- ------------------- ---------------
LIABILITIES:
Payable for:
Capital stock redeemed................... 3,343,973 7,342,603 375,628 3,875,620
Dividends and distributions.............. 7,931,549 5,251,720 2,248 19,709
Investments purchased.................... 1,656,505 -- 1,688,499 8,598,500
Investment management fee................ 397,363 780,487 111,196 681,750
Accrued expenses......................... 321,146 401,929 108,849 242,751
------------- --------------- ------------------- ---------------
Total liabilities.......................... 13,650,536 13,776,739 2,286,420 13,418,330
------------- --------------- ------------------- ---------------
NET ASSETS................................... $797,146,565 $ 1,753,023,541 $134,193,000 $ 969,358,891
------------- --------------- ------------------- ---------------
------------- --------------- ------------------- ---------------
NET ASSETS consist of:
Undistributed net investment income........ $ 155,405 $ 31,399 $ -- $ --
Unrealized appreciation on:
Investments.............................. 227,833,566 625,890,161 34,513,926 288,592,559
Translation of assets and liabilities in
foreign currencies...................... -- -- 4,246 --
Undistributed net realized loss from:
Investments.............................. (2,889,085) (4,438,960) (1,595,627) (1,328,411)
Capital shares............................. -- 412,388 -- 410,385
Capital paid in............................ 572,046,679 1,131,128,553 101,270,455 681,684,358
------------- --------------- ------------------- ---------------
$797,146,565 $ 1,753,023,541 $134,193,000 $ 969,358,891
------------- --------------- ------------------- ---------------
------------- --------------- ------------------- ---------------
SHARES OF CAPITAL STOCK OUTSTANDING.......... 32,670,725 41,238,820 8,683,069 41,038,458
------------- --------------- ------------------- ---------------
------------- --------------- ------------------- ---------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE *........................... $ 24.40 $ 42.51 $ 15.45 $ 23.62
------------- --------------- ------------------- ---------------
------------- --------------- ------------------- ---------------
</TABLE>
* The net asset value per share is computed by dividing net assets applicable
to outstanding shares by shares of capital stock outstanding.
See Notes to Financial Statements.
66
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
-----------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMBIA U.S.
COLUMBIA COLUMBIA REAL COLUMBIA GOVERNMENT
SMALL CAP ESTATE EQUITY BALANCED SECURITIES
December 31, 1998 FUND, INC. FUND, INC. FUND, INC. FUND, INC.
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at identified cost............. $126,624,815 $157,255,085 $ 797,729,841 $ 39,239,616
- --------------------------------------------- ------------ ------------- ------------- -------------
Investments at value....................... $152,373,425 $154,935,923 $ 960,497,499 $ 39,512,361
Temporary cash investments, at cost........ 13,238,468 7,185,194 2,336,196 674,576
Receivable for:
Interest................................. 53,500 31,389 5,259,776 627,696
Dividends................................ 101,037 1,094,520 319,837 --
Investments sold......................... 2,481,239 -- 13,521,228 --
Capital stock sold....................... 641,462 2,551,001 2,314,591 162,414
------------ ------------- ------------- -------------
Total assets............................... 168,889,131 165,798,027 984,249,127 40,977,047
------------ ------------- ------------- -------------
LIABILITIES:
Payable for:
Capital stock redeemed................... 633,373 1,339,660 2,126,760 341,559
Dividends and distributions.............. 952 113,075 406,671 12,961
Investments purchased.................... 7,590,370 -- 5,618,847 --
Investment management fee................ 120,435 103,642 402,870 17,161
Accrued expenses......................... 71,794 69,296 313,221 27,500
------------ ------------- ------------- -------------
Total liabilities.......................... 8,416,924 1,625,673 8,868,369 399,181
------------ ------------- ------------- -------------
NET ASSETS................................... $160,472,207 $164,172,354 $ 975,380,758 $ 40,577,866
------------ ------------- ------------- -------------
------------ ------------- ------------- -------------
NET ASSETS consist of:
Undistributed net investment income........ $ -- $ -- $ 205,849 $ --
Unrealized appreciation (depreciation) on
investments............................... 25,748,610 (2,319,162) 162,767,658 272,745
Undistributed net realized gain (loss) from
investments............................... (10,245,034) (699) (871,081) 21,399
Capital shares............................. -- -- -- 48,364
Capital paid in............................ 144,968,631 166,492,215 813,278,332 40,235,358
------------ ------------- ------------- -------------
$160,472,207 $164,172,354 $ 975,380,758 $ 40,577,866
------------ ------------- ------------- -------------
------------ ------------- ------------- -------------
SHARES OF CAPITAL STOCK OUTSTANDING.......... 9,206,099 10,419,194 42,094,927 4,836,447
------------ ------------- ------------- -------------
------------ ------------- ------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE *........................... $ 17.43 $ 15.76 $ 23.17 $ 8.39
------------ ------------- ------------- -------------
------------ ------------- ------------- -------------
</TABLE>
* The net asset value per share is computed by dividing net assets applicable
to outstanding shares by shares of capital stock outstanding.
See Notes to Financial Statements.
67
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
-----------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMBIA FIXED
INCOME COLUMBIA COLUMBIA COLUMBIA
SECURITIES MUNICIPAL BOND HIGH YIELD DAILY INCOME
December 31, 1998 FUND, INC. FUND, INC. FUND, INC. COMPANY
--------------- ------------------- --------------- ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at identified cost............. $ 405,960,645 $427,438,373 $ 51,359,035 $ 1,100,606,014
- --------------------------------------------- --------------- ------------------- --------------- ---------------
Investments at value....................... $ 415,277,505 $451,238,057 $ 51,521,675 $ 1,100,606,014
Temporary cash investments, at cost........ 12,152,844 7,375,062 4,165,505 --
Cash....................................... -- -- -- 300,000
Receivable for:
Interest................................. 4,831,384 5,443,170 1,134,089 117,405
Investments sold......................... 123,262 -- 1,044,000 --
Capital stock sold....................... 867,944 310,638 294,713 19,397,344
--------------- ------------------- --------------- ---------------
Total assets............................... 433,252,939 464,366,927 58,159,982 1,120,420,763
--------------- ------------------- --------------- ---------------
LIABILITIES:
Payable for:
Capital stock redeemed................... 3,542,802 200,614 430,215 10,557,337
Dividends and distributions.............. 1,060,315 1,082,832 136,445 --
Investments purchased.................... 5,946,834 -- -- --
Investment management fee................ 181,390 197,456 29,141 431,785
Accrued expenses......................... 191,467 77,302 40,348 290,430
--------------- ------------------- --------------- ---------------
Total liabilities.......................... 10,922,808 1,558,204 636,149 11,279,552
--------------- ------------------- --------------- ---------------
NET ASSETS................................... $ 422,330,131 $462,808,723 $ 57,523,833 $$1,109,141,211
--------------- ------------------- --------------- ---------------
--------------- ------------------- --------------- ---------------
NET ASSETS consist of:
Unrealized appreciation on investments..... $ 9,316,860 $ 23,799,684 $ 162,640 $ --
Undistributed net realized gain from
investments............................... 123,381 8,029 18,462 --
Capital shares............................. 314,783 371,528 -- 1,109,141
Capital paid in............................ 412,575,107 438,629,482 57,342,731 1,108,032,070
--------------- ------------------- --------------- ---------------
$ 422,330,131 $462,808,723 $ 57,523,833 $ 1,109,141,211
--------------- ------------------- --------------- ---------------
--------------- ------------------- --------------- ---------------
SHARES OF CAPITAL STOCK OUTSTANDING.......... 31,478,253 37,152,839 5,844,221 1,109,141,211
--------------- ------------------- --------------- ---------------
--------------- ------------------- --------------- ---------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE *........................... $ 13.42 $ 12.46 $ 9.84 $ 1.00
--------------- ------------------- --------------- ---------------
--------------- ------------------- --------------- ---------------
</TABLE>
* The net asset value per share is computed by dividing net assets applicable
to outstanding shares by shares of capital stock outstanding.
See Notes to Financial Statements.
68
<PAGE>
STATEMENTS OF OPERATIONS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA COLUMBIA COLUMBIA
COMMON STOCK GROWTH INTERNATIONAL STOCK SPECIAL
Year Ended December 31, 1998 FUND, INC. FUND, INC. FUND, INC. FUND, INC.
------------- ------------- ------------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Interest................................. $ 1,879,282 $ 1,555,149 $ 453,922 $ 5,591,237
Dividends................................ 9,496,591 12,068,714 1,958,431 4,205,461
Foreign taxes withheld (net of
reclaims)............................... -- -- (235,625) --
------------- ------------- ------------------- -------------
Total income........................... 11,375,873 13,623,863 2,176,728 9,796,698
------------- ------------- ------------------- -------------
Expenses:
Investment management fees............... 5,136,336 8,591,359 1,414,138 9,054,501
Shareholder servicing costs.............. 1,221,712 1,269,928 419,311 1,199,754
Reports to shareholders.................. 137,567 296,169 93,468 243,128
Financial information and accounting..... 56,436 65,078 86,043 70,649
Custodian fees........................... 34,144 57,375 82,479 40,932
Bank transaction and checking fees....... 25,658 37,637 29,352 21,344
Registration fees........................ 40,754 76,644 24,972 29,449
Legal, insurance and auditing fees....... 40,411 53,488 37,833 50,818
Other.................................... 10,119 20,121 11,244 13,387
------------- ------------- ------------------- -------------
Total expenses......................... 6,703,137 10,467,799 2,198,840 10,723,962
------------- ------------- ------------------- -------------
Net investment income (loss)............... 4,672,736 3,156,064 (22,112) (927,264)
------------- ------------- ------------------- -------------
REALIZED GAIN (LOSS) AND UNREALIZED
APPRECIATION (DEPRECIATION) FROM INVESTMENT
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments.............................. 89,973,443 77,263,496 (1,586,408) (544,655)*
Foreign currency transactions............ -- -- (1,099,734) --
------------- ------------- ------------------- -------------
Net realized gain (loss)............... 89,973,443 77,263,496 (2,686,142) (544,655)
------------- ------------- ------------------- -------------
Net unrealized appreciation (depreciation)
on:
Investments.............................. 89,964,455 322,622,139 19,606,801 150,392,854
Translation of assets and liabilities in
foreign currencies...................... -- -- (120,200) --
------------- ------------- ------------------- -------------
Net unrealized appreciation during the
year.................................. 89,964,455 322,622,139 19,486,601 150,392,854
------------- ------------- ------------------- -------------
Net gain on investment and foreign
currency transactions................... 179,937,898 399,885,635 16,800,459 149,848,199
------------- ------------- ------------------- -------------
Net increase in net assets resulting from
operations.............................. $184,610,634 $ 403,041,699 $16,778,347 $ 148,920,935
------------- ------------- ------------------- -------------
------------- ------------- ------------------- -------------
</TABLE>
* Includes $1,927,092 gain from affiliated issuers.
See Notes to Financial Statements.
69
<PAGE>
STATEMENTS OF OPERATIONS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA REAL COLUMBIA COLUMBIA U.S.
SMALL CAP ESTATE EQUITY FUND, BALANCED GOVERNMENT SECURITIES
Year Ended December 31, 1998 FUND, INC. INC. FUND, INC. FUND, INC.
-------------- ------------------- ------------- ---------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Interest................................. $ 547,539 $ 554,969 $ 29,438,800 $2,119,617
Dividends................................ 270,613 8,613,123 5,498,785 --
-------------- ------------------- ------------- -----------
Total income........................... 818,152 9,168,092 34,937,585 2,119,617
-------------- ------------------- ------------- -----------
Expenses:
Investment management fees............... 1,246,153 1,221,370 4,512,177 194,507
Shareholder servicing costs.............. 233,858 228,699 1,098,799 62,014
Reports to shareholders.................. 49,508 50,328 153,377 13,383
Financial information and accounting..... 42,959 44,854 68,432 38,919
Custodian fees........................... 4,987 6,555 35,784 1,551
Bank transaction and checking fees....... 25,574 11,816 33,805 1,748
Registration fees........................ 45,129 66,511 74,704 11,685
Legal, insurance and auditing fees....... 8,953 24,272 45,436 21,289
Other.................................... 1,918 2,252 11,189 562
-------------- ------------------- ------------- -----------
Total expenses......................... 1,659,039 1,656,657 6,033,703 345,658
-------------- ------------------- ------------- -----------
Net investment income (loss)............... (840,887) 7,511,435 28,903,882 1,773,959
-------------- ------------------- ------------- -----------
REALIZED GAIN (LOSS) AND UNREALIZED
APPRECIATION (DEPRECIATION) FROM INVESTMENT
TRANSACTIONS:
Net realized gain (loss) from
investments............................... (10,185,536) (225,330) 65,831,341 463,379
Net unrealized appreciation (depreciation)
on investments during the year............ 16,364,251 (29,435,976) 68,447,300 181,795
-------------- ------------------- ------------- -----------
Net gain (loss) on investments............. 6,178,715 (29,661,306) 134,278,641 645,174
-------------- ------------------- ------------- -----------
Net increase (decrease) in net assets
resulting from operations................. $ 5,337,828 $(22,149,871) $ 163,182,523 $2,419,133
-------------- ------------------- ------------- -----------
-------------- ------------------- ------------- -----------
</TABLE>
See Notes to Financial Statements.
70
<PAGE>
STATEMENTS OF OPERATIONS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMBIA FIXED COLUMBIA COLUMBIA COLUMBIA
INCOME SECURITIES MUNICIPAL BOND HIGH YIELD DAILY INCOME
Year Ended December 31, 1998 FUND, INC. FUND, INC. FUND, INC. COMPANY
----------------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Interest................................. $27,879,133 $22,316,793 $4,165,777 $59,398,908
----------------- -------------- ----------- ------------
Total income........................... 27,879,133 22,316,793 4,165,777 59,398,908
----------------- -------------- ----------- ------------
Expenses:
Investment management fees............... 2,050,200 2,149,321 292,249 5,005,974
Shareholder servicing costs.............. 336,622 128,224 61,207 940,235
Reports to shareholders.................. 78,431 25,628 16,578 195,509
Financial information and accounting..... 56,632 84,201 42,751 60,219
Custodian fees........................... 16,274 17,029 1,946 42,323
Bank transaction and checking fees....... 21,072 6,758 3,700 197,378
Registration fees........................ 41,425 24,346 26,741 53,181
Legal, insurance and auditing fees....... 41,364 35,703 22,118 46,866
Other.................................... 5,360 15,433 1,458 15,007
----------------- -------------- ----------- ------------
Total expenses......................... 2,647,380 2,486,643 468,748 6,556,692
----------------- -------------- ----------- ------------
Net investment income...................... 25,231,753 19,830,150 3,697,029 52,842,216
----------------- -------------- ----------- ------------
REALIZED GAIN AND UNREALIZED APPRECIATION
(DEPRECIATION) FROM INVESTMENT TRANSACTIONS:
Net realized gain from investments......... 4,181,058 3,856,207 277,970 --
Net unrealized depreciation on investments
during the year........................... (283,034) (263,686) (968,024) --
----------------- -------------- ----------- ------------
Net gain (loss) on investments............. 3,898,024 3,592,521 (690,054) --
----------------- -------------- ----------- ------------
Net increase in net assets resulting from
operations................................ $29,129,777 $23,422,671 $3,006,975 $52,842,216
----------------- -------------- ----------- ------------
----------------- -------------- ----------- ------------
</TABLE>
See Notes to Financial Statements.
71
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA COLUMBIA
COMMON STOCK GROWTH INTERNATIONAL STOCK
Years Ended December 31, FUND, INC. FUND, INC. FUND, INC.
--------------------------- ------------------------------- ---------------------------
1998 1997 1998 1997 1998 1997
------------ ------------ -------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income
(loss)...................... $ 4,672,736 $ 9,354,883 $ 3,156,064 $ 6,692,676 $ (22,112) $ 276,986
Net realized gain (loss)
from:
Investments................ 89,973,443 61,630,849 77,263,496 150,238,079 (1,586,408) 17,347,526
Foreign currency
transactions.............. -- -- -- -- (1,099,734) (286,335)
Change in net unrealized
appreciation (depreciation)
on:
Investments................ 89,964,455 76,981,002 322,622,139 122,000,869 19,606,801 (1,735,993)
Translation of assets and
liabilities in foreign
currencies................ -- -- -- -- (120,200) (67,221)
------------ ------------ -------------- -------------- ------------ ------------
Net increase in net assets
resulting from operations... 184,610,634 147,966,734 403,041,699 278,931,624 16,778,347 15,534,963
Distributions to shareholders:
From net investment income... (4,552,680) (8,468,207) (3,081,414) (5,838,423) -- --
In excess of net investment
income...................... (69,472)* -- (50,967)* -- -- --
From net realized gain from
investment transactions and
foreign currency
transactions................ (91,091,522) (61,141,619) (79,945,012) (148,364,649) (65,195) (16,691,558)
In excess of net realized
gain from investment
transactions................ (4,001,636)* -- (5,463,435)* -- -- --
Capital share transactions,
net........................... (71,654,578) 168,789,109 113,604,981 136,089,618 (28,800,687) 21,927,539
------------ ------------ -------------- -------------- ------------ ------------
Net increase (decrease) in
net assets.................. 13,240,746 247,146,017 428,105,852 260,818,170 (12,087,535) 20,770,944
NET ASSETS:
Beginning of year.............. 783,905,819 536,759,802 1,324,917,689 1,064,099,519 146,280,535 125,509,591
------------ ------------ -------------- -------------- ------------ ------------
End of year.................... $797,146,565 $783,905,819 $1,753,023,541 $1,324,917,689 $134,193,000 $146,280,535
------------ ------------ -------------- -------------- ------------ ------------
------------ ------------ -------------- -------------- ------------ ------------
- ---------------------------------
------------ ------------ -------------- -------------- ------------ ------------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Undistributed net investment
income $ 155,405 $ 1,537,363 $ 31,399 $ 1,999,579 $ -- $ --
* On a tax basis, there was no return of capital.
</TABLE>
See Notes to Financial Statements.
72
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA COLUMBIA
SPECIAL SMALL CAP REAL ESTATE EQUITY
Years Ended December 31, FUND, INC. FUND, INC. FUND, INC.
--------------------------------- ---------------------------- ----------------------------
1998 1997 1998 1997 1998 1997
--------------- --------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income
(loss)................... $ (927,264) $ 531,773 $ (840,887) $ (443,585) $ 7,511,435 $ 5,578,378
Net realized gain (loss)
from investments......... (544,655) 122,678,842 (10,185,536) 4,931,098 (225,330) 3,597,873
Change in net unrealized
appreciation
(depreciation) on
investments.............. 150,392,854 49,916,627 16,364,251 7,895,606 (29,435,976) 16,211,982
--------------- --------------- ------------- ------------ ------------- ------------
Net increase (decrease) in
net assets resulting from
operations............... 148,920,935 173,127,242 5,337,828 12,383,119 (22,149,871) 25,388,233
Distributions to
shareholders:
From net investment
income................... (254,898) -- -- -- (6,572,683) (4,230,674)
From net realized gain
from investment
transactions............. (230,229) (122,678,842) (12,878) (4,258,935) (2,387) (3,597,873)
In excess of net realized
gain from investment
transactions............. (154,157)* -- -- (243,742)*
From tax return of
capital.................. -- -- -- -- (940,385) (1,252,467)
Capital share transactions,
net........................ (428,794,714) (385,860,660) 58,715,948 67,245,755 42,283,240 67,417,742
--------------- --------------- ------------- ------------ ------------- ------------
Net increase (decrease) in
net assets............... (280,358,906) (335,566,417) 64,040,898 75,369,939 12,617,914 83,481,219
NET ASSETS:
Beginning of year........... 1,249,717,797 1,585,284,214 96,431,309 21,061,370 151,554,440 68,073,221
--------------- --------------- ------------- ------------ ------------- ------------
End of year................. $ 969,358,891 $ 1,249,717,797 $ 160,472,207 $ 96,431,309 $ 164,172,354 $151,554,440
--------------- --------------- ------------- ------------ ------------- ------------
--------------- --------------- ------------- ------------ ------------- ------------
- ------------------------------
--------------- --------------- ------------- ------------ ------------- ------------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Undistributed net investment
income $ -- $ 360,073 $ -- $ -- $ -- $ --
* On a tax basis, there was no return of capital.
</TABLE>
See Notes to Financial Statements.
73
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA COLUMBIA
BALANCED U.S. GOVERNMENT FIXED INCOME SECURITIES
Years Ended December 31, FUND, INC. SECURITIES FUND, INC. FUND, INC.
--------------------------- -------------------------- ----------------------------
1998 1997 1998 1997 1998 1997
------------ ------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income.......... $ 28,903,882 $ 29,022,353 $ 1,773,959 $ 1,946,052 $ 25,231,753 $ 23,438,026
Net realized gain from
investments................... 65,831,341 62,144,958 463,379 147,024 4,181,058 2,758,117
Change in net unrealized
appreciation (depreciation) on
investments................... 68,447,300 38,270,990 181,795 63,763 (283,034) 7,594,450
------------ ------------ ------------ ------------ ------------- ------------
Net increase in net assets
resulting from operations..... 163,182,523 129,438,301 2,419,133 2,156,839 29,129,777 33,790,593
Distributions to shareholders:
From net investment income..... (28,733,052) (28,593,156) (1,773,959) (1,946,052) (25,231,753) (23,438,026)
From net realized gain from
investment transactions....... (66,826,702) (61,376,451) (192,702) -- (4,065,757) (847,470)
In excess of net realized gain
from investment
transactions.................. (1,501,528)* -- -- -- -- --
Capital share transactions,
net............................. 116,881,261 80,316,642 2,288,719 (3,150,453) 41,165,110 15,406,761
------------ ------------ ------------ ------------ ------------- ------------
Net increase (decrease) in net
assets........................ 183,002,502 119,785,336 2,741,191 (2,939,666) 40,997,377 24,911,858
NET ASSETS:
Beginning of year................ 792,378,256 672,592,920 37,836,675 40,776,341 381,332,754 356,420,896
------------ ------------ ------------ ------------ ------------- ------------
End of year...................... $975,380,758 $792,378,256 $ 40,577,866 $ 37,836,675 $ 422,330,131 $381,332,754
------------ ------------ ------------ ------------ ------------- ------------
------------ ------------ ------------ ------------ ------------- ------------
- -----------------------------------
------------ ------------ ------------ ------------ ------------- ------------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Undistributed net investment
income $ 205,849 $ 758,037 $ -- $ -- $ -- $ --
* On a tax basis, there was no return of capital.
</TABLE>
See Notes to Financial Statements.
74
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA COLUMBIA
MUNICIPAL BOND HIGH YIELD DAILY INCOME
Years Ended December 31, FUND, INC. FUND, INC. COMPANY
-------------------------- ----------------------------- ---------------
1998 1997 1998 1997 1998
------------ ------------ ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income................... $ 19,830,150 $ 19,046,726 $ 3,697,029 $ 2,832,822 $ 52,842,216
Net realized gain from investments...... 3,856,207 2,429,586 277,970 1,148,575 --
Change in net unrealized appreciation
(depreciation) on investments.......... (263,686) 10,155,954 (968,024) 279,884 --
------------ ------------ ------------- ------------- ---------------
Net increase in net assets resulting
from operations........................ 23,422,671 31,632,266 3,006,975 4,261,281 52,842,216
Distributions to shareholders:
From net investment income.............. (19,830,150) (19,046,726) (3,697,029) (2,832,822) (52,842,216)
In excess of net investment income...... (10,701)* (4,724)* -- -- --
From net realized gain from investment
transactions........................... (4,149,947) (2,276,966) (290,221) (1,136,542) --
Capital share transactions, net........... 54,228,675 23,176,895 19,225,699 10,168,259 (59,954,357)
------------ ------------ ------------- ------------- ---------------
Net increase (decrease) in net assets... 53,660,548 33,480,745 18,245,424 10,460,176 (59,954,357)
NET ASSETS:
Beginning of year......................... 409,148,175 375,667,430 39,278,409 28,818,233 1,169,095,568
------------ ------------ ------------- ------------- ---------------
End of year............................... $462,808,723 $409,148,175 $ 57,523,833 $ 39,278,409 $ 1,109,141,211
------------ ------------ ------------- ------------- ---------------
------------ ------------ ------------- ------------- ---------------
* On a tax basis, there was no return of capital.
<CAPTION>
Years Ended December 31,
1997
---------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income................... $ 44,915,266
Net realized gain from investments...... --
Change in net unrealized appreciation
(depreciation) on investments.......... --
---------------
Net increase in net assets resulting
from operations........................ 44,915,266
Distributions to shareholders:
From net investment income.............. (44,915,266)
In excess of net investment income......
---
From net realized gain from investment
transactions........................... --
Capital share transactions, net........... 279,295,599
---------------
Net increase (decrease) in net assets... 279,295,599
NET ASSETS:
Beginning of year......................... 889,799,969
---------------
End of year............................... $ 1,169,095,568
---------------
---------------
* On a tax basis, there was no return of ca
</TABLE>
See Notes to Financial Statements.
75
<PAGE>
NOTES TO FINANCIAL STATEMENTS
-----------------------------------------------------------------
-- 1. SIGNIFICANT ACCOUNTING POLICIES: --
The Columbia Funds (the Funds) consist of Columbia Common Stock Fund, Inc.
(CCSF), Columbia Growth Fund, Inc. (CGF), Columbia International Stock Fund,
Inc. (CISF), Columbia Special Fund, Inc. (CSF), Columbia Small Cap Fund, Inc.
(CSCF), Columbia Real Estate Equity Fund, Inc. (CREF), Columbia Balanced Fund,
Inc. (CBF), Columbia U.S. Government Securities Fund, Inc. (CUSG), Columbia
Fixed Income Securities Fund, Inc. (CFIS), Columbia Municipal Bond Fund, Inc.
(CMBF), Columbia High Yield Fund, Inc. (CHYF), and Columbia Daily Income Company
(CDIC). All Funds are open-end investment companies registered under the
Investment Company Act of 1940, as amended, and are diversified except CMBF,
which is non-diversified. The policies described below are consistently followed
by the Funds for the preparation of their financial statements in conformity
with generally accepted accounting principles.
INVESTMENT VALUATION. The values of CCSF, CGF, CISF, CSF, CSCF, CREF and CBF
equity investments are based on the last sale prices reported by the principal
securities exchanges on which the investments are traded, or, in the absence of
recorded sales, at the closing bid prices on such exchanges or over-the-counter
markets. Securities for which market quotations are not readily available will
be valued at fair value as determined in good faith under procedures established
by and under the general supervision of the Board of Directors of each fund.
Temporary cash investments in short-term securities (principally repurchase
agreements) are valued at cost, which approximates market.
CDIC investments are carried at values deemed best to reflect their fair
values as determined in good faith by or under the supervision of officers of
CDIC's investment advisor, specifically so authorized by its Directors. These
values are based on cost adjusted for amortization of discount or premium and
accrued interest, unless unusual circumstances indicate that another method of
determining fair value should be considered.
CBF, CUSG, CFIS, CMBF and CHYF fixed income investments are carried at
values deemed best to reflect their fair values as determined in good faith
under consistently applied procedures by or under the supervision of officers of
the investment advisor to those Funds, specifically so authorized by their
Directors. These values are based on market value as quoted by dealers who are
market makers in these securities or by an independent pricing service unless
unusual circumstances indicate that another method of determining fair value
should be considered. Market values for CBF, CUSG, CFIS and CHYF fixed income
investments are based on the average of bid and ask prices and market value for
CMBF is based on bid prices, or by reference to other securities with comparable
ratings, interest rates and maturities. Temporary cash investments in short-term
securities (principally repurchase agreements) are valued at cost, which
approximates market.
76
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
-- 1. SIGNIFICANT ACCOUNTING POLICIES, CONTINUED --
AFFILIATED ISSUERS. Under the Investment Company Act of 1940, as amended, an
issuer is an "affiliated issuer" of a Fund if the Fund holds 5% or more of that
issuer's outstanding voting securities or is held under common control. CSF and
CBF had investments in such affiliated issuers at December 31, 1998 as follows:
<TABLE>
<CAPTION>
BALANCE OF DIVIDEND INCOME
SHARES/PRINCIPAL BALANCE OF JANUARY 1,
HELD GROSS GROSS SHARES HELD VALUE 1998-
DECEMBER 31, PURCHASES & SALES & DECEMBER 31, DECEMBER 31, DECEMBER 31,
NAME OF ISSUER 1997 ADDITIONS REDUCTIONS 1998 1998 1998
- ----------------------------------------- -------------- ----------- ---------- ------------ --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Columbia Special Fund (a)
Abercrombie & Fitch Co................... 800,000 50,000 475,000 375,000 $ 26,531,250*
AnnTaylor Stores Corp.................... 1,240,000 160,000 921,000 479,000 18,890,562*
Celadon Group, Inc....................... 500,000 500,000 -- --
Gadzooks, Inc............................ 700,000 10,000 710,000 -- --
Integrated Measurement Syst.............. 300,000 300,000 -- --
Osmonics, Inc............................ 869,000 108,300 977,300 -- --
Resmed, Inc.............................. 500,000 460,000 174,000 786,000 35,664,750
Schnitzer Steel Industries............... 550,000 550,000 -- -- $ 52,500
Vans, Inc................................ 860,000 15,000 360,000 515,000 3,540,625*
--------------- -------
84,627,187 52,500
Columbia Balanced Fund (b)
Fleet Mortgage Group, Inc................ 550,000 550,000 -- --
--------------- -------
Total Affiliated Issuers.................................................................... $ 84,627,187 $ 52,500
--------------- -------
--------------- -------
</TABLE>
* Not an affiliate at 12/31/1998.
(a) Fund held or holds 5% or more of that issuer's outstanding shares.
(b) Fund held an investment under common control.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. CISF enters into forward foreign
currency exchange contracts to hedge certain portfolio securities denominated in
foreign currencies. Forward contracts are recorded at market value. CISF could
be exposed to risks if counterparties to the forward contracts are unable to
meet the terms of their contracts or if the value of the foreign currency
changes unfavorably. The effect of any change in the value of a hedged foreign
currency would be offset by the increase (resulting from a change in exchange
rates) in value of the securities denominated in that currency. Net realized
loss arising from forward contracts amounted to $1,097,544 and is included in
net realized loss from foreign currency transactions. CISF had no outstanding
forward contracts on December 31, 1998.
77
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
-- 1. SIGNIFICANT ACCOUNTING POLICIES, --
CONTINUED
FOREIGN CURRENCY TRANSLATIONS. The books and records of CISF are maintained in
U.S. dollars. Foreign currency transactions are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets, and liabilities at
the daily rates of exchange on the valuation date, and
(ii) purchases and sales of investment securities, dividend and interest income
and certain expenses at the rates of exchange prevailing on the respective
dates of such transactions.
CISF does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of investments held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign currency gains or losses arise from the sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on CISF's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities, other than investments in securities, resulting from
changes in the exchange rates.
INTEREST AND DIVIDEND INCOME. Interest income is recorded on the accrual basis
and dividend income is recorded on the ex-dividend date. Amortization of
discount or premium is recorded over the life of the instrument. The majority of
dividend income recorded by CREF is from Real Estate Investment Trusts (REITs).
For tax purposes, a portion of these dividends consist of capital gains and
return of capital. For financial reporting purposes, these dividends are
recorded as dividend income.
SHAREHOLDER DISTRIBUTIONS. CCSF, CREF and CBF distribute net investment income
quarterly and any net realized gains from investment transactions annually. CGF,
CISF, CSF and CSCF distribute net investment income and any net realized gains
annually. CDIC distributes its net investment income daily. CUSG, CFIS, CMBF and
CHYF distribute their net investment income monthly and any net realized gains
annually. Distributions to shareholders are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations, which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, net operating losses, deferral of losses from
wash sales, passive foreign investment company income and return of capital
received from REITS.
USE OF ESTIMATES. The preparation of the financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those estimates.
FEDERAL INCOME TAXES. The Funds have made no provision for federal income taxes
on net investment income or net realized gains from sales of investment
securities, since it is the intention of the Funds to comply with the provisions
of the Internal Revenue Code available to certain regulated investment
companies, and to make distributions of income and security profits sufficient
to relieve them from substantially all federal income taxes.
78
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
-- 1. SIGNIFICANT ACCOUNTING POLICIES, --
CONTINUED
As of December 31, 1998, certain Funds have capital loss carryovers
available to offset future capital gains as follows:
<TABLE>
<CAPTION>
YEAR CARRYOVER EXPIRES CISF CSF CSCF
- ----------------------- --------- --------- ---------
<S> <C> <C> <C>
2006 $1,410,029 $1,021,462 $9,350,313
</TABLE>
To the extent that the capital loss carryovers are used to offset any
capital gains, it is unlikely that the gains so offset will be distributed to
shareholders.
OTHER. Investment transactions are accounted for on the date the investments
are purchased or sold. The cost of investments sold is determined by the use of
the specific identification method for both financial reporting and income tax
purposes. Realized gains and losses from investment transactions and unrealized
appreciation or depreciation of investments are reported on the basis of
identified costs.
The Funds, through their custodians, receive delivery of underlying
securities collateralizing repurchase agreements (included in temporary cash
investments). Market values of these securities are required to be at least 100%
of the cost of the repurchase agreements.
The Funds' investment advisor determines that the value of the underlying
securities is at all times at least equal to the resale price. In the event of
default or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral may be subject to legal proceedings.
CHYF invests in lower rated debt securities, which may be more susceptible
to adverse economic conditions than investment grade holdings. These securities
are often subordinated to the prior claims of other senior lenders, and
uncertainties exist as to an issuer's ability to meet principal and interest
payments. At December 31, 1998, 1% of the Fund's debt securities were rated Baa,
43% were rated Ba, and 56% were rated B by Moody's Investor Services, Inc.
79
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
-- 2. INVESTMENT TRANSACTIONS: --
Aggregate purchases, sales and maturities, net realized gain (loss) and
unrealized appreciation (depreciation) of investments, including temporary cash
investments for CDIC and excluding temporary cash investments for all other
Funds, as of and for the period ended December 31, 1998, were as follows:
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA COLUMBIA COLUMBIA
COMMON STOCK GROWTH INTERNATIONAL STOCK SPECIAL
FUND, INC. (CCSF) FUND, INC. (CGF) FUND, INC. (CISF) FUND, INC. (CSF)
----------------- ---------------- ------------------- ----------------
<S> <C> <C> <C> <C>
PURCHASES:
Investment securities other than
U.S. Government obligations..... 1$,129,094,921 $1,612,295,388 $ 97,930,955 $1,279,917,477
----------------- ---------------- ------------------- ----------------
----------------- ---------------- ------------------- ----------------
SALES AND MATURITIES:
Investment securities other than
U.S. Government obligations..... 1$,251,336,234 $1,584,390,311 $118,336,084 $1,700,822,134
----------------- ---------------- ------------------- ----------------
----------------- ---------------- ------------------- ----------------
NET REALIZED GAIN (LOSS):
Investment securities other than
U.S. Government obligations..... $ 89,973,443 $ 77,263,496 $ (1,586,408) $ (544,655)
----------------- ---------------- ------------------- ----------------
----------------- ---------------- ------------------- ----------------
UNREALIZED APPRECIATION
(DEPRECIATION) AS OF DECEMBER 31,
1998:
Appreciation..................... $235,093,132 $ 631,181,726 $ 40,516,921 $ 308,916,638
Depreciation..................... (7,259,566) (5,291,565) (6,002,995) (20,324,079)
----------------- ---------------- ------------------- ----------------
Net unrealized appreciation.... $227,833,566 $ 625,890,161 $ 34,513,926 $ 288,592,559
----------------- ---------------- ------------------- ----------------
----------------- ---------------- ------------------- ----------------
UNREALIZED APPRECIATION
(DEPRECIATION) FOR FEDERAL INCOME
TAX PURPOSES AS OF DECEMBER 31,
1998:
Appreciation..................... $233,744,884 $ 627,928,419 $ 40,511,159 $ 308,719,262
Depreciation..................... (8,844,654) (6,485,616) (6,182,830) (20,433,652)
----------------- ---------------- ------------------- ----------------
Net unrealized appreciation.... $224,900,230 $ 621,442,803 $ 34,328,329 $ 288,285,610
----------------- ---------------- ------------------- ----------------
----------------- ---------------- ------------------- ----------------
For federal income tax purposes,
the cost of investments owned at
December 31, 1998................. $561,749,172 $1,108,178,096 $ 93,546,963 $ 659,242,770
----------------- ---------------- ------------------- ----------------
----------------- ---------------- ------------------- ----------------
</TABLE>
The net realized gain for CCSF, CGF, & CSF includes proceeds of $75,163,
$345,394, & $777,028, respectively, from shareholder class action suits related
to securities held by those Funds.
80
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
-- 2. INVESTMENT TRANSACTIONS, CONTINUED --
<TABLE>
<CAPTION>
COLUMBIA
COLUMBIA REAL ESTATE COLUMBIA COLUMBIA U.S.
SMALL CAP EQUITY FUND, INC. BALANCED GOVERNMENT SECURITIES
FUND, INC. (CSCF) (CREF) FUND, INC. (CBF) FUND, INC. (CUSG)
----------------- ----------------- ---------------- ---------------------
<S> <C> <C> <C> <C>
PURCHASES:
Investment securities other than U.S.
Government obligations............... $233,395,351 $ 53,045,531 $ 729,928,631 $ --
U.S. Government obligations........... -- -- 436,330,135 71,008,711
----------------- ----------------- ---------------- ---------------------
Total purchases..................... $233,395,351 $ 53,045,531 $1,166,258,766 $71,008,711
----------------- ----------------- ---------------- ---------------------
----------------- ----------------- ---------------- ---------------------
SALES AND MATURITIES:
Investment securities other than U.S.
Government obligations............... $180,538,702 $ 8,610,059 $ 718,083,911 $ --
U.S. Government obligations........... -- -- 403,682,023 69,047,865
----------------- ----------------- ---------------- ---------------------
Total sales and maturities.......... $180,538,702 $ 8,610,059 $1,121,765,934 $69,047,865
----------------- ----------------- ---------------- ---------------------
----------------- ----------------- ---------------- ---------------------
NET REALIZED GAIN (LOSS):
Investment securities other than U.S.
Government obligations............... $(10,185,536) $ (225,330) $ 63,610,090 $ --
U.S. Government obligations........... -- -- 2,221,251 463,379
----------------- ----------------- ---------------- ---------------------
Total net realized gain (loss)...... $(10,185,536) $ (225,330) $ 65,831,341 $ 463,379
----------------- ----------------- ---------------- ---------------------
----------------- ----------------- ---------------- ---------------------
UNREALIZED APPRECIATION (DEPRECIATION)
AS OF DECEMBER 31, 1998:
Appreciation.......................... $ 30,641,231 $ 10,580,861 $ 169,395,015 $ 315,675
Depreciation.......................... (4,892,621) (12,900,023) (6,627,357) (42,930)
----------------- ----------------- ---------------- ---------------------
Net unrealized appreciation
(depreciation)..................... $ 25,748,610 $ (2,319,162) $ 162,767,658 $ 272,745
----------------- ----------------- ---------------- ---------------------
----------------- ----------------- ---------------- ---------------------
UNREALIZED APPRECIATION (DEPRECIATION)
FOR FEDERAL INCOME TAX PURPOSES AS OF
DECEMBER 31, 1998:
Appreciation.......................... $ 29,887,958 $ 12,047,904 $ 168,462,123 $ 315,675
Depreciation.......................... (5,034,071) (11,819,293) (6,640,232) (42,930)
----------------- ----------------- ---------------- ---------------------
Net unrealized appreciation......... $ 24,853,887 $ 228,611 $ 161,821,891 $ 272,745
----------------- ----------------- ---------------- ---------------------
----------------- ----------------- ---------------- ---------------------
For federal income tax purposes, the
cost of investments owned at December
31, 1998............................... $127,519,538 $154,707,312 $ 798,675,608 $39,239,616
----------------- ----------------- ---------------- ---------------------
----------------- ----------------- ---------------- ---------------------
</TABLE>
81
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
-- 2. INVESTMENT TRANSACTIONS, CONTINUED --
<TABLE>
<CAPTION>
COLUMBIA FIXED COLUMBIA COLUMBIA COLUMBIA
INCOME SECURITIES MUNICIPAL BOND HIGH YIELD DAILY INCOME
FUND, INC. (CFIS) FUND, INC. (CMBF) FUND, INC. (CHYF) COMPANY (CDIC)
----------------- ----------------- ----------------- ---------------
<S> <C> <C> <C> <C>
PURCHASES:
Investment securities other than U.S.
Government obligations............... $117,932,587 $118,516,226 $52,133,634 $9,300,863,600
U.S. Government obligations........... 356,343,890 -- -- 29,534,303
----------------- ----------------- ----------------- ---------------
Total purchases..................... $474,276,477 $118,516,226 $52,133,634 $9,330,397,903
----------------- ----------------- ----------------- ---------------
----------------- ----------------- ----------------- ---------------
SALES AND MATURITIES:
Investment securities other than U.S.
Government obligations............... $ 79,673,898 $ 69,367,033 $35,136,859 $9,461,984,392
U.S. Government obligations........... 344,972,034 -- -- --
----------------- ----------------- ----------------- ---------------
Total sales and maturities.......... $424,645,932 $ 69,367,033 $35,136,859 $9,461,984,392
----------------- ----------------- ----------------- ---------------
----------------- ----------------- ----------------- ---------------
NET REALIZED GAIN:
Investment securities other than U.S.
Government obligations............... $ 946,821 $ 3,856,207 $ 277,970
U.S. Government obligations........... 3,234,237 -- --
----------------- ----------------- -----------------
Total net realized gain............. $ 4,181,058 $ 3,856,207 $ 277,970
----------------- ----------------- -----------------
----------------- ----------------- -----------------
UNREALIZED APPRECIATION (DEPRECIATION)
AS OF DECEMBER 31, 1998:
Appreciation.......................... $ 10,730,450 $ 24,047,833 $ 885,498
Depreciation.......................... (1,413,590) (248,149) (722,858)
----------------- ----------------- -----------------
Net unrealized appreciation......... $ 9,316,860 $ 23,799,684 $ 162,640
----------------- ----------------- -----------------
----------------- ----------------- -----------------
UNREALIZED APPRECIATION (DEPRECIATION)
FOR FEDERAL INCOME TAX PURPOSES AS OF
DECEMBER 31, 1998:
Appreciation.......................... $ 10,730,450 $ 24,038,889 $ 858,123
Depreciation.......................... (1,413,590) (259,561) (730,895)
----------------- ----------------- -----------------
Net unrealized appreciation......... $ 9,316,860 $ 23,779,328 $ 127,228
----------------- ----------------- -----------------
----------------- ----------------- -----------------
For federal income tax purposes, the
cost of investments owned at December
31, 1998............................... $405,960,645 $427,458,729 $51,394,447 $1,100,606,014
----------------- ----------------- ----------------- ---------------
----------------- ----------------- ----------------- ---------------
</TABLE>
82
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
-- 3. CAPITAL STOCK: --
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA COLUMBIA
COMMON STOCK GROWTH INTERNATIONAL STOCK
FUND, INC. (CCSF) FUND, INC. (CGF) FUND, INC. (CISF)
----------------------------- ------------------------------- -----------------------------
1998 1997 1998 1997 1998 1997
------------- ------------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
SHARES:
Shares sold................... 13,269,125 12,609,458 12,502,270 9,453,209 6,757,057 6,414,910
Shares issued for reinvestment
of dividends................. 3,761,670 3,039,307 1,958,431 4,230,608 4,073 1,146,267
------------- ------------- -------------- -------------- ------------- -------------
17,030,795 15,648,765 14,460,701 13,683,817 6,761,130 7,561,177
Less shares redeemed.......... (19,963,393) (7,908,821) (11,802,719) (9,715,431) (8,752,521) (5,939,634)
------------- ------------- -------------- -------------- ------------- -------------
Net increase (decrease) in
shares....................... (2,932,598) 7,739,944 2,657,982 3,968,386 (1,991,391) 1,621,543
------------- ------------- -------------- -------------- ------------- -------------
AMOUNTS:
Sales......................... $ 313,993,826 $ 277,332,028 $ 483,570,772 $ 329,861,186 $ 96,626,658 $ 98,515,375
Reinvestment of dividends..... 91,734,934 66,961,124 83,252,983 145,279,077 62,933 15,703,862
------------- ------------- -------------- -------------- ------------- -------------
405,728,760 344,293,152 566,823,755 475,140,263 96,689,591 114,219,237
Less redemptions.............. (477,383,338) (175,504,043) (453,218,774) (339,050,645) (125,490,278) (92,291,698)
------------- ------------- -------------- -------------- ------------- -------------
Net increase (decrease)....... $ (71,654,578) $ 168,789,109 $ 113,604,981 $ 136,089,618 $ (28,800,687) $ 21,927,539
------------- ------------- -------------- -------------- ------------- -------------
------------- ------------- -------------- -------------- ------------- -------------
Capital stock authorized
(shares)..................... 100,000,000 100,000,000 100,000,000
Par Value..................... no par $ .01 no par
</TABLE>
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA COLUMBIA
SPECIAL SMALL CAP REAL ESTATE EQUITY
FUND, INC. (CSF) FUND, INC. (CSCF) FUND, INC. (CREF)
------------------------------- ---------------------------- ------------------------------
1998 1997 1998 1997 1998 1997
-------------- -------------- ------------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
SHARES:
Shares sold................... 15,749,843 17,301,738 8,487,025 6,092,245 9,988,402 9,713,082
Shares issued for reinvestment
of dividends................. 19,697 5,787,116 684 229,093 416,553 444,904
-------------- -------------- ------------- ------------ ------------- --------------
15,769,540 23,088,854 8,487,709 6,321,338 10,404,955 10,157,986
Less shares redeemed.......... (36,402,850) (41,278,382) (5,074,580) (2,149,149) (8,048,667) (6,308,136)
-------------- -------------- ------------- ------------ ------------- --------------
Net increase (decrease) in
shares....................... (20,633,310) (18,189,528) 3,413,129 4,172,189 2,356,288 3,849,850
-------------- -------------- ------------- ------------ ------------- --------------
AMOUNTS:
Sales......................... $ 326,466,750 $ 365,659,534 $ 142,918,397 $ 97,707,061 $ 171,289,503 $ 168,764,062
Reinvestment of dividends..... 465,243 117,246,979 11,916 3,814,406 6,951,254 8,209,513
-------------- -------------- ------------- ------------ ------------- --------------
326,931,993 482,906,513 142,930,313 101,521,467 178,240,757 176,973,575
Less redemptions.............. (755,726,707) (868,767,173) (84,214,365) (34,275,712) (135,957,517) (109,555,833)
-------------- -------------- ------------- ------------ ------------- --------------
Net increase (decrease)....... $ (428,794,714) $ (385,860,660) $ 58,715,948 $ 67,245,755 $ 42,283,240 $ 67,417,742
-------------- -------------- ------------- ------------ ------------- --------------
-------------- -------------- ------------- ------------ ------------- --------------
Capital stock authorized
(shares)..................... 100,000,000 100,000,000 100,000,000
Par Value..................... $ .01 no par no par
</TABLE>
83
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
-- 3. CAPITAL STOCK, CONTINUED --
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA U.S. COLUMBIA FIXED
BALANCED GOVERNMENT SECURITIES INCOME SECURITIES
FUND, INC. (CBF) FUND, INC. (CUSG) FUND, INC. (CFIS)
----------------------------- --------------------------- -----------------------------
1998 1997 1998 1997 1998 1997
------------- ------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
SHARES:
Shares sold................... 13,507,447 11,631,390 2,328,032 1,678,641 12,025,253 8,909,289
Shares issued for reinvestment
of dividends................. 4,168,672 4,143,787 220,206 214,917 1,746,053 1,456,925
------------- ------------- ------------ ------------ ------------- -------------
17,676,119 15,775,177 2,548,238 1,893,558 13,771,306 10,366,214
Less shares redeemed.......... (12,580,813) (11,880,698) (2,273,646) (2,278,311) (10,720,493) (9,188,186)
------------- ------------- ------------ ------------ ------------- -------------
Net increase (decrease) in
shares....................... 5,095,306 3,894,479 274,592 (384,753) 3,050,813 1,178,028
------------- ------------- ------------ ------------ ------------- -------------
------------- ------------- ------------ ------------ ------------- -------------
AMOUNTS:
Sales......................... $ 307,811,840 $ 255,961,711 $ 19,453,757 $ 13,843,228 $ 162,360,726 $ 117,209,758
Reinvestment of dividends..... 96,330,655 89,309,106 1,841,909 1,771,509 23,546,526 19,185,059
------------- ------------- ------------ ------------ ------------- -------------
404,142,495 345,270,817 21,295,666 15,614,737 185,907,252 136,394,817
Less redemptions.............. (287,261,234) (264,954,175) (19,006,947) (18,765,190) (144,742,142) (120,988,056)
------------- ------------- ------------ ------------ ------------- -------------
Net increase (decrease)....... $ 116,881,261 $ 80,316,642 $ 2,288,719 $ (3,150,453) $ 41,165,110 $ 15,406,761
------------- ------------- ------------ ------------ ------------- -------------
------------- ------------- ------------ ------------ ------------- -------------
Capital stock authorized
(shares)..................... 100,000,000 100,000,000 200,000,000
Par Value..................... no par $ .01 $ .01
</TABLE>
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA COLUMBIA
MUNICIPAL BOND HIGH YIELD DAILY INCOME
FUND, INC. (CMBF) FUND, INC. (CHYF) COMPANY (CDIC)
----------------------------- ----------------------------- ---------------
1998 1997 1998 1997 1998
------------- ------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
SHARES:
Shares sold...................... 10,282,298 6,372,612 5,050,748 2,127,208 1,712,535,787
Shares issued for reinvestment of
dividends....................... 1,535,194 1,369,697 350,237 342,994 52,814,144
------------- ------------- ------------- ------------- ---------------
11,817,492 7,742,309 5,400,985 2,470,202 1,765,349,931
Less shares redeemed............. (7,484,819) (5,853,872) (3,469,996) (1,457,004) (1,825,304,288)
------------- ------------- ------------- ------------- ---------------
Net increase (decrease) in
shares.......................... 4,332,673 1,888,437 1,930,989 1,013,198 (59,954,357)
------------- ------------- ------------- ------------- ---------------
------------- ------------- ------------- ------------- ---------------
AMOUNTS:
Sales............................ $ 128,573,968 $ 77,959,329 $ 50,292,553 $ 21,499,878 $ 1,712,535,787
Reinvestment of dividends........ 19,177,222 16,813,005 3,493,216 3,460,890 52,814,144
------------- ------------- ------------- ------------- ---------------
147,751,190 94,772,334 53,785,769 24,960,768 1,765,349,931
Less redemptions................. (93,522,515) (71,595,439) (34,560,070) (14,792,509) (1,825,304,288)
------------- ------------- ------------- ------------- ---------------
Net increase (decrease).......... $ 54,228,675 $ 23,176,895 $ 19,225,699 $ 10,168,259 $ (59,954,357)
------------- ------------- ------------- ------------- ---------------
------------- ------------- ------------- ------------- ---------------
Capital stock authorized
(shares)........................ 100,000,000 100,000,000 2,000,000,000
Par Value........................ $ .01 no par $ .001
<CAPTION>
1997
---------------
<S> <C>
SHARES:
Shares sold...................... 1,948,660,105
Shares issued for reinvestment of
dividends....................... 44,892,534
---------------
1,993,552,639
Less shares redeemed............. (1,714,257,040)
---------------
Net increase (decrease) in
shares.......................... 279,295,599
---------------
---------------
AMOUNTS:
Sales............................ $ 1,948,660,105
Reinvestment of dividends........ 44,892,534
---------------
1,993,552,639
Less redemptions................. (1,714,257,040)
---------------
Net increase (decrease).......... $ 279,295,599
---------------
---------------
Capital stock authorized
(shares)........................
Par Value........................
</TABLE>
84
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
-- 4. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES: --
<TABLE>
<CAPTION>
COLUMBIA
COLUMBIA COLUMBIA COLUMBIA SPECIAL
COMMON STOCK GROWTH INTERNATIONAL STOCK FUND, INC.
FUND, INC. (CCSF) FUND, INC. (CGF) FUND, INC. (CISF) (CSF)
----------------- --------------------- ------------------- ----------
Investment management fees incurred..... $5,136,336 $8,591,359 $1,414,138 $9,054,501
<S> <C> <C> <C> <C>
Investment management fee computation
basis (percentage of daily net assets
per annum)............................. 0.60 of 1% 0.75 of 1% to 1% 1% to
$200,000,000 daily $500,000,000
net assets; 0.625 of daily net
1% between assets;
$200,000,000 and 0.75 of 1%
$500,000,000; and in excess
0.50 of 1% of
in excess of $500,000,000
$500,000,000
Transfer agent fee (included in
shareholder servicing costs)........... $566,008 $1,070,063 $351,255 $883,820
Fees earned by directors not affiliated
with each Fund's investment adviser,
transfer agent, or Columbia Management
Co..................................... $8,409 $15,130 $1,413 $10,492
</TABLE>
<TABLE>
<CAPTION>
COLUMBIA COLUMBIA COLUMBIA COLUMBIA U.S.
SMALL CAP REAL ESTATE EQUITY BALANCED GOVERNMENT SECURITIES
FUND, INC. (CSCF) FUND, INC. (CREF) FUND, INC. (CBF) FUND, INC. (CUSG)
----------------- ------------------ ---------------- ---------------------
<S> <C> <C> <C> <C>
Investment management fees incurred..... $1,246,153 $1,221,370 $4,512,177 $194,507
Investment management fee computation
basis (percentage of daily net assets
per annum)............................. 1% 0.75 of 1% 0.50 of 1% 0.50 of 1%
Transfer agent fee (included in
shareholder servicing costs)........... $205,425 $196,454 $631,375 $48,648
Fees earned by directors not affiliated
with each Fund's investment adviser,
transfer agent, or Columbia Management
Co..................................... $1,206 $1,629 $8,884 $390
</TABLE>
85
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
-- 4. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES, CONTINUED --
<TABLE>
<CAPTION>
COLUMBIA FIXED COLUMBIA COLUMBIA COLUMBIA
INCOME SECURITIES MUNICIPAL BOND HIGH YIELD DAILY INCOME
FUND, INC. (CFIS) FUND, INC. (CMBF) FUND, INC. (CHYF) COMPANY (CDIC)
----------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Investment management fees incurred..... $2,050,200 $2,149,321 $292,249 $5,005,974
Investment management fee computation
basis (percentage of daily net assets
per annum)............................. 0.50 of 1% 0.50 of 1% 0.60 of 1% 0.50 of 1% to
$500,000,000 daily
net assets; 0.45
of 1% between
$500,000,000 and
$1,000,000,000;
and 0.40 of 1% in
excess of
$1,000,000,000
Transfer agent fee (included in
shareholder servicing costs)........... $279,982 $121,757 $54,467 $734,286
Fees earned by directors not affiliated
with each Fund's investment adviser,
transfer agent, or Columbia Management
Co..................................... $4,081 $4,276 $481 $10,609
Value of investments held at December
31, 1998 by:
Columbia Management Co................ $1,091,186 $6,856,080 $27,551,924
Columbia Funds Management Company..... $248,322 $1,887,379 $22,773,231
</TABLE>
The investment adviser of the Funds is Columbia Funds Management Company (CFMC).
The transfer agent for the Funds is Columbia Trust Company (CTC), a majority
owned subsidiary of CFMC. The transfer agent is compensated based on a per
account fee.
CFMC, CTC and Columbia Management Company (CMC), an affiliated company, are
indirect subsidiaries of Fleet Financial Group, Inc. (Fleet), a publicly owned
multi-bank holding company registered under the Bank Holding Company Act of
1956. J. Jerry Inskeep, Jr., an officer and director of the Funds, is affiliated
with Fleet, but receives no compensation or other payment from the Funds.
Columbia Common Stock Fund, Columbia Special Fund and Columbia Balanced Fund
paid $5,190, $3,000 and $1,080 in brokerage commissions to Quick & Reilly, Inc.,
an affiliate, during the fiscal year ending December 31, 1998.
86
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
-----------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS,
Columbia Common Stock Fund, Inc. (CCSF)
Columbia Growth Fund, Inc. (CGF)
Columbia International Stock Fund, Inc. (CISF)
Columbia Special Fund, Inc. (CSF)
Columbia Small Cap Fund, Inc. (CSCF)
Columbia Real Estate Equity Fund, Inc. (CREF)
Columbia Balanced Fund, Inc. (CBF)
Columbia U.S. Government Securities Fund, Inc. (CUSG)
Columbia Fixed Income Securities Fund, Inc. (CFIS)
Columbia Municipal Bond Fund, Inc. (CMBF)
Columbia High Yield Fund, Inc. (CHYF)
Columbia Daily Income Company (CDIC)
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, 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 each of the twelve funds comprising
the Columbia Funds (the "Funds"), investment companies, at December 31, 1998,
and the results of their operations and the changes in their net assets for the
years ended December 31, 1998 and 1997, and the financial highlights for the
periods presented therein, in conformity with generally accepted accounting
principles. 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 generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities owned as of December 31, 1998 by correspondence with
the custodians and brokers, provide a reasonable basis for the opinion expressed
above.
PRICEWATERHOUSECOOPERS LLP
Portland, Oregon
February 12, 1999
87
<PAGE>
NOTES
<PAGE>
MUTUAL FUND SHARES ARE NOT INSURED BY THE FDIC OR ANY OTHER GOVERNMENTAL ENTITY;
ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK; AND
INVOLVE RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
<PAGE>
[LOGO]
COLUMBIA FUNDS
--1301 S.W. FIFTH AVENUE, PORTLAND, OREGON 97201--
--DIRECTORS--
--------------------------------------------------
JAMES C. GEORGE
J. JERRY INSKEEP, JR.
THOMAS R. MACKENZIE
RICHARD L. WOOLWORTH
--INVESTMENT ADVISOR--
--------------------------------------------------
COLUMBIA FUNDS MANAGEMENT COMPANY
1300 S.W. SIXTH AVENUE
PORTLAND, OREGON 97201
--LEGAL COUNSEL--
--------------------------------------------------
STOEL RIVES LLP
900 S.W. FIFTH AVENUE, SUITE 2300
PORTLAND, OREGON 97204-1268
--AUDITORS--
--------------------------------------------------
PRICEWATERHOUSECOOPERS LLP
1300 S.W. FIFTH AVENUE, SUITE 3100
PORTLAND, OREGON 97201
--TRANSFER AGENT--
--------------------------------------------------
COLUMBIA TRUST COMPANY
1301 S.W. FIFTH AVENUE
PORTLAND, OREGON 97201
THIS INFORMATION MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
THE MANAGERS VIEWS CONTAINED IN THIS REPORT ARE SUBJECT TO CHANGE AT ANY
TIME, BASED ON MARKET AND OTHER CONSIDERATIONS.
PORTFOLIO CHANGES SHOULD NOT BE CONSIDERED RECOMMENDATIONS FOR ACTION BY
INDIVIDUAL INVESTORS.
FUNDS DISTRIBUTED BY PROVIDENT DISTRIBUTORS, INC.
