UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04367
Columbia Funds Series Trust I
(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
(Address of principal executive offices) (Zip code)
James R. Bordewick, Jr., Esq.
Columbia Management Advisors, LLC
One Financial Center
Boston, MA 02111
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-617-426-3750
Date of fiscal year end: June 30
Date of reporting period: June 30, 2009
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
Annual Report
June 30, 2009
Columbia High Yield Municipal Fund
| | |
| NOT FDIC INSURED | | May Lose Value |
| NOT BANK ISSUED | | No Bank Guarantee |
Table of Contents
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia Fund. References to specific securities should not be construed as a recommendation or investment advice.
President’s Message
Dear Shareholder:
Recent events have shown great volatility in the markets and uncertainty in the economy. During these challenging times, it becomes even more important to focus on long-term horizons and key investment tools that can help manage volatility. This may be the time to reflect on your investment goals and evaluate your portfolio to ensure you are positioned for any potential market rebound.
A long-term financial plan can serve as a road map and guide you through the necessary steps designed to meet your financial goals. Your financial plan should take into account your investment goals, time horizon, overall financial situation, risk tolerance and willingness to ride out market volatility. Your investment professional can be a key resource as you work through this process. The knowledge and experience of an investment professional can help as you create or reevaluate your investment strategy.
The importance of diversification
Although diversification does not ensure a profit or guarantee against loss, a diversified portfolio can be a strategy for successful long-term investing. Diversification refers to the mix of investments within a portfolio. A mutual fund can contribute to portfolio diversification given that a mutual fund’s portfolio represents several investments. Additionally, the way you allocate your money among stocks, bonds and cash, and geographically between foreign and domestic investments, can help to reduce risks. Diversification can result in multiple investments where the positive performance of certain holdings can offset any negative performance from other holdings. Having a diversified portfolio doesn’t mean that the value of the portfolio will never go down, but rather helps strike a balance between risk and reward.
Reevaluate your strategy
An annual review of your investments is a key opportunity to determine if your investment needs have changed or if you need minor adjustments to rebalance your portfolio. Life events like a birth, marriage, home improvement, or change in employment can have a major effect on your spending and goals. Ask yourself how your spending or goals have changed and factor this into your financial plan. Are you using automated investments or payroll deductions to help keep your savings on track? Are you able to set aside additional savings or increase your 401(k) plan contributions? If during your review you find that your investments in any one category (e.g., stocks, bonds or cash) have grown too large based on your diversification plan, you may want to consider redirecting future investments to get back on track.
History has shown that the U.S. stock market has been remarkably resilient.¹ Volatility can lead to opportunity. Patience and a commitment to your long-term financial plan may position you to potentially benefit over your investment horizon. We appreciate your business and continued support of Columbia Funds.
Sincerely,
J. Kevin Connaughton
President, Columbia Funds
| 1 | The Dow Jones Industrial Average is the most widely used indicator of the overall condition of the stock market. The Dow Jones Industrial Average Index is a price-weighted average of 30 actively traded blue-chip stocks as selected by the editors of the Wall Street Journal. Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. It is not possible to invest directly in an index. |
Fund Profile – Columbia High Yield Municipal Fund
Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.
Summary
1-year return as of 06/30/09
| | |
| |
 | | –9.60% Class A shares (without sales charge) |
| |
 | | +3.77% Barclays Capital Municipal Bond Index1 |
Morningstar Style Box™
Fixed Income Maturity
The Morningstar Style Box™ reveals a fund’s investment strategy. For fixed-income funds, the vertical axis shows the average credit quality of the bonds owned, and the horizontal axis shows interest rate sensitivity as measured by a bond’s duration (short, intermediate or long). Information shown is based on the most recent data provided by Morningstar.
| 1 | The Barclays Capital Municipal Bond Index is considered representative of the broad market for investment-grade, tax-exempt bonds with a maturity of at least one year. Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index. |
Summary
| n | | For the 12-month period that ended June 30, 2009, the fund’s Class A shares returned negative 9.60% without sales charge. |
| n | | The fund was constrained by its exposure to high yield bonds tied to real estate development and utilities. However, strong performance of its position in airline bonds in the second half of the period and its position in relatively less-risky bonds helped the fund hold up better than its peers in a challenging environment. |
| n | | Going forward, we plan to take advantage of opportunities to buy bonds at attractive prices while maintaining our focus on issuer diversification. |
Portfolio Management
Chad Farrington has managed the fund since February 2009 and has been associated with the advisor or its predecessors since 2003.
1
Economic Update – Columbia High Yield Municipal Fund
Summary
For the 12-month period that ended June 30, 2009
| | n | | Despite volatility in many segments of the bond market, the Barclays Capital Aggregate Bond Index delivered positive results. High-yield bonds lost ground, as measured by the Merrill Lynch U.S. High Yield, Cash Pay Index. | |
| | |
| Barclays Aggregate Index | | Merrill Lynch High Yield Index |
| |
| | 
|
6.05% | | -3.63% |
| | n | | Stocks lost ground around the world, as measured by the S&P 500 Index and the MSCI EAFE Index. | |
| | |
| S&P Index | | MSCI Index |
| |
| |
|
-26.21% | | -31.35% |
Past performance is no guarantee of future results.
During the 12-month period that began July 1, 2008 and ended June 30, 2009, the U.S. economy struggled under the weight of the worst financial crisis since the Great Depression. Economic growth, as measured by gross domestic product, contracted by more than 6% in the second half of 2008. Although the decline for the first half of 2009 appears to have been less severe, hopes for a late 2009 recovery remain in doubt. The lapse from growth has resulted in the longest — and most severe — recession in nearly three decades.
The labor market shed millions of jobs between 2008 and 2009, raising the unemployment rate to 9.5% as of the end of the period and virtually wiping out all of the jobs gained since the last recession. Manufacturing activity slowed and consumer spending declined. The beleaguered housing market continued to lose ground as prices fell and inventories rose. However, mortgage purchase applications increased late in the period, buoyed by low interest rates and an $8,000 first-time home buyer tax credit. Late in 2008, consumer confidence, as measured by the Conference Board, plummeted to its lowest point ever. However, it stabilized, then turned higher in 2009.
Troubles that began in the U.S. subprime mortgage market resulted in a meltdown within the U.S. financial sector that claimed several major institutions in 2008 and led others to seek bailouts, restructuring or both. New rigorous lending standards severely limited access to credit, further hampering economic growth. In this environment, a new administration sought to stabilize the financial system, address economic woes and introduce sweeping health care reform. Stimulus spending began to flow into the economy, raising hopes that growth would be restored in the second half of 2009. However, with much of the developed world in recession, any substantial improvement in economic conditions may be longer in coming. In December 2008, the Federal Reserve Board (the Fed) lowered a key short-term borrowing rate — the federal funds rate — to between zero and 0.25% — a record low. In light of protracted economic weakness, we believe the Fed is unlikely to tighten its reins on money until the economy and the labor markets stabilize.
2
Economic Update (continued) – Columbia High Yield Municipal Fund
Bonds outperformed stocks
As investors sought refuge from a volatile stock market, the highest quality sectors of the U.S. bond market delivered modest gains. During the first half of the period, Treasury prices rose and yields declined sharply as the economy faltered and stock market volatility increased. As hopes for a recovery materialized in the second half of the period, yields rose and Treasuries lagged riskier segments of the bond market. The benchmark 10-year U.S. Treasury yield began the period at just under 4.0%, declined to 2.2% in December 2008 then rose to end the period at 3.5%. In this environment, the Barclays Capital Aggregate Bond Index1 (formerly the Lehman Brothers U.S. Aggregate Bond Index) returned 6.05%. High-yield bond prices fell sharply in 2008 as economic prospects weakened and default fears rose, then rebounded strongly in 2009. For the 12-month period, the Merrill Lynch U.S. High Yield, Cash Pay Index2 returned negative 3.63%. For the last six months of the period, the index gained 28.99%.
Stocks retreated, then rebounded
Against a weakening economic backdrop, the U.S. stock market lost 26.21% for the 12-month period, as measured by the S&P 500 Index.3 Losses affected the stocks of companies of all sizes and investment style categories, although growth stocks held up slightly better than value stocks, as measured by their respective Russell indices.4 Stock markets outside the U.S. suffered even greater losses. The MSCI EAFE Index,5 a broad gauge of stock market performance in foreign developed markets, lost 31.35% (in U.S. dollars) for the period. Emerging stock markets, which generally have had a strong run over the past several years, were also caught in the downdraft. As investors backed away from risk, the MSCI Emerging Markets Index6 returned negative 28.07% (in U.S. dollars).
Past performance is no guarantee of future results.
| 1 | The Barclays Capital Aggregate Bond Index is a market value-weighted index that tracks the daily price, coupon, pay-downs, and total return performance of fixed-rate, publicly placed, dollar-denominated, and non-convertible investment-grade debt issues with a least $250 million par amount outstanding and with at least one year to final maturity. |
| 2 | The Merrill Lynch U.S. High Yield, Cash Pay Index tracks the performance of non-investment-grade corporate bonds. As of 01/01/2009, Merrill Lynch & Co., Inc. is a wholly-owned subsidiary of Bank of America Corporation and an affiliate of Columbia Management. |
| 3 | The Standard & Poor’s (S&P) 500 Index tracks the performance of 500 widely held, large-capitalization U.S. stocks. |
| 4 | The Russell 1000 Index measures the performance of 1,000 of the largest U.S. companies, based on market capitalization. The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index, as ranked by total market capitalization. The Russell 2000 Index measures the performance of the 2,000 smallest of the 3,000 largest U.S. companies, based on market capitalization. The Russell 1000 Growth Index measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Value Index measures the performance of those companies in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Growth Index measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Value Index measures the performance of those Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 3000 Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000 Value Index measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap Growth Index measures the performance of those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell Midcap Value Index measures the performance of those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values. |
| 5 | The Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East (EAFE) Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada. |
| 6 | The Morgan Stanley Capital International (MSCI) Emerging Markets Index is composed of a sample of companies from 22 countries representing the global emerging stock markets. |
Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index.
3
Performance Information – Columbia High Yield Municipal Fund
Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.
| | |
| Annual operating expense ratio (%)* |
| |
Class A | | 0.92 |
Class B | | 1.67 |
Class C | | 1.67 |
Class Z | | 0.72 |
| * | The annual operating expense ratio is as stated in the fund’s prospectus that is current as of the date of this report. Differences in expense ratios disclosed elsewhere in this report may result from including fee waivers and expense reimbursements as well as different time periods used in calculating the ratios. | |
|
| Performance of a $10,000 investment 07/01/99 – 06/30/09 |
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia High Yield Municipal Fund during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares. The Barclays Capital Municipal Bond Index is considered representative of the broad market for investment-grade, tax-exempt bonds with a maturity of at least one year. Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index.
| | | | |
| Performance of a $10,000 investment 07/01/99 – 06/30/09 ($) |
| | |
| Sales charge: | | without | | with |
Class A | | 12,686 | | 12,087 |
Class B | | 12,039 | | 12,039 |
Class C | | 12,164 | | 12,164 |
Class Z | | 12,946 | | n/a |
| | | | | | | | | | | | | | |
| Average annual total return as of 06/30/09 (%) |
| | | | |
| Share class | | A | | B | | C | | Z |
| Inception | | 07/31/00 | | 07/15/02 | | 07/15/02 | | 03/05/84 |
| Sales charge | | without | | with | | without | | with | | without | | with | | without |
1-year | | –9.60 | | –13.85 | | –10.27 | | –14.53 | | –10.14 | | –10.99 | | –9.42 |
5-year | | 0.50 | | –0.48 | | –0.25 | | –0.58 | | –0.10 | | –0.10 | | 0.70 |
10-year | | 2.41 | | 1.91 | | 1.87 | | 1.87 | | 1.98 | | 1.98 | | 2.62 |
The “with sales charge” returns include the maximum initial sales charge of 4.75% for Class A shares and the applicable contingent deferred sales charge of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter for Class B shares and 1.00% for Class C shares for the first year only. The “without sales charge” returns do not include the effect of sales charges. If they had, returns would be lower.
All results shown assume reinvestment of distributions. Class Z shares are sold at net asset value with no distribution and service (Rule 12b-1) fees. Class Z shares have limited eligibility and the investment minimum requirements may vary. Please see the fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class.
Performance results reflect any fee waivers or reimbursements of fund expenses by the investment advisor and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
The table does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.
Class A, Class B and Class C are newer classes of shares. Class A performance information includes the performance of Class Z shares (the oldest existing share class) for periods prior to its inception. Class B and Class C performance information includes returns of Class A shares for the period from July 31, 2000 through July 15, 2002, and the returns of Class Z shares for periods prior thereto. These returns reflect differences in sales charges, but have not been restated to reflect any differences in expenses (such as distribution and service (Rule 12b-1) fees) between Class Z shares (or Class A shares) and the newer classes of shares. If differences in expenses had been reflected, the returns shown for periods prior to the inception of the newer classes of shares would have been lower, since the newer classes of shares are subject to distribution and service (Rule 12b-1) fees. Class A shares were initially offered on July 31, 2000, Class B and Class C shares were initially offered July 15, 2002, and Class Z shares were initially offered on March 5, 1984.
4
Understanding Your Expenses – Columbia High Yield Municipal Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| | n | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. | |
| | n | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. | |
| | 1. | Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6. | |
| | 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “Actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. | |
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to a $20 annual fee. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees or exchange fees. There are also ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “Hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| 01/01/09 – 06/30/09 |
| | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
Class A | | 1,000.00 | | 1,000.00 | | 1,150.90 | | 1,020.63 | | 4.48 | | 4.21 | | 0.84 |
Class B | | 1,000.00 | | 1,000.00 | | 1,146.68 | | 1,016.96 | | 8.41 | | 7.90 | | 1.58 |
Class C | | 1,000.00 | | 1,000.00 | | 1,147.48 | | 1,017.70 | | 7.61 | | 7.15 | | 1.43 |
Class Z | | 1,000.00 | | 1,000.00 | | 1,151.99 | | 1,021.62 | | 3.41 | | 3.21 | | 0.64 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 365.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses for Class C shares, the account value at the end of the period for Class C shares would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
5
Portfolio Manager’s Report – Columbia High Yield Municipal Fund
Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.
| | |
| Net asset value per share |
| |
as of 06/30/09 ($) | | |
Class A | | 8.79 |
Class B | | 8.79 |
Class C | | 8.79 |
Class Z | | 8.79 |
| | |
| Distributions declared per share |
| |
07/01/08 – 06/30/09 ($) | | |
Class A | | 0.53 |
Class B | | 0.46 |
Class C | | 0.47 |
Class Z | | 0.54 |
A portion of the fund’s income may be subject to the alternative minimum tax. The fund may at times purchase tax-exempt securities at a discount. Some or all of this discount may be included in the fund’s ordinary income, and is taxable when distributed.
| | |
| 30-day SEC yields |
| |
as of 06/30/09 (%) | | |
Class A | | 5.99 |
Class B | | 5.54 |
Class C | | 5.69 |
Class Z | | 6.50 |
The 30-day SEC yields reflect the fund’s earning power, net of expenses, expressed as an annualized percentage of the public offering price per share at the end of the period. Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses for Class C shares, the 30-day SEC yields for Class C shares would have been lower.
| | |
| Taxable equivalent SEC yields |
| |
as of 06/30/09 (%) | | |
Class A | | 9.22 |
Class B | | 8.52 |
Class C | | 8.76 |
Class Z | | 10.00 |
Taxable-equivalent SEC yields are based on the maximum effective 35.0% federal income tax rate. This tax rate does not reflect the phase out of exemptions or the reduction of otherwise allowable deductions that occur when adjusted gross income exceeds certain levels.
For the 12-month period that ended June 30, 2009, the fund’s Class A shares returned negative 9.60% without sales charge. The fund’s benchmark, the Barclays Capital Municipal Bond Index1 (formerly the Lehman Brothers Municipal Bond Index), returned 3.77% for the same period. The fund outperformed its peer group, the Lipper High Yield Municipal Debt Funds Classification2, which had an average return of negative 11.14%. We believe that the fund’s greater exposure to bonds with higher credit quality helped it hold up better than its peers. The fund’s Barclays benchmark consists of even higher quality bonds, including investment-grade bonds, which gave it an advantage as investors continued to favor quality over the 12 months covered by this report.
On February 20, 2009, Chad H. Farrington took over as portfolio manager of the fund.
Pre-refunded and airline bonds aided performance
In a period that saw a fair amount of volatility in the municipal bond market, pre-refunded bonds performed well. When a bond is pre-refunded, the issuer floats a second bond. The proceeds from the sale of the second bond are typically invested in Treasury securities that are used to pay off the first bond issue at its call date. Bond issuers typically pre-refund bonds during periods of low interest rates in order to lower their interest costs.
The fund’s exposure to airline bonds — tax exempt bonds backed by major airlines — also made a positive contribution to performance. While these securities underperformed through much of 2008, they began to recover in 2009 as airlines benefited from lower oil prices and as fears about the plight of the airline industry abated. In fact, once it was clear that airline bond prices had been bid down to extraordinary lows, they became attractive and were some of the fund’s strongest performers for the period. Also, the fund’s underweight exposure to higher-yielding lower quality bonds contributed to its outperformance relative to its peer group.
Real estate-related and insured utility bonds detracted from performance
The fund’s performance was hurt by its holdings of bonds issued to pay for infrastructure — road, water and sewer projects — for new real estate developments, which came under pressure as the commercial and residential real estate market collapsed, particularly in Florida. The depressed real estate market also had a negative impact on fund holdings of bonds issued by continuing care retirement communities. These retirement communities depend on people being able to sell their homes in order to fund a community’s entrance fees — a trend that has been interrupted by a weak real estate market. Insured oil and gas and investor-owned utility bonds detracted from fund performance as the bond ratings of their insurers
| 1 | The Barclays Capital Municipal Bond Index is considered representative of the broad market for investment-grade, tax-exempt bonds with a maturity of at least one year. Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index. |
| 2 | Lipper Inc., a widely respected data provider in the industry, calculates an average total return (assuming reinvestment of distributions) for mutual funds with investment objectives similar to those of the fund. Lipper makes no adjustment for the effect of sales loads. |
6
Portfolio Manager’s Report (continued) – Columbia High Yield Municipal Fund
| | | | |
| Top 10 holdings | | |
| |
as of 06/30/09 (%) | | |
| VA | | Tobacco Settlement Financing Corp. | | 2.1 |
| TX | | Matagorda County Navigation District No. 1 | | 1.0 |
| NY | | New York City | | 0.9 |
| PR | | Commonwealth of Puerto Rico Sales Tax Financing Corp. | | 0.9 |
| FL | | North Brevard County Hospital District | | 0.8 |
| IL | | Finance Authority | | 0.8 |
| CO | | Health Facilities Authority | | 0.8 |
| WI | | Health & Educational Facilities Authority | | 0.8 |
| CO | | Educational & Cultural Facilities Authority | | 0.8 |
| MA | | Educational Financing Authority | | 0.8 |
Top 10 holdings are calculated as a percentage of net assets. Short-term securities are excluded from top ten holdings. The Fund is actively managed and the composition of its portfolio will change over time.
| | |
| Maturity breakdown | | |
| |
as of 05/31/09 (%) | | |
0-1 year | | 1.6 |
1-3 years | | 5.7 |
3-5 years | | 5.1 |
5-7 years | | 4.4 |
7-10 years | | 6.5 |
10-15 years | | 8.8 |
15-20 years | | 15.5 |
20-25 years | | 15.1 |
25 years and over | | 33.6 |
Cash & Equivalents | | 3.7 |
| | |
| Quality breakdown | | |
| |
as of 06/30/09 (%) | | |
AAA | | 13.0 |
AA | | 4.1 |
A | | 16.0 |
BBB | | 28.3 |
BB | | 2.5 |
B | | 2.4 |
CCC | | 0.9 |
Not Rated | | 32.8 |
Quality and maturity breakdowns are calculated as a percentage of net assets. Ratings shown in the quality breakdown represent the rating assigned to a particular bond by one of the following nationally recognized rating agencies: Standard & Poor’s, a division of McGraw-Hill Companies, Inc., Moody’s Investor Services, Inc. or Fitch Ratings Ltd. Ratings are relative and subjective and are not absolute standards of quality. The Fund’s credit quality does not remove the market risk.
were lowered when problems in the financial sector grew. We sold these utility bonds in December but not before realizing some losses. Finally, Treasury futures, which we used as a hedge against changing interest rates, also hurt performance as Treasury rates moved lower. We eliminated Treasury futures from the fund during the period.
Looking Ahead
While we believe that economic weakness is going to continue for some time, we also believe that weak growth should help keep inflation in check despite federal stimulus spending. In this environment, we plan to continue to put the fund’s relatively high cash position to work. Cash, in combination with the fund’s holdings of highly liquid pre-refunded bonds, should allow us to continue to buy bonds that we feel are attractively priced. At the same time, we plan to maintain the portfolio’s broad diversification to limit exposure to any one geographic area or sector.
Tax-exempt investing offers current tax-exempt income, but it also involves certain risks. The value of the fund will be affected by interest rate changes and the creditworthiness of issues held in the fund. When interest rates go up, bond prices generally drop and vice versa. Interest income from certain tax-exempt bonds may be subject to certain state and local taxes and, if applicable, the alternative minimum tax. Capital gains are not exempt from income taxes.
Investments in high-yield or “junk” bonds offer the potential for higher income than investments in investment-grade bonds, but also involve a higher degree of risk. Changes in economic conditions or other circumstances may adversely affect a high-yield bond issuer’s ability to make timely principal and interest payments.
Portfolio holdings and characteristics are subject to change periodically and may not be representative of current holdings and characteristics. The outlook for the fund may differ from those presented for other Columbia Funds.
Past performance is no guarantee of future results.
7
Investment Portfolio – Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds – 94.8%
| | | | |
| | | Par ($) | | Value ($) |
| Education – 4.9% | | | | |
| Education – 1.8% | | | | |
| CA Municipal Finance Authority | | | | |
Biola University,
Series 2008,
5.875% 10/01/34 | | 1,500,000 | | 1,363,605 |
|
| CA Statewide Communities Development Authority |
San Francisco Art Institute,
Series 2002,
7.375% 04/01/32 | | 500,000 | | 334,065 |
| |
| PA Higher Education Facilities Authority | | |
Edinboro University,
Series 2008,
5.875% 07/01/38 | | 2,200,000 | | 1,872,970 |
| |
| VT Education & Health Buildings Agency | | |
Vermont Law School Project,
Series 2003 A,
5.500% 01/01/33 | | 500,000 | | 403,855 |
|
| WI Health & Educational Facilities Authority |
Medical College of Wisconsin,
Series 2008 A,
5.250% 12/01/35 | | 5,000,000 | | 4,493,650 |
| | |
WV University
| | | | |
Series 2000 A,
Insured: AMBAC: | | | | |
(a) 04/01/19 | | 1,250,000 | | 802,575 |
(a) 04/01/25 | | 2,750,000 | | 1,182,500 |
| | | | |
Education Total | | | | 10,453,220 |
| | |
| Prep School – 1.1% | | | | |
| CA Statewide Communities Development Authority |
Crossroads School for Arts & Sciences,
Series 1998,
6.000% 08/01/28 (b) | | 915,000 | | 771,116 |
|
| IL Finance Authority |
Chicago Charter School Foundation, |
Series 2007, 5.000% 12/01/36 | | 1,750,000 | | 1,204,647 |
|
| KY Louisville & Jefferson County Metropolitan Government |
Assumption High School, Inc., Series 2006,
5.000% 10/01/35 | | 1,500,000 | | 1,229,595 |
|
| MA Health & Educational Facilities Authority |
Learning Center for Deaf Children,
|
Series 1999 C,
6.100% 07/01/19 | | 1,000,000 | | 870,990 |
| | | | |
| | | Par ($) | | Value ($) |
MI Conner Creek Academy
| | |
Series 2007,
5.000% 11/01/26 | | 2,540,000 | | 1,780,362 |
| |
| MI Summit Academy North | | |
Series 2005,
5.500% 11/01/35 | | 750,000 | | 463,013 |
| | | | |
Prep School Total | | | | 6,319,723 |
| | |
| Student Loan – 2.0% | | | | |
| CT Higher Education Supplemental Loan Authority |
Family Education Loan Program,
Series 2005 A, AMT,
Insured: NPFGC
4.375% 11/15/21 | | 1,050,000 | | 892,615 |
|
| MA Educational Financing Authority |
Series 2008 H, AMT,
Insured: AGO
6.350% 01/01/30 | | 4,500,000 | | 4,464,360 |
| | |
| NE Nebhelp, Inc. | | | | |
Series 1993 A-6, AMT,
Insured: NPFGC
6.450% 06/01/18 | | 4,000,000 | | 4,047,680 |
|
| NM Educational Assistance Foundation |
Series 1996 A-2, AMT,
6.650% 11/01/25 | | 1,915,000 | | 1,915,709 |
| | | | |
Student Loan Total | | | | 11,320,364 |
| | | | |
Education Total | | | | 28,093,307 |
| | | | |
| Health Care – 34.3% | | | | |
| Continuing Care Retirement – 15.5% |
| CA La Verne | | | | |
Brethren Hillcrest Homes,
Series 2003 B,
6.625% 02/15/25 | | 685,000 | | 578,674 |
| | |
| CO Health Facilities Authority | | | | |
Christian Living Communities, Series 2006 A: | | | | |
5.750% 01/01/26 | | 500,000 | | 393,345 |
5.750% 01/01/37 | | 1,500,000 | | 1,067,535 |
Covenant Retirement Communities, Inc.:
| | |
Series 2002 B, 6.125% 12/01/33 | | 1,000,000 | | 840,140 |
Series 2005, 5.000% 12/01/35 | | 2,900,000 | | 2,048,502 |
| | |
| FL City of Lakeland | | | | |
Series 2008: | | | | |
6.250% 01/01/28 | | 675,000 | | 538,853 |
6.375% 01/01/43 | | 2,250,000 | | 1,631,700 |
See Accompanying Notes to Financial Statements.
8
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Health Care (continued) | | | | |
| FL Lee County Industrial Development Authority |
Shell Point Village,
Series 2007,
5.000% 11/15/29 | | 4,000,000 | | 2,683,760 |
| |
| FL Orange County Health Facilities Authority | | |
Orlando Lutheran:
Series 2005,
5.700% 07/01/26 | | 2,000,000 | | 1,472,640 |
Series 2007: | | | | |
5.500% 07/01/32 | | 350,000 | | 231,630 |
5.500% 07/01/38 | | 1,750,000 | | 1,121,225 |
|
| FL Palm Beach County Health Facilities Authority |
Abbey Delray South,
Series 2003,
5.350% 10/01/14 | | 1,250,000 | | 1,182,775 |
| |
| FL Sarasota County Health Facility Authority | | |
Village on the Isle,
Series 2007,
5.500% 01/01/32 | | 4,000,000 | | 2,777,920 |
|
| FL St. John’s County Industrial Development Authority |
Glenmoor at St. John’s, Inc.,
Series 2006 A,
5.375% 01/01/40 | | 4,275,000 | | 2,583,596 |
Ponte Vedra, Inc.,
Series 2007,
5.000% 02/15/27 | | 2,765,000 | | 2,112,681 |
| | |
| GA Fulton County | | | | |
Canterbury Court,
Series 2004 A,
6.125% 02/15/34 | | 1,000,000 | | 742,710 |
Lenbrook,
Series 2006 A: | | | | |
5.000% 07/01/17 | | 2,000,000 | | 1,674,540 |
5.000% 07/01/29 | | 3,000,000 | | 1,956,690 |
|
| GA Savannah Economic Development Authority |
Marshes of Skidaway,
Series 2003 A: | | | | |
7.400% 01/01/24 | | 500,000 | | 444,410 |
7.400% 01/01/34 | | 3,000,000 | | 2,470,410 |
|
| IA Finance Authority |
Deerfield Retirement Community, Inc., | | |
Series 2007 A: | | | | |
5.500% 11/15/27 | | 1,135,000 | | 702,610 |
5.500% 11/15/37 | | 750,000 | | 417,293 |
| | | | |
| | | Par ($) | | Value ($) |
| IL Du Page County Special Service Area No. 31 |
Monarch Landing Project,
Series 2006,
5.625% 03/01/36 | | 750,000 | | 467,295 |
|
| IL Finance Authority |
Lutheran Senior Services,
Series 2006,
5.125% 02/01/26 | | 2,000,000 | | 1,515,900 |
Monarch Landing, Inc.,
Series 2007 A,
7.000% 12/01/27 | | 1,640,000 | | 1,105,655 |
Sedgebrook, Inc.,
Series 2007 A:
6.000% 11/15/37 | | 5,000,000 | | 2,742,800 |
6.000% 11/15/42 | | 2,000,000 | | 1,079,660 |
Tabor Hills Supportive Living,
Series 2006,
5.250% 11/15/36 | | 2,000,000 | | 1,217,600 |
Washington & Jane Smith Community:
|
Series 2003 A, 7.000% 11/15/32 | | 1,000,000 | | 814,290 |
Series 2005 A, 6.250% 11/15/35 | | 2,750,000 | | 2,114,475 |
|
| IL Lincolnshire Special Services Area No. 1 |
Sedgebrook Project,
Series 2004,
6.250% 03/01/34 | | 750,000 | | 487,748 |
|
| IN Health & Educational Facilities Financing Authority |
Baptist Homes of Indiana, Inc., Series 2005,
5.250% 11/15/35 | | 2,750,000 | | 2,020,782 |
|
| KS Lenexa |
Lakeview Village, Inc.,
Series 2007,
5.500% 05/15/39 | | 4,250,000 | | 2,799,517 |
| |
| KS Manhattan | | |
Manhattan Health Care Facility, | | | | |
Series 2007 A,
5.000% 05/15/29 | | 2,680,000 | | 1,919,738 |
| |
| MA Development Finance Agency | | |
Linden Ponds, Inc.,
| | | | |
Series 2007 A: 5.750% 11/15/35 | | 700,000 | | 422,142 |
5.750% 11/15/42 | | 3,530,000 | | 2,057,602 |
Loomis House, Inc.:
| | | | |
Series 1999 A, 5.625% 07/01/15 | | 650,000 | | 601,699 |
Series 2002 A, 6.900% 03/01/32 | | 220,000 | | 195,873 |
See Accompanying Notes to Financial Statements.
9
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Health Care (continued) | | | | |
| MD Howard County | | |
Columbia Vantage House Corp.: | | | | |
Series 2007 A, 5.250% 04/01/33 | | 1,990,000 | | 1,233,700 |
Series 2007 B, 5.250% 04/01/37 | | 1,500,000 | | 902,970 |
|
| MD Westminster Economic Development Authority |
Carroll Lutheran Village, Inc.,
| | | | |
Series 2004 A, 6.250% 05/01/34 | | 1,750,000 | | 1,306,620 |
| |
| MI Kentwood Economic Development Corp. | | |
Holland Home,
Series 2006 A,
5.375% 11/15/36 | | 1,750,000 | | 1,191,435 |
|
| MN Columbia Heights |
Crest View Corp., | | | | |
Series 2007 A: 5.550% 07/01/27 | | 1,000,000 | | 705,650 |
5.700% 07/01/42 | | 2,000,000 | | 1,306,820 |
| |
| MO Health & Educational Facilities Authority | | |
Lutheran Senior Services,
Series 2007 A,
4.875% 02/01/27 | | 3,000,000 | | 2,216,220 |
| |
| MO St. Louis Industrial Development Authority | | |
St. Andrew’s Resources for Seniors, | | | | |
Series 2007 A: 6.250% 12/01/26 | | 2,000,000 | | 1,646,440 |
6.375% 12/01/41 | | 3,000,000 | | 2,326,740 |
| |
| MT Facility Finance Authority | | |
St. John’s Lutheran Ministries, Inc., | | | | |
Series 2006 A, 6.125% 05/15/36 | | 1,000,000 | | 758,750 |
|
| NH Higher Educational & Health Facilities Authority |
Rivermead at Peterborough, | | | | |
Series 1998, 5.625% 07/01/18 | | 500,000 | | 440,985 |
| |
| NJ Economic Development Authority | | |
Seabrook Village, Inc., | | | | |
Series 2006, 5.250% 11/15/36 | | 2,250,000 | | 1,553,782 |
|
| NY Broome Country Industrial Development Agency |
Good Shepherd Village at Endwell, | | |
Series 2008 A, 6.875% 07/01/40 | | 1,750,000 | | 1,344,910 |
| | | | |
| | | Par ($) | | Value ($) |
| NY East Rochester Housing Authority | | |
Woodland Village Project, | | | | |
Series 2006, 5.500% 08/01/33 | | 1,700,000 | | 1,146,327 |
|
| NY Nassau County Industrial Development Agency |
Amsterdam at Harborside, | | | | |
Series 2007 A, 6.700% 01/01/43 | | 1,000,000 | | 756,180 |
|
| PA Bucks County Industrial Development Authority |
Ann’s Choice, Inc., | | | | |
Series 2005 A, 6.250% 01/01/35 | | 1,750,000 | | 1,266,737 |
| |
| PA Chartiers Valley Industrial & Commercial Development Authority | | |
Asbury Health Center, | | | | |
Series 1999, 6.375% 12/01/24 | | 750,000 | | 636,053 |
Friendship Village of South Hills, | | | | |
Series 2003 A, 5.750% 08/15/20 | | 1,000,000 | | 879,040 |
| |
| PA Montgomery County Industrial Development Authority | | |
Whitemarsh Continuing Care Retirement Community:
|
Series 2005: 6.125% 02/01/28 | | 1,400,000 | | 891,646 |
6.250% 02/01/35 | | 1,350,000 | | 822,056 |
Series 2008, 7.000% 02/01/36 | | 2,000,000 | | 1,386,220 |
| |
| SC Jobs Economic Development Authority | | |
Lutheran Homes of South Carolina, Inc., | | |
Series 2007: 5.375% 05/01/21 | | 1,000,000 | | 778,380 |
5.500% 05/01/28 | | 1,100,000 | | 769,703 |
Wesley Commons, | | | | |
Series 2006, 5.300% 10/01/36 | | 3,000,000 | | 1,878,360 |
| |
| TN Metropolitan Government Nashville & Davidson County | | |
Blakeford at Green Hills, | | | | |
Series 1998, 5.650% 07/01/24 | | 1,825,000 | | 1,397,749 |
| |
| TN Shelby County Health Educational & Housing Facilities Board | | |
Germantown Village: | | | | |
Series 2003 A, 7.250% 12/01/34 | | 675,000 | | 541,451 |
Series 2006, 6.250% 12/01/34 | | 500,000 | | 348,995 |
See Accompanying Notes to Financial Statements.
10
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Health Care (continued) | | | | |
| TX Abilene Health Facilities Development Corp. |
Sears Methodist Retirement Center: |
Series 1998 A, 5.900% 11/15/25 | | 1,350,000 | | 944,298 |
Series 2003 A, | | | | |
7.000% 11/15/33 | | 800,000 | | 584,952 |
| |
| TX HFDC of Central Texas, Inc. | | |
Legacy at Willow Bend, | | | | |
Series 2006 A, | | |
5.750% 11/01/36 | | 2,100,000 | | 1,387,827 |
| |
| VA Suffolk Industrial Development Authority | | |
Lake Prince Center, | | | | |
Series 2006, | | | | |
5.150% 09/01/24 | | 750,000 | | 584,528 |
|
| WI Health & Educational Facilities Authority |
Clement Manor, | | | | |
Series 1998, | | | | |
5.750% 08/15/24 | | 2,200,000 | | 1,780,108 |
Milwaukee Catholic Home, | | | | |
Series 2006, | | | | |
5.000% 07/01/26 | | 750,000 | | 636,623 |
Three Pillars Senior Living Communities: | | |
Series 2003, | | | | |
5.600% 08/15/23 | | 790,000 | | 739,408 |
Series 2004 A, | | | | |
5.500% 08/15/34 | | 870,000 | | 710,442 |
| | | | |
Continuing Care Retirement Total | | 89,038,520 |
| |
| Health Services – 0.4% | | |
| CO Health Facilities Authority | | |
National Jewish Medical & Research Center, |
Series 1998, 5.375% 01/01/23 | | 1,080,000 | | 888,818 |
| |
| MA Development Finance Agency | | |
Boston Biomedical Research Institute, | | |
Series 1999: | | |
5.650% 02/01/19 | | 370,000 | | 307,085 |
5.750% 02/01/29 | | 550,000 | | 393,817 |
| |
MN Minneapolis & St. Paul
Housing & Redevelopment Authority | | |
HealthPartners,
Series 2003,
5.875% 12/01/29 | | 400,000 | | 363,132 |
| | | | |
Health Services Total | | | | 1,952,852 |
| | | | |
| | | Par ($) | | Value ($) |
| Hospitals – 14.7% | | |
| AZ Health Facilities Authority | | |
Phoenix Memorial Hospital, | | | | |
Series 1991,
| | | | |
8.125% 06/01/12 (c) | | 1,803,743 | | 18,037 |
|
| AZ Yavapai County Industrial Development Authority |
Yavapai Community Hospital Association,
|
Series 2008 B, 5.625% 08/01/37 | | 3,500,000 | | 2,991,310 |
|
| CA ABAG Finance Authority for Nonprofit Corps. |
San Diego Hospital Association,
| | |
Series 2003 C, 5.375% 03/01/21 | | 500,000 | | 450,270 |
| |
| CA Turlock Health Facility | | |
Emanuel Medical Center, Inc.:
| | | | |
Series 2004, | | | | |
5.375% 10/15/34 | | 2,000,000 | | 1,380,300 |
Series 2007 B, | | | | |
5.125% 10/15/37 | | 2,035,000 | | 1,324,887 |
| |
| CO Health Facilities Authority | | |
Vail Valley Medical Center,
| | | | |
Series 2004, 5.000% 01/15/20 | | 1,000,000 | | 936,040 |
|
| FL Hillsborough County Industrial Development Authority |
Tampa General Hospital,
Series 2003 B,
5.250% 10/01/34 | | 1,000,000 | | 837,180 |
| |
| FL Miami Health Facilities Authority | | |
Catholic Health East,
Series 2003 B,
5.125% 11/15/24 | | 1,000,000 | | 925,160 |
|
FL North Brevard County Hospital District
|
Series 2008,
5.750% 10/01/38 | | 5,000,000 | | 4,848,200 |
| |
| FL Orange County Health Facilities Authority | | |
Orlando Regional Healthcare System: |
Series 1999 E, 6.000% 10/01/26 | | 855,000 | | 840,491 |
Series 2008 C, | | |
5.250% 10/01/35 | | 4,000,000 | | 3,496,080 |
|
| FL South Lake County Hospital District |
South Lake Hospital, Inc., | | | | |
Series 2003: | | | | |
6.375% 10/01/28 | | 750,000 | | 675,188 |
6.375% 10/01/34 | | 500,000 | | 453,850 |
See Accompanying Notes to Financial Statements.
11
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Health Care (continued) | | | | |
FL West Orange Health Care District
|
Series 2001 A,
5.650% 02/01/22 | | 1,450,000 | | 1,379,718 |
|
| IL Finance Authority |
Provena Health,
Series 2009,
7.750% 08/15/34 | | 3,000,000 | | 2,947,530 |
Silver Cross Hospital & Medical,
Series 2009,
7.000% 08/15/44 | | 5,000,000 | | 4,822,700 |
|
| IL Southwestern Development Authority |
Anderson Hospital: | | | | |
Series 1999: | | | | |
5.500% 08/15/20 | | 500,000 | | 461,165 |
5.625% 08/15/29 | | 250,000 | | 207,078 |
Series 2006, | | | | |
5.125% 08/15/26 | | 1,245,000 | | 1,006,607 |
|
| IN Health & Educational Facility Financing Authority |
Schneck Memorial Hospital,
Series 2006 A,
5.250% 02/15/30 | | 1,000,000 | | 825,520 |
|
| LA Public Facilities Authority |
Ochsner Clinic Foundation,
Series 2007 A,
5.250% 05/15/38 | | 5,000,000 | | 3,967,350 |
Touro Infirmary,
Series 1999 A:
5.500% 08/15/19 | | 510,000 | | 454,170 |
5.625% 08/15/29 | | 240,000 | | 188,436 |
| |
| MA Health & Educational Facilities Authority | | |
Caregroup, Inc.,
Series 2008 E-2,
5.375% 07/01/25 | | 2,000,000 | | 1,920,200 |
Jordan Hospital,
Series 1998 D,
5.250% 10/01/18 | | 600,000 | | 483,036 |
Milford-Whitinsville Regional Hospital:
|
Series 1998 C, 5.750% 07/15/13 | | 525,000 | | 510,636 |
Series 2007, | | | | |
5.000% 07/15/32 | | 1,250,000 | | 824,600 |
|
| MD Health & Higher Educational Facilities Authority |
Adventist Health Care,
Series 2003 A:
5.000% 01/01/16 | | 400,000 | | 371,392 |
5.750% 01/01/25 | | 600,000 | | 530,250 |
| | | | |
| | | Par ($) | | Value ($) |
| MI Dickinson County |
Dickinson County Health Care System,
|
Series 1999, 5.800% 11/01/24 | | 1,000,000 | | 870,320 |
|
| MI Hospital Finance Authority |
Detroit Medical Center,
Series 1997 A,
Insured: AMBAC
5.500% 08/15/24 | | 3,000,000 | | 2,058,510 |
Garden City Hospital,
Series 2007,
5.000% 08/15/38 | | 2,250,000 | | 1,095,818 |
Henry Ford Health,
Series 2006 A:
5.000% 11/15/21 | | 1,000,000 | | 879,150 |
5.250% 11/15/46 | | 3,000,000 | | 2,233,230 |
McLaren Health Care Corp.,
Series 2005 C,
5.000% 08/01/35 | | 2,500,000 | | 2,077,950 |
|
| MI Saginaw Hospital Finance Authority |
Covenant Medical Center Inc.,
Series 2000 F,
6.500% 07/01/30 | | 3,000,000 | | 2,939,490 |
|
| MN St. Paul Housing & Redevelopment Authority |
HealthEast, Inc.,
Series 2005:
5.150% 11/15/20 | | 750,000 | | 614,258 |
6.000% 11/15/30 | | 3,000,000 | | 2,341,740 |
| |
| MN Washington County Housing & Redevelopment Authority | | |
HealthEast, Inc.,
| | |
Series 1998, 5.250% 11/15/12 | | 1,100,000 | | 1,070,245 |
| |
| MO Cape Girardeau County | | |
Southeast Missouri Hospital Association,
|
Series 2003, 5.000% 06/01/27 | | 3,750,000 | | 3,104,062 |
| |
| MO Health & Educational Facilities Authority | | |
Lake Regional Health Systems,
| | | | |
Series 2003, 5.700% 02/15/34 | | 1,000,000 | | 846,260 |
|
| MO Saline County Industrial Development Authority |
John Fitzgibbon Memorial Hospital,
| | | | |
Series 2005, 5.625% 12/01/35 | | 2,750,000 | | 2,043,415 |
See Accompanying Notes to Financial Statements.
12
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Health Care (continued) | | | | |
| NC Medical Care Commission | | |
Stanly Memorial Hospital,
| | | | |
Series 1999, 6.375% 10/01/29 | | 1,000,000 | | 877,980 |
|
| NH Higher Educational & Health Facilities Authority |
The Memorial Hospital at North Conway,
|
Series 2006, 5.250% 06/01/21 | | 1,000,000 | | 868,080 |
| |
| NJ Health Care Facilities Financing Authority | | |
Children’s Specialized Hospital,
| | | | |
Series 2005 A, 5.000% 07/01/24 | | 745,000 | | 616,428 |
St. Joseph’s Hospital & Medical Center,
|
Series 2008: 6.000% 07/01/18 | | 2,000,000 | | 1,796,720 |
6.625% 07/01/38 | | 2,000,000 | | 1,627,200 |
| |
| NM Farmington Hospital Revenue | | |
San Juan Medical Center,
| | | | |
Series 2004 A, 5.000% 06/01/23 | | 500,000 | | 448,445 |
| |
| NY Dormitory Authority | | |
Mount Sinai Hospital,
Series 2000,
5.500% 07/01/26 | | 225,000 | | 223,772 |
NYU Hospital Center,
Series 2007 B,
5.625% 07/01/37 | | 2,000,000 | | 1,759,420 |
|
| NY Monroe County Industrial Development Agency |
Highland Hospital,
Series 2005,
5.000% 08/01/25 | | 1,115,000 | | 978,914 |
|
| OH Lakewood Hospital Improvement District |
Lakewood Hospital Association,
Series 2003,
5.500% 02/15/15 | | 1,250,000 | | 1,292,912 |
|
| OH Miami County Hospital Facilities Authority |
Upper Valley Medical Center, Inc.,
| | |
Series 2006, 5.250% 05/15/17 | | 1,000,000 | | 943,220 |
| |
| OH Sandusky County | | |
Memorial Hospital,
Series 1998,
5.150% 01/01/10 | | 250,000 | | 250,160 |
| |
| OK Norman Regional Hospital Authority | | |
Series 2007,
5.000% 09/01/27 | | 2,000,000 | | 1,353,540 |
| | | | |
| | | Par ($) | | Value ($) |
| SC Jobs Economic Development Authority | | |
Series 2008,
6.000% 09/15/38 | | 4,000,000 | | 3,460,520 |
| |
| TN Sullivan County Health Educational & Housing Facilities Board | | |
Wellmont Health System,
Series 2006 C:
5.250% 09/01/26 | | 500,000 | | 367,535 |
5.250% 09/01/36 | | 4,500,000 | | 2,988,945 |
|
| WI Health & Educational Facilities Authority |
Aurora Health Care, Inc.,
Series 2003,
6.400% 04/15/33 | | 700,000 | | 661,619 |
Fort Health Care, Inc.,
Series 2004,
6.100% 05/01/34 | | 1,965,000 | | 1,702,201 |
|
Hospitals Total | | | | 84,469,440 |
| |
| Intermediate Care Facilities – 0.6% | | |
| IL Development Finance Authority | | |
Hoosier Care, Inc.,
Series 1999 A,
7.125% 06/01/34 | | 1,370,000 | | 1,074,066 |
| |
| IN Health Facilities Financing Authority | | |
Hoosier Care, Inc.,
Series 1999 A,
7.125% 06/01/34 | | 1,125,000 | | 864,596 |
| |
| LA Public Facilities Authority | | |
Progressive Health Care Providers, Inc.,
|
Series 1998,
6.375% 10/01/28 | | 2,000,000 | | 1,526,560 |
| | | | |
Intermediate Care Facilities Total | | 3,465,222 |
| | |
| Nursing Homes – 3.1% | | | | |
| AK Juneau | | | | |
St. Ann’s Care Center, Inc.,
Series 1999,
6.875% 12/01/25 | | 1,565,000 | | 1,211,733 |
| | |
| CO Health Facilities Authority | | | | |
Evangelical Luth Gs Society, Series 2009 A
6.125% 06/01/38 | | 4,750,000 | | 4,670,722 |
|
| CT Development Authority Health Facility |
Alzheimers Resources Center, Inc., | | |
Series 2007: 5.400% 08/15/21 | | 1,080,000 | | 810,227 |
5.500% 08/15/27 | | 1,000,000 | | 697,500 |
See Accompanying Notes to Financial Statements.
13
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Health Care (continued) | | | | |
| IA Finance Authority | | | | |
Care Initiatives,
Series 1998 B:
5.750% 07/01/18 | | 600,000 | | 504,654 |
5.750% 07/01/28 | | 1,475,000 | | 1,038,341 |
| | |
| IA Marion Health Care Facilities | | | | |
AHF/Kentucky-Iowa, Inc.,
Series 2003,
8.000% 01/01/29 | | 300,000 | | 240,588 |
|
| KY Economic Development Finance Authority |
AHF/Kentucky-Iowa, Inc.,
Series 2003,
8.000% 01/01/29 | | 920,000 | | 737,803 |
| |
| MA Development Finance Agency | | |
Alliance Health Care,
Series 1999 A,
7.100% 07/01/32 | | 2,115,000 | | 1,665,013 |
| | |
| MA Industrial Finance Agency | | | | |
GF/Massachusetts, Inc.,
Series 1994,
8.300% 07/01/23 (l) | | 785,000 | | 549,500 |
| | |
| MN Eveleth | | | | |
Arrowhead Senior Living Community,
|
Series 2007, 5.200% 10/01/27 | | 2,375,000 | | 1,718,882 |
| | |
| MN Sartell | | | | |
Foundation for Health Care: | | | | |
Series 1999 A, | | | | |
6.625% 09/01/29 | | 2,000,000 | | 1,691,620 |
Series 2001 A, | | | | |
8.000% 09/01/30 | | 995,000 | | 914,554 |
|
| MO St. Louis County Industrial Development Authority |
Ranken Jordan, | | | | |
Series 2007, | | | | |
5.000% 11/15/35 | | 1,300,000 | | 777,972 |
| |
| NJ Economic Development Authority | | |
Seashore Gardens, | | | | |
Series 2006, | | | | |
5.300% 11/01/26 | | 500,000 | | 350,620 |
|
| PA Chester County Industrial Development Authority |
Pennsylvania Nursing Home,
Series 2002, | | | | |
8.500% 05/01/32 | | 370,000 | | 319,229 |
| | | | |
Nursing Homes Total | | | | 17,898,958 |
| | | | |
Health Care Total | | | | 196,824,992 |
| | | | |
| | | Par ($) | | Value ($) |
| Housing – 8.2% | | | | |
| Assisted Living/Senior – 1.7% | | | | |
| DE Kent County | | | | |
Heritage at Dover, | | | | |
Series 1999, AMT, | | | | |
7.625% 01/01/30 | | 2,455,000 | | 1,979,540 |
|
| FL St. John’s County Industrial Development Authority |
Bayview Assisted Living, | | | | |
Series 2007 A, | | | | |
5.250% 10/01/41 | | 3,725,000 | | 2,196,111 |
| |
| GA Columbus Housing Authority | | |
The Gardens at Calvary, | | | | |
Series 1999, | | | | |
7.000% 11/15/29 | | 2,000,000 | | 1,499,900 |
| |
| MA Development Finance Agency | | |
VOA Concord Assisted Living, Inc., | | |
Series 2007, | | | | |
5.200% 11/01/41 | | 1,000,000 | | 598,800 |
| |
| MN Roseville | | |
Care Institute, Inc.,
Series 1993, | | | | |
7.750% 11/01/23 | | 1,270,000 | | 962,850 |
| |
| NY Huntington Housing Authority | | |
Gurwin Jewish Senior Center,
Series 1999 A: | | | | |
5.875% 05/01/19 | | 1,900,000 | | 1,550,115 |
6.000% 05/01/29 | | 625,000 | | 450,719 |
|
| NY Suffolk County Industrial Development Agency |
Gurwin Jewish Phase II,
Series 2004,
6.700% 05/01/39 | | 495,000 | | 371,572 |
| | | | |
Assisted Living/Senior Total | | | | 9,609,607 |
| | |
| Multi-Family – 4.8% | | | | |
| CO Educational & Cultural Facilities Authority |
Campus Village Apartments LLC, Series 2008 CA,
5.500% 06/01/38 | | 5,000,000 | | 4,470,400 |
| |
| DC Housing Finance Agency | | |
FDS Residential II LP,
Series 2004, AMT,
Insured: FHA
4.850% 06/01/35 | | 1,460,000 | | 1,284,347 |
| |
| DE Wilmington | | |
Electra Arms Senior Association, Series 1998, AMT,
6.250% 06/01/28 | | 830,000 | | 629,812 |
See Accompanying Notes to Financial Statements.
14
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Housing (continued) | | | | |
| FL Broward County Housing Finance Authority |
Chaves Lake Apartments Ltd., Series 2000 A, AMT,
7.500% 07/01/40 | | 1,500,000 | | 1,331,640 |
| |
| FL Capital Trust Agency | | |
Series 2008 B, | | | | |
7.000% 07/15/32 | | 1,465,000 | | 1,217,972 |
| |
| FL Clay County Housing Finance Authority | | |
Breckenridge Commons Ltd., Series 2000 A, AMT,
7.450% 07/01/40 | | 1,325,000 | | 1,132,133 |
| |
| MA Housing Finance Agency | | |
Series 2005 E, AMT,
5.000% 12/01/28 | | 750,000 | | 702,158 |
| |
| MD Economic Development Corp. | | |
University of Maryland, College Park Projects,
|
Series 2008, 5.875% 06/01/43 | | 2,735,000 | | 2,516,528 |
| |
| MN Minneapolis Student Housing | | |
Riverton Community Housing, Inc.,
Series 2006 A,
5.700% 08/01/40 | | 1,600,000 | | 1,125,504 |
| |
| NC Durham Housing Authority | | |
Magnolia Pointe Apartments,
Series 2005, AMT,
5.650% 02/01/38 (b) | | 3,267,359 | | 2,466,202 |
| |
| NC Medical Care Commission | | |
ARC Project,
Series 2004 A, | | | | |
5.800% 10/01/34 | | 1,550,000 | | 1,325,979 |
| |
| NM Mortgage Finance Authority | | |
Series 2005 E, AMT,
Insured: FHA
4.800% 09/01/40 | | 1,200,000 | | 1,026,300 |
| |
| OH Montgomery County | | |
Heartland of Centerville LLC,
Series 2005, AMT,
Insured: FHLMC
4.950% 11/01/35 | | 750,000 | | 741,233 |
| |
| OK County Finance Authority | | |
Sail Associates LLC,
Series 2007, AMT,
LOC: Bank of the West
5.250% 12/01/41 | | 1,475,000 | | 1,388,535 |
| | | | |
| | | Par ($) | | Value ($) |
| OR Forest Grove Student Housing | | |
Oak Tree Foundation,
Series 2007,
5.500% 03/01/37 | | 2,900,000 | | 2,132,225 |
|
| OR Housing & Community Services Department |
Series 2005 A, AMT,
Insured: FHA
4.850% 07/01/35 | | 1,755,000 | | 1,543,628 |
| |
| Resolution Trust Corp. | | |
Pass-Through Certificates,
Series 1993 A,
8.500% 12/01/16 (d) | | 455,481 | | 419,462 |
| |
| TX El Paso County Housing Finance Corp. | | |
American Village Communities:
Series 2000 C,
8.000% 12/01/32 | | 560,000 | | 494,323 |
Series 2000 D, | | | | |
10.000% 12/01/32 | | 665,000 | | 583,012 |
| |
| WA Seattle Housing Authority | | |
High Rise Rehabilitation Phase I LP, |
Series 2005, AMT,
Insured: FSA
5.000% 11/01/25 | | 1,000,000 | | 952,700 |
| | | | |
Multi-Family Total | | | | 27,484,093 |
|
| Single-Family – 1.7% |
| CA Housing Finance Agency | | |
Series 2006 K, AMT,
4.625% 08/01/26 | | 5,000,000 | | 4,023,250 |
| |
| CO Housing & Finance Authority | | |
Series 1997 A-2, AMT,
7.250% 05/01/27 | | 15,000 | | 15,263 |
| |
| FL Housing Finance Corp. | | |
Series 2006 1, AMT,
Guarantor: GNMA
4.850% 07/01/37 | | 1,185,000 | | 1,051,249 |
| |
| MA Housing Finance Agency | | |
Series 2006 122, AMT,
4.875% 12/01/37 | | 3,855,000 | | 3,404,890 |
| |
| MN Housing Finance Agency | | |
Series 2006 I, AMT,
5.000% 07/01/21 | | 1,350,000 | | 1,350,000 |
|
| MN Minneapolis St. Paul Housing Finance Board |
Series 2006, AMT,
Guarantor: GNMA
5.000% 12/01/38 | | 105,310 | | 99,108 |
| | | | |
Single-Family Total | | | | 9,943,760 |
| | | | |
Housing Total | | | | 47,037,460 |
See Accompanying Notes to Financial Statements.
15
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Industrials – 4.8% | | | | |
| Food Products – 0.4% |
| MI Strategic Fund | | |
Imperial Sugar Co.:
Series 1998 A, | | | | |
6.250% 11/01/15 | | 1,000,000 | | 910,070 |
Series 1998 C, AMT, | | | | |
6.550% 11/01/25 | | 1,500,000 | | 1,178,850 |
| | | | |
Food Products Total | | | | 2,088,920 |
| |
| Forest Products & Paper – 1.9% | | |
| AL Courtland Industrial Development Board | | |
International Paper Co.:
Series 2003 B, AMT, | | | | |
6.250% 08/01/25 | | 2,000,000 | | 1,789,060 |
Series 2005 A, | | | | |
5.200% 06/01/25 | | 1,000,000 | | 759,050 |
|
| AL Phoenix City Industrial Development Board |
Meadwestvaco Corp.,
Series 2002 A, AMT,
6.350% 05/15/35 | | 1,000,000 | | 792,740 |
|
| AR Camden Environmental Improvement Authority |
International Paper Co.,
Series 2004 A, AMT,
5.000% 11/01/18 | | 250,000 | | 212,598 |
|
| GA Rockdale County Development Authority |
Visy Paper, Inc.,
Series 2007 A, AMT,
6.125% 01/01/34 | | 5,000,000 | | 3,462,900 |
| |
| MS Lowndes County | | |
Weyerhaeuser Co.: |
Series 1992 A,
6.800% 04/01/22 | | 1,995,000 | | 1,906,522 |
Series 1992 B,
6.700% 04/01/22 | | 230,000 | | 217,918 |
| |
| MS Warren County Gulf Opportunity Zone | | |
International Paper Co., | | |
Series 2008 A,
6.500% 09/01/32 | | 2,000,000 | | 1,806,140 |
| | | | |
Forest Products & Paper Total | | | | 10,946,928 |
| | |
| Manufacturing – 0.4% | | | | |
| IL Will-Kankakee Regional Development Authority |
Flanders Corp., | | |
Series 1997, AMT,
6.500% 12/15/17 | | 605,000 | | 532,442 |
| | | | |
| | | Par ($) | | Value ($) |
| KS Wichita Airport Authority | | |
Cessna Citation Service Center, | | |
Series 2002 A, AMT,
6.250% 06/15/32 | | 1,875,000 | | 1,455,094 |
| | | | |
Manufacturing Total | | | | 1,987,536 |
| | |
| Metals & Mining – 0.3% | | | | |
| NV Department of Business & Industry | | |
Wheeling-Pittsburgh Steel Corp., | | |
Series 1999 A, AMT,
8.000% 09/01/14 | | 305,000 | | 293,428 |
|
| VA Greensville County Industrial Development Authority |
Wheeling-Pittsburgh Steel Corp., | | |
Series 1999 A, AMT,
7.000% 04/01/14 | | 1,440,000 | | 1,349,885 |
| | | | |
Metals & Mining Total | | | | 1,643,313 |
| | |
| Oil & Gas – 1.3% | | | | |
| LA St. John Baptist Parish | | |
Marathon Oil Corp., | | |
Series 2007 A,
5.125% 06/01/37 | | 5,000,000 | | 4,186,500 |
|
| NV Clark County Industrial Development Authority |
Southwest Gas Corp., | | |
Series 2003 E, AMT,
5.800% 03/01/38 | | 1,750,000 | | 1,716,522 |
|
| TX Gulf Coast Industrial Development Authority |
Citgo Petroleum, | | |
Series 1998, AMT,
8.000% 04/01/28 | | 875,000 | | 851,209 |
|
| VI Virgin Islands Public Finance Authority |
Hovensa LLC, | | |
Series 2003, AMT,
6.125% 07/01/22 | | 875,000 | | 833,236 |
| | |
| VI Virgin Islands | | | | |
Hovensa LLC, |
Series 2002, AMT, | | | | |
6.500% 07/01/21 | | 125,000 | | 123,163 |
| | | | |
Oil & Gas Total | | | | 7,710,630 |
| | |
| Other Industrial Development Bonds – 0.5% | | | | |
| NJ Economic Development Authority | | |
GMT Realty LLC, |
Series 2006 B, AMT, | | | | |
6.875% 01/01/37 | | 4,000,000 | | 2,900,800 |
| | | | |
Other Industrial Development Bonds Total | | 2,900,800 |
| | | | |
Industrials Total | | | | 27,278,127 |
See Accompanying Notes to Financial Statements.
16
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Other – 13.3% | | | | |
| Other – 0.5% | | | | |
| NY City Industrial Development Agency | | |
Bronx Parking Development, |
Series 2007, | | | | |
5.750% 10/01/37 | | 5,000,000 | | 2,924,900 |
| | | | |
Other Total | | | | 2,924,900 |
| | |
| Pool/Bond Bank – 0.8% | | | | |
| OH Cleveland-Cuyahoga County Port Authority |
Series 2005 B, | | | | |
5.125% 05/15/25 | | 700,000 | | 532,959 |
|
| OH Summit County Port Authority |
Seville Project, |
Series 2005 A, | | | | |
5.100% 05/15/25 | | 425,000 | | 301,287 |
|
| PA Industrial Development Authority |
Series 2008, | | | | |
5.500% 07/01/23 | | 2,355,000 | | 2,470,842 |
|
| SD Economic Development Finance Authority |
Davis Family Sodak, |
Series 2004 4-A, AMT, | | | | |
6.000% 04/01/29 | | 1,400,000 | | 1,376,018 |
| | | | |
Pool/Bond Bank Total | | | | 4,681,106 |
| | |
| Refunded/Escrowed(e) – 10.1% | | | | |
| AL Camden Industrial Development Board | | |
Weyerhaeuser Co., |
Series 2003 B, AMT, | | | | |
Pre-refunded 12/01/13, | | | | |
6.375% 12/01/24 | | 275,000 | | 316,531 |
|
| CA Golden State Tobacco Securitization Corp. |
Series 2003 A-1, | | | | |
Pre-refunded 06/01/13, | | | | |
6.750% 06/01/39 | | 200,000 | | 232,762 |
|
| CA Lincoln Community Facilities District No. 2003-1 |
Series 2004, | | | | |
Pre-refunded 09/01/13: | | | | |
5.750% 09/01/20 | | 450,000 | | 527,967 |
5.900% 09/01/24 | | 445,000 | | 524,757 |
|
| CA Statewide Communities Development Authority |
Eskaton Village – Grass Valley, |
Series 2000, | | | | |
Pre-refunded 11/15/10, | | | | |
8.250% 11/15/31 | | 1,665,000 | | 1,836,711 |
| | | | |
| | | Par ($) | | Value ($) |
| CO Adams County |
Series 1991 B: | | | | |
Escrowed to Maturity, | | | | |
11.250% 09/01/11 | | 220,000 | | 267,344 |
Pre-refunded 09/01/09, | | | | |
11.250% 09/01/11 | | 325,000 | | 330,886 |
Pre-refunded 09/01/10, | | | | |
11.250% 09/01/11 | | 360,000 | | 403,981 |
| |
| CO E-470 Public Highway Authority | | |
Series 2000 B, | | | | |
Pre-refunded 09/01/10, | | | | |
(a) 09/01/35 | | 17,500,000 | | 2,633,050 |
|
| CO Northwest Parkway Public Highway Authority |
Series 2001 D, | | | | |
Pre-refunded 06/15/11, | | | | |
7.125% 06/15/41 | | 2,720,000 | | 3,017,976 |
| |
| FL Capital Projects Finance Authority | | |
Glenridge on Palmer Ranch, |
Series 2002 A, | | | | |
Pre-refunded 06/01/12, | | | | |
8.000% 06/01/32 | | 1,250,000 | | 1,472,700 |
| |
| FL Islands at Doral Southwest Community Development District | | |
Series 2003, | | | | |
Pre-refunded 05/01/13, | | | | |
6.375% 05/01/35 | | 750,000 | | 847,860 |
|
| FL Lee County Industrial Development Authority |
Shell Point Village, |
Series 1999 A, | | | | |
Pre-refunded 11/15/09, | | | | |
5.500% 11/15/29 | | 1,200,000 | | 1,235,124 |
| |
| FL Orange County Health Facilities Authority | | |
Orlando Regional Health Care System: |
Series 1999 E, | | | | |
Pre-refunded 10/01/09, | | | | |
6.000% 10/01/26 | | 20,000 | | 20,478 |
Series 2002, | | | | |
Pre-refunded 12/01/12, | | | | |
5.750% 12/01/32 | | 350,000 | | 400,782 |
| | |
| GA Municipal Electric Authority | | | | |
Series 1991 V: | | | | |
Escrowed to Maturity, | | | | |
6.600% 01/01/18 | | 690,000 | | 828,276 |
Pre-refunded 01/01/13, | | | | |
6.600% 01/01/18 | | 75,000 | | 86,882 |
See Accompanying Notes to Financial Statements.
17
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Other (continued) | | | | |
| IA Finance Authority | | |
Care Initiatives, |
Series 1996, | | | | |
Pre-refunded 07/01/11, | | | | |
9.250% 07/01/25 | | 450,000 | | 523,593 |
| |
| IL Health Facilities Authority | | |
Lutheran Senior Ministries, |
Series 2001 A, | | | | |
Pre-refunded 08/15/11, | | | | |
7.375% 08/15/31 | | 1,300,000 | | 1,461,161 |
| |
| MA Development Finance Agency | | |
Western New England College, |
Series 2002, | | | | |
Pre-refunded 12/01/12, | | | | |
6.125% 12/01/32 | | 300,000 | | 345,456 |
| |
| MA Health & Educational Facilities Authority | | |
Civic Investments, Inc., |
Series 2002 A, | | | | |
Pre-refunded 12/15/12, | | | | |
9.000% 12/15/15 | | 1,300,000 | | 1,541,371 |
Milford-Whitinsville Regional Hospital, |
Series 2002 D, | | | | |
Pre-refunded 07/15/12, | | | | |
6.350% 07/15/32 | | 1,715,000 | | 1,964,498 |
| |
| MI Pontiac Tax Increment Finance Authority | | |
Development Area No. 3, |
Series 2002, | | | | |
Pre-refunded 06/01/12, | | | | |
6.375% 06/01/31 | | 1,000,000 | | 1,151,240 |
| |
| MN Carlton | | |
Inter-Faith Social Services, Inc., |
Series 2000, | | | | |
Pre-refunded 04/01/10, | | | | |
7.500% 04/01/19 | | 220,000 | | 231,796 |
| |
| NC Eastern Municipal Power Agency | | |
Series 1991 A, | | | | |
Escrowed to Maturity, | | | | |
6.500% 01/01/18 | | 3,320,000 | | 4,197,775 |
| |
| NC Medical Care Commission | | |
DePaul Community Facilities, Inc., |
Series 1999, | | | | |
Pre-refunded 11/01/09, | | | | |
7.625% 11/01/29 | | 2,115,000 | | 2,200,975 |
| |
| NH Health & Educational Facilities Authority | | |
Catholic Medical Center, | | | | |
Series 2002 A, | | | | |
Pre-refunded 7/01/12, | | | | |
6.125% 07/01/32 | | 350,000 | | 400,813 |
| | | | |
| | | Par ($) | | Value ($) |
| NH Industrial Development Authority | | |
Pennichuck Water Works, Inc., | | | | |
Series 1988, AMT, | | | | |
Escrowed to Maturity, | | | | |
7.500% 07/01/18 | | 310,000 | | 373,355 |
| |
| NJ Economic Development Authority | | |
Seabrook Village, Inc., | | | | |
Series 2000 A, | | | | |
Pre-refunded 11/15/10, | | | | |
8.250% 11/15/30 | | 1,625,000 | | 1,800,077 |
| |
| NJ Tobacco Settlement Financing Corp. | | |
Series 2003, | | | | |
Pre-refunded 06/01/13, | | | | |
6.750% 06/01/39 | | 2,000,000 | | 2,378,000 |
| |
| OH Highland County Joint Township | | |
Series 1999, | | | | |
Pre-refunded 12/01/09, | | | | |
6.750% 12/01/29 | | 1,735,000 | | 1,805,684 |
|
| PA Lancaster Industrial Development Authority |
Garden Spot Village, | | | | |
Series 2000 A, | | | | |
Pre-refunded 05/01/10, | | | | |
7.625% 05/01/31 | | 825,000 | | 881,356 |
| |
| PR Commonwealth of Puerto Rico | | |
Series 2006 B, | | | | |
Pre-refunded 07/01/16, | | | | |
5.000% 07/01/35 | | 3,090,000 | | 3,570,557 |
| |
| SC Jobs Economic Development Authority | | |
Bon Secours Health System, | | | | |
Series 2002 A, | | | | |
Pre-refunded 11/15/12, | | | | |
5.500% 11/15/23 | | 485,000 | | 548,860 |
|
| SC Tobacco Settlement Revenue Management Authority |
Series 2001 B, | | | | |
Pre-refunded 05/15/11, | | | | |
6.375% 05/15/28 | | 1,000,000 | | 1,100,980 |
|
| TX Houston Health Facilities Development Corp. |
Buckingham Senior Living Community, Inc., | | |
Series 2004 A, | | | | |
Pre-refunded 02/15/14, | | | | |
7.125% 02/15/34 | | 1,000,000 | | 1,185,470 |
| |
| TX Tyler Health Facilities Development Corp. | | |
Mother Frances Hospital, | | | | |
Series 2001, | | | | |
Pre-refunded 07/01/12, | | | | |
6.000% 07/01/31 | | 750,000 | | 840,742 |
See Accompanying Notes to Financial Statements.
18
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Other (continued) | | | | |
| VA Tobacco Settlement Financing Corp. | | |
Series 2005, | | | | |
Pre-refunded 06/01/15, | | | | |
5.625% 06/01/37 | | 10,485,000 | | 12,061,210 |
|
| WI Health & Educational Facilities Authority |
Wheaton Franciscan Services, |
Series 2002, | | | | |
Pre-refunded 02/15/12, | | | | |
5.750% 08/15/30 | | 1,050,000 | | 1,175,244 |
| |
| WV Hospital Finance Authority | | |
Charleston Area Medical Center, |
Series 2000, | | | | |
Pre-refunded 09/01/10, | | | | |
6.750% 09/01/30 | | 925,000 | | 998,917 |
| | | | |
Refunded/Escrowed Total | | | | 57,723,197 |
| | |
| Tobacco – 1.9% | | | | |
| CA Silicon Valley Tobacco Securitization Authority |
Series 2007 A, | | | | |
(a) 06/01/36 | | 3,000,000 | | 206,100 |
| |
| IA Tobacco Settlement Authority | | |
Series 2005 C, | | | | |
5.625% 06/01/46 | | 3,000,000 | | 1,799,970 |
| |
| LA Tobacco Settlement Financing Corp. | | |
Series 2001 B, | | | | |
5.875% 05/15/39 | | 1,000,000 | | 783,870 |
| |
| MI Tobacco Settlement Finance Authority | | |
Series 2007 A, | | | | |
6.000% 06/01/48 | | 5,000,000 | | 3,016,700 |
| |
| NJ Tobacco Settlement Financing Corp. | | |
Series 2007 1C, | | | | |
(a) 06/01/41 | | 7,500,000 | | 286,050 |
|
| NY Nassau County Tobacco Settlement Corp. |
Series 2006, | | | | |
(a) 06/01/60 | | 25,000,000 | | 107,250 |
|
| OH Buckeye Tobacco Settlement Financing Authority |
Series 2007 A-2: | | | | |
5.750% 06/01/34 | | 2,000,000 | | 1,281,840 |
5.875% 06/01/47 | | 2,100,000 | | 1,182,342 |
6.000% 06/01/42 | | 3,250,000 | | 1,923,512 |
| |
| PR Commonwealth of Puerto Rico Children’s Trust Fund | | |
Series 2005 B, | | | | |
(a) 05/15/55 | | 25,000,000 | | 284,250 |
| | | | |
Tobacco Total | | | | 10,871,884 |
| | | | |
Other Total | | | | 76,201,087 |
| | | | |
| | | Par ($) | | Value ($) |
| Other Revenue – 2.6% | | | | |
| Hotels – 0.7% | | | | |
| MD Economic Development Corp. | | |
Chesapeake Bay Conference Center, | | |
Series 2006 A, | | | | |
5.000% 12/01/31 | | 2,250,000 | | 1,173,915 |
| |
| NJ Middlesex County Improvement Authority | | |
Heldrich Associates LLC: | | | | |
Series 2005 B, | | | | |
6.250% 01/01/37 | | 4,250,000 | | 2,190,152 |
Series 2005 C, | | | | |
8.750% 01/01/37 | | 1,250,000 | | 914,588 |
| | | | |
Hotels Total | | | | 4,278,655 |
| | |
| Recreation – 1.9% | | | | |
| CA Agua Caliente Band Cahuilla Indians | | |
Series 2003, | | |
6.000% 07/01/18 | | 1,000,000 | | 834,370 |
| |
| CA Cabazon Band Mission Indians | | |
Series 2004: | | |
8.375% 10/01/15 (d) | | 400,000 | | 307,268 |
8.750% 10/01/19 (d) | | 1,800,000 | | 1,384,074 |
| |
| CT Mashantucket Western Pequot Tribe | | |
Series 1999 B, | | |
(a) 09/01/15 (d) | | 2,000,000 | | 1,011,060 |
| |
| CT Mohegan Tribe Gaming Authority | | |
Series 2001, | | |
6.250% 01/01/31 (d) | | 475,000 | | 308,641 |
| | |
| CT Mohegan Tribe of Indians | | | | |
Series 2003, | | |
5.250% 01/01/33 | | 1,000,000 | | 600,690 |
| | |
| FL Seminole Indian Tribe | | | | |
Series 2007, | | |
5.500% 10/01/24 (d) | | 2,000,000 | | 1,746,860 |
| | |
| IL Finance Authority Sports Facility | | | | |
Leafs Hockey Club Project, | | |
Series 2007 A, | | | | |
6.000% 03/01/37 | | 1,000,000 | | 398,590 |
| | |
| NY Liberty Development Corp. | | | | |
National Sports Museum, | | |
Series 2006 A, | | | | |
6.125% 02/15/19 (d)(f) | | 1,979,996 | | 5,940 |
| | |
| OK Chickasaw Nation | | | | |
Series 2007, | | |
6.250% 12/01/32 (d) | | 3,500,000 | | 2,912,945 |
See Accompanying Notes to Financial Statements.
19
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Other Revenue (continued) | | | | |
| OR Cow Creek Band Umpqua Tribe of Indians |
Series 2006 C, | | | | |
5.625% 10/01/26 (d) | | 1,700,000 | | 1,159,366 |
| | | | |
Recreation Total | | | | 10,669,804 |
| | | | |
Other Revenue Total | | | | 14,948,459 |
| | | | |
| Resource Recovery – 1.1% | | | | |
| Disposal – 0.3% | | | | |
| OH Solid Waste | | | | |
Republic Services, Inc., | | | | |
Series 2004, AMT, | | | | |
4.250% 04/01/33 | | 2,000,000 | | 1,826,760 |
| | | | |
Disposal Total | | | | 1,826,760 |
| | |
| Resource Recovery – 0.8% | | | | |
| FL Lee County Solid Waste Systems | | |
Series 2006 A, AMT, | | | | |
Insured: AMBAC | | | | |
5.000% 10/01/17 | | 2,010,000 | | 1,887,571 |
| | |
| MA Development Finance Agency | | | | |
Covanta,
Series 1999 A, AMT, | | | | |
6.700% 12/01/14 | | 510,000 | | 479,130 |
| | |
| MA Industrial Finance Agency | | | | |
Covanta, | | | | |
Series 1998 A, AMT: | | | | |
5.500% 12/01/13 | | 500,000 | | 459,550 |
5.600% 12/01/19 | | 1,000,000 | | 805,630 |
|
| NY Niagara County Industrial Development Agency |
Covanta, | | | | |
Series 2001 A, AMT, | | | | |
5.450% 11/15/26 | | 1,000,000 | | 971,810 |
| | | | |
Resource Recovery Total | | | | 4,603,691 |
| | | | |
Resource Recovery Total | | | | 6,430,451 |
| | | | |
| Tax-Backed – 13.2% | | | | |
| Local Appropriated – 0.8% | | | | |
| CA Southeast Resource Recovery Facilities Authority |
Series 2003 B, AMT, | | | | |
Insured: AMBAC | | | | |
5.375% 12/01/18 | | 2,000,000 | | 1,946,780 |
|
| MO St. Louis Industrial Development Authority |
St. Louis Convention Center, | | | | |
Series 2000, | | | | |
Insured: AMBAC | | | | |
(a) 07/15/18 | | 3,000,000 | | 1,519,050 |
| | | | |
| | | Par ($) | | Value ($) |
| SC Laurens County School District No. 55 | | |
Series 2005, | | | | |
5.250% 12/01/30 | | 1,300,000 | | 1,118,806 |
| | | | |
Local Appropriated Total | | | | 4,584,636 |
| |
| Local General Obligations – 1.6% | | |
CA Modesto High School District, | | | | |
Series 2002 A,
Insured: FGIC | | | | |
(a) 08/01/19 | | 2,650,000 | | 1,531,939 |
| |
| CO Northwest Metropolitan District No. 3 | | |
Series 2005, | | | | |
6.250% 12/01/35 | | 1,000,000 | | 572,660 |
| |
| CO Red Sky Ranch Metropolitan District | | |
Series 2003, | | | | |
6.050% 12/01/33 | | 1,000,000 | | 688,450 |
| |
| NY New York City | | |
Series 2009 H1, | | | | |
5.000% 03/01/13 | | 5,000,000 | | 5,420,300 |
| |
| TX Dallas County Flood Control District | | |
Series 2002, | | | | |
7.250% 04/01/32 | | 1,000,000 | | 999,840 |
| | | | |
Local General Obligations Total | | | | 9,213,189 |
| |
| Special Non-Property Tax – 3.0% | | |
| IL Bolingbrook | | |
Sales Tax Revenue,
Series 2005, | | | | |
6.250% 01/01/24 | | 1,500,000 | | 769,185 |
| |
| KS Wyandotte County | | |
Series 2005 B, | | | | |
5.000% 12/01/20 | | 3,125,000 | | 2,923,125 |
Series 2006, | | | | |
4.875% 10/01/28 | | 2,020,000 | | 1,277,307 |
| |
| KY Economic Development Finance Authority | | |
Louisville Arena Authority, Inc., | | |
Series 2008 A1, | | | | |
Insured: AGO | | | | |
6.000% 12/01/38 | | 1,150,000 | | 1,177,025 |
| |
| NJ Economic Development Authority | | |
Cigarette Tax, | | | | |
Series 2004: | | | | |
5.500% 06/15/31 | | 315,000 | | 237,015 |
5.750% 06/15/29 | | 1,000,000 | | 790,820 |
|
| NV Sparks Tourism Improvement District No. 1 |
Series 2008 A, | | | | |
6.750% 06/15/28 | | 3,000,000 | | 2,146,530 |
See Accompanying Notes to Financial Statements.
20
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Tax-Backed (continued) | | | | |
| PR Commonwealth of Puerto Rico Sales Tax Financing Corp. | | |
Series 2009 B, | | | | |
5.000% 08/01/39 | | 5,000,000 | | 5,056,000 |
| |
| VA Peninsula Town Center Community Development Authority | | |
Series 2007, | | | | |
6.450% 09/01/37 | | 4,000,000 | | 2,967,480 |
| | | | |
Special Non-Property Tax Total | | | | 17,344,487 |
| | | | |
| Special Property Tax – 7.1% |
| CA Carson Improvement Bond Act 1915 | | |
Series 1992, | | | | |
7.375% 09/02/22 | | 115,000 | | 106,303 |
| |
| CA Empire Union School District | | |
Series 1987-1 A, | | | | |
Insured: AMBAC | | | | |
(a) 10/01/21 | | 1,665,000 | | 815,117 |
|
| CA Huntington Beach Community Facilities District |
Grand Coast Resort, |
Series 2001-1, | | | | |
6.450% 09/01/31 | | 1,250,000 | | 1,058,850 |
| |
| CA Oakdale Public Financing Authority | | |
Central City Redevelopment Project, |
Series 2004, | | | | |
5.375% 06/01/33 | | 2,000,000 | | 1,510,900 |
|
| FL Ave Maria Stewardship Community District |
Series 2006 A, | | | | |
5.125% 05/01/38 | | 3,480,000 | | 1,744,176 |
|
| FL Brandy Creek Community Development District |
Series 2003 A, | | | | |
6.350% 05/01/34 | | 935,000 | | 901,022 |
|
| FL Celebration Community Development District |
Series 2003 A, | | | | |
6.400% 05/01/34 | | 940,000 | | 827,040 |
| |
| FL Channing Park Development District | | |
Series 2007, | | | | |
5.300% 05/01/38 | | 1,000,000 | | 503,400 |
|
| FL Colonial Country Club Community Development District |
Series 2003, | | | | |
6.400% 05/01/33 | | 700,000 | | 685,685 |
|
| FL Double Branch Community Development District |
Series 2002 A, | | | | |
6.700% 05/01/34 | | 655,000 | | 656,258 |
| | | | |
| | | Par ($) | | Value ($) |
| FL Lexington Oaks Community Development District |
Series 2002 A, | | | | |
6.700% 05/01/33 | | 250,000 | | 250,637 |
|
| FL Middle Village Community Development District |
Series 2004 A, | | | | |
6.000% 05/01/35 | | 2,000,000 | | 1,373,680 |
|
| FL Oakmont Grove Community Development District |
Series 2007 A, | | | | |
5.400% 05/01/38 (f) | | 1,200,000 | | 494,760 |
Series 2007 B, | | | | |
5.250% 05/01/12 (f) | | 1,000,000 | | 476,710 |
| |
| FL Orlando | | |
Conroy Road Interchange, |
Series 1998 A: | | | | |
5.500% 05/01/10 | | 60,000 | | 59,112 |
5.800% 05/01/26 | | 600,000 | | 506,376 |
|
| FL Sarasota National Community Development District |
Series 2003, | | | | |
5.300% 05/01/39 | | 4,000,000 | | 2,038,920 |
|
| FL Seven Oaks Community Development District II |
Series 2004 A, | | | | |
5.875% 05/01/35 | | 465,000 | | 249,919 |
Series 2004 B, | | | | |
7.500% 05/01/16 | | 3,925,000 | | 3,449,094 |
|
| FL Sweetwater Creek Community Development District |
Series 2007 A, | | | | |
5.500% 05/01/38 | | 3,935,000 | | 2,182,351 |
| |
| FL Tolomato Community Development District | | |
Series 2007, | | | | |
6.650% 05/01/40 | | 3,000,000 | | 1,986,360 |
|
| FL Waterset North Community Development District |
Series 2007 A, | | | | |
6.600% 05/01/39 | | 2,000,000 | | 1,173,600 |
| |
| FL West Villages Improvement District | | |
Series 2006, | | | | |
5.500% 05/01/37 | | 1,700,000 | | 796,620 |
|
| FL Westchester Community Development District No. 1 |
Series 2003, | | | | |
6.125% 05/01/35 | | 800,000 | | 513,792 |
|
| FL Westridge Community Development District |
Series 2005, | | | | |
5.800% 05/01/37 | | 2,650,000 | | 1,054,885 |
See Accompanying Notes to Financial Statements.
21
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Tax-Backed (continued) | | | | |
| GA Atlanta | | |
Eastside Project, |
Series 2005 B, | | | | |
5.600% 01/01/30 | | 1,615,000 | | 1,227,610 |
| |
| IL Annawan | | |
Patriot Renewable Fuels LLC, |
Series 2007, | | | | |
5.625% 01/01/18 | | 1,500,000 | | 1,142,520 |
| |
| IL Chicago | | |
Pilsen Redevelopment, |
Series 2004 B, | | | | |
6.750% 06/01/22 | | 1,225,000 | | 1,057,101 |
| |
| IL Hillside | | |
Series 2008, | | | | |
7.000% 01/01/28 | | 2,500,000 | | 1,933,650 |
|
| IL Plano Special Service Area No. 4 |
Lakewood Springs Project, |
Series 2005 5-B, | | | | |
6.000% 03/01/35 | | 2,985,000 | | 2,098,067 |
| |
| IL Rosemont | | |
River Road Hotel Partners Project, |
Series 2007, | | | | |
5.100% 12/30/23 | | 2,800,000 | | 1,982,456 |
|
| IL Volo Village Special Service Area No. 3 |
Symphony Meadows Project, |
Series 2006-1, | | | | |
6.000% 03/01/36 | | 1,996,000 | | 1,123,828 |
| |
| IN City of Portage | | |
Ameriplex Project, |
Series 2006, | | | | |
5.000% 07/15/23 | | 700,000 | | 608,902 |
| |
| MO Fenton | | |
Tax Increment Revenue, |
Series 2006, | | | | |
4.500% 04/01/21 | | 380,000 | | 337,402 |
|
| MO Kansas City Tax Increment Financing Commission |
Maincor Project, Inc., |
Series 2007 A, | | | | |
5.250% 03/01/18 | | 1,000,000 | | 865,450 |
| |
| MO Riverside | | |
Tax Increment Revenue, |
Series 2004, | | | | |
5.250% 05/01/20 | | 1,275,000 | | 1,187,956 |
| | | | |
| | | Par ($) | | Value ($) |
| OH Hickory Chase Community Authority |
Series 2008, | | | | |
7.000% 12/01/38 | | 2,500,000 | | 1,867,475 |
| | | | |
Special Property Tax Total | | | | 40,847,984 |
| |
| State Appropriated – 0.3% | | |
| NY Triborough Bridge & Tunnel Authority | | |
Javits Convention Center, |
Series 1990 E, | | | | |
7.250% 01/01/10 | | 350,000 | | 361,294 |
|
| PR Commonwealth of Puerto Rico Public Finance Corp. |
Series 2004 A, | | | | |
LOC: Government Development
Bank for Puerto Rico | | |
5.750% 08/01/27 | | 1,465,000 | | 1,473,248 |
| | | | |
State Appropriated Total | | | | 1,834,542 |
| | |
| State General Obligations – 0.4% CA State | | | | |
Series 2004 A-2, | | | | |
LOC: Citibank N.A., | | | | |
LOC: California State Teachers’ Retirement System | | |
0.180% 05/01/34 | | 200,000 | | 200,000 |
Series 2007, | | | | |
5.000% 11/01/37 | | 2,475,000 | | 2,066,328 |
| | | | |
State General Obligations Total | | | | 2,266,328 |
| | | | |
Tax-Backed Total | | | | 76,091,166 |
| | | | |
| Transportation – 3.6% | | |
| Air Transportation – 2.2% | | |
| CA Los Angeles Regional Airports Improvement Corp. |
American Airlines, Inc., |
Series 2000 C, AMT, | | | | |
7.500% 12/01/24 | | 400,000 | | 347,476 |
| |
| FL Capital Trust Agency | | |
Air Cargo-Orlando, |
Series 2003, AMT, | | | | |
6.750% 01/01/32 | | 650,000 | | 492,882 |
| |
| NC Charlotte/Douglas International Airport | | |
US Airways, Inc., |
Series 1998, AMT, | | | | |
5.600% 07/01/27 | | 1,500,000 | | 897,930 |
| |
| NJ Economic Development Authority | | |
Continental Airlines, Inc.: |
Series 1999, AMT: | | | | |
6.250% 09/15/19 | | 1,000,000 | | 830,300 |
6.250% 09/15/29 | | 2,500,000 | | 1,925,400 |
Series 2003, AMT, | | | | |
9.000% 06/01/33 | | 1,000,000 | | 1,009,910 |
See Accompanying Notes to Financial Statements.
22
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Transportation (continued) | | |
| NY Industrial Development Agency | | |
American Airlines, Inc., |
Series 2005, | | | | |
7.625% 08/01/25 | | 3,000,000 | | 2,629,800 |
|
| NY New York City Industrial Development Agency |
American Airlines, Inc., |
Series 2005, | | | | |
8.000% 08/01/28 | | 2,000,000 | | 1,794,060 |
|
| PA Philadelphia Authority for Industrial Development |
Aero Philadelphia, |
Series 1999, AMT, | | | | |
5.500% 01/01/24 | | 1,000,000 | | 737,300 |
| |
| TX Dallas-Fort Worth International Airport | | |
American Airlines, Inc., |
Series 2000 A, AMT, | | | | |
9.000% 05/01/29 | | 2,250,000 | | 1,374,615 |
| |
| TX Houston Industrial Development Corp. | | |
United Parcel Service, |
Series 2002, AMT, | | | | |
6.000% 03/01/23 | | 900,000 | | 700,686 |
| | | | |
Air Transportation Total | | | | 12,740,359 |
| |
| Airports – 0.4% | | |
| MO Branson Regional Airport Transportation Development District | | |
Branson Airport LLC: |
Series 2007 A, | | | | |
6.000% 07/01/37 | | 500,000 | | 335,085 |
Series 2007 B, | | | | |
6.000% 07/01/37 | | 3,550,000 | | 2,258,759 |
| | | | |
Airports Total | | | | 2,593,844 |
| |
| Toll Facilities – 0.8% | | |
| CO E-470 Public Highway Authority | | |
Series 2000, | | | | |
Insured: NPFGC | | | | |
(a) 09/01/18 | | 4,000,000 | | 2,126,040 |
| TX North Texas Tollway Authority | | |
Series 2008 F, | | | | |
5.750% 01/01/38 | | 2,645,000 | | 2,530,921 |
| | | | |
Toll Facilities Total | | | | 4,656,961 |
| | | | |
| | | Par ($) | | Value ($) |
| Transportation – 0.2% | | |
| NV Director of the State of NV Department of Business & Industry | | |
Las Vegas Monorail Co., |
Series 2000 | | | | |
Insured: AMBAC | | | | |
5.625% 01/01/34 | | 3,000,000 | | 924,810 |
| | | | |
Transportation Total | | | | 924,810 |
| | | | |
Transportation Total | | | | 20,915,974 |
| | | | |
| Utilities – 8.8% | | |
| Independent Power Producers – 1.8% | | |
| NY Port Authority of New York & New Jersey |
KIAC Partners, |
Series 1996 IV, AMT: | | | | |
6.750% 10/01/11 | | 2,300,000 | | 2,290,294 |
6.750% 10/01/19 | | 120,000 | | 99,981 |
| |
| OR Western Generation Agency | | |
Wauna Cogeneration, |
Series 2006 A, | | | | |
5.000% 01/01/20 | | 2,235,000 | | 1,797,834 |
|
| PA Economic Development Financing Authority |
Colver Project, |
Series 2005, AMT, | | | | |
5.125% 12/01/15 | | 775,000 | | 660,385 |
Northampton Generating, | | | | |
Series 1994 A, AMT, | | | | |
6.500% 01/01/13 | | 3,000,000 | | 2,098,950 |
| |
| PR Commonwealth of Puerto Rico Industrial, Tourist, Educational, Medical & Environmental Cogeneration Facilities | | |
AES Project, |
Series 2000, AMT, | | | | |
6.625% 06/01/26 | | 3,820,000 | | 3,798,990 |
| | | | |
Independent Power Producers Total | | 10,746,434 |
| |
| Investor Owned – 5.9% | | |
| AR Independence County | | |
Entergy Mississippi, Inc., |
Series 1999, | | | | |
Insured: AMBAC | | | | |
4.900% 07/01/22 | | 1,200,000 | | 1,083,900 |
| |
| AZ Maricopa County Pollution Control Corp. | | |
El Paso Electric Co., |
Series 2009 B, | | | | |
7.250% 04/01/40 | | 3,600,000 | | 3,773,736 |
See Accompanying Notes to Financial Statements.
23
Columbia High Yield Municipal Fund
June 30, 2009
Municipal Bonds (continued)
| | | | |
| | | Par ($) | | Value ($) |
| Utilities (continued) | | |
| CA Chula Vista Industrial Development Authority |
San Diego Gas & Electric Co., |
Series 1996 B, AMT, | | | | |
5.500% 12/01/21 | | 1,275,000 | | 1,244,375 |
| |
| IL Development Finance Authority | | |
Peoples Gas Light & Coke Co., |
Series 2003 E, AMT, | | | | |
Insured: AMBAC | | | | |
4.875% 11/01/38 | | 2,500,000 | | 2,247,950 |
| |
| IN Jasper County | | |
Northern Indiana Public Service Co., |
Series 1994 C, | | | | |
Insured: NPFGC | | | | |
5.850% 04/01/19 | | 1,000,000 | | 993,670 |
| |
| IN Petersburg | | |
Indianapolis Power & Light Co., |
Series 1991, | | | | |
5.750% 08/01/21 | | 1,000,000 | | 915,880 |
|
| LA Calcasieu Parish Industrial Development Board |
Entergy Gulf States, Inc., | | | | |
Series 1999, | | | | |
5.450% 07/01/10 | | 500,000 | | 496,695 |
| |
| LA West Feliciana Parish | | |
Entergy Gulf States, Inc., | | | | |
Series 1999 B, | | | | |
6.600% 09/01/28 | | 135,000 | | 134,976 |
| |
| NM Farmington | | |
Tucson Electric Power Co., | | | | |
Series 1997 A, | | | | |
6.950% 10/01/20 | | 2,000,000 | | 2,001,160 |
|
| NV Clark County Industrial Development Authority |
Nevada Power Co.: | | | | |
Series 1995 B, AMT, | | | | |
5.900% 10/01/30 | | 2,135,000 | | 1,853,799 |
Series 1997 A, AMT, | | | | |
5.900% 11/01/32 | | 750,000 | | 645,780 |
|
| PA Economic Development Financing Authority |
Allegheny Energy Specialty Co., | | | | |
Series 2009, | | | | |
7.000% 07/15/39 (g) | | 4,000,000 | | 4,037,080 |
|
| SC Berkeley County Pollution Control Facilities Authority |
South Carolina Generating Co. Project, | | | | |
Series 2003, | | | | |
4.875% 10/01/14 | | 950,000 | | 955,529 |
| | | | |
| | | Par ($) | | Value ($) |
| TX Brazos River Authority | | |
TXU Energy Co., LLC: | | | | |
Series 2001 C, AMT, | | | | |
5.750% 05/01/36 | | 2,515,000 | | 1,957,651 |
Series 2003 C, AMT, | | | | |
6.750% 10/01/38 | | 1,180,000 | | 566,435 |
|
| TX Matagorda County Navigation District No. 1 |
AEP Texas Project, | | | | |
Series 2005 A, | | | | |
Insured: AMBAC | | | | |
4.400% 05/01/30 | | 7,500,000 | | 5,494,800 |
| |
| TX Sabine River Authority | | |
TXU Energy Co., LLC, | | | | |
Series 2001 B, AMT, | | | | |
5.750% 05/01/30 | | 1,415,000 | | 1,101,422 |
| |
| WY Campbell County | | |
Black Hills Power, Inc., | | | | |
Series 2004, | | | | |
5.350% 10/01/24 | | 3,250,000 | | 2,776,247 |
| |
| WY Converse County | | |
PacifiCorp, | | | | |
Series 1988, | | | | |
3.900% 01/01/14 | | 1,500,000 | | 1,511,715 |
| | | | |
Investor Owned Total | | | | 33,792,800 |
| |
| Municipal Electric – 0.2% | | |
| PR Commonwealth of Puerto Rico Electric Power Authority | | |
Series 1998 NN, | | | | |
5.500% 07/01/20 | | 1,005,000 | | 999,271 |
| | | | |
Municipal Electric Total | | | | 999,271 |
| |
| Water & Sewer – 0.9% | | |
| AZ Surprise Municipal Property Corp. | | |
Series 2007, | | | | |
4.900% 04/01/32 | | 2,000,000 | | 1,463,880 |
| |
| MS V Lakes Utility District | | |
Series 1994, | | | | |
7.000% 07/15/37 | | 250,000 | | 199,570 |
|
| PA Dauphin County Industrial Development Authority |
Dauphin Water Supply Co., | | | | |
Series 1992 A, AMT, | | | | |
6.900% 06/01/24 | | 3,200,000 | | 3,511,360 |
| | | | |
Water & Sewer Total | | | | 5,174,810 |
| | | | |
Utilities Total | | | | 50,713,315 |
| | | | |
Total Municipal Bonds (cost of $651,787,509) | | | | 544,534,338 |
See Accompanying Notes to Financial Statements.
24
Columbia High Yield Municipal Fund
June 30, 2009
Investment Companies – 3.5%
| | | | |
| | | Shares | | Value ($) |
|
Columbia Tax-Exempt Reserves, Capital Class
(7 day yield 0.210%)(h)(i) | | 10,025,800 | | 10,025,800 |
Dreyfus Tax-Exempt Cash Management Fund
(7 day yield 0.400%) | | 10,105,946 | | 10,105,946 |
| | | | |
Total Investment Companies (cost of $20,131,746) | | | | 20,131,746 |
| | |
| | | Par ($) | | |
Municipal Preferred Stocks – 0.9% | | | | |
| Housing – 0.9% | | | | |
| Multi-Family – 0.9% | | | | |
| Centerline Equity Issuer Trust | | | | |
AMT: | | | | |
6.300% 05/15/19 (d) | | 1,000,000 | | 1,023,180 |
Series 1999, | | | | |
6.625% 07/15/09 (d) | | 2,000,000 | | 2,000,260 |
Series 2000, | | | | |
7.600% 12/15/10 (d) | | 1,500,000 | | 1,568,685 |
| | |
| MuniMae Trust | | | | |
AMT, | | | | |
5.800% 06/30/49 (d) | | 1,000,000 | | 601,100 |
| | | | |
Multi-Family Total | | | | 5,193,225 |
| | | | |
Housing Total | | | | 5,193,225 |
| | | | |
Total Municipal Preferred Stocks
(cost of $5,500,000) | | 5,193,225 |
| | |
Short-Term Obligations – 0.1% | | | | |
| Variable Rate Demand Notes (j) – 0.1% | | |
| CO Educational & Cultural Facilities Authority |
Jewish Community Center, | | | | |
Series 2006 D-1, | | | | |
LOC: JPMorgan Chase Bank | | | | |
0.230% 07/01/36 | | 500,000 | | 500,000 |
| |
| NV Clark County School District | | |
Series 2001 A, | | | | |
Insured: FSA, | | | | |
SPA: State Street Bank & Trust Co. | | |
0.280% 06/15/21 | | 170,000 | | 170,000 |
| | | | |
Variable Rate Demand Notes Total | | 670,000 |
| | | | |
Total Short-Term Obligations
(cost of $670,000) | | 670,000 |
| | | | |
Total Investments – 99.3%
(cost of $678,089,255) (k) | | 570,529,309 |
| | | | |
Other Assets & Liabilities, Net – 0.7% | | 4,126,398 |
| | | | |
Net Assets – 100.0% | | | | 574,655,707 |
Notes to Investment Portfolio:
| (b) | Denotes a restricted security, which is subject to restrictions on resale under federal securities laws or in transactions exempt from registration. At June 30, 2009, the value of these securities amounted to $3,237,318, which represents 0.6% of net assets. |
| | | | | |
Security | | Acquisition Date | | Acquisition
Cost |
| | | | | | |
CA Statewide Communities Development Authority, Crossroads School for Arts & Sciences,
Series 1998, | | | | | |
6.000% 08/01/28 | | 08/21/98 | | $ | 265,000 |
6.000% 08/01/28 | | 08/31/98 | | | 700,000 |
NC Durham Housing Authority, Magnolia Pointe Apartments, Series 2005, AMT, | | | | | |
5.650% 02/01/38 | | 12/19/06 | | | 3,500,000 |
| | | | | |
| | | | $ | 4,465,000 |
| | | | | |
| (c) | The issuer has filed for bankruptcy protection under Chapter 11, and is in default of certain debt covenants. Income is not being accrued. At June 30, 2009, the value of this security represents less than 0.1% of net assets. |
| (d) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2009, these securities, which are not illiquid except as listed below, amounted to $14,448,841, which represents 2.5% of net assets. |
| | | | | | | | | | | |
Security | | Acquisition
Date | | Par | | Acquisition Cost | | Market Value |
Resolution Trust Corp.
Pass-Through Certificates, Series 1993 A, 8.500% 12/01/16 | | 11/12/93 | | $ | 455,481 | | $ | 463,388 | | $ | 419,462 |
CA Cabazon Band Mission
Indians, Series 2004:
8.375% 10/01/15
8.750% 10/01/19 | | 10/08/04
10/08/04 | |
| 400,000
1,800,00 | |
| 550,000
1,950,000 | |
| 307,268
1,384,074 |
OR Cow Creek Band Umpqua Tribe of Indians,
Series 2006 C, 5.625% 10/01/26 | | 06/15/06 | | | 1,700,000 | | | 1,700,000 | | | 1,159,366 |
NY Liberty Development Corp., National Sports Museum Series 2006 A, 6.125% 02/15/19 | | 08/17/06 | | | 1,979,996 | | | 1,979,996 | | | 5,940 |
MuniMae Trust, AMT, 5.800% 06/30/49 | | 10/19/04 | | | 1,000,000 | | | 1,000,000 | | | 601,100 |
| | | | | | | | | | | |
| | | | | | | | | | $ | 3,877,210 |
| | | | | | | | | | | |
| (e) | The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest. |
| (f) | The issuer is in default of certain debt covenants. Income is not being accrued. At June 30, 2009, the value of these securities amounted to $977,410, which represents 0.2% of net assets. |
| (g) | Security purchased on a delayed delivery basis. |
| (h) | Investments in affiliates during the year ended June 30, 2009: Security name: Columbia Tax-Exempt Reserves, Capital Class (7 day yield 0.210%) |
| | | | |
Shares as of 06/30/08: | | | — | |
Shares purchased: | | | 76,825,272 | |
Shares sold: | | | (66,799,472 | ) |
Shares as of 06/30/09: | | | 10,025,800 | |
Net realized gain(loss): | | $ | — | |
Dividend income earned: | | $ | 36,793 | |
Value at end of period: | | $ | 10,025,800 | |
See Accompanying Notes to Financial Statements.
25
Columbia High Yield Municipal Fund
June 30, 2009
| (i) | Money market mutual fund registered under the Investment Company Act of 1940, as amended and advised by Columbia Management Advisors, LLC. |
| (j) | Variable rate demand notes. These securities are payable upon demand and are secured by letters of credit or other credit support agreements from banks. The interest rates change periodically and the interest rates shown reflect the rates at June 30, 2009. |
| (k) | Cost for federal income tax purposes is $677,557,743. |
| (l) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. |
The following table summarizes the inputs used, as of June 30, 2009 in valuing the Fund’s assets:
| | | | | | | | | | | | |
Description | | Quoted
Prices (Level 1) | | Other Significant
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Municipal Bonds | | | | | | | | | | | | |
Education | | | | | | | | | | | | |
Education | | $ | — | | $ | 10,453,220 | | $ | — | | $ | 10,453,220 |
Prep School | | | — | | | 6,319,723 | | | — | | | 6,319,723 |
Student Loan | | | — | | | 11,320,364 | | | — | | | 11,320,364 |
| | | | | | | | | | | | |
Education Total | | | — | | | 28,093,307 | | | — | | | 28,093,307 |
| | | | | | | | | | | | |
Health Care | | | | | | | | | | | | |
Continuing Care Retirement | | | — | | | 89,038,520 | | | — | | | 89,038,520 |
Health Services | | | — | | | 1,952,852 | | | — | | | 1,952,852 |
Hospitals | | | — | | | 84,469,440 | | | — | | | 84,469,440 |
Intermediate Care Facilities | | | — | | | 3,465,222 | | | — | | | 3,465,222 |
Nursing Homes | | | — | | | 17,349,458 | | | 549,500 | | | 17,898,958 |
| | | | | | | | | | | | |
Health Care Total | | | — | | | 196,275,492 | | | 549,500 | | | 196,824,992 |
| | | | | | | | | | | | |
Housing | | | | | | | | | | | | |
Assisted Living/Senior | | | — | | | 9,609,607 | | | — | | | 9,609,607 |
Multi-Family | | | — | | | 27,484,093 | | | — | | | 27,484,093 |
Single-Family | | | — | | | 9,943,760 | | | — | | | 9,943,760 |
| | | | | | | | | | | | |
Housing Total | | | — | | | 47,037,460 | | | — | | | 47,037,460 |
| | | | | | | | | | | | |
Industrials | | | | | | | | | | | | |
Food Products | | | — | | | 2,088,920 | | | — | | | 2,088,920 |
Forest Products & Paper | | | — | | | 10,946,928 | | | — | | | 10,946,928 |
Manufacturing | | | — | | | 1,987,536 | | | — | | | 1,987,536 |
Metals & Mining | | | — | | | 1,643,313 | | | — | | | 1,643,313 |
Oil & Gas | | | — | | | 7,710,630 | | | — | | | 7,710,630 |
Other Industrial Development Bonds | | | — | | | 2,900,800 | | | — | | | 2,900,800 |
| | | | | | | | | | | | |
Industrials Total | | | — | | | 27,278,127 | | | — | | | 27,278,127 |
| | | | | | | | | | | | |
Other | | | | | | | | | | | | |
Other | | | — | | | 2,924,900 | | | — | | | 2,924,900 |
Pool/Bond Bank | | | — | | | 4,681,106 | | | — | | | 4,681,106 |
Refunded/Escrowed | | | — | | | 57,723,197 | | | — | | | 57,723,197 |
Tobacco | | | — | | | 10,871,884 | | | — | | | 10,871,884 |
| | | | | | | | | | | | |
Other Total | | | — | | | 76,201,087 | | | — | | | 76,201,087 |
| | | | | | | | | | | | |
Other Revenue | | | | | | | | | | | | |
Hotels | | | — | | | 4,278,655 | | | — | | | 4,278,655 |
Recreation | | | — | | | 10,669,804 | | | — | | | 10,669,804 |
| | | | | | | | | | | | |
Other Revenue Total | | | — | | | 14,948,459 | | | — | | | 14,948,459 |
| | | | | | | | | | | | |
Resource Recovery | | | | | | | | | | | | |
Disposal | | | — | | | 1,826,760 | | | — | | | 1,826,760 |
Resource Recovery | | | — | | | 4,603,691 | | | — | | | 4,603,691 |
| | | | | | | | | | | | |
Resource Recovery Total | | | — | | | 6,430,451 | | | — | | | 6,430,451 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Description | | Quoted
Prices (Level 1) | | Other Significant
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
Tax-Backed | | | | | | | | | | | | |
Local Appropriated | | $ | — | | $ | 4,584,636 | | $ | — | | $ | 4,584,636 |
Local General Obligations | | | — | | | 9,213,189 | | | — | | | 9,213,189 |
Special Non-Property Tax | | | — | | | 17,344,487 | | | — | | | 17,344,487 |
Special Property Tax | | | — | | | 40,847,984 | | | — | | | 40,847,984 |
State Appropriated | | | — | | | 1,834,542 | | | — | | | 1,834,542 |
State General Obligations | | | — | | | 2,266,328 | | | — | | | 2,266,328 |
| | | | | | | | | | | | |
Tax-Backed Total | | | — | | | 76,091,166 | | | — | | | 76,091,166 |
| | | | | | | | | | | | |
Transportation | | | | | | | | | | | | |
Air Transportation | | | — | | | 12,740,359 | | | — | | | 12,740,359 |
Airports | | | — | | | 2,593,844 | | | — | | | 2,593,844 |
Toll Facilities | | | — | | | 4,656,961 | | | — | | | 4,656,961 |
Transportation | | | — | | | 924,810 | | | — | | | 924,810 |
| | | | | | | | | | | | |
Transportation Total | | | — | | | 20,915,974 | | | — | | | 20,915,974 |
| | | | | | | | | | | | |
Utilities | | | | | | | | | | | | |
Independent Power Producers | | | — | | | 10,746,434 | | | — | | | 10,746,434 |
Investor Owned | | | — | | | 33,792,800 | | | — | | | 33,792,800 |
Municipal Electric | | | — | | | 999,271 | | | — | | | 999,271 |
Water & Sewer | | | — | | | 5,174,810 | | | — | | | 5,174,810 |
| | | | | | | | | | | | |
Utilities Total | | | — | | | 50,713,315 | | | — | | | 50,713,315 |
| | | | | | | | | | | | |
Total Municipal Bonds | | | — | | | 543,984,838 | | | 549,500 | | | 544,534,338 |
| | | | | | | | | | | | |
Investment Companies | | | 20,131,746 | | | — | | | — | | | 20,131,746 |
Municipal Preferred Stocks | | | | | | | | | | | | |
Housing | | | | | | | | | | | | |
Multi-Family | | | — | | | 5,193,225 | | | — | | | 5,193,225 |
| | | | | | | | | | | | |
Housing Total | | | — | | | 5,193,225 | | | — | | | 5,193,225 |
| | | | | | | | | | | | |
Total Municipal Preferred Stocks | | | | | | 5,193,225 | | | — | | | 5,193,225 |
| | | | | | | | | | | | |
Short-Term Obligations | | | | | | | | | | | | |
Variable Rate Demand Notes | | | — | | | 670,000 | | | — | | | 670,000 |
Total Short-Term Obligations | | | | | | 670,000 | | | — | | | 670,000 |
| | | | | | | | | | | | |
Total Investments | | | 20,131,746 | | | 549,848,063 | | | 549,500 | | | 570,529,309 |
| | | | | | | | | | | | |
Total | | $ | 20,131,746 | | $ | 549,848,063 | | $ | 549,500 | | $ | 570,529,309 |
| | | | | | | | | | | | |
See Accompanying Notes to Financial Statements.
26
Columbia High Yield Municipal Fund
June 30, 2009
| | The following table reconciles asset balances for the twelve month period ending June 30, 2009, in which significant unobservable inputs (Level 3) were used in determining value: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Investments in
Securities | | Balance
as of
June 30,
2008 | | Accrued
Discounts/
Premiums | | Realized
Gain/
(Loss) | | Change in
Unrealized
Appreciation
(Depreciation) | | | Net
Purchases | | Net
Sales | | Net
transfers
into
Level 3 | | Net
transfers
out of
Level 3 | | Balance
as of
June 30,
2009 | | Change in
Unrealized
Appreciation
(Depreciation)
from
Investments
held at
June 30,
2009 | |
Municipal Bonds | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HEALTH CARE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nursing Homes | | $ | — | | $ | — | | $ | — | | ($ | 175,584 | ) | | $ | — | | $ | 25,000 | | $ | 750,084 | | $ | — | | $ | 549,500 | | ($ | 175,584 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | — | | $ | — | | $ | — | | ($ | 175,584 | ) | | $ | — | | $ | 25,000 | | $ | 750,084 | | $ | — | | $ | 549,500 | | ($ | 175,584 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | The information in the above reconciliation represents fiscal year to date activity for any securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. |
| | The change in unrealized losses attributable to securities owned at June 30, 2009 which were valued using significant unobservable inputs (Level 3) amounted to $175,584. This amount is included in net change in unrealized depreciation on the Statement of Changes in Net Assets. |
| | For more information on valuation inputs, and their aggregation into the levels used in the tables above, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
See Accompanying Notes to Financial Statements.
27
Columbia High Yield Municipal Fund
June 30, 2009
At June 30, 2009 the composition of the Fund by Revenue Source is as follows:
| | |
Revenue Source (Unaudited) | | % of
Net Assets |
Health Care | | 34.3 |
Tax-Backed | | 13.2 |
Refunded/Escrowed | | 10.1 |
Housing | | 9.1 |
Utilities | | 8.8 |
Education | | 4.9 |
Industrials | | 4.8 |
Transportation | | 3.6 |
Other | | 3.2 |
Other Revenue | | 2.6 |
Resource Recovery | | 1.1 |
| | |
| | 95.7 |
Investment Companies | | 3.5 |
Short-Term Obligations | | 0.1 |
Other Assets & Liabilities, Net | | 0.7 |
| | |
| | 100.0 |
| | |
| | |
Acronym | | Name |
| AGO | | Assured Guaranty Ltd. |
| AMBAC | | Ambac Assurance Corp. |
| AMT | | Alternative Minimum Tax |
| FGIC | | Financial Guaranty Insurance Co. |
| FHLMC | | Federal Home Loan Mortgage Corp. |
| FSA | | Financial Security Assurance, Inc. |
| GNMA | | Government National Mortgage Association |
| HFDC | | Health Facility Development Corporation |
| LOC | | Letter of Credit |
| NPFGC | | National Public Finance Guarantee Corp. |
| SPA | | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
28
Statement of Assets and Liabilities – Columbia High Yield Municipal Fund
June 30, 2009
| | | | | |
| | | | | ($) | |
| Assets | | Unaffiliated investments, at cost | | 668,063,455 | |
| | Affiliated investments, at cost | | 10,025,800 | |
| | | | | |
| | Total investments, at cost | | 678,089,255 | |
| | Unaffiliated investments, at value | | 560,503,509 | |
| | Affiliated investments, at value | | 10,025,800 | |
| | | | | |
| | Total investments, at value | | 570,529,309 | |
| | |
| | Cash | | 544 | |
| | Receivable for: | | | |
| | Investments sold | | 754,080 | |
| | Fund shares sold | | 1,119,406 | |
| | Interest | | 9,945,944 | |
| | Trustees’ deferred compensation plan | | 41,958 | |
| | Prepaid expenses | | 12,026 | |
| | | | | |
| | Total Assets | | 582,403,267 | |
| | |
| Liabilities | | Payable for: | | | |
| | Investments purchased on a delayed delivery basis | | 4,000,000 | |
| | Fund shares repurchased | | 1,000,200 | |
| | Distributions | | 2,318,801 | |
| | Investment advisory fee | | 186,878 | |
| | Administration fee | | 51,076 | |
| | Transfer agent fee | | 31,077 | |
| | Trustees’ fees | | 391 | |
| | Pricing and bookkeeping fees | | 27,091 | |
| | Custody fee | | 6,533 | |
| | Distribution and service fees | | 18,102 | |
| | Chief compliance officer expenses | | 194 | |
| | Trustees’ deferred compensation plan | | 41,958 | |
| | Other liabilities | | 65,259 | |
| | | | | |
| | Total Liabilities | | 7,747,560 | |
| | |
| | | | | |
| | Net Assets | | 574,655,707 | |
| | |
| Net Assets Consist of | | Paid-in capital | | 752,314,797 | |
| | Undistributed net investment income | | 1,240,262 | |
| | Accumulated net realized loss | | (71,339,406 | ) |
| | Net unrealized appreciation (depreciation) on investments | | (107,559,946 | ) |
| | | | | |
| | Net Assets | | 574,655,707 | |
See Accompanying Notes to Financial Statements.
29
Statement of Assets and Liabilities (continued) – Columbia High Yield Municipal Fund
June 30, 2009
| | | | | | |
| Class A | | Net assets | | $ | 59,188,645 | |
| | Shares outstanding | | | 6,736,909 | |
| | Net asset value per share | | $ | 8.79 | (a) |
| | Maximum sales charge | | | 4.75 | % |
| | Maximum offering price per share ($8.79/0.9525) | | $ | 9.23 | (b) |
| | |
| Class B | | | | | | |
| | Net assets | | $ | 8,392,327 | |
| | Shares outstanding | | | 955,207 | |
| | Net asset value and offering price per share | | $ | 8.79 | (a) |
| | |
| Class C | | | | | | |
| | Net assets | | $ | 8,340,930 | |
| | Shares outstanding | | | 949,367 | |
| | Net asset value and offering price per share | | $ | 8.79 | (a) |
| | |
| Class Z | | | | | | |
| | Net assets | | $ | 498,733,805 | |
| | Shares outstanding | | | 56,765,831 | |
| | Net asset value, offering and redemption price per share | | $ | 8.79 | |
| (a) | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
| (b) | On sales of $50,000 or more the offering price is reduced. |
See Accompanying Notes to Financial Statements.
30
Statement of Operations – Columbia High Yield Municipal Fund
For the Year Ended June 30, 2009
| | | | | |
| | | | | ($) | |
| Investment Income | | Interest | | 39,565,319 | |
| | Dividends | | 128,178 | |
| | Dividends from affiliates | | 36,793 | |
| | | |
| | Total Investment Income | | 39,730,290 | |
| | |
| Expenses | | Investment advisory fee | | 2,421,629 | |
| | Administration fee | | 661,657 | |
| | Distribution fee: | | | |
| | Class B | | 68,663 | |
| | Class C | | 66,839 | |
| | Service fee: | | | |
| | Class A | | 123,838 | |
| | Class B | | 18,310 | |
| | Class C | | 17,823 | |
| | Transfer agent fee | | 517,687 | |
| | Pricing and bookkeeping fees | | 180,290 | |
| | Trustees’ fees | | 30,741 | |
| | Custody fee | | 30,428 | |
| | Chief compliance officer expenses | | 789 | |
| | Other expenses | | 243,127 | |
| | | |
| | Total Expenses | | 4,381,821 | |
| | |
| | Fees waived by distributor – Class C | | (13,371 | ) |
| | Expense reductions | | (3,970 | ) |
| | | |
| | Net Expenses | | 4,364,480 | |
| |
| | | |
| | Net Investment Income | | 35,365,810 | |
| | |
| Net Realized and Unrealized Gain (Loss) on Investments and Futures Contracts | | Net realized loss on: | | | |
| | Investments | | (33,236,358 | ) |
| | Futures contracts | | (6,567,463 | ) |
| | | |
| | Net realized loss | | (39,803,821 | ) |
| | |
| | Net change in unrealized appreciation (depreciation) on: | | | |
| | Investments | | (71,909,172 | ) |
| | Futures contracts | | 1,323,704 | |
| | | |
| | Net change in unrealized appreciation (depreciation) | | (70,585,468 | ) |
| | | |
| | Net Loss | | (110,389,289 | ) |
| |
| | | |
| | Net Decrease Resulting from Operations | | (75,023,479 | ) |
See Accompanying Notes to Financial Statements.
31
Statement of Changes in Net Assets – Columbia High Yield Municipal Fund
| | | | | | | | |
| Increase (Decrease) in Net Assets | | | | Year Ended
June 30,
2009 ($) | | | Year Ended
June 30,
2008 ($) | |
| Operations | | Net investment income | | 35,365,810 | | | 36,858,792 | |
| | Net realized loss on investments, swap contracts and futures contracts | | (39,803,821 | ) | | (14,081,613 | ) |
| | Net change in unrealized appreciation (depreciation) on investments, swap contracts and futures contracts | | (70,585,468 | ) | | (54,619,486 | ) |
| | | | | | | | |
| | Net decrease resulting from operations | | (75,023,479 | ) | | (31,842,307 | ) |
| | | |
| Distributions to Shareholders | | From net investment income: | | | | | | |
| | Class A | | (3,633,149 | ) | | (3,933,279 | ) |
| | Class B | | (466,244 | ) | | (590,174 | ) |
| | Class C | | (468,337 | ) | | (511,488 | ) |
| | Class Z | | (30,574,264 | ) | | (31,712,990 | ) |
| | | | | | | | |
| | Total distributions to shareholders | | (35,141,994 | ) | | (36,747,931 | ) |
| | | |
| | Net Capital Stock Transactions | | (42,026,276 | ) | | (24,534,734 | ) |
| | | | | | | | |
| | Total decrease in net assets | | (152,191,749 | ) | | (93,124,972 | ) |
| | | |
| Net Assets | | Beginning of period | | 726,847,456 | | | 819,972,428 | |
| | End of period | | 574,655,707 | | | 726,847,456 | |
| | Undistributed net investment income at end of period | | 1,240,262 | | | 1,084,662 | |
See Accompanying Notes to Financial Statements.
32
Statement of Changes in Net Assets – Capital Stock Activity
| | | | | | | | | | | | |
| | | Columbia High Yield Municipal Fund | |
| | | Year Ended
June 30, 2009 | | | Year Ended
June 30, 2008 | |
| | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Class A | | | | | | | | | | | | |
Subscriptions | | 1,077,239 | | | 9,324,226 | | | 1,256,976 | | | 13,647,769 | |
Distributions reinvested | | 225,765 | | | 1,993,420 | | | 208,142 | | | 2,235,548 | |
Redemptions | | (1,794,935 | ) | | (15,859,796 | ) | | (2,180,658 | ) | | (23,709,042 | ) |
| | | | | | | | | | | | |
Net decrease | | (491,931 | ) | | (4,542,150 | ) | | (715,540 | ) | | (7,825,725 | ) |
| | | | |
Class B | | | | | | | | | | | | |
Subscriptions | | 185,475 | | | 1,578,364 | | | 73,271 | | | 794,844 | |
Distributions reinvested | | 26,304 | | | 232,508 | | | 29,283 | | | 315,127 | |
Redemptions | | (414,186 | ) | | (3,688,094 | ) | | (481,908 | ) | | (5,215,968 | ) |
| | | | | | | | | | | | |
Net decrease | | (202,407 | ) | | (1,877,222 | ) | | (379,354 | ) | | (4,105,997 | ) |
| | | | |
Class C | | | | | | | | | | | | |
Subscriptions | | 218,827 | | | 1,900,642 | | | 192,222 | | | 2,075,752 | |
Distributions reinvested | | 23,318 | | | 205,692 | | | 22,291 | | | 239,567 | |
Redemptions | | (367,569 | ) | | (3,276,441 | ) | | (387,704 | ) | | (4,236,926 | ) |
| | | | | | | | | | | | |
Net decrease | | (125,424 | ) | | (1,170,107 | ) | | (173,191 | ) | | (1,921,607 | ) |
| | | | |
Class Z | | | | | | | | | | | | |
Subscriptions | | 15,518,948 | | | 138,277,279 | | | 19,046,612 | | | 203,604,008 | |
Distributions reinvested | | 575,053 | | | 5,081,922 | | | 498,121 | | | 5,350,463 | |
Redemptions | | (20,306,908 | ) | | (177,795,998 | ) | | (20,234,726 | ) | | (219,635,876 | ) |
| | | | | | | | | | | | |
Net decrease | | (4,212,907 | ) | | (34,436,797 | ) | | (689,993 | ) | | (10,681,405 | ) |
See Accompanying Notes to Financial Statements.
33
Financial Highlights – Columbia High Yield Municipal Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | Year Ended June 30, | |
| Class A Shares | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Net Asset Value, Beginning of Period | | $ | 10.32 | | | $ | 11.33 | | | $ | 11.25 | | | $ | 11.39 | | | $ | 10.96 | |
| | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.53 | | | | 0.52 | | | | 0.51 | | | | 0.52 | | | | 0.54 | |
Net realized and unrealized gain (loss) on investments, swap contracts and futures contracts | | | (1.53 | ) | | | (1.01 | ) | | | 0.08 | | | | (0.14 | ) | | | 0.43 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | (1.00 | ) | | | (0.49 | ) | | | 0.59 | | | | 0.38 | | | | 0.97 | |
| | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.53 | ) | | | (0.52 | ) | | | (0.51 | ) | | | (0.52 | ) | | | (0.54 | ) |
| | | | | |
Net Asset Value, End of Period | | $ | 8.79 | | | $ | 10.32 | | | $ | 11.33 | | | $ | 11.25 | | | $ | 11.39 | |
Total return (b) | | | (9.60 | )% | | | (4.39 | )% | | | 5.23 | % | | | 3.39 | %(c) | | | 9.00 | % |
| | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | |
Net expenses before interest expense and fees (d) | | | 0.90 | % | | | 0.90 | % | | | 0.88 | % | | | 0.85 | % | | | 0.87 | % |
Interest expense and fees | | | — | | | | 0.05 | %(e) | | | 0.07 | %(e) | | | 0.07 | %(e) | | | 0.06 | %(e) |
Net expenses (d) | | | 0.90 | % | | | 0.95 | % | | | 0.95 | % | | | 0.92 | % | | | 0.93 | % |
Waiver/Reimbursement | | | — | | | | — | | | | — | | | | — | %(f) | | | — | |
Net investment income (d) | | | 5.90 | % | | | 4.84 | % | | | 4.43 | % | | | 4.60 | % | | | 4.79 | % |
Portfolio turnover rate | | | 26 | % | | | 32 | % | | | 27 | % | | | 13 | % | | | 7 | % |
Net assets, end of period (000s) | | $ | 59,189 | | | $ | 74,593 | | | $ | 89,977 | | | $ | 90,151 | | | $ | 91,470 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Total return at net asset value assuming all distributions reinvested and no initial sales change or contingent deferred sales charge. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Interest expense and fees relate to the Fund’s liability with respect to floating-rate notes held in conjunction with investments in inverse floating rate obligations. |
| (f) | Rounds to less than 0.01%. |
See Accompanying Notes to Financial Statements.
34
Financial Highlights – Columbia High Yield Municipal Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | Year Ended June 30, | |
| Class B Shares | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Net Asset Value, Beginning of Period | | $ | 10.32 | | | $ | 11.33 | | | $ | 11.25 | | | $ | 11.39 | | | $ | 10.96 | |
| | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.46 | | | | 0.44 | | | | 0.42 | | | | 0.43 | | | | 0.46 | |
Net realized and unrealized gain (loss) on investments, swap contracts and futures contracts | | | (1.53 | ) | | | (1.01 | ) | | | 0.08 | | | | (0.14 | ) | | | 0.42 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | (1.07 | ) | | | (0.57 | ) | | | 0.50 | | | | 0.29 | | | | 0.88 | |
| | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.46 | ) | | | (0.44 | ) | | | (0.42 | ) | | | (0.43 | ) | | | (0.45 | ) |
| | | | | |
Net Asset Value, End of Period | | $ | 8.79 | | | $ | 10.32 | | | $ | 11.33 | | | $ | 11.25 | | | $ | 11.39 | |
Total return (b) | | | (10.27 | )% | | | (5.10 | )% | | | 4.45 | % | | | 2.62 | %(c) | | | 8.19 | % |
| | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | |
Net expenses before interest expense and fees (d) | | | 1.65 | % | | | 1.65 | % | | | 1.63 | % | | | 1.60 | % | | | 1.62 | % |
Interest expense and fees | | | — | | | | 0.05 | %(e) | | | 0.07 | %(e) | | | 0.07 | %(e) | | | 0.06 | %(e) |
Net expenses (d) | | | 1.65 | % | | | 1.70 | % | | | 1.70 | % | | | 1.67 | % | | | 1.68 | % |
Waiver/Reimbursement | | | — | | | | — | | | | — | | | | — | %(f) | | | — | |
Net investment income (d) | | | 5.13 | % | | | 4.09 | % | | | 3.68 | % | | | 3.85 | % | | | 4.04 | % |
Portfolio turnover rate | | | 26 | % | | | 32 | % | | | 27 | % | | | 13 | % | | | 7 | % |
Net assets, end of period (000s) | | $ | 8,392 | | | $ | 11,945 | | | $ | 17,407 | | | $ | 24,735 | | | $ | 32,824 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Interest expense and fees relate to the Fund’s liability with respect to floating-rate notes held in conjunction with investments in inverse floating rate obligations. |
| (f) | Rounds to less than 0.01%. |
See Accompanying Notes to Financial Statements.
35
Financial Highlights – Columbia High Yield Municipal Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | Year Ended June 30, | |
| Class C Shares | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Net Asset Value, Beginning of Period | | $ | 10.32 | | | $ | 11.33 | | | $ | 11.25 | | | $ | 11.39 | | | $ | 10.96 | |
| | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.48 | | | | 0.46 | | | | 0.44 | | | | 0.45 | | | | 0.47 | |
Net realized and unrealized gain (loss) on investments, swap contracts and futures contracts | | | (1.54 | ) | | | (1.01 | ) | | | 0.08 | | | | (0.14 | ) | | | 0.43 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | (1.06 | ) | | | (0.55 | ) | | | 0.52 | | | | 0.31 | | | | 0.90 | |
| | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.47 | ) | | | (0.46 | ) | | | (0.44 | ) | | | (0.45 | ) | | | (0.47 | ) |
| | | | | |
Net Asset Value, End of Period | | $ | 8.79 | | | $ | 10.32 | | | $ | 11.33 | | | $ | 11.25 | | | $ | 11.39 | |
Total return (b)(c) | | | (10.14 | )% | | | (4.96 | )% | | | 4.61 | % | | | 2.77 | % | | | 8.35 | % |
| | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | |
Net expenses before interest expense and fees (d) | | | 1.50 | % | | | 1.50 | % | | | 1.48 | % | | | 1.45 | % | | | 1.47 | % |
Interest expense and fees | | | — | | | | 0.05 | %(e) | | | 0.07 | %(e) | | | 0.07 | %(e) | | | 0.06 | %(e) |
Net expenses (d) | | | 1.50 | % | | | 1.55 | % | | | 1.55 | % | | | 1.52 | % | | | 1.53 | % |
Waiver/Reimbursement | | | 0.15 | % | | | 0.15 | % | | | 0.15 | % | | | 0.15 | % | | | 0.15 | % |
Net investment income (d) | | | 5.29 | % | | | 4.24 | % | | | 3.82 | % | | | 3.99 | % | | | 4.19 | % |
Portfolio turnover rate | | | 26 | % | | | 32 | % | | | 27 | % | | | 13 | % | | | 7 | % |
Net assets, end of period (000s) | | $ | 8,341 | | | $ | 11,090 | | | $ | 14,134 | | | $ | 14,727 | | | $ | 13,593 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Interest expense and fees relate to the Fund’s liability with respect floating-rate notes held in conjunction with investments in inverse floating rate obligations. |
See Accompanying Notes to Financial Statements.
36
Financial Highlights – Columbia High Yield Municipal Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | Year Ended June 30, | |
| Class Z Shares | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Net Asset Value, Beginning of Period | | $ | 10.32 | | | $ | 11.33 | | | $ | 11.25 | | | $ | 11.39 | | | $ | 10.96 | |
| | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.55 | | | | 0.54 | | | | 0.53 | | | | 0.54 | | | | 0.56 | |
Net realized and unrealized gain (loss) on investments, swap contracts and futures contracts | | | (1.54 | ) | | | (1.01 | ) | | | 0.08 | | | | (0.14 | ) | | | 0.43 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | (0.99 | ) | | | (0.47 | ) | | | 0.61 | | | | 0.40 | | | | 0.99 | |
| | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.54 | ) | | | (0.54 | ) | | | (0.53 | ) | | | (0.54 | ) | | | (0.56 | ) |
| | | | | |
Net Asset Value, End of Period | | $ | 8.79 | | | $ | 10.32 | | | $ | 11.33 | | | $ | 11.25 | | | $ | 11.39 | |
Total return (b) | | | (9.42 | )% | | | (4.20 | )% | | | 5.44 | % | | | 3.59 | %(c) | | | 9.22 | % |
| | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | |
Net expenses before interest expense and fees (d) | | | 0.70 | % | | | 0.70 | % | | | 0.68 | % | | | 0.65 | % | | | 0.67 | % |
Interest expense and fees | | | — | | | | 0.05 | %(e) | | | 0.07 | %(e) | | | 0.07 | %(e) | | | 0.06 | %(e) |
Net expenses (d) | | | 0.70 | % | | | 0.75 | % | | | 0.75 | % | | | 0.72 | % | | | 0.73 | % |
Waiver/Reimbursement | | | — | | | | — | | | | — | | | | — | %(f) | | | — | |
Net investment income (d) | | | 6.07 | % | | | 5.03 | % | | | 4.63 | % | | | 4.80 | % | | | 4.99 | % |
Portfolio turnover rate | | | 26 | % | | | 32 | % | | | 27 | % | | | 13 | % | | | 7 | % |
Net assets, end of period (000s) | | $ | 498,734 | | | $ | 629,219 | | | $ | 698,454 | | | $ | 576,355 | | | $ | 447,945 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Total return at net asset value assuming all distributions reinvested. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (e) | Interest expense and fees relate to the Fund’s liability with respect to floating-rate notes held in conjunction with investments in inverse floating rate obligations. |
| (f) | Rounds to less than 0.01%. |
See Accompanying Notes to Financial Statements.
37
Notes to Financial Statements – Columbia High Yield Municipal Fund
June 30, 2009
Note 1. Organization
Columbia High Yield Municipal Fund (the “Fund”), a series of Columbia Funds Series Trust I, (the “Trust”), is a diversified portfolio. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company organized as a Massachusetts business trust.
Investment Objective
The Fund seeks total return, consisting of current income exempt from federal income tax and capital appreciation.
Fund Shares
The Trust may issue an unlimited number of shares, and the Fund offers four classes of shares: Class A, Class B, Class C and Class Z. Each share class has its own expense structure and sales charges, as applicable. Effective June 22, 2009, the Fund no longer accepts investments in Class B shares from new or existing investors in the Fund’s Class B shares, except in connection with the reinvestment of any dividend and/or capital gain distributions in Class B shares of the Fund and exchanges by existing Class B shareholders of the other Columbia Funds.
Class A shares are subject to a maximum front-end sales charge of 4.75% based on the amount of initial investment. Class A shares purchased without an initial sales charge in accounts aggregating $1 million to $50 million at the time of purchase are subject to a 1.00% contingent deferred sales charge (“CDSC”) on shares sold within one year after purchase. Class B shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class B shares will convert to Class A shares eight years after purchase. Class C shares are subject to a 1.00% CDSC on shares sold within one year after purchase. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in the Fund’s prospectus.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through August 20, 2009, the date the financial statements were issued, and noted no items requiring adjustment of the financial statements or additional disclosures. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Debt securities generally are valued by pricing services approved by the Trust’s Board of Trustees, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Debt securities for which quotations are readily available are valued at an over-the-counter or exchange bid quotation.
Certain debt securities, which tend to be more thinly traded and of lesser quality, are priced based on fundamental analysis of the financial condition of the issuer and the estimated value of any collateral. Valuations developed through pricing techniques may vary from the actual amounts realized upon sale of the securities, and the potential variation may be greater for those securities valued using fundamental analysis.
Short-term investments maturing in 60 days or less are valued at amortized cost, which approximates market value.
Investments in other open-end investment companies are valued at net asset value.
Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reliable, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision
38
Columbia High Yield Municipal Fund
June 30, 2009
of the Board of Trustees. If a security is valued at fair value, such value is likely to be different from the last quoted market price for the security. The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine value.
On July 1, 2008 the Funds adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical securities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy under SFAS 157 are described below:
| n | | Level 1 — quoted prices in active markets for identical securities |
| n | | Level 2 — prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others) |
| n | | Level 3 — prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management’s own assumptions about the factors market participants would use in pricing an investment. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Futures Contracts
The Fund entered into interest rate futures contracts to manage its exposure to movements in interest rates.
The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instruments or the underlying securities, or (3) an inaccurate prediction of the future direction of interest rates by Columbia Management Advisors, LLC (“Columbia”), the Fund’s investment advisor.
Upon entering into a futures contract, the Fund pledges cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by the Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed or expires.
Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statement of Assets and Liabilities.
Restricted Securities
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale at the issuer’s expense either upon demand by the Fund or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees. The Fund will not incur any registration costs upon such resale.
Swap Contracts
The Fund may engage in swap transactions such as interest rate and volatility swaps, consistent with its investment objective and policies to obtain a desired return at a lower cost than if the Fund had invested directly in the asset that yielded the desired return. Swaps involve the exchange by a Fund with another party of their respective commitments to pay or receive interest or total return throughout the lives of the agreements. The interest to be paid or received on swaps is included in realized gain/(loss) on investments. Unrealized
39
Columbia High Yield Municipal Fund
June 30, 2009
gains are reported as an asset and unrealized losses are reported as a liability on the Statement of Assets and Liabilities. A realized gain or loss is recorded upon termination of swap agreements and is equal to the difference between the Fund’s basis in the swap and the proceeds from (or cost of) the closing transaction. Swap agreements are stated at fair value. Notional principal amounts are used to express the extent of involvement in these transactions, but the amounts potentially subject to credit risk are much smaller.
If there is a default by the counterparty to a swap contract, the Fund will be limited to contractual remedies pursuant to the agreements related to the transaction. There is no assurance that the swap contract counterparties will be able to meet their obligations pursuant to the swap contracts or that, in the event of default, the Fund will succeed in pursuing contractual remedies. The Fund thus assumes the risk that it may be delayed in or prevented from obtaining payments owed to it pursuant to the swap contracts.
The use of derivative instruments involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted. Original issue discount is accreted to interest income over the life of the security with a corresponding increase in the cost basis. Dividend income is recorded on the ex-date.
Expenses
General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust’s organizational documents and by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations.
40
Columbia High Yield Municipal Fund
June 30, 2009
For the year ended June 30, 2009, permanent book and tax basis differences resulting primarily from differing treatments for discount accretion/premium amortization on debt securities partnership adjustments, paydown reclasses, market discount reclasses and expired capital loss carryforwards were identified and reclassified among the components of the Fund’s net assets as follows:
| | | | |
| | | | | |
Undistributed Net Investment
Income | | Accumulated Net Realized
Loss | | Paid-In Capital |
| $(68,216) | | $1,996,782 | | $(1,928,566) |
Net investment income and net realized gains (losses), as disclosed on the Statement of Operations, and net assets were not affected by this reclassification.
The tax character of distributions paid during the years ended June 30, 2009 and June 30, 2008 was as follows:
| | | | | | |
| | | June 30, 2009 | | June 30, 2008 |
| Distributions paid from: | | | | |
Tax-Exempt Income | | $ | 34,890,769 | | $ | 36,711,040 |
Ordinary Income* | | | 251,225 | | | 36,891 |
| * | For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions. |
As of June 30, 2009, the components of distributable earnings on a tax basis were as follows:
| | | | |
| | | | | |
Undistributed
Tax-Exempt Income | | Undistributed Long-Term Capital Gains | | Net
Unrealized Depreciation* |
| $3,285,222 | | $— | | $(107,028,434) |
| * | The differences between book-basis and tax-basis net unrealized depreciation are primarily due to deferral of losses from wash sales. |
Unrealized appreciation and depreciation at June 30, 2009, based on cost of investments for federal income tax purposes were:
| | | | |
| | | | |
Unrealized appreciation | | $ | 10,382,662 | |
Unrealized depreciation | | | (117,411,096 | ) |
Net unrealized depreciation | | $ | (107,028,434 | ) |
The following capital loss carryforwards may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
| | |
| | | |
| Year of Expiration | | Capital Loss Carryforwards |
| 2010 | | $ 1,780,434 |
| 2011 | | $ 697,947 |
| 2012 | | $ 1,587,432 |
| 2013 | | $ 5,621,572 |
| 2014 | | $ 466,991 |
| 2015 | | $ 1,471,699 |
| 2016 | | $ 5,694,295 |
| 2017 | | $17,741,445 |
| | | |
| Total | | $35,061,815 |
Capital loss carryforwards of $1,928,565 expired during the year ended June 30, 2009.
Of the capital loss carryforwards attributable to the Fund, $1,095,076 (expiring on June 30, 2010) was obtained in a merger with Liberty High Yield Municipal Fund. Utilization of these losses could be subject to limitations imposed by the Internal Revenue Code.
Under current tax rules, certain currency and capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. As of June 30, 2009, post-October capital losses of $35,172,418 attributed to security transactions were deferred to July 1, 2009.
Under Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109 (“FIN 48”), management determines whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management has evaluated the known implications of FIN 48 on the computation of net assets for the Fund. As a result of this evaluation, management has concluded that FIN 48 did not have any effect on the Fund’s
41
Columbia High Yield Municipal Fund
June 30, 2009
financial statements. However, management’s conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Note 4. Fees and Compensation Paid to Affiliates
Investment Advisory Fee
Columbia, an indirect, wholly owned subsidiary of Bank of America Corporation (“BOA”), provides investment advisory services to the Fund. In rendering investment advisory services to the Fund, Columbia may use the portfolio management and research resources of Columbia Management Pte. Ltd., an affiliate of Columbia. Columbia receives a monthly investment advisory fee based on the Fund’s average daily net assets at the following annual rates:
| | | |
| | | | |
| Average Daily Net Assets | | Annual Fee Rate | |
First $100 million | | 0.450 | % |
$100 million to $200 million | | 0.425 | % |
Over $200 million | | 0.400 | % |
For the year ended June 30, 2009, the Fund’s effective investment advisory fee rate was 0.41% of the Fund’s average daily net assets.
Administration Fee
Columbia provides administrative and other services to the Fund for a monthly administration fee based on the Fund’s average daily net assets at the following annual rates:
| | | |
| | | | |
| Average Daily Net Assets | | Annual Fee Rate | |
First $100 million | | 0.150 | % |
$100 million to $200 million | | 0.125 | % |
Over $200 million | | 0.100 | % |
For the year ended June 30, 2009, the Fund’s effective administration fee rate was 0.11% of the Fund’s average daily net assets.
Pricing and Bookkeeping Fees
The Fund has entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank & Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Fund. The Fund has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) with State Street and Columbia pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Fund also reimburses State Street for certain out-of-pocket expenses and charges.
The Fund has entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. Under the Services Agreement, the Fund reimburses Columbia for out-of-pocket expenses.
Transfer Agent Fee
Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Fund and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. The Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $17.34 per open account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Fund.
42
Columbia High Yield Municipal Fund
June 30, 2009
The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, Individual Retirement Account (“IRA”) trustee agent fees and account transcript fees due to the Transfer Agent from shareholders of the Fund and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Fund. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the Fund’s initial minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the year ended June 30, 2009, there were no minimum account balance fees charged by the Fund.
Underwriting Discounts, Service and Distribution Fees
Columbia Management Distributors, Inc. (the “Distributor”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, is the principal underwriter of the Fund’s shares. For the year ended June 30, 2009, the Distributor has retained net underwriting discounts of $7,933 on sales of the Fund’s Class A shares and received net CDSC fees of $33, $16,011 and $736 on Class A, Class B and Class C share redemptions, respectively.
The Fund has adopted distribution and shareholder servicing plans (the “Plans”) pursuant to Rule 12b-1 under the 1940 Act which require the payment of a monthly service fee to the Distributor. The service fee is equal to 0.20% annually of the average daily net assets attributable to Class A, Class B and Class C shares. The Plans also require the payment of a monthly distribution fee to the Distributor at the annual rate of 0.75% of the average daily net assets attributable to Class B and Class C shares only. The Distributor has voluntarily agreed to waive a portion of the Class C shares distribution fee so that it will not exceed 0.60% annually of the average daily net assets attributable to Class C shares. This arrangement may be modified or terminated by the Distributor at any time.
The CDSC and the distribution fees are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares.
Fee Waivers and Expense Reimbursements
Effective January 1, 2009, Columbia has voluntarily agreed to waive fees and/or reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 0.65% annually of the Fund’s average daily net assets. Columbia, in its discretion, may revise or discontinue this arrangement at any time.
Fees Paid to Officers and Trustees
All officers of the Fund are employees of Columbia or its affiliates and, with the exception of the Fund’s Chief Compliance Officer, receive no compensation from the Fund. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer. The Fund’s expenses for the Chief Compliance Officer will not exceed $15,000 per year.
The Trust’s eligible Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Fund’s assets.
Other
The Fund may make daily investments of cash balances in Columbia Tax-Exempt Reserves, an affiliated open-ended investment company, pursuant to an exemptive order received from the Securities and Exchange Commission. As an investing Fund, the Fund indirectly bears its proportionate share of the expenses of Columbia Tax-Exempt Reserves.
Note 5. Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement.
For the year ended June 30, 2009, these custody credits reduced total expenses by $3,970 for the Fund.
43
Columbia High Yield Municipal Fund
June 30, 2009
Note 6. Derivative Instruments
Derivatives not accounted for as hedging instruments under Statement 133:
The table below reflects the Fund’s realized gain (loss) and change in unrealized appreciation or (depreciation) on derivatives by primary risk exposure for the year ended June 30, 2009.
| | | | | | | |
| | | | | | |
| Interest Rate Risk | | Net realized
gain (loss) | | | Change in
unrealized
appreciation
(depreciation) |
Futures contracts | | $ | (6,567,463 | ) | | $ | 1,323,704 |
Total Derivatives Realized and Change in unrealized
gain (loss) (a)(b) | | $ | (6,567,463 | ) | | $ | 1,323,704 |
| (a) | Total derivatives realized gain (loss) included in the Statement of Operations is comprised of $(6,567,463) for futures contracts. |
| (b) | Total derivatives change in unrealized appreciation (depreciation) included in the Statement of Operations is comprised of $1,323,704 for futures contracts. |
Note 7. Portfolio Information
For the year ended June 30, 2009, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, for the Fund were $143,945,379 and $174,932,570, respectively.
Note 8. Line of Credit
The Fund and other affiliated funds participate in a $280,000,000 committed, unsecured revolving line of credit provided by State Street. The maximum amount that may be borrowed by any fund is limited to the lesser of $200,000,000 and the Fund’s borrowing limit set forth in the Fund’s registration statement. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund’s borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 0.50% or the overnight LIBOR Rate plus 0.50%. In addition, an annual operations agency fee of $20,000, an amendment fee of 0.02% and a commitment fee of 0.12% per annum are accrued and apportioned among the participating funds pro rata based on their relative net assets. Prior to October 16, 2008, the Fund and other affiliated funds participated in a $350,000,000 committed, unsecured revolving line of credit and a $150,000,000 uncommitted, unsecured line of credit, both provided by State Street. Interest on the committed line of credit was charged to each participating fund based on the fund’s borrowings at a rate per annum equal to the Federal Funds Rate plus 0.50%. In addition, a commitment fee of 0.10% per annum was accrued and apportioned among the participating funds pro rata based on their relative net assets. Interest on the uncommitted line of credit was charged to each participating fund based on the fund’s borrowings at a rate per annum equal to the Federal Funds Rate plus 0.375%. State Street charged an annual operations agency fee of $40,000 for the committed line of credit and was able to charge an annual administration fee of $15,000 for the uncommitted line of credit. The commitment fee, the operations agency fee and the administration fee were accrued and apportioned among the participating funds pro rata based on their relative net assets.
For the year ended June 30, 2009, the Fund did not borrow under these arrangements.
Note 9. Shares of Beneficial Interest
As of June 30, 2009, 68.3% of the Fund’s shares outstanding were beneficially owned by two participant accounts over which BOA and/or any of its affiliates had either sole or joint investment discretion.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.
Note 10. Significant Risks and Contingencies
Tax Development Risk
The Fund purchases municipal securities whose interest, in the opinion of bond counsel, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that an issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued. As a shareholder of the Fund, you may be required to file an amended tax return as a result.
Geographic Concentration Risk
The Fund had greater than 5% of its total net assets at June 30, 2009 invested in debt obligations issued by each of Florida (11.6%) and Illinois (6.6%) and their political
44
Columbia High Yield Municipal Fund
June 30, 2009
subdivisions, agencies and public authorities. The Fund is more susceptible to economic and political factors adversely affecting issuers of these states’ or territories’ municipal securities than are municipal bond funds that are not concentrated to the same extent in these issuers.
Concentration of Credit Risk
The Fund holds investments that are insured by private insurers who guarantee the payment of principal and interest in the event of default or that are supported by a letter of credit. At June 30, 2009, there were no private insurers who insured greater than 5% of the total investments of the Fund.
High-Yield Securities Risk
Investing in high-yield securities may involve greater credit risk and considerations not typically associated with investing in U.S. Government bonds and other higher quality fixed income securities. These securities are non-investment grade securities, often referred to as “junk” bonds. Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high-yield securities may be less liquid to the extent that there is no established secondary market.
Sector Focus Risk
The Fund may focus its investments in certain sectors, subjecting it to greater risk than a fund that is less focused.
Legal Proceedings
Columbia Management Advisors, LLC and Columbia Management Distributors, Inc. (collectively, the “Columbia Group”) are subject to a settlement agreement with the New York Attorney General (“NYAG”) (the “NYAG Settlement”) and a settlement order with the SEC (the “SEC Order”) on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms of the SEC Order, the Columbia Group (or predecessor entities) agreed, among other things, to: pay disgorgement and civil money penalties collectively totaling $140 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the Columbia Group’s applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires Columbia Management Advisors, LLC and its affiliates to reduce management fees for certain funds in the Columbia family of mutual funds in a projected total of $160 million over five years through November 30, 2009 and to make certain disclosures to investors relating to expenses. In connection with the Columbia Group providing services to the Columbia Funds, the Columbia Funds have voluntarily undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
Pursuant to the SEC Order and related procedures, the $140 million in settlement amounts described above has been substantially distributed in accordance with a distribution plan that was developed by an independent distribution consultant and approved by the SEC on April 6, 2007.
In connection with the events described above, various parties have filed suit against certain funds, the Trustees of the Columbia Funds, FleetBoston Financial Corporation and its affiliated entities and/or Bank of America and its affiliated entities.
On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the “MDL”). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Columbia Management Advisors, Inc. (which has since merged into Banc of America Capital Management, LLC (now named Columbia Management Advisors, LLC)) (“Columbia”), Columbia Funds Distributor, Inc. (now named Columbia Management Distributors, Inc.) (the “Distributor”), the Trustees of the Columbia Funds, Bank of America Corporation and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of the Columbia Funds that asserts claims under federal securities laws and state common law.
45
Columbia High Yield Municipal Fund
June 30, 2009
On February 25, 2005, Columbia and other defendants filed motions to dismiss the claims in the pending cases. On March 1, 2006, for reasons stated in the court’s memoranda dated November 3, 2005, the United States District Court for the District of Maryland granted in part and denied in part the defendants’ motions to dismiss. The court dismissed all of the class action claims pending against the Columbia Funds Trusts. As to Columbia and the Distributor, the claims under the Securities Act of 1933, the claims under Sections 34(b) and 36(a) of the Investment Company Act of 1940 (“ICA”) and the state law claims were dismissed. The claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and claims under Section 36(b) of the ICA were not dismissed.
On March 21, 2005, a purported class action was filed in Massachusetts state court alleging that certain conduct, including market timing, entitled Class B shareholders in certain Columbia Funds to an exemption from contingent deferred sales charges upon early redemption (the “CDSC Lawsuit”). The CDSC Lawsuit was removed to federal court in Massachusetts and transferred to the MDL.
On September 14, 2007, the plaintiffs and the Columbia defendants named in the MDL, including the Columbia Funds, entered into a stipulation of settlement with respect to all Columbia-related claims in the MDL described above, including the CDSC Lawsuit. The settlement is subject to court approval.
46
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust I and the Shareholders of Columbia High Yield Municipal Fund
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia High Yield Municipal Fund (the “Fund”) (a series of Columbia Funds Series Trust I) at June 30, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 20, 2009
47
Federal Income Tax Information (Unaudited) – Columbia High Yield Municipal Fund
99.3% of the distributions from net investment income will be treated as exempt income for federal income tax purposes.
48
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the Columbia Funds Series Trust I, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the Columbia Funds Complex.
Independent Trustees
| | |
Name, Address and Year of Birth,
Position with Funds, Year First
Elected or Appointed to Office | | Principal Occupation(s) During Past Five Years, Number of Funds in the Columbia
Funds Complex Overseen by Trustee, Other Directorships Held |
| |
| John D. Collins (Born 1938) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 2007) | | Retired. Consultant, KPMG, LLP (accounting and tax firm) from July 1999 to June 2000; Partner, KPMG, LLP from March 1962 to June 1999. Oversees 79; Mrs. Fields Famous Brands LLC (consumer products); Suburban Propane Partners, L.P.; and Montpelier Re (underwriting firm) |
| |
| Rodman L. Drake (Born 1943) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 2007)
and Chairman of the Board
(since 2009) | | Co-Founder of Baringo Capital LLC (private equity) since 2002; President, Continuation Investments Group, Inc. from 1997 to 2001. Oversees 79; Jackson Hewitt Tax Service Inc. (tax preparation services); Crystal Capital River Inc. (real estate investment trust); Student Loan Corporation (student loan provider); Celgene Corporation (global biotechnology company); Apex Silver Mines Ltd. (mining); and Helios Total Return Fund, Inc. and Helios Strategic Mortgage Income Fund, Inc. (exchange-traded funds) |
| |
| Douglas A. Hacker (Born 1955) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1996) | | Independent business executive since May 2006; Executive Vice President–Strategy of United Airlines (airline) from December 2002 to May 2006; President of UAL Loyalty Services (airline marketing company) from September 2001 to December 2002; Executive Vice President and Chief Financial Officer of United Airlines from July 1999 to September 2001. Oversees 79; Nash Finch Company (food distributor); Aircastle Limited (aircraft leasing) |
|
| Janet Langford Kelly (Born 1957) |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1996) | | Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (integrated energy company) since September 2007; Deputy General Counsel–Corporate Legal Services, ConocoPhillips from August 2006 to August 2007; Partner, Zelle, Hofmann, Voelbel, Mason & Gette LLP (law firm) from March 2005 to July 2006; Adjunct Professor of Law, Northwestern University, from September 2004 to June 2006; Director, UAL Corporation (airline) from February 2006 to July 2006; Oversees 79; None |
| |
| Charles R. Nelson (Born 1942) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1981) | | Professor of Economics, University of Washington, since January 1976; Ford and Louisa Van Voorhis Professor of Political Economy, University of Washington, since September 1993; Adjunct Professor of Statistics, University of Washington, since September 1980; Associate Editor, Journal of Money Credit and Banking from 1993 to 2008; Consultant on econometric and statistical matters. Oversees 79; None |
49
Fund Governance (continued)
Independent Trustees (continued)
| | |
Name, Address and Year of Birth,
Position with Funds, Year First
Elected or Appointed to Office | | Principal Occupation(s) During Past Five Years, Number of Funds in the Columbia
Funds Complex Overseen by Trustee, Other Directorships Held |
| |
| John J. Neuhauser (Born 1943) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1985) | | President, Saint Michael’s College, since August 2007; University Professor, Boston College from November 2005 to August 2007; Academic Vice President and Dean of Faculties, Boston College from August 1999 to October 2005. Oversees 79; Liberty All-Star Equity Fund and Liberty All-Star Growth Fund, Inc. (closed-end funds) |
| |
| Jonathan Piel (Born 1938) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 2007) | | Cable television producer and website designer; The Editor, Scientific American from 1984 to 1994; Vice President, Scientific American, Inc., from 1984 to 1994; Member, Advisory Board, Stone Age Institute, Bloomington, Indiana (research institute that explores the effect of technology on human evolution); Member, Board of Directors of the National Institute of Social Sciences, New York City; Member, Board of Trustees of the William Alanson White Institute, New York City (institution for training psychoanalysts); and Member, Advisory Board, Mount Sinai Children’s Environmental Health Center, New York. Oversees 79; None |
| |
| Patrick J. Simpson (Born 1944) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 2000) | | Partner, Perkins Coie LLP (law firm). Oversees 79; None |
|
| Thomas C. Theobald (Born 1937) |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1996) | | Partner and Senior Advisor, Chicago Growth Partners (private equity investing) since September 2004; Managing Director, William Blair Capital Partners (private equity investing) from September 1994 to September 2004. Oversees 79; Anixter International (network support equipment distributor); Ventas, Inc. (real estate investment trust); Jones Lang LaSalle (real estate management services); Ambac Financial Group (financial guaranty insurance) |
| |
| Anne-Lee Verville (Born 1945) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1998) | | Retired since 1997 (formerly General Manager–Global Education Industry (from 1994 to 1997), President–Application Systems Division (from 1991 to 1994), Chief Financial Officer–US Marketing & Services (from 1988 to 1991), and Chief Information Officer (from 1987 to 1988), IBM Corporation (computer and technology)). Oversees 79; None |
Interested Trustee
| | |
| |
| William E. Mayer1 (Born 1940) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1994) | | Partner, Park Avenue Equity Partners (private equity) since February 1999; Dean and Professor, College of Business, University of Maryland from 1992 to 1997. Oversees 79; Lee Enterprises (print media); WR Hambrecht + Co. (financial service provider); BlackRock Kelso Capital Corporation (investment company) |
| 1 | The Funds currently treat Mr. Mayer as an “interested person” (as defined in the Investment Company Act of 1940) by reason of his affiliation with WR Hambrecht + Co., a registered broker/dealer that may execute portfolio transactions for or engage in principal transactions with the Funds or other funds or accounts advised/managed by the Advisor or other Bank of America affiliates. |
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 1-800-345-6611.
50
Fund Governance (continued)
Officers
| | |
Name, Address and Year of Birth,
Position with Funds, Year First
Elected or Appointed to Office | | Principal Occupation(s) During Past Five Years |
|
| J. Kevin Connaughton (Born 1964) |
One Financial Center Boston, MA 02111 President (since 2009) | | Managing Director of Columbia Management Advisors, LLC since December 2004; Senior Vice President and Chief Financial Officer–Columbia Funds, from June 2008 to January 2009; Treasurer–Columbia Funds, from October 2003 to May 2008; Treasurer–the Liberty Funds, Stein Roe Funds and Liberty All-Star Funds, December 2000–December 2006; Senior Vice President–Columbia Management Advisors, LLC, from April 2003 to December 2004; President–Columbia Funds, Liberty Funds and Stein Roe Funds, February 2004 to October 2004; Treasurer–Galaxy Funds, September 2002 to December 2005; Treasurer, December 2002 to December 2004, and President, February 2004 to December 2004–Columbia Management Multi-Strategy Hedge Fund, LLC; and a senior officer of various other Bank of America-affiliated entities, including other registered and unregistered funds. |
|
| James R. Bordewick, Jr. (Born 1959) |
One Financial Center Boston, MA 02111 Senior Vice President, Secretary and Chief Legal Officer (since 2006) | | Associate General Counsel, Bank of America since April 2005; Senior Vice President and Associate General Counsel, MFS Investment Management (investment management) prior to April 2005. |
| |
| Linda J. Wondrack (Born 1964) | | |
One Financial Center Boston, MA 02111 Senior Vice President and Chief Compliance Officer (since 2007) | | Director (Columbia Management Group LLC and Investment Product Group Compliance), Bank of America since June 2005; Director of Corporate Compliance and Conflicts Officer, MFS Investment Management (investment management), August 2004 to May 2005; Managing Director, Deutsche Asset Management (investment management) prior to August 2004. |
| |
| Michael G. Clarke (Born 1969) | | |
One Financial Center Boston, MA 02111 Senior Vice President and Chief Financial Officer (since 2009) | | Director of Fund Administration of the Advisor since January 2006; Managing Director of the Advisor September 2004 to December 2005; Vice President Fund Administration June 2002 to September 2004. |
| |
| Jeffrey R. Coleman (Born 1969) | | |
One Financial Center Boston, MA 02111 Deputy Treasurer (since 2006) | | Director of Fund Administration of the Advisor since January 2006; Fund Controller of the Advisor from October 2004 to January 2006; Vice President of CDC IXIS Asset Management Services, Inc. (investment management) from August 2000 to September 2004. |
| |
| Joseph F. DiMaria (Born 1968) | | |
One Financial Center Boston, MA 02111 Chief Accounting Officer and Treasurer (since 2009) | | Director of Fund Administration of the Advisor since January 2006; Head of Tax/Compliance and Assistant Treasurer of the Advisor from November 2004 to December 2005; Director of Trustee Administration (Sarbanes-Oxley) of the Advisor from May 2003 to October 2004. |
51
Fund Governance (continued)
Officers (continued)
| | |
Name, Address and Year of Birth,
Position with Funds, Year First
Elected or Appointed to Office | | Principal Occupation(s) During Past Five Years |
| |
| Julian Quero (Born 1967) | | |
One Financial Center Boston, MA 02111 Deputy Treasurer (since 2008) | | Senior Tax Manager of the Advisor since August 2006; Senior Compliance Manager of the Advisor from April 2002 to August 2006. |
| |
| Barry S. Vallan (Born 1969) | | |
One Financial Center Boston, MA 02111 Controller (since 2006) | | Vice President–Fund Treasury of the Advisor since October 2004; Vice President–Trustee Reporting of the Advisor from April 2002 to October 2004. |
| |
| Stephen T. Welsh (Born 1957) | | |
One Financial Center Boston, MA 02111 Vice President (since 1996) | | President, Columbia Management Services, Inc. since July 2004; Senior Vice President and Controller, Columbia Management Services, Inc. prior to July 2004. |
52
Important Information About This Report
Transfer Agent
Columbia Management Services, Inc.
P.O. Box 8081
Boston, MA 02266-8081
1-800-345-6611
Distributor
Columbia Management
Distributors, Inc.
One Financial Center
Boston, MA 02111
Investment Advisor
Columbia Management Advisors, LLC
100 Federal Street
Boston, MA 02110
The fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Columbia High Yield Municipal Fund.
A description of the policies and procedures that the fund uses to determine how to vote proxies and a copy of the fund’s voting records are available (i) at www.columbiamanagement.com; (ii) on the Securities and Exchange Commission’s website at www.sec.gov, and (iii) without charge, upon request, by calling 1-800-368-0346. Information regarding how the fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC’s website. Information regarding how the fund voted proxies relating to portfolio securities is also available from the website, www.columbiamanagement.com.
The fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus which contains this and other important information about the fund, contact your Columbia Management representative or financial advisor or go to www.columbiamanagement.com.
Columbia Management Group, LLC (“Columbia Management”) is the investment management division of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Columbia Funds are distributed by Columbia Management Distributors, Inc., member of FINRA, SIPC, part of Columbia Management and an affiliate of Bank of America Corporation.
53
One Financial Center
Boston, MA 02111-2621
Columbia High Yield Municipal Fund
Annual Report, June 30, 2009
©2009 Columbia Management Distributors, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
SHC-42/19907-0609 (08/09) 09/84992
Annual Report
June 30, 2009
Columbia Small Cap Value Fund I
| | |
| NOT FDIC INSURED | | May Lose Value |
| NOT BANK ISSUED | | No Bank Guarantee |
Table of Contents
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Columbia Fund. References to specific securities should not be construed as a recommendation or investment advice.
President’s Message
Dear Shareholder:
Recent events have shown great volatility in the markets and uncertainty in the economy. During these challenging times, it becomes even more important to focus on long-term horizons and key investment tools that can help manage volatility. This may be the time to reflect on your investment goals and evaluate your portfolio to ensure you are positioned for any potential market rebound.
A long-term financial plan can serve as a road map and guide you through the necessary steps designed to meet your financial goals. Your financial plan should take into account your investment goals, time horizon, overall financial situation, risk tolerance and willingness to ride out market volatility. Your investment professional can be a key resource as you work through this process. The knowledge and experience of an investment professional can help as you create or reevaluate your investment strategy.
The importance of diversification
Although diversification does not ensure a profit or guarantee against loss, a diversified portfolio can be a strategy for successful long-term investing. Diversification refers to the mix of investments within a portfolio. A mutual fund can contribute to portfolio diversification given that a mutual fund’s portfolio represents several investments. Additionally, the way you allocate your money among stocks, bonds and cash, and geographically between foreign and domestic investments, can help to reduce risks. Diversification can result in multiple investments where the positive performance of certain holdings can offset any negative performance from other holdings. Having a diversified portfolio doesn’t mean that the value of the portfolio will never go down, but rather helps strike a balance between risk and reward.
Reevaluate your strategy
An annual review of your investments is a key opportunity to determine if your investment needs have changed or if you need minor adjustments to rebalance your portfolio. Life events like a birth, marriage, home improvement, or change in employment can have a major effect on your spending and goals. Ask yourself how your spending or goals have changed and factor this into your financial plan. Are you using automated investments or payroll deductions to help keep your savings on track? Are you able to set aside additional savings or increase your 401(k) plan contributions? If during your review you find that your investments in any one category (e.g., stocks, bonds or cash) have grown too large based on your diversification plan, you may want to consider redirecting future investments to get back on track.
History has shown that the U.S. stock market has been remarkably resilient.¹ Volatility can lead to opportunity. Patience and a commitment to your long-term financial plan may position you to potentially benefit over your investment horizon. We appreciate your business and continued support of Columbia Funds.
Sincerely,
J. Kevin Connaughton
President, Columbia Funds
| 1 | The Dow Jones Industrial Average is the most widely used indicator of the overall condition of the stock market. The Dow Jones Industrial Average Index is a price-weighted average of 30 actively traded blue-chip stocks as selected by the editors of the Wall Street Journal. Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index. |
Fund Profile – Columbia Small Cap Value Fund I
Summary
| n | | For the 12-month period that ended June 30, 2009, the fund’s Class A shares returned negative 20.73% without sales charge. |
| n | | In a period that was challenging for all areas of the stock market, the fund held up better than its benchmark, the Russell 2000 Value Index1, and the average fund in its peer group, the Lipper Small-Cap Value Funds Classification.2 |
| n | | The fund’s long-standing focus on high quality companies helped stem losses as stock prices declined sharply. |
Portfolio Management
Stephen D. Barbaro has managed or co-managed the fund since June 2002 and has been with the advisor or its predecessors or affiliate organization since 1976.
Jeremy Javidi has co-managed the fund since August 2005 and has been with the advisor or its predecessors or affiliate organization since 2000.
| 1 | The Russell 2000 Value Index measures the performance of those Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values. Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index. |
| 2 | Lipper Inc., a widely respected data provider in the industry, calculates an average total return (assuming reinvestment of distributions) for mutual funds with investment objectives similar to those of the fund. Lipper makes no adjustment for the effect of sales loads. |
Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.
Summary
1-year return as of 06/30/09
| | |
| |
 | | –20.73% Class A shares (without sales charge) |
| |
| | –25.24% Russell 2000 Value Index |
|
Morningstar Style Box™ |
|
Equity Style |
 |
The Morningstar Style Box™ reveals a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows investment style (value, blend or growth). Information shown is based on the most recent data provided by Morningstar.
1
Economic Update – Columbia Small Cap Value Fund I
Summary
For the 12-month period that ended June 30, 2009
| | n | | Stocks lost ground around the world, as measured by the S&P 500 Index and the MSCI EAFE Index. | |
| | |
| S&P Index | | MSCI Index |
| |
| |
|
-26.21% | | -31.35% |
| | n | | Despite volatility in many segments of the bond market, the Barclays Capital Aggregate Bond Index delivered positive results. High-yield bonds lost ground, as measured by the Merrill Lynch U.S. High Yield, Cash Pay Index. | |
| | |
Barclays Aggregate Index | | Merrill Lynch High Yield Index |
| |
| |
|
6.05% | | -3.63% |
Past performance is no guarantee of future results.
During the 12-month period that began July 1, 2008 and ended June 30, 2009, the U.S. economy struggled under the weight of the worst financial crisis since the Great Depression. Economic growth, as measured by gross domestic product, contracted by more than 6% in the second half of 2008. Although the decline for the first half of 2009 was less severe than expected, hopes for a late 2009 recovery remain in doubt. The lapse from growth has resulted in the longest—and most severe—recession in nearly three decades.
The labor market shed millions of jobs between 2008 and 2009, raising the unemployment rate to 9.5% in June 2009 and virtually wiping out all of the jobs gained since the last recession. Manufacturing activity slowed and consumer spending declined. The beleaguered housing market continued to lose ground as prices fell and inventories rose. However, mortgage purchase applications increased late in the period, buoyed by low interest rates and an $8,000 first-time home buyer tax credit. Late in 2008, consumer confidence, as measured by the Conference Board, plummeted to its lowest point ever. However, it stabilized, then turned higher in 2009.
Troubles that began in the U.S. subprime mortgage market resulted in a meltdown within the U.S. financial sector that claimed several major institutions in 2008 and led others to seek bailouts, restructuring or both. New rigorous lending standards severely limited access to credit, further hampering economic growth. In this environment, a new administration sought to stabilize the financial system, address economic woes and introduce sweeping health care reform. Stimulus spending began to flow into the economy, raising hopes that growth would be restored in the second half of 2009. However, with much of the developed world in recession, any substantial improvement in economic conditions may be longer in coming. In December 2008, the Federal Reserve Board (the Fed) lowered a key short-term borrowing rate—the federal funds rate—to between zero and 0.25%—a record low. In light of protracted economic weakness, we believe the Fed is unlikely to tighten its reins on money until the economy and the labor markets stabilize.
Stocks retreated, then rebounded
Against a weakening economic backdrop, the U.S. stock market lost 26.21% for the 12-month period, as measured by the S&P 500 Index.1 Losses affected the stocks of companies of all sizes and investment style categories, although growth stocks held up slightly better than value stocks, as measured by their respective Russell indices.2
| 1 | The Standard and Poor’s (S&P) 500 Index tracks the performance of 500 widely held, large-capitalization U.S. stocks. |
| 2 | The Russell 1000 Growth Index measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Value Index measures the performance of those companies in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Growth Index measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Value Index measures the performance of those Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 3000 Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000 Value Index measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap Growth Index measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The Russell Midcap Value Index measures the performance of those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values. |
2
Economic Update (continued) – Columbia Small Cap Value Fund I
Stock markets outside the U.S. suffered even greater losses. The MSCI EAFE Index,3 a broad gauge of stock market performance in foreign developed markets, lost 31.35% (in U.S. dollars) for the period. Emerging stock markets, which generally have had a strong run over the past several years, were also caught in the downdraft. As investors backed away from risk, the MSCI Emerging Markets Index4 returned negative 28.07% (in U.S. dollars).
Bonds outperformed stocks
As investors sought refuge from a volatile stock market, the highest quality sectors of the U.S. bond market delivered modest gains. During the first half of the period, Treasury prices rose and yields declined sharply as the economy faltered and stock market volatility increased. As hopes for a recovery materialized in the second half of the period, yields rose and Treasuries lagged riskier segments of the bond market. The benchmark 10-year Treasury yield began the period at just under 4.0%, declined to 2.2% in December 2008 then rose to end the period at 3.5%. In this environment, the Barclays Capital Aggregate Bond Index5 (formerly the Lehman Brothers U.S. Aggregate Bond Index) returned 6.05%. High-yield bond prices fell sharply in 2008 as economic prospects weakened and default fears rose, then rebounded strongly in 2009. For the 12-month period, the Merrill Lynch U.S. High Yield, Cash Pay Index6 returned negative 3.63%. For the last six months of the period, the index gained 28.99%.
Past performance is no guarantee of future results.
| 3 | The Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East (EAFE) Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance excluding the U.S. and Canada. |
| 4 | The MSCI Emerging Markets Index is composed of a sample of companies from 22 countries representing the global emerging stock markets. |
| 5 | The Barclays Capital Aggregate Bond Index is a market value-weighted index that tracks the daily price, coupon, pay-downs and total return performance of fixed-rate, publicly placed, dollar-denominated and non-convertible investment-grade debt issues with at least $250 million par amount outstanding and with at least one year to final maturity. |
| 6 | The Merrill Lynch U.S. High Yield, Cash Pay Index tracks the performance of non-investment-grade corporate bonds. |
| | Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index. |
3
Performance Information – Columbia Small Cap Value Fund I
Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.
| | |
| Annual operating expense ratio (%)* |
| |
Class A | | 1.30 |
Class B | | 2.05 |
Class C | | 2.05 |
Class Z | | 1.05 |
| * | The annual operating expense ratio is as stated in the fund’s prospectus that is current as of the date of this report and includes the expenses incurred by the investment companies in which the fund invests. Differences in expense ratios disclosed elsewhere in this report may result from including expenses incurred by the investment companies, fee waivers and expense reimbursements as well as different time periods used in calculating the ratios. |
|
| Performance of a $10,000 investment 07/01/99 – 06/30/09 ($) |
The chart above shows the change in value of a hypothetical $10,000 investment in Class A shares of Columbia Small Cap Value Fund I during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares. The Russell 2000 Value Index measures the performance of those Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values. Indices are not available for investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the fund may not match those in an index.
| | | | |
| Performance of a $10,000 investment 07/01/99 – 06/30/09 ($) |
| | |
| Sales charge | | without | | with |
Class A | | 18,373 | | 17,316 |
Class B | | 17,031 | | 17,031 |
Class C | | 17,036 | | 17,036 |
Class Z | | 18,858 | | n/a |
| | | | | | | | | | | | | | |
| Average annual total return as of 06/30/09 (%) |
| | | | |
| Share class | | A | | B | | C | | Z |
| Inception | | 07/25/86 | | 11/09/92 | | 01/15/96 | | 07/31/95 |
| Sales charge | | without | | with | | without | | with | | without | | with | | without |
1-year | | –20.73 | | –25.29 | | –21.31 | | –24.94 | | –21.30 | | –22.03 | | –20.53 |
5-year | | –0.19 | | –1.37 | | –0.94 | | –1.20 | | –0.93 | | –0.93 | | 0.07 |
10-year | | 6.27 | | 5.64 | | 5.47 | | 5.47 | | 5.47 | | 5.47 | | 6.55 |
The “with sales charge” returns include the maximum initial sales charge of 5.75% for Class A shares and the applicable contingent deferred sales charge of 5.00% in the first year, declining to 1.00% in the sixth year and eliminated thereafter for Class B shares and 1.00% for Class C shares for the first year only. The “without sales charge” returns do not include the effect of sales charges. If they had, returns would be lower.
Performance results reflect any fee waivers or reimbursements of fund expenses by the investment advisor and/or any of its affiliates. Absent these fee waivers or expense reimbursement arrangements, performance results would have been lower.
All results shown assume reinvestment of distributions. Class Z shares are sold at net asset value with no distribution and service (Rule 12b-1) fees. Class Z shares have limited eligibility and the investment minimum requirements may vary. Please see the fund’s prospectus for details. Performance for different share classes will vary based on differences in sales charges and fees associated with each class.
The table does not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares.
4
Understanding Your Expenses – Columbia Small Cap Value Fund I
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| | n | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. | |
| | n | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. | |
| | 1. | Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6. | |
| | 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “Actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. | |
If the value of your account falls below the minimum initial investment requirement applicable to you, your account generally will be subject to a $20 annual fee. This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds.
As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption fees or exchange fees. There are also ongoing costs, which generally include investment advisory fees, distribution and service (Rule 12b-1) fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “Actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “Hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the end
of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
Class A | | 1,000.00 | | 1,000.00 | | 1,004.81 | | 1,018.15 | | 6.66 | | 6.71 | | 1.34 |
Class B | | 1,000.00 | | 1,000.00 | | 1,001.29 | | 1,014.43 | | 10.37 | | 10.44 | | 2.09 |
Class C | | 1,000.00 | | 1,000.00 | | 1,001.19 | | 1,014.43 | | 10.37 | | 10.44 | | 2.09 |
Class Z | | 1,000.00 | | 1,000.00 | | 1,006.20 | | 1,019.39 | | 5.42 | | 5.46 | | 1.09 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 365.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
5
Portfolio Managers’ Report – Columbia Small Cap Value Fund I
Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates.
| | |
| Net asset value per share |
| |
as of 06/30/09 ($) | | |
Class A | | 29.29 |
Class B | | 23.96 |
Class C | | 25.35 |
Class Z | | 30.68 |
| | |
| Distributions declared per share |
| |
07/01/08 – 06/30/09 ($) | | |
Class A | | 1.94 |
Class B | | 1.93 |
Class C | | 1.93 |
Class Z | | 1.99 |
For the 12-month period that ended June 30, 2009, the fund’s Class A shares returned negative 20.73% without sales charge. By comparison, the fund’s benchmark, the Russell 2000 Value Index, returned negative 25.24%, and the average return of its peer group, the Lipper Small-Cap Value Funds Classification, was negative 24.24%. Small-cap stocks were hit hard as a credit crisis unfolded and the economy weakened. The fund’s focus on companies with strong cash flows and fortress-like balance sheets helped reduce the damage during the downturn, then helped the fund outperform when the market rebounded in the spring.
Stock market turbulence
The stock market posted steep declines during the past year. Several major financial institutions folded and credit markets froze. After a dismal nine months, the market began to turn in March, driven by signs that the worst of the worst recession in decades might be behind us. Against this backdrop, the most beaten-down and economically-sensitive sectors posted sharp gains in a rally that commenced late in March. However, these sectors still ended the year down more than defensive sectors, such as consumer staples, health care and utilities.
Stemming losses in financials and materials
Stock selection in the financials, materials and consumer discretionary sectors kept the fund from losing as much ground as the index. In financials, our high quality focus kept us out of the sector’s worst performers and steered us toward stocks that held up relatively well, including some specialty finance stocks and real estate investment trusts (REITs). Pressured by a weak economy, materials stocks posted steep declines. The fund’s materials stocks, however, fell much less than the sector, largely because of positive contributions from Clearwater Paper and steel stocks. Clearwater, which makes store-brand, private label tissue, rallied nicely after being spun out at an attractive price from a REIT we already owned. Steel stocks that we had purchased at severe discounts also made a comeback, thanks to improved expectations for the economy. In the consumer discretionary sector, stock selection further limited downside. Standouts included Pacific Sunwear of California, a premier teen retailer that gained after restructuring its operations for greater profitability.
Weak market for energy and industrials
Although no one sector hurt the fund relative to the index, the fund did experience some sharp sector declines that were in line with those in the index. The biggest loss came from energy stocks, which fell over 60%, as slowing global demand caused oil prices to plunge from a high of about $140 per barrel last summer to roughly $34 per barrel last December. Although we cut back on energy stocks, we would have benefited from making bigger reductions sooner. Fortunately, energy was a relatively small sector within both the index and the fund. Industrials were also weak performers as economies around the world slowed. The fund’s losses within industrials were close to those in the index, where the sector declined about 27%.
6
Portfolio Managers’ Report (continued) – Columbia Small Cap Value Fund I
| | |
| Top 5 equity sectors |
| |
as of 06/30/09 (%) | | |
Financials | | 30.3 |
Industrials | | 16.9 |
Information Technology | | 14.9 |
Consumer Discretionary | | 10.6 |
Materials | | 7.0 |
| | |
| Top 10 equity holdings |
| |
as of 06/30/09 (%) | | |
Greif | | 1.3 |
Werner Enterprises | | 1.0 |
Weis Markets | | 0.9 |
Clearwater Paper | | 0.9 |
H.B. Fuller | | 0.8 |
United American Indemnity | | 0.8 |
Black Hills | | 0.7 |
Rent-a-Center | | 0.7 |
Avista | | 0.7 |
Benchmark Electronics | | 0.7 |
The fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets.
| | |
| Holding discussed in this report |
| |
as of 06/30/09 (%) | | |
Clearwater Paper | | 0.9 |
Pacific Sunwear of California | | 0.6 |
Shift to more neutral sector weights
The fund began the year defensively positioned with overweights in health care, consumer staples and utilities. When the market corrected in October and again in February, we used the opportunity to buy stocks that we liked at attractive entry points. Through these purchases, we increased our stakes in more economically-sensitive sectors, including consumer discretionary, materials, energy, industrials and technology. By year-end, most of the sector weights in the fund were close to those in the index.
A look ahead
We expect the current credit crisis to continue, forcing weaker competitors to exit lines of business and stronger companies to find new opportunities. We believe that our focus on financially strong small-cap companies will help us identify the best prospects in this environment. In addition, we think the outlook for small-cap stocks could be strong as they historically have been among the first to rise during an economic recovery.
Portfolio holdings and characteristics are subject to change periodically and may not be representative of current holdings and characteristics. The outlook for the fund may differ from those presented for other Columbia Funds.
Equity investments are affected by stock market fluctuations that occur in response to economic and business developments.
Investments in small-cap stocks may be subject to greater volatility and price fluctuations because they may be thinly traded and less liquid than investments in larger companies.
Value stocks are securities of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor. The price of the company’s stock may not approach the value the manager has placed on it.
7
Investment Portfolio – Columbia Small Cap Value Fund I
June 30, 2009
Common Stocks – 99.4%
| | | | |
| | | Shares | | Value ($) |
| Consumer Discretionary – 10.6% | | |
Auto Components – 0.2% | | | | |
Stoneridge, Inc. (a) | | 171,143 | | 821,486 |
Superior Industries International, Inc. | | 85,086 | | 1,199,713 |
| | | | |
Auto Components Total | | | | 2,021,199 |
| |
Diversified Consumer Services – 0.7% | | |
Regis Corp. | | 223,776 | | 3,895,940 |
Sotheby’s | | 182,600 | | 2,576,486 |
| | | | |
Diversified Consumer Services Total | | | | 6,472,426 |
| |
Hotels, Restaurants & Leisure – 2.1% | | |
Benihana, Inc., Class A (a) | | 538,397 | | 3,402,669 |
Bob Evans Farms, Inc. | | 167,361 | | 4,809,955 |
CEC Entertainment, Inc. (a) | | 119,720 | | 3,529,346 |
Jack in the Box, Inc. (a) | | 106,230 | | 2,384,864 |
Landry’s Restaurants, Inc. (a) | | 109,540 | | 942,044 |
Red Robin Gourmet Burgers, Inc. (a) | | 160,151 | | 3,002,831 |
| | | | |
Hotels, Restaurants & Leisure Total | | | | 18,071,709 |
| | |
Household Durables – 1.6% | | | | |
American Greetings Corp., Class A | | 452,560 | | 5,285,901 |
Cavco Industries, Inc. (a) | | 106,887 | | 2,707,448 |
CSS Industries, Inc. | | 183,195 | | 3,733,514 |
Ethan Allen Interiors, Inc. | | 246,170 | | 2,550,321 |
| | | | |
Household Durables Total | | | | 14,277,184 |
| |
Leisure Equipment & Products – 0.7% | | |
Brunswick Corp. | | 653,433 | | 2,822,831 |
Jakks Pacific, Inc. (a) | | 237,680 | | 3,049,434 |
| | | | |
Leisure Equipment & Products Total | | | | 5,872,265 |
| | |
Specialty Retail – 4.2% | | | | |
America’s Car-Mart, Inc. (a) | | 289,420 | | 5,933,110 |
AnnTaylor Stores Corp. (a) | | 534,791 | | 4,267,632 |
Christopher & Banks Corp. | | 172,369 | | 1,156,596 |
Foot Locker, Inc. | | 292,785 | | 3,065,459 |
Men’s Wearhouse, Inc. | | 209,165 | | 4,011,785 |
OfficeMax, Inc. | | 558,360 | | 3,506,501 |
Pacific Sunwear of California (a) | | 1,692,553 | | 5,703,903 |
Rent-A-Center, Inc. (a) | | 357,404 | | 6,372,513 |
Shoe Carnival, Inc. (a) | | 233,617 | | 2,787,051 |
| | | | |
Specialty Retail Total | | | | 36,804,550 |
| | | | |
| | | Shares | | Value ($) |
Textiles, Apparel & Luxury Goods – 1.1% | | |
Movado Group, Inc. | | 317,089 | | 3,342,118 |
Phillips-Van Heusen Corp. | | 103,291 | | 2,963,419 |
Wolverine World Wide, Inc. | | 139,650 | | 3,080,679 |
| | | | |
Textiles, Apparel & Luxury Goods Total | | | | 9,386,216 |
| | |
| | | | |
Consumer Discretionary Total | | | | 92,905,549 |
| | | | |
| Consumer Staples – 3.2% | | | | |
Food & Staples Retailing – 2.5% | | | | |
BJ’s Wholesale Club, Inc. (a) | | 86,550 | | 2,789,507 |
Casey’s General Stores, Inc. | | 205,349 | | 5,275,416 |
Ruddick Corp. | | 187,519 | | 4,393,570 |
Spartan Stores, Inc. | | 181,571 | | 2,253,296 |
Weis Markets, Inc. | | 228,449 | | 7,657,610 |
| | | | |
Food & Staples Retailing Total | | | | 22,369,399 |
| | |
Food Products – 0.7% | | | | |
Fresh Del Monte Produce, Inc. (a) | | 287,885 | | 4,681,010 |
Lancaster Colony Corp. | | 33,982 | | 1,497,587 |
| | | | |
Food Products Total | | | | 6,178,597 |
| | | | |
| | | | |
Consumer Staples Total | | | | 28,547,996 |
| | | | |
| Energy – 5.2% | | | | |
Energy Equipment & Services – 2.4% | | |
Gulf Island Fabrication, Inc. | | 152,620 | | 2,415,975 |
Lufkin Industries, Inc. | | 65,201 | | 2,741,702 |
Matrix Service Co. (a) | | 203,280 | | 2,333,654 |
Patterson-UTI Energy, Inc. | | 176,580 | | 2,270,819 |
Superior Well Services, Inc. (a) | | 234,404 | | 1,394,704 |
T-3 Energy Services, Inc. (a) | | 130,910 | | 1,559,138 |
TGC Industries, Inc. (a) | | 354,313 | | 1,725,504 |
Tidewater, Inc. | | 106,610 | | 4,570,371 |
Union Drilling, Inc. (a) | | 352,466 | | 2,333,325 |
| | | | |
Energy Equipment & Services Total | | | | 21,345,192 |
| |
Oil, Gas & Consumable Fuels – 2.8% | | |
Berry Petroleum Co., Class A | | 159,070 | | 2,957,111 |
Cimarex Energy Co. | | 86,920 | | 2,463,313 |
Forest Oil Corp. (a) | | 134,600 | | 2,008,232 |
Holly Corp. | | 173,779 | | 3,124,546 |
Mariner Energy, Inc. (a) | | 326,030 | | 3,830,853 |
Nordic American Tanker Shipping | | 94,378 | | 3,003,108 |
Stone Energy Corp. (a) | | 465,660 | | 3,455,197 |
Swift Energy Co. (a) | | 220,389 | | 3,669,477 |
| | | | |
Oil, Gas & Consumable Fuels Total | | | | 24,511,837 |
| | | | |
| | | | |
Energy Total | | | | 45,857,029 |
See Accompanying Notes to Financial Statements.
8
Columbia Small Cap Value Fund I
June 30, 2009
Common Stocks (continued)
| | | | |
| | | Shares | | Value ($) |
| Financials – 30.3% | | | | |
Capital Markets – 1.9% | | | | |
Federated Investors, Inc., Class B | | 118,720 | | 2,859,965 |
Investment Technology Group, Inc. (a) | | 129,300 | | 2,636,427 |
Janus Capital Group, Inc. | | 255,509 | | 2,912,802 |
Piper Jaffray Companies, Inc. (a) | | 126,072 | | 5,505,564 |
Raymond James Financial, Inc. | | 179,490 | | 3,089,023 |
| | | | |
Capital Markets Total | | | | 17,003,781 |
| | |
Commercial Banks – 7.2% | | | | |
BancFirst Corp. | | 117,243 | | 4,054,263 |
BancTrust Financial Group, Inc. | | 382,938 | | 1,148,814 |
Bryn Mawr Bank Corp. | | 231,324 | | 4,365,084 |
Capitol Bancorp Ltd. | | 233,208 | | 618,001 |
Chemical Financial Corp. | | 315,593 | | 6,283,457 |
Columbia Banking System, Inc. | | 244,085 | | 2,496,990 |
Community Trust Bancorp, Inc. | | 147,160 | | 3,936,530 |
First Citizens BancShares, Inc., Class A | | 45,976 | | 6,144,692 |
First Financial Corp. | | 193,638 | | 6,115,088 |
First National Bank of Alaska | | 1,836 | | 2,955,960 |
Investors Bancorp, Inc. (a) | | 405,127 | | 3,710,963 |
Mass Financial Corp., Class A (a) | | 287,470 | | 1,776,565 |
Merchants Bancshares, Inc. | | 213,676 | | 4,741,470 |
Northfield Bancorp, Inc. | | 292,284 | | 3,396,340 |
Northrim BanCorp, Inc. | | 254,046 | | 3,536,320 |
South Financial Group, Inc. | | 539,341 | | 641,816 |
Sterling Bancorp NY | | 345,896 | | 2,888,232 |
Taylor Capital Group, Inc. (a) | | 232,666 | | 1,593,762 |
West Coast Bancorp | | 329,340 | | 671,854 |
Whitney Holding Corp. | | 280,939 | | 2,573,401 |
| | | | |
Commercial Banks Total | | | | 63,649,602 |
| | |
Consumer Finance – 0.7% | | | | |
Cash America International, Inc. | | 259,499 | | 6,069,682 |
| | | | |
Consumer Finance Total | | | | 6,069,682 |
| |
Diversified Financial Services – 0.7% | | |
Medallion Financial Corp. | | 491,091 | | 3,756,846 |
Pico Holdings, Inc. (a) | | 92,761 | | 2,662,241 |
| | | | |
Diversified Financial Services Total | | | | 6,419,087 |
| | | | |
| | | Shares | | Value ($) |
Insurance – 6.9% | | | | |
Baldwin & Lyons, Inc., Class B | | 208,742 | | 4,112,217 |
CNA Surety Corp. (a) | | 359,439 | | 4,848,832 |
EMC Insurance Group, Inc. | | 228,929 | | 4,764,013 |
FBL Financial Group, Inc. Class A | | 336,243 | | 2,777,367 |
First Mercury Financial Corp. | | 231,807 | | 3,191,982 |
Harleysville Group, Inc. | | 120,125 | | 3,389,928 |
Horace Mann Educators Corp. | | 459,622 | | 4,582,431 |
National Western Life Insurance Co., Class A | | 23,379 | | 2,729,498 |
Navigators Group, Inc. (a) | | 108,351 | | 4,814,035 |
RLI Corp. | | 93,050 | | 4,168,640 |
Safety Insurance Group, Inc. | | 166,741 | | 5,095,605 |
Selective Insurance Group, Inc. | | 214,985 | | 2,745,358 |
Stewart Information Services Corp. | | 237,810 | | 3,388,793 |
United America Indemnity Ltd., Class A (a) | | 1,406,938 | | 6,739,233 |
United Fire & Casualty Co. | | 176,444 | | 3,026,015 |
| | | | |
Insurance Total | | | | 60,373,947 |
|
Real Estate Investment Trusts (REITs) – 7.0% |
DCT Industrial Trust, Inc. | | 843,969 | | 3,443,394 |
DiamondRock Hospitality Co. | | 808,959 | | 5,064,083 |
Duke Realty Corp. | | 274,640 | | 2,408,593 |
DuPont Fabros Technology, Inc. | | 259,460 | | 2,444,113 |
Franklin Street Properties Corp. | | 459,900 | | 6,093,675 |
Getty Realty Corp. | | 156,006 | | 2,943,833 |
LaSalle Hotel Properties | | 283,812 | | 3,502,240 |
Mack-Cali Realty Corp. | | 88,730 | | 2,023,044 |
National Health Investors, Inc. | | 201,458 | | 5,380,943 |
National Retail Properties, Inc. | | 341,430 | | 5,923,811 |
Potlatch Corp. | | 259,101 | | 6,293,563 |
Sun Communities, Inc. | | 233,589 | | 3,218,857 |
Sunstone Hotel Investors, Inc. | | 573,426 | | 3,067,829 |
Universal Health Realty Income Trust | | 169,433 | | 5,340,528 |
Urstadt Biddle Properties, Inc., Class A | | 311,342 | | 4,383,695 |
| | | | |
Real Estate Investment Trusts (REITs) Total | | | | 61,532,201 |
|
Real Estate Management & Development – 0.4% |
Avatar Holdings, Inc. (a) | | 102,239 | | 1,857,682 |
Maui Land & Pineapple Co., Inc. (a) | | 169,432 | | 1,306,321 |
| | | | |
Real Estate Management & Development Total | | | | 3,164,003 |
See Accompanying Notes to Financial Statements.
9
Columbia Small Cap Value Fund I
June 30, 2009
Common Stocks (continued)
| | | | |
| | | Shares | | Value ($) |
| Financials (continued) | | | | |
Thrifts & Mortgage Finance – 5.5% | | |
Bank Mutual Corp. | | 560,516 | | 4,887,699 |
BankFinancial Corp. | | 407,199 | | 3,607,783 |
Beneficial Mutual Bancorp, Inc. (a) | | 473,469 | | 4,545,302 |
Brookline Bancorp, Inc. | | 632,399 | | 5,893,959 |
Clifton Savings Bancorp, Inc. | | 384,084 | | 4,132,744 |
ESSA Bancorp, Inc. | | 255,567 | | 3,493,601 |
Home Federal Bancorp, Inc. | | 503,648 | | 5,132,173 |
TrustCo Bank Corp. NY | | 501,194 | | 2,962,057 |
United Financial Bancorp, Inc. | | 303,776 | | 4,198,184 |
Washington Federal, Inc. | | 359,751 | | 4,676,763 |
Westfield Financial, Inc. | | 568,412 | | 5,149,813 |
| | | | |
Thrifts & Mortgage Finance Total | | | | 48,680,078 |
| | | | |
| | | | |
Financials Total | | | | 266,892,381 |
| | | | |
| Health Care – 4.7% | | | | |
| |
Health Care Equipment & Supplies – 0.4% | | |
Analogic Corp. | | 56,389 | | 2,083,574 |
Young Innovations, Inc. | | 75,300 | | 1,640,787 |
| | | | |
Health Care Equipment & Supplies Total | | | | 3,724,361 |
| |
Health Care Providers & Services – 3.8% | | |
Allion Healthcare, Inc. (a) | | 83,888 | | 499,134 |
AmSurg Corp. (a) | | 126,977 | | 2,722,387 |
Cross Country Healthcare, Inc. (a) | | 292,218 | | 2,007,538 |
Healthspring, Inc. (a) | | 360,904 | | 3,919,417 |
Kindred Healthcare, Inc. (a) | | 295,931 | | 3,660,666 |
Magellan Health Services, Inc. (a) | | 95,300 | | 3,127,746 |
Medcath Corp. (a) | | 117,976 | | 1,387,398 |
Mednax, Inc. (a) | | 6,514 | | 274,435 |
NovaMed, Inc. (a) | | 703,388 | | 2,778,382 |
Owens & Minor, Inc. | | 62,281 | | 2,729,153 |
Res-Care, Inc. (a) | | 394,997 | | 5,648,457 |
Triple-S Management Corp. (a) | | 117,652 | | 1,834,195 |
U.S. Physical Therapy, Inc. (a) | | 153,696 | | 2,267,016 |
| | | | |
Health Care Providers & Services Total | | | | 32,855,924 |
| |
Life Sciences Tools & Services – 0.5% | | |
PAREXEL International Corp. (a) | | 116,683 | | 1,677,902 |
Varian, Inc. (a) | | 75,570 | | 2,979,725 |
| | | | |
Life Sciences Tools & Services Total | | | | 4,657,627 |
| | | | |
| | | | |
Health Care Total | | | | 41,237,912 |
| | | | |
| | | Shares | | Value ($) |
| Industrials – 16.9% | | | | |
Aerospace & Defense – 1.4% | | | | |
AAR Corp. (a) | | 164,265 | | 2,636,453 |
Ceradyne, Inc. (a) | | 165,586 | | 2,924,249 |
Esterline Technologies Corp. (a) | | 106,590 | | 2,885,391 |
Ladish Co., Inc. (a) | | 287,650 | | 3,730,821 |
| | | | |
Aerospace & Defense Total | | | | 12,176,914 |
| | |
Air Freight & Logistics – 0.2% | | | | |
Pacer International, Inc. | | 693,179 | | 1,545,789 |
| | | | |
Air Freight & Logistics Total | | | | 1,545,789 |
| | |
Airlines – 0.4% | | | | |
Skywest, Inc. | | 345,621 | | 3,525,334 |
| | | | |
Airlines Total | | | | 3,525,334 |
| | |
Building Products – 1.7% | | | | |
Ameron International Corp. | | 60,917 | | 4,083,876 |
Builders FirstSource, Inc. (a) | | 616,034 | | 2,562,701 |
Lennox International, Inc. | | 144,559 | | 4,641,789 |
NCI Building Systems, Inc. (a) | | 354,561 | | 936,041 |
Universal Forest Products, Inc. | | 97,251 | | 3,218,036 |
| | | | |
Building Products Total | | | | 15,442,443 |
| |
Commercial Services & Supplies – 1.7% | | |
ABM Industries, Inc. | | 168,760 | | 3,049,493 |
ATC Technology Corp. (a) | | 170,300 | | 2,469,350 |
Comfort Systems USA, Inc. | | 263,151 | | 2,697,298 |
Consolidated Graphics, Inc. (a) | | 159,680 | | 2,781,626 |
Ennis, Inc. | | 10,535 | | 131,266 |
United Stationers, Inc. (a) | | 116,300 | | 4,056,544 |
| | | | |
Commercial Services & Supplies Total | | | | 15,185,577 |
| | |
Construction & Engineering – 2.2% | | | | |
Dycom Industries, Inc. (a) | | 353,751 | | 3,916,024 |
EMCOR Group, Inc. (a) | | 274,790 | | 5,528,775 |
KBR, Inc. | | 247,969 | | 4,572,548 |
KHD Humboldt Wedag International Ltd. (a) | | 246,192 | | 2,053,241 |
Layne Christensen Co. (a) | | 136,060 | | 2,782,427 |
Sterling Construction Co., Inc. (a) | | 36,626 | | 558,913 |
| | | | |
Construction & Engineering Total | | | | 19,411,928 |
| | |
| Electrical Equipment – 1.9% | | | | |
A.O. Smith Corp. | | 117,120 | | 3,814,598 |
Acuity Brands, Inc. | | 107,230 | | 3,007,801 |
Belden, Inc. | | 195,431 | | 3,263,698 |
GrafTech International Ltd. (a) | | 555,009 | | 6,277,152 |
| | | | |
Electrical Equipment Total | | | | 16,363,249 |
See Accompanying Notes to Financial Statements.
10
Columbia Small Cap Value Fund I
June 30, 2009
Common Stocks (continued)
| | | | |
| | | Shares | | Value ($) |
| Industrials (continued) | | | | |
| | |
| Machinery – 2.6% | | | | |
Astec Industries, Inc. (a) | | 105,238 | | 3,124,516 |
CIRCOR International, Inc. | | 122,460 | | 2,891,281 |
EnPro Industries, Inc. (a) | | 209,022 | | 3,764,486 |
FreightCar America, Inc. | | 156,661 | | 2,633,471 |
Harsco Corp. | | 89,187 | | 2,523,992 |
Kadant, Inc. (a) | | 228,369 | | 2,578,286 |
LB Foster Co., Class A (a) | | 74,221 | | 2,231,825 |
Robbins & Myers, Inc. | | 160,230 | | 3,084,428 |
| | | | |
Machinery Total | | | | 22,832,285 |
| | |
| Professional Services – 1.7% | | | | |
CDI Corp. | | 252,706 | | 2,817,672 |
Kforce, Inc. (a) | | 238,764 | | 1,974,578 |
Korn/Ferry International (a) | | 261,401 | | 2,781,307 |
LECG Corp. (a) | | 471,065 | | 1,535,672 |
MPS Group, Inc. (a) | | 806,225 | | 6,159,559 |
| | | | |
Professional Services Total | | | | 15,268,788 |
| | |
| Road & Rail – 2.3% | | | | |
Arkansas Best Corp. | | 110,950 | | 2,923,533 |
Genesee & Wyoming, Inc., Class A (a) | | 104,263 | | 2,764,012 |
Heartland Express, Inc. | | 226,254 | | 3,330,459 |
Ryder System, Inc. | | 99,039 | | 2,765,169 |
Werner Enterprises, Inc. | | 463,879 | | 8,405,487 |
| | | | |
Road & Rail Total | | | | 20,188,660 |
| |
| Trading Companies & Distributors – 0.8% | | |
Kaman Corp. | | 217,222 | | 3,627,608 |
Watsco, Inc. | | 71,725 | | 3,509,504 |
| | | | |
Trading Companies & Distributors Total | | | | 7,137,112 |
| | | | |
Industrials Total | | | | 149,078,079 |
| | | | |
| Information Technology – 14.9% | | |
| |
| Communications Equipment – 3.6% | | |
ADC Telecommunications, Inc. (a) | | 355,989 | | 2,833,673 |
Airvana, Inc. (a) | | 131,814 | | 839,655 |
Anaren, Inc. (a) | | 245,630 | | 4,342,738 |
Avocent Corp. (a) | | 194,990 | | 2,722,060 |
Bel Fuse, Inc., Class B | | 100,917 | | 1,618,709 |
Black Box Corp. | | 148,056 | | 4,955,434 |
Comtech Telecommunications Corp. (a) | | 39,265 | | 1,251,768 |
Plantronics, Inc. | | 191,170 | | 3,615,025 |
Symmetricom, Inc. (a) | | 482,980 | | 2,786,795 |
Tekelec (a) | | 181,590 | | 3,056,160 |
Tellabs, Inc. (a) | | 691,210 | | 3,960,633 |
| | | | |
Communications Equipment Total | | | | 31,982,650 |
| | | | |
| | | Shares | | Value ($) |
| Computers & Peripherals – 0.9% | | | | |
Adaptec, Inc. (a) | | 395,502 | | 1,048,080 |
Electronics for Imaging, Inc. (a) | | 303,991 | | 3,240,544 |
QLogic Corp. (a) | | 268,381 | | 3,403,071 |
| | | | |
Computers & Peripherals Total | | | | 7,691,695 |
| | |
| Electronic Equipment, Instruments & Components – 3.9% | | | | |
Anixter International, Inc. (a) | | 136,590 | | 5,134,418 |
Benchmark Electronics, Inc. (a) | | 438,091 | | 6,308,510 |
Brightpoint, Inc. (a) | | 689,563 | | 4,323,560 |
CPI International, Inc. (a) | | 283,699 | | 2,465,344 |
CTS Corp. | | 331,974 | | 2,174,430 |
Electro Scientific Industries, Inc. (a) | | 275,600 | | 3,081,208 |
Littelfuse, Inc. (a) | | 143,590 | | 2,866,056 |
Methode Electronics, Inc., | | 87,390 | | 613,478 |
MTS Systems Corp. | | 156,764 | | 3,237,177 |
NAM TAI Electronics, Inc. | | 644,110 | | 2,743,909 |
Plexus Corp. (a) | | 82,247 | | 1,682,774 |
| | | | |
Electronic Equipment, Instruments & Components Total | | | | 34,630,864 |
| | |
| Internet Software & Services – 0.3% | | | | |
InfoSpace, Inc. (a) | | 320,980 | | 2,128,097 |
| | | | |
Internet Software & Services Total | | | | 2,128,097 |
| | |
| IT Services – 1.6% | | | | |
Acxiom Corp. | | 250,450 | | 2,211,473 |
CACI International, Inc., Class A (a) | | 101,870 | | 4,350,868 |
CSG Systems International, Inc. (a) | | 220,999 | | 2,926,027 |
MAXIMUS, Inc. | | 114,639 | | 4,728,859 |
| | | | |
IT Services Total | | | | 14,217,227 |
| | |
| Semiconductors & Semiconductor Equipment – 3.0% | | | | |
Actel Corp. (a) | | 211,746 | | 2,272,035 |
ATMI, Inc. (a) | | 123,402 | | 1,916,433 |
Cirrus Logic, Inc. (a) | | 559,100 | | 2,515,950 |
Fairchild Semiconductor International, Inc. (a) | | 604,151 | | 4,223,015 |
Kulicke & Soffa Industries, Inc. (a) | | 717,348 | | 2,460,504 |
MKS Instruments, Inc. (a) | | 186,322 | | 2,457,587 |
OmniVision Technologies, Inc. (a) | | 341,987 | | 3,553,245 |
Verigy Ltd. (a) | | 346,987 | | 4,222,832 |
Zoran Corp. (a) | | 288,456 | | 3,144,170 |
| | | | |
Semiconductors & Semiconductor Equipment Total | | | | 26,765,771 |
See Accompanying Notes to Financial Statements.
11
Columbia Small Cap Value Fund I
June 30, 2009
Common Stocks (continued)
| | | | |
| | | Shares | | Value ($) |
| Information Technology (continued) |
| Software – 1.6% | | |
Jack Henry & Associates, Inc. | | 113,190 | | 2,348,693 |
Mentor Graphics Corp. (a) | | 525,526 | | 2,874,627 |
MSC.Software Corp. (a) | | 483,671 | | 3,221,249 |
Parametric Technology Corp. (a) | | 248,690 | | 2,907,186 |
Progress Software Corp. (a) | | 115,349 | | 2,441,938 |
| | | | |
Software Total | | | | 13,793,693 |
| | | | |
Information Technology Total | | 131,209,997 |
| | | | |
| Materials – 7.0% | | | | |
| Chemicals – 2.0% | | | | |
Cytec Industries, Inc. | | 202,034 | | 3,761,873 |
H.B. Fuller Co. | | 387,649 | | 7,276,172 |
OM Group, Inc. (a) | | 213,629 | | 6,199,513 |
| | | | |
Chemicals Total | | | | 17,237,558 |
| | |
| Construction Materials – 0.3% | | | | |
Eagle Materials, Inc. | | 113,381 | | 2,861,737 |
| | | | |
Construction Materials Total | | | | 2,861,737 |
| | |
| Containers & Packaging – 1.7% | | | | |
Greif, Inc., Class A | | 77,856 | | 3,442,792 |
Greif, Inc., Class B | | 196,647 | | 7,915,042 |
Packaging Corp. of America | | 222,420 | | 3,603,204 |
| | | | |
Containers & Packaging Total | | | | 14,961,038 |
| | |
| Metals & Mining – 2.2% | | | | |
Carpenter Technology Corp. | | 146,050 | | 3,039,300 |
Harry Winston Diamond Corp. | | 667,326 | | 3,977,263 |
Haynes International, Inc. (a) | | 147,844 | | 3,503,903 |
Olympic Steel, Inc. | | 176,729 | | 4,324,559 |
RTI International Metals, Inc. (a) | | 253,051 | | 4,471,411 |
| | | | |
Metals & Mining Total | | | | 19,316,436 |
| | |
| Paper & Forest Products – 0.8% | | | | |
Clearwater Paper Corp. (a) | | 297,415 | | 7,521,625 |
| | | | |
Paper & Forest Products Total | | | | 7,521,625 |
| | | | |
Materials Total | | | | 61,898,394 |
| | | | |
| Telecommunication Services – 1.0% | | |
| Diversified Telecommunication Services – 0.4% |
Warwick Valley Telephone Co.(b) | | 271,200 | | 3,118,800 |
| | | | |
Diversified Telecommunication Services Total | | | | 3,118,800 |
|
| Wireless Telecommunication Services – 0.6% |
Syniverse Holdings, Inc. (a) | | 336,480 | | 5,393,774 |
| | | | |
Wireless Telecommunication Services Total | | | | 5,393,774 |
| | | | |
Telecommunication Services Total | | 8,512,574 |
| | | | | |
| | | Shares | | Value ($) | |
| Utilities – 5.6% | | | | | |
| Electric Utilities – 3.0% | | | | | |
ALLETE, Inc. | | 174,180 | | 5,007,675 | |
El Paso Electric Co. (a) | | 286,868 | | 4,004,677 | |
Great Plains Energy, Inc. | | 196,151 | | 3,050,148 | |
Hawaiian Electric Industries, Inc. | | 130,201 | | 2,481,631 | |
Maine & Maritimes Corp. | | 56,850 | | 1,975,538 | |
MGE Energy, Inc. | | 165,004 | | 5,535,884 | |
UIL Holdings Corp. | | 174,996 | | 3,928,660 | |
| | | | | |
Electric Utilities Total | | | | 25,984,213 | |
|
| Independent Power Producers & Energy Traders – 0.7% | |
Black Hills Corp. | | 278,431 | | 6,401,129 | |
| | | | | |
Independent Power Producers & Energy Traders Total | | | | 6,401,129 | |
| | |
| Multi-Utilities – 1.9% | | | | | |
Avista Corp. | | 356,730 | | 6,353,361 | |
CH Energy Group, Inc. | | 100,504 | | 4,693,537 | |
NorthWestern Corp. | | 236,651 | | 5,386,177 | |
| | | | | |
Multi-Utilities Total | | | | 16,433,075 | |
| | | | | |
Utilities Total | | | | 48,818,417 | |
| | | | | |
Total Common Stocks
(cost of $960,989,861) | | | | 874,958,328 | |
| | | | | |
| | | Par ($) | | | |
| Short-Term Obligation – 0.8% | | | | | |
Repurchase agreement with Fixed Income Clearing Corp., dated 06/30/09, due 07/01/09 at 0.000001%, collateralized by a U.S. Treasury obligation maturing 02/12/15, market value $7,150,455 (repurchase proceeds $7,010,000) | | 7,010,000 | | 7,010,000 | |
| | | | | |
Total Short-Term Obligation
(cost of $7,010,000) | | | | 7,010,000 | |
| | | | | |
Total Investments – 100.2%
(cost of $967,999,861)(c) | | | | 881,968,328 | |
| | | | | |
Other Assets & Liabilities, Net – (0.2)% | | (1,389,887 | ) |
| | | | | |
Net Assets – 100.0% | | | | 880,578,441 | |
See Accompanying Notes to Financial Statements.
12
Columbia Small Cap Value Fund I
June 30, 2009
Common Stocks (continued)
Notes to Investment Portfolio:
| (a) | Non-income producing security. |
| (b) | An affiliate may include any company in which the Fund owns five percent or more of its outstanding voting shares. Transactions in this affiliated company during the year ended June 30, 2009, are as follows: |
| | |
Security name: | | Warwick Valley Telephone Co. |
| | | | |
Shares as of 06/30/08: | | | 194,460 | |
Shares purchased: | | | 79,290 | |
Shares sold: | | | (2,550 | ) |
Shares as of 06/30/09: | | | 271,200 | |
Net realized loss: | | $ | (4,181 | ) |
Dividend income earned: | | $ | 191,989 | |
Value at end of period: | | $ | 3,118,800 | |
| (c) | Cost for federal income tax purposes is $974,554,000. |
| | The following table summarizes the inputs used, as of June 30, 2009 in valuing the Fund’s assets: |
| | | | | | | | | | | | |
Description | | Quoted Prices (Level 1) | | Other
Significant
Observable
Inputs (Level 2) | | Significant
Unobservable
Inputs (Level 3) | | Total |
Common Stocks | | | | | | | | | | | | |
Consumer Discretionary | | | | | | | | | |
Auto Components | | $ | 2,021,199 | | $ | — | | $ | — | | $ | 2,021,199 |
Diversified Consumer Services | | | 6,472,426 | | | — | | | — | | | 6,472,426 |
Hotels, Restaurants & Leisure | | | 18,071,709 | | | — | | | — | | | 18,071,709 |
Household Durables | | | 14,277,184 | | | — | | | — | | | 14,277,184 |
Leisure Equipment & Products | | | 5,872,265 | | | — | | | — | | | 5,872,265 |
Specialty Retail | | | 36,804,550 | | | — | | | — | | | 36,804,550 |
Textiles, Apparel & Luxury Goods | | | 9,386,216 | | | — | | | — | | | 9,386,216 |
| | | | | | | | | | | | |
Consumer Discretionary Total | | | 92,905,549 | | | — | | | — | | | 92,905,549 |
| | | | | | | | | | | | |
Consumer Staples | | | | | | | | | |
Food & Staples Retailing | | | 22,369,399 | | | — | | | — | | | 22,369,399 |
Food Products | | | 6,178,597 | | | — | | | — | | | 6,178,597 |
| | | | | | | | | | | | |
Consumer Staples Total | | | 28,547,996 | | | — | | | — | | | 28,547,996 |
| | | | | | | | | | | | |
Energy | | | | | | | | | |
Energy Equipment & Services | | | 21,345,192 | | | — | | | — | | | 21,345,192 |
Oil, Gas & Consumable Fuels | | | 24,511,837 | | | — | | | — | | | 24,511,837 |
| | | | | | | | | | | | |
Energy Total | | | 45,857,029 | | | — | | | — | | | 45,857,029 |
| | | | | | | | | | | | |
Financials | | | | | | | | | | | | |
Capital Markets | | | 17,003,781 | | | — | | | — | | | 17,003,781 |
Commercial Banks | | | 63,649,602 | | | — | | | — | | | 63,649,602 |
Consumer Finance | | | 6,069,682 | | | — | | | — | | | 6,069,682 |
Diversified Financial Services | | | 6,419,087 | | | — | | | — | | | 6,419,087 |
Insurance | | | 60,373,947 | | | — | | | — | | | 60,373,947 |
Real Estate Investment Trusts (REITs) | | | 61,532,201 | | | — | | | — | | | 61,532,201 |
Real Estate Management & Development | | | 3,164,003 | | | — | | | — | | | 3,164,003 |
Thrifts & Mortgage Finance | | | 48,680,078 | | | — | | | — | | | 48,680,078 |
| | | | | | | | | | | | |
Financials Total | | | 266,892,381 | | | — | | | — | | | 266,892,381 |
| | | | | | | | | | | | |
| | | | | | | | |
Description | | Quoted
Prices (Level 1) | | Other
Significant
Observable
Inputs (Level 2) | | Significant
Unobservable
Inputs (Level 3) | | Total |
Health Care | | | | | | |
Health Care Equipment & Supplies | | 3,724,361 | | — | | — | | 3,724,361 |
Health Care Providers & Services | | 32,855,924 | | — | | — | | 32,855,924 |
Life Sciences Tools & Services | | 4,657,627 | | — | | — | | 4,657,627 |
| | | | | | | | |
Health Care Total | | 41,237,912 | | — | | — | | 41,237,912 |
| | | | | | | | |
Industrials | | | | | | |
Aerospace & Defense | | 12,176,914 | | — | | — | | 12,176,914 |
Air Freight & Logistics | | 1,545,789 | | — | | — | | 1,545,789 |
Airlines | | 3,525,334 | | — | | — | | 3,525,334 |
Building Products | | 15,442,443 | | — | | — | | 15,442,443 |
Commercial Services & Supplies | | 15,185,577 | | — | | — | | 15,185,577 |
Construction & Engineering | | 19,411,928 | | — | | — | | 19,411,928 |
Electrical Equipment | | 16,363,249 | | — | | — | | 16,363,249 |
Machinery | | 22,832,285 | | — | | — | | 22,832,285 |
Professional Services | | 15,268,788 | | — | | — | | 15,268,788 |
Road & Rail | | 20,188,660 | | — | | — | | 20,188,660 |
Trading Companies & Distributors | | 7,137,112 | | — | | — | | 7,137,112 |
| | | | | | | | |
Industrials Total | | 149,078,079 | | — | | — | | 149,078,079 |
| | | | | | | | |
Information Technology | | | | | | |
Communications Equipment | | 31,982,650 | | — | | — | | 31,982,650 |
Computers & Peripherals | | 7,691,695 | | — | | — | | 7,691,695 |
Electronic Equipment, Instruments & Components | | 34,630,864 | | — | | — | | 34,630,864 |
Internet Software & Services | | 2,128,097 | | — | | — | | 2,128,097 |
IT Services | | 14,217,227 | | — | | — | | 14,217,227 |
Semiconductors & Semiconductor Equipment | | 26,765,771 | | — | | — | | 26,765,771 |
Software | | 13,793,693 | | — | | — | | 13,793,693 |
| | | | | | | | |
Information Technology Total | | 131,209,997 | | — | | — | | 131,209,997 |
| | | | | | | | |
Materials | | | | | | |
Chemicals | | 17,237,558 | | — | | — | | 17,237,558 |
Construction Materials | | 2,861,737 | | — | | — | | 2,861,737 |
Containers & Packaging | | 14,961,038 | | — | | — | | 14,961,038 |
Metals & Mining | | 19,316,436 | | — | | — | | 19,316,436 |
Paper & Forest Products | | 7,521,625 | | — | | — | | 7,521,625 |
| | | | | | | | |
Materials Total | | 61,898,394 | | — | | — | | 61,898,394 |
| | | | | | | | |
Telecommunication Services | | | | |
Diversified Telecommunication Services | | 3,118,800 | | — | | — | | 3,118,800 |
Wireless Telecommunication Services | | 5,393,774 | | — | | — | | 5,393,774 |
| | | | | | | | |
Telecommunication Services Total | | 8,512,574 | | — | | — | | 8,512,574 |
| | | | | | | | |
See Accompanying Notes to Financial Statements.
13
Columbia Small Cap Value Fund I
June 30, 2009
Common Stocks (continued)
| | | | | | | | | | | | |
Description | | Quoted
Prices
(Level 1) | | Other
Significant
Observable
Inputs (Level 2) | | Significant
Unobservable
Inputs (Level 3) | | Total |
Utilities | | | | | | | | | |
Electric Utilities | | | 25,984,213 | | | — | | | — | | | 25,984,213 |
Independent Power Producers & Energy Traders | | | 6,401,129 | | | — | | | — | | | 6,401,129 |
Multi-Utilities | | | 16,433,075 | | | — | | | — | | | 16,433,075 |
| | | | | | | | | | | | |
Utilities Total | | | 48,818,417 | | | — | | | — | | | 48,818,417 |
|
Total Common Stocks | | | 874,958,328 | | | — | | | — | | | 874,958,328 |
| | | | | | | | | | | | |
Short-Term Obligation | | | | | | | | | | | | |
Repurchase Agreement | | | — | | | 7,010,000 | | | — | | | 7,010,000 |
| | | | | | | | | | | | |
Total Short-Term Obligations | | | — | | | 7,010,000 | | | — | | | 7,010,000 |
| | | | | | | | | | | | |
Total Investments | | | 874,958,328 | | | 7,010,000 | | | — | | | 881,968,328 |
| | | | | | | | | | | | |
Total | | $ | 874,958,328 | | $ | 7,010,000 | | $ | — | | $ | 881,968,328 |
| | | | | | | | | | | | |
For more information on valuation inputs, and their aggregation into the levels used in the table above, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At June 30, 2009, the Fund held investments in the following sectors:
| | | |
Sector (Unaudited) | | % of Net Assets | |
Financials | | 30.3 | |
Industrials | | 16.9 | |
Information Technology | | 14.9 | |
Consumer Discretionary | | 10.6 | |
Materials | | 7.0 | |
Utilities | | 5.6 | |
Energy | | 5.2 | |
Health Care | | 4.7 | |
Consumer Staples | | 3.2 | |
Telecommunication Services | | 1.0 | |
| | | |
| | 99.4 | |
Short-Term Obligation | | 0.8 | |
Other Assets & Liabilities, Net | | (0.2 | ) |
| | | |
| | 100.0 | |
| | | |
See Accompanying Notes to Financial Statements.
14
Statement of Assets and Liabilities – Columbia Small Cap Value Fund I
June 30, 2009
| | | | | | |
| | | | | ($) | |
| Assets | | Unaffiliated investments, at cost | | | 964,607,658 | |
| | Affiliated investments, at cost | | | 3,392,203 | |
| | | | | | |
| | Total investments, at cost | | | 967,999,861 | |
| | |
| | Unaffiliated investments, at value | | | 878,849,528 | |
| | Affiliated investments, at value | | | 3,118,800 | |
| | | | | | |
| | Total investments, at value | | | 881,968,328 | |
| | Cash | | | 413 | |
| | Receivable for: | | | | |
| | Investments sold | | | 4,137,097 | |
| | Fund shares sold | | | 2,632,639 | |
| | Dividends | | | 1,005,270 | |
| | Trustees’ deferred compensation plan | | | 50,068 | |
| | Prepaid expenses | | | 16,683 | |
| | | | | | |
| | Total Assets | | | 889,810,498 | |
| | |
| Liabilities | | Expense reimbursement due to investment advisor | | | 28,301 | |
| | Payable for: | | | | |
| | Investments purchased | | | 6,779,095 | |
| | Fund shares repurchased | | | 1,055,663 | |
| | Investment advisory fee | | | 567,606 | |
| | Pricing and bookkeeping fees | | | 13,726 | |
| | Transfer agent fee | | | 449,227 | |
| | Trustees’ fees | | | 43 | |
| | Custody fee | | | 22,826 | |
| | Distribution and service fees | | | 155,037 | |
| | Chief compliance officer expenses | | | 244 | |
| | Trustees’ deferred compensation plan | | | 50,068 | |
| | Other liabilities | | | 110,221 | |
| | | | | | |
| | Total Liabilities | | | 9,232,057 | |
| | | | | | |
| | Net Assets | | | 880,578,441 | |
| | |
| Net Assets Consist of | | Paid-in capital | | | 1,036,150,345 | |
| | Undistributed net investment income | | | 5,670,837 | |
| | Accumulated net realized loss | | | (75,211,208 | ) |
| | Net unrealized appreciation (depreciation) on investments | | | (86,031,533 | ) |
| | | | | | |
| | Net Assets | | | 880,578,441 | |
| | |
| Class A | | Net assets | | $ | 443,154,463 | |
| | Shares outstanding | | | 15,129,057 | |
| | Net asset value per share | | $ | 29.29 | (a) |
| | Maximum sales charge | | | 5.75 | % |
| | Maximum offering price per share ($29.29/0.9425) | | $ | 31.08 | (b) |
| | |
| Class B | | Net assets | | $ | 28,976,721 | |
| | Shares outstanding | | | 1,209,466 | |
| | Net asset value and offering price per share | | $ | 23.96 | (a) |
| | |
| Class C | | Net assets | | $ | 44,376,734 | |
| | Shares outstanding | | | 1,750,818 | |
| | Net asset value and offering price per share | | $ | 25.35 | (a) |
| | |
| Class Z | | Net assets | | $ | 364,070,523 | |
| | Shares outstanding | | | 11,867,332 | |
| | Net asset value, offering and redemption price per share | | $ | 30.68 | |
| (a) | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
| (b) | On sales of $50,000 or more the offering price is reduced. |
See Accompanying Notes to Financial Statements.
15
Statement of Operations – Columbia Small Cap Value Fund I
For the Year Ended June 30, 2009
| | | | | |
| | | | | ($) | |
| Investment Income | | Dividends | | 16,444,015 | |
| | Dividends from affiliates | | 191,989 | |
| | Interest | | 32,851 | |
| | Foreign taxes withheld | | (3,661 | ) |
| | | | | |
| | Total Investment Income | | 16,665,194 | |
| | |
| Expenses | | Investment advisory fee | | 6,138,109 | |
| | Distribution fee: | | | |
| | Class B | | 270,687 | |
| | Class C | | 362,693 | |
| | Service fee: | | | |
| | Class A | | 1,102,787 | |
| | Class B | | 89,538 | |
| | Class C | | 120,769 | |
| | Pricing and bookkeeping fees | | 145,161 | |
| | Transfer agent fee | | 1,768,390 | |
| | Trustees’ fees | | 38,756 | |
| | Custody fee | | 203,989 | |
| | Chief compliance officer expenses | | 914 | |
| | Other expenses | | 559,417 | |
| | | | | |
| | Expenses before interest expense | | 10,801,210 | |
| | Interest expense | | 607 | |
| | | | | |
| | Total Expenses | | 10,801,817 | |
| | Expense reductions | | (1,982 | ) |
| | | | | |
| | Net Expenses | | 10,799,835 | |
| | |
| | | | | |
| | Net Investment Income | | 5,865,359 | |
| Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | | | | | |
| | Net realized gain (loss) on: | | | |
| | Unaffiliated investments | | (67,787,239 | ) |
| | Affiliated investments | | (4,181 | ) |
| | Foreign currency transactions | | 4,377 | |
| | | | | |
| | Net realized loss | | (67,787,043 | ) |
| | Net change in unrealized appreciation (depreciation) on: | | | |
| | Investments | | (120,306,238 | ) |
| | Foreign currency translations | | 52 | |
| | | | | |
| | Net change in unrealized appreciation (depreciation) | | (120,306,186 | ) |
| | | | | |
| | Net Loss | | (188,093,229 | ) |
| | |
| | | | | |
| | Net Decrease Resulting from Operations | | (182,227,870 | ) |
See Accompanying Notes to Financial Statements.
16
Statement of Changes in Net Assets – Columbia Small Cap Value Fund I
| | | | | | | | |
| Increase (Decrease) in Net Assets | | | | Year Ended
June 30,
2009 ($) | | | Year Ended
June 30,
2008 ($) | |
| Operations | | Net investment income | | 5,865,359 | | | 2,211,776 | |
| | Net realized gain (loss) on
investments and foreign currency
transactions | | (67,787,043 | ) | | 55,032,503 | |
| | Net change in unrealized
appreciation (depreciation) on
investments and foreign currency
translations | | (120,306,186 | ) | | (234,008,590 | ) |
| | | |
| | | | | | | | |
| | Net decrease resulting from
operations | | (182,227,870 | ) | | (176,764,311 | ) |
| | | |
| Distributions to Shareholders | | From net investment income: | | | | | | |
| | Class A | | (96,427 | ) | | (1,590,109 | ) |
| | Class Z | | (409,448 | ) | | (1,242,987 | ) |
| | From net realized gains: | | | | | | |
| | Class A | | (26,043,809 | ) | | (50,668,302 | ) |
| | Class B | | (2,603,676 | ) | | (7,829,642 | ) |
| | Class C | | (3,321,986 | ) | | (7,569,234 | ) |
| | Class Z | | (13,590,135 | ) | | (20,406,711 | ) |
| | | |
| | | | | | | | |
| | Total distributions to shareholders | | (46,065,481 | ) | | (89,306,985 | ) |
| | | |
| | Net Capital Stock Transactions | | 247,711,791 | | | 101,825,529 | |
| | | |
| | Increase from Regulatory Settlements | | 20,959 | | | — | |
| | Total increase (decrease) in net
assets | | 19,439,399 | | | (164,245,767 | ) |
| | | |
| Net Assets | | Beginning of period | | 861,139,042 | | | 1,025,384,809 | |
| | End of period | | 880,578,441 | | | 861,139,042 | |
| | Undistributed net investment
income, at end of period | | 5,670,837 | | | 306,919 | |
See Accompanying Notes to Financial Statements.
17
Statement of Changes in Net Assets – Columbia Small Cap Value Fund I
| | | | | | | | | | | | | | |
| | | | | Capital Stock Activity | |
| | | | | Year Ended
June 30, 2009 | | | Year Ended
June 30, 2008 | |
| | | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | |
| Class A | | | | | | | | | | | | |
| | Subscriptions | | 6,328,169 | | | 197,710,536 | | | 3,614,777 | | | 161,334,656 | |
| | Distributions reinvested | | 847,952 | | | 23,835,899 | | | 1,043,838 | | | 46,962,310 | |
| | Redemptions | | (5,050,685 | ) | | (152,493,634 | ) | | (4,368,142 | ) | | (198,705,832 | ) |
| | | | | | | | | | | | | | |
| | Net increase | | 2,125,436 | | | 69,052,801 | | | 290,473 | | | 9,591,134 | |
| | | | |
| Class B | | | | | | | | | | | | |
| | Subscriptions | | 120,146 | | | 3,182,019 | | | 67,445 | | | 2,588,620 | |
| | Distributions reinvested | | 103,495 | | | 2,389,643 | | | 191,638 | | | 7,232,413 | |
| | Redemptions | | (553,019 | ) | | (14,125,365 | ) | | (908,991 | ) | | (34,087,764 | ) |
| | | | | | | | | | | | | | |
| | Net decrease | | (329,378 | ) | | (8,553,703 | ) | | (649,908 | ) | | (24,266,731 | ) |
| | | | |
| Class C | | | | | | | | | | | | |
| | Subscriptions | | 450,221 | | | 12,286,660 | | | 316,737 | | | 12,871,921 | |
| | Distributions reinvested | | 104,710 | | | 2,558,051 | | | 142,870 | | | 5,680,491 | |
| | Redemptions | | (560,320 | ) | | (14,796,916 | ) | | (582,164 | ) | | (23,008,126 | ) |
| | | | | | | | | | | | | | |
| | Net increase (decrease) | | (5,389 | ) | | 47,795 | | | (122,557 | ) | | (4,455,714 | ) |
| | | | |
| Class Z | | | | | | | | | | | | |
| | Subscriptions | | 8,119,589 | | | 249,737,204 | | | 3,680,443 | | | 179,006,809 | |
| | Distributions reinvested | | 348,224 | | | 10,237,790 | | | 312,515 | | | 14,650,724 | |
| | Redemptions | | (2,317,324 | ) | | (72,810,096 | ) | | (1,542,658 | ) | | (72,700,693 | ) |
| | | | | | | | | | | | | | |
| | Net increase | | 6,150,489 | | | 187,164,898 | | | 2,450,300 | | | 120,956,840 | |
See Accompanying Notes to Financial Statements.
18
Financial Highlights – Columbia Small Cap Value Fund I
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | Year Ended June 30, | |
| Class A Shares | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Net Asset Value, Beginning of Period | | $ | 39.50 | | | $ | 52.16 | | | $ | 48.03 | | | $ | 43.12 | | | $ | 42.17 | |
| | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.23 | (b) | | | 0.15 | | | | 0.12 | (c) | | | 0.06 | | | | 0.11 | |
Net realized and unrealized gain (loss) on investments
and foreign currency | | | (8.50 | ) | | | (8.46 | ) | | | 7.61 | | | | 6.82 | | | | 4.46 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | (8.27 | ) | | | (8.31 | ) | | | 7.73 | | | | 6.88 | | | | 4.57 | |
| | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.01 | ) | | | (0.14 | ) | | | (0.01 | ) | | | — | | | | — | |
From net realized gains | | | (1.93 | ) | | | (4.21 | ) | | | (3.59 | ) | | | (1.97 | ) | | | (3.62 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total distributions to shareholders | | | (1.94 | ) | | | (4.35 | ) | | | (3.60 | ) | | | (1.97 | ) | | | (3.62 | ) |
| | | | | |
Increase from regulatory settlements | | | — | (d) | | | — | | | | — | | | | — | | | | — | |
| | | | | |
Net Asset Value, End of Period | | $ | 29.29 | | | $ | 39.50 | | | $ | 52.16 | | | $ | 48.03 | | | $ | 43.12 | |
Total return (e) | | | (20.73 | )% | | | (16.96 | )% | | | 16.61 | % | | | 16.25 | %(f)(g) | | | 10.99 | % |
| | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | |
Net expenses before interest expense (h) | | | 1.38 | % | | | 1.26 | % | | | 1.29 | % | | | 1.28 | % | | | 1.32 | % |
Interest expense | | | — | %(i) | | | — | %(i) | | | — | %(i) | | | — | %(i) | | | — | |
Net expenses (h) | | | 1.38 | % | | | 1.26 | % | | | 1.29 | % | | | 1.28 | % | | | 1.32 | % |
Waiver/Reimbursement | | | — | | | | — | | | | — | | | | 0.01 | % | | | — | |
Net investment income (h) | | | 0.74 | % | | | 0.29 | % | | | 0.25 | % | | | 0.13 | % | | | 0.28 | % |
Portfolio turnover rate | | | 50 | % | | | 40 | % | | | 39 | % | | | 32 | % | | | 31 | % |
Net assets, end of period (000s) | | $ | 443,154 | | | $ | 513,671 | | | $ | 663,160 | | | $ | 505,971 | | | $ | 396,568 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Net investment income per share reflects special dividends. The effect of these dividends amounted to $0.03 per share. |
| (c) | Net investment income per share reflects special dividends. The effect of these dividends amounted to $0.05 per share. |
| (d) | Rounds to less than $0.01 per share. |
| (e) | Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. |
| (f) | Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement increased total return and net asset value per share by less than 0.01% and less than $0.01, respectively. |
| (g) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (h) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (i) | Rounds to less than 0.01%. |
See Accompanying Notes to Financial Statements.
19
Financial Highlights – Columbia Small Cap Value Fund I
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | Year Ended June 30, | |
| Class B Shares | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Net Asset Value, Beginning of Period | | $ | 33.00 | | | $ | 44.51 | | | $ | 41.75 | | | $ | 38.00 | | | $ | 37.60 | |
| | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment loss (a) | | | (0.01 | )(b) | | | (0.21 | ) | | | (0.24 | )(c) | | | (0.26 | ) | | | (0.18 | ) |
Net realized and unrealized gain (loss) on investments
and foreign currency | | | (7.10 | ) | | | (7.09 | ) | | | 6.59 | | | | 5.98 | | | | 3.96 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | (7.11 | ) | | | (7.30 | ) | | | 6.35 | | | | 5.72 | | | | 3.78 | |
| | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net realized gains | | | (1.93 | ) | | | (4.21 | ) | | | (3.59 | ) | | | (1.97 | ) | | | (3.38 | ) |
| | | | | |
Increase from regulatory settlements | | | — | (d) | | | — | | | | — | | | | — | | | | — | |
| | | | | |
Net Asset Value, End of Period | | $ | 23.96 | | | $ | 33.00 | | | $ | 44.51 | | | $ | 41.75 | | | $ | 38.00 | |
Total return (e) | | | (21.31 | )% | | | (17.58 | )% | | | 15.74 | % | | | 15.36 | %(f)(g) | | | 10.18 | % |
| | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | |
Net expenses before interest expense (h) | | | 2.13 | % | | | 2.01 | % | | | 2.04 | % | | | 2.03 | % | | | 2.07 | % |
Interest expense | | | — | %(i) | | | — | %(i) | | | — | %(i) | | | — | %(i) | | | — | |
Net expenses (h) | | | 2.13 | % | | | 2.01 | % | | | 2.04 | % | | | 2.03 | % | | | 2.07 | % |
Waiver/Reimbursement | | | — | | | | — | | | | — | | | | 0.01 | % | | | — | |
Net investment loss (h) | | | (0.02 | )% | | | (0.47 | )% | | | (0.55 | )% | | | (0.64 | )% | | | (0.47 | )% |
Portfolio turnover rate | | | 50 | % | | | 40 | % | | | 39 | % | | | 32 | % | | | 31 | % |
Net assets, end of period (000s) | | $ | 28,977 | | | $ | 50,784 | | | $ | 97,425 | | | $ | 135,721 | | | $ | 182,648 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Net investment income per share reflects special dividends. The effect of these dividends amounted to $0.03 per share. |
| (c) | Net investment income per share reflects special dividends. The effect of these dividends amounted to $0.05 per share. |
| (d) | Rounds to less than $0.01 per share. |
| (e) | Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. |
| (f) | Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement increased total return and net asset value per share by less than 0.01% and less than $0.01, respectively. |
| (g) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (h) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (i) | Rounds to less than 0.01%. |
See Accompanying Notes to Financial Statements.
20
Financial Highlights – Columbia Small Cap Value Fund I
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | Year Ended June 30, | |
| Class C Shares | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Net Asset Value, Beginning of Period | | $ | 34.76 | | | $ | 46.65 | | | $ | 43.60 | | | $ | 39.60 | | | $ | 39.05 | |
| | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment loss (a) | | | (0.00 | )(b)(c) | | | (0.22 | ) | | | (0.23 | )(d) | | | (0.26 | ) | | | (0.18 | ) |
Net realized and unrealized gain (loss) on investments
and foreign currency | | | (7.48 | ) | | | (7.46 | ) | | | 6.87 | | | | 6.23 | | | | 4.11 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | (7.48 | ) | | | (7.68 | ) | | | 6.64 | | | | 5.97 | | | | 3.93 | |
| | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net realized gains | | | (1.93 | ) | | | (4.21 | ) | | | (3.59 | ) | | | (1.97 | ) | | | (3.38 | ) |
| | | | | |
Increase from regulatory settlements | | | — | (c) | | | — | | | | — | | | | — | | | | — | |
| | | | | |
Net Asset Value, End of Period | | $ | 25.35 | | | $ | 34.76 | | | $ | 46.65 | | | $ | 43.60 | | | $ | 39.60 | |
Total return (e) | | | (21.30 | )% | | | (17.59 | )% | | | 15.74 | % | | | 15.37 | %(f)(g) | | | 10.19 | % |
| | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | |
Net expenses before interest expense (h) | | | 2.13 | % | | | 2.01 | % | | | 2.04 | % | | | 2.03 | % | | | 2.07 | % |
Interest expense | | | — | %(i) | | | — | %(i) | | | — | %(i) | | | — | %(i) | | | — | |
Net expenses (h) | | | 2.13 | % | | | 2.01 | % | | | 2.04 | % | | | 2.03 | % | | | 2.07 | % |
Waiver/Reimbursement | | | — | | | | — | | | | — | | | | 0.01 | % | | | — | |
Net investment loss (h) | | | (0.01 | )% | | | (0.47 | )% | | | (0.51 | )% | | | (0.62 | )% | | | (0.47 | )% |
Portfolio turnover rate | | | 50 | % | | | 40 | % | | | 39 | % | | | 32 | % | | | 31 | % |
Net assets, end of period (000s) | | $ | 44,377 | | | $ | 61,053 | | | $ | 87,642 | | | $ | 68,436 | | | $ | 57,471 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Net investment income per share reflects special dividends. The effect of these dividends amounted to $0.03 per share. |
| (c) | Rounds to less than $0.01 per share. |
| (d) | Net investment income per share reflects special dividends. The effect of these dividends amounted to $0.05 per share. |
| (e) | Total return at net asset value assuming all distributions reinvested and no contingent deferred sales charge. |
| (f) | Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement increased total return and net asset value per share by less than 0.01% and less than $0.01, respectively. |
| (g) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (h) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (i) | Rounds to less than 0.01%. |
See Accompanying Notes to Financial Statements.
21
Financial Highlights – Columbia Small Cap Value Fund I
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | Year Ended June 30, | |
| Class Z Shares | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Net Asset Value, Beginning of Period | | $ | 41.22 | | | $ | 54.23 | | | $ | 49.79 | | | $ | 44.54 | | | $ | 43.41 | |
| | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.32 | (b) | | | 0.30 | | | | 0.26 | (c) | | | 0.18 | | | | 0.23 | |
Net realized and unrealized gain (loss) on investments
and foreign currency | | | (8.87 | ) | | | (8.84 | ) | | | 7.90 | | | | 7.05 | | | | 4.62 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | (8.55 | ) | | | (8.54 | ) | | | 8.16 | | | | 7.23 | | | | 4.85 | |
| | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.06 | ) | | | (0.26 | ) | | | (0.13 | ) | | | (0.01 | ) | | | — | |
From net realized gains | | | (1.93 | ) | | | (4.21 | ) | | | (3.59 | ) | | | (1.97 | ) | | | (3.72 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total distributions to shareholders | | | (1.99 | ) | | | (4.47 | ) | | | (3.72 | ) | | | (1.98 | ) | | | (3.72 | ) |
| | | | | |
Increase from regulatory settlements | | | — | (d) | | | — | | | | — | | | | — | | | | — | |
| | | | | |
Net Asset Value, End of Period | | $ | 30.68 | | | $ | 41.22 | | | $ | 54.23 | | | $ | 49.79 | | | $ | 44.54 | |
Total return (e) | | | (20.53 | )% | | | (16.74 | )% | | | 16.91 | % | | | 16.51 | %(f)(g) | | | 11.34 | % |
| | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | |
Net expenses before interest expense (h) | | | 1.13 | % | | | 1.01 | % | | | 1.04 | % | | | 1.03 | % | | | 1.07 | % |
Interest expense | | | — | %(i) | | | — | %(i) | | | — | %(i) | | | — | %(i) | | | — | |
Net expenses (h) | | | 1.13 | % | | | 1.01 | % | | | 1.04 | % | | | 1.03 | % | | | 1.07 | % |
Waiver/Reimbursement | | | — | | | | — | | | | — | | | | 0.01 | % | | | — | |
Net investment income (h) | | | 1.00 | % | | | 0.55 | % | | | 0.51 | % | | | 0.37 | % | | | 0.53 | % |
Portfolio turnover rate | | | 50 | % | | | 40 | % | | | 39 | % | | | 32 | % | | | 31 | % |
Net assets, end of period (000s) | | $ | 364,071 | | | $ | 235,632 | | | $ | 177,158 | | | $ | 113,833 | | | $ | 83,508 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Net investment income per share reflects special dividends. The effect of these dividends amounted to $0.03 per share. |
| (c) | Net investment income per share reflects special dividends. The effect of these dividends amounted to $0.05 per share. |
| (d) | Rounds to less than $0.01 per share. |
| (e) | Total return at net asset value assuming all distributions reinvested. |
| (f) | Total return includes a voluntary reimbursement by the investment advisor for a realized investment loss due to a trading error. This reimbursement increased total return and net asset value per share by less than 0.01% and less than $0.01, respectively. |
| (g) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (h) | The benefits derived from expense reductions had an impact of less than 0.01%. |
| (i) | Rounds to less than 0.01%. |
See Accompanying Notes to Financial Statements.
22
Notes to Financial Statements – Columbia Small Cap Value Fund I
June 30, 2009
Note 1. Organization
Columbia Small Cap Value Fund I (the “Fund”), a series of Columbia Funds Series Trust I (the “Trust”), is a diversified portfolio. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company organized as a Massachusetts business trust.
Investment Objective
The Fund seeks long-term capital appreciation.
Fund Shares
The Trust may issue an unlimited number of shares, and the Fund offers four classes of shares: Class A, Class B, Class C and Class Z. Each share class has its own expense structure and sales charges, as applicable. Effective June 22, 2009, the Fund no longer accepts investments in Class B shares from new or existing investors in the Fund’s Class B shares, except in connection with the reinvestment of any dividend and/or capital gain distributions in Class B shares of the Fund and exchanges by existing Class B shareholders of the other Columbia Funds.
Effective July 15, 2009, the Fund will commence offering Class Y shares to individual and institutional investors who invest at least $1 million in Class Y shares and to group retirement plans with plan assets of at least $10 million.
Class A shares are subject to a maximum front-end sales charge of 5.75% based on the amount of initial investment. Class A shares purchased without an initial sales charge in accounts aggregating $1 million to $50 million at the time of purchase are subject to a 1.00% contingent deferred sales charge (“CDSC”) if the shares are sold within one year after purchase. Class B shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class B shares will convert to Class A shares eight years after purchase. Class C shares are subject to a 1.00% CDSC on shares sold within one year after purchase. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in the Fund’s prospectus.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Management has evaluated the events and transactions that have occurred through August 20, 2009, the date the financial statements were issued, and noted no items requiring adjustment of the financial statements or additional disclosures. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.
Security Valuation
Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.
Short-term investments maturing in 60 days or less are valued at amortized cost, which approximates market value.
Foreign securities are generally valued at the last sale price on the foreign exchange or market on which they trade. If any foreign share prices are not readily available as a result of limited share activity, the securities are valued at the last sale price of the local shares in the principal market in which such securities are normally traded.
Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange (“NYSE”). The values of such securities used in computing the net asset value of the Fund’s shares are determined as of such times. Foreign currency exchange rates are generally determined at 4:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the values of such foreign securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE, which would not be reflected in the computation of the Fund’s net asset value. If events materially affecting the values of
23
Columbia Small Cap Value Fund I
June 30, 2009
such foreign securities occur and it is determined that market quotations are not reliable, then these foreign securities will be valued at their fair value using procedures approved by the Board of Trustees.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reliable, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. If a security is valued at fair value, such value is likely to be different from the last quoted market price for the security. The determination of fair value often requires significant judgment. To determine fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums. Multiple inputs from various sources may be used to determine value.
On July 1, 2008, the Fund adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value giving the highest priority to unadjusted quoted prices in active markets for identical securities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the fair value hierarchy under SFAS 157 are described below:
| n | | Level 1 – quoted prices in active markets for identical securities |
| n | | Level 2 – prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others) |
| n | | Level 3 – prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management’s own assumptions about the factors market participants would use in pricing an investment. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Repurchase Agreements
The Fund may engage in repurchase agreement transactions with institutions that Columbia Management Advisors, LLC (“Columbia”), the Fund’s investment advisor, has determined are creditworthy. The Fund, through its custodian, receives delivery of the underlying securities collateralizing a repurchase agreement. Columbia is responsible for determining that the collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays in or restrictions on the Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.
Foreign Currency Transactions and Translations
The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day’s exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions and translations include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Fund does not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments on the Statement of Operations.
24
Columbia Small Cap Value Fund I
June 30, 2009
Income Recognition
Interest income is recorded on the accrual basis. Corporate actions and dividend income are recorded on the ex-date except for certain foreign securities which are recorded as soon after the ex-date as the Fund becomes aware of such, net of any non-reclaimable tax withholdings. Distributions received from real estate investment trusts (REITs) in excess of their income are recorded as a reduction of the cost of the related investments. If the Fund no longer owns the applicable securities, any distributions received in excess of income are recorded as realized gains. Awards from class action litigation are recorded as a reduction of cost if the Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities, the proceeds are recorded as realized gains.
Expenses
General expenses of the Trust are allocated to the Fund and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statement of Operations) and realized and unrealized gains (losses) are allocated to each class of the Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its tax exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the Trust’s organizational documents and by contract, the Trustees and officers of the Trust are indemnified against certain liabilities that may arise out of actions relating to their duties to the Trust. However, based on experience, the Fund expects the risk of loss due to these representations, warranties and indemnities to be minimal.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund’s capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations.
For the year ended June 30, 2009, permanent book and tax basis differences resulting primarily from differing treatments for foreign currency transactions and redemption based payments treated as eligible for the dividends paid deduction were identified and reclassified among the components of the Fund’s net assets as follows:
| | | | |
| | | | | |
Undistributed Net Investment
Income | | Accumulated Net Realized Loss | | Paid-In Capital |
| $4,434 | | $2,388,929 | | $(2,393,363) |
Net investment income and net realized gains (losses), as disclosed on the Statement of Operations, and net assets were not affected by this reclassification.
25
Columbia Small Cap Value Fund I
June 30, 2009
The tax character of distributions paid during the years ended June 30, 2009 and June 30, 2008 was as follows:
| | | | | | |
| | | June 30, |
| | | 2009 | | 2008 |
| Distributions paid from: | | | | |
Ordinary Income* | | $ | 505,874 | | $ | 14,936,561 |
Long-Term Capital Gains | | | 45,559,607 | | | 74,370,424 |
| * | For tax purposes short-term capital gain distributions, if any, are considered ordinary income distributions. |
As of June 30, 2009, the components of distributable earnings on a tax basis were as follows:
| | | | |
| | | | | |
Undistributed
Ordinary Income | | Undistributed Long-Term Capital Gains | | Net Unrealized Depreciation* |
| $5,780,620 | | $— | | $(92,585,672) |
| * | The differences between book-basis and tax-basis net unrealized depreciation are primarily due to passive foreign investment company adjustments and deferral of losses from wash sales. |
Unrealized appreciation and depreciation at June 30, 2009, based on cost of investments for federal income tax purposes were:
| | | | |
| | |
Unrealized appreciation | | $ | 109,474,936 | |
Unrealized depreciation | | | (202,060,608 | ) |
| | | | |
Net unrealized depreciation | | $ | (92,585,672 | ) |
The following capital loss carryforwards may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
| | |
| | | |
| Year of Expiration | | Capital Loss Carryforwards |
| 2012* | | $ 4,933,783 |
| 2017 | | 12,636,496 |
| | |
| | $17,570,279 |
| * | These carryforwards remain from the Fund’s merger with Liberty Contrarian Small Cap Fund on 11/01/2002. Utilization of Liberty Contrarian Small Cap Fund’s losses could be subject to limitations imposed by the Internal Revenue Code. |
Under current tax rules, certain currency and capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. As of June 30, 2009, post-October capital losses of $51,123,960 attributed to security transactions were deferred to July 1, 2009.
Under Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109 (“FIN 48”), management determines whether a tax position of the Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management has evaluated the known implications of FIN 48 on the computation of net assets for the Fund. As a result of this evaluation, management has concluded that FIN 48 did not have any effect on the Fund’s financial statements. However, management’s conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations, and administrative interpretations (including relevant court decisions). The Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Note 4. Fees and Compensation Paid to Affiliates
Investment Advisory Fee
Columbia, an indirect, wholly owned subsidiary of Bank of America Corporation (“BOA”) provides investment advisory, administrative and other services to the Fund. In rendering investment advisory services to the Fund, Columbia may use the portfolio management and research resources of Columbia Management Pte. Ltd., an affiliate of Columbia. Columbia receives a monthly investment advisory fee based on the Fund’s average daily net assets at the following annual rates:
26
Columbia Small Cap Value Fund I
June 30, 2009
| | | |
| | |
| Average Daily Net Assets | | Annual Fee Rate | |
First $500 million | | 0.80 | % |
$500 million to $1 billion | | 0.75 | % |
Over $1 billion | | 0.70 | % |
For the year ended June 30, 2009, the Fund’s effective investment advisory fee rate was 0.78% of the Fund’s average daily net assets.
Pricing and Bookkeeping Fees
The Fund has entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank & Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Fund. The Fund has also entered into an Accounting Services Agreement (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) with State Street and Columbia pursuant to which State Street provides accounting services to the Fund. Under the State Street Agreements, the Fund pays State Street an annual fee of $38,000 paid monthly plus an additional monthly fee based on an annualized percentage rate of average daily net assets of the Fund for the month. The aggregate fee will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Fund also reimburses State Street for certain out-of-pocket expenses and charges.
The Fund has entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. Under the Services Agreement, the Fund reimburses Columbia for out-of-pocket expenses.
Transfer Agent Fee
Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Fund and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. The Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $17.34 per open account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Fund.
The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, Individual Retirement Account (“IRA”) trustee agent fees and account transcript fees due to the Transfer Agent from shareholders of the Fund and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Fund. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.
An annual minimum account balance fee of $20 may apply to certain accounts with a value below the Fund’s initial minimum investment requirements to reduce the impact of small accounts on transfer agent fees. These minimum account balance fees are recorded as part of expense reductions on the Statement of Operations. For the year ended June 30, 2009, no minimum account balance fees were charged by the Fund.
Underwriting Discounts, Service and Distribution Fees
Columbia Management Distributors, Inc. (the “Distributor”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, is the principal underwriter of the Fund’s shares. For the year ended June 30, 2009, the Distributor has retained net underwriting discounts of $40,492 on sales of the Fund’s Class A shares and received net CDSC fees of $519, $69,591 and $7,107 on Class A, Class B and Class C share redemptions, respectively.
The Fund has adopted distribution and shareholder servicing plans (the “Plans”) pursuant to Rule 12b-1 under the 1940 Act which require the payment of distribution and service fees. The Plan requires the payment of a monthly service fee to the Distributor at the annual rate of 0.25% of the average daily net assets of the Fund attributable to Class A, Class B and Class C shares. The Plans also require the payment of a monthly distribution fee to the Distributor at the annual rate of 0.75% of the average daily net assets attributable to Class B and Class C shares only.
27
Columbia Small Cap Value Fund I
June 30, 2009
The CDSC and the distribution fees are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares.
Fee Waivers and Expense Reimbursements
Effective January 1, 2009, Columbia has voluntarily agreed to waive fees and/or reimburse a portion of the Fund’s expenses so that the Fund’s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the Fund’s custodian, do not exceed 1.10% annually of the Fund’s average daily net assets. Columbia, in its discretion, may revise or discontinue this arrangement at any time.
Fees Paid to Officers and Trustees
All officers of the Fund are employees of Columbia or its affiliates and, with the exception of the Fund’s Chief Compliance Officer, receive no compensation from the Fund. The Board of Trustees has appointed a Chief Compliance Officer to the Fund in accordance with federal securities regulations. The Fund, along with other affiliated funds, pays its pro-rata share of the expenses associated with the Chief Compliance Officer. The Fund’s expenses for the Chief Compliance Officer will not exceed $15,000 per year.
The Trust’s eligible Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Fund’s assets.
Other Related Party Transactions
In connection with the purchase and sale of its securities during the period, the Fund used several brokers that are affiliates of BOA. The total brokerage commissions paid to affiliated brokers for the year ended June 30, 2009 was $34,346.
Note 5. Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as part of expense reductions on the Statement of Operations. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement.
For the year ended June 30, 2009, these custody credits reduced total expenses by $1,982 for the Fund.
Note 6. Portfolio Information
For the year ended June 30, 2009, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, for the Fund were $606,286,160 and $395,009,668, respectively.
Note 7. Regulatory Settlements
As of June 30, 2009, the Fund had received payments of $20,959 relating to certain regulatory settlements the Fund had participated in during the year. The payments have been included in “Increase from regulatory settlements” on the Statement of Changes in Net Assets.
Note 8. Line of Credit
The Fund and other affiliated funds participate in a $280,000,000 committed, unsecured revolving line of credit provided by State Street. The maximum amount that may be borrowed by any fund is limited to the lesser of $200,000,000 and the Fund’s borrowing limit set forth in the Fund’s registration statement. Borrowings are available for short-term liquidity or temporary or emergency purposes.
Interest is charged to each participating fund based on the fund’s borrowings at a rate per annum equal to the greater of the Federal Funds Rate plus 0.50% or the overnight LIBOR Rate plus 0.50%. In addition, an annual operations agency fee of $20,000, an amendment fee of 0.02% and a commitment fee of 0.12% per annum are accrued and apportioned among the participating funds pro rata based on their relative net assets. Prior to October 16, 2008, the Fund and other affiliated funds participated in a $350,000,000 committed, unsecured revolving line of credit and a $150,000,000 uncommitted, unsecured line of credit, both provided by State Street. Interest on the committed line of credit was charged to each participating fund based on the fund’s borrowings at a rate per annum equal to the Federal Funds Rate plus 0.50%. In addition, a commitment fee of 0.10% per annum was accrued and apportioned among the participating funds pro rata based on their relative net assets. Interest on the uncommitted line of credit was charged to each participating
28
Columbia Small Cap Value Fund I
June 30, 2009
fund based on the fund’s borrowings at a rate per annum equal to the Federal Funds Rate plus 0.375%. State Street charged an annual operations agency fee of $40,000 for the committed line of credit and was able to charge an annual administration fee of $15,000 for the uncommitted line of credit. The commitment fee, the operations agency fee and the administration fee were accrued and apportioned among the participating funds pro rata based on their relative net assets.
For the year ended June 30, 2009, the average daily loan balance outstanding on days where borrowing existed was $2,666,667 at a weighted average interest rate of 0.86%.
Note 9. Shares of Beneficial Interest
As of June 30, 2009, 11.3% of the Fund’s shares outstanding were beneficially owned by one participant account over which BOA and/or any of its affiliates had either sole or joint investment discretion.
As of June 30, 2009, the Fund had one shareholder that held 8.6% of the shares outstanding, over which BOA and/or any of its affiliates did not have investment discretion.
Subscription and redemption activity of these accounts may have a significant effect on the operations of the Fund.
Note 10. Significant Risks and Contingencies
Sector Focus Risk
The Fund may focus its investments in certain sectors, subjecting it to greater risk than a fund that is less focused.
Legal Proceedings
Columbia Management Advisors, LLC and Columbia Management Distributors, Inc. (collectively, the “Columbia Group”) are subject to a settlement agreement with the New York Attorney General (“NYAG”) (the “NYAG Settlement”) and a settlement order with the SEC (the “SEC Order”) on matters relating to mutual fund trading, each dated February 9, 2005. Under the terms of the SEC Order, the Columbia Group (or predecessor entities) agreed, among other things, to: pay disgorgement and civil money penalties collectively totaling $140 million; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; and retain an independent consultant to review the Columbia Group’s applicable supervisory, compliance, control and other policies and procedures. The NYAG Settlement, among other things, requires Columbia Management Advisors, LLC and its affiliates to reduce management fees for certain funds in the Columbia family of mutual funds in a projected total of $160 million over five years through November 30, 2009 and to make certain disclosures to investors relating to expenses. In connection with the Columbia Group providing services to the Columbia Funds, the Columbia Funds have voluntarily undertaken to implement certain governance measures designed to maintain the independence of their boards of trustees and certain special consulting and compliance measures.
Pursuant to the SEC Order and related procedures, the $140 million in settlement amounts described above has been substantially distributed in accordance with a distribution plan that was developed by an independent distribution consultant and approved by the SEC on April 6, 2007.
In connection with the events described above, various parties have filed suit against certain funds, the Trustees of the Columbia Funds, FleetBoston Financial Corporation and its affiliated entities and/or Bank of America and its affiliated entities.
On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred these cases and cases against other mutual fund companies based on similar allegations to the United States District Court in Maryland for consolidated or coordinated pretrial proceedings (the “MDL”). Subsequently, additional related cases were transferred to the MDL. On September 29, 2004, the plaintiffs in the MDL filed amended and consolidated complaints. One of these amended complaints is a putative class action that includes claims under the federal securities laws and state common law, and that names Columbia Management Advisors, Inc. (which has since merged into Banc of America Capital Management, LLC (now named Columbia Management Advisors, LLC)) (“Columbia”), Columbia Funds Distributor, Inc. (now named Columbia Management Distributors, Inc.) (the “Distributor”), the Trustees of the Columbia Funds, Bank of America Corporation and others as defendants. Another of the amended complaints is a derivative action purportedly on behalf of the Columbia Funds that asserts claims under federal securities laws and state common law.
29
Columbia Small Cap Value Fund I
June 30, 2009
On February 25, 2005, Columbia and other defendants filed motions to dismiss the claims in the pending cases. On March 1, 2006, for reasons stated in the court’s memoranda dated November 3, 2005, the United States District Court for the District of Maryland granted in part and denied in part the defendants’ motions to dismiss. The court dismissed all of the class action claims pending against the Columbia Funds Trusts. As to Columbia and the Distributor, the claims under the Securities Act of 1933, the claims under Sections 34(b) and 36(a) of the Investment Company Act of 1940 (“ICA”) and the state law claims were dismissed. The claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and claims under Section 36(b) of the ICA were not dismissed.
On March 21, 2005, a purported class action was filed in Massachusetts state court alleging that certain conduct, including market timing, entitled Class B shareholders in certain Columbia Funds to an exemption from contingent deferred sales charges upon early redemption (the “CDSC Lawsuit”). The CDSC Lawsuit was removed to federal court in Massachusetts and transferred to the MDL.
On September 14, 2007, the plaintiffs and the Columbia defendants named in the MDL, including the Columbia Funds, entered into a stipulation of settlement with respect to all Columbia-related claims in the MDL described above, including the CDSC Lawsuit. The settlement is subject to court approval.
30
Report of Independent Registered Public Accounting Firm
To the Trustees of Columbia Funds Series Trust I and the Shareholders of Columbia Small Cap Value Fund I
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Columbia Small Cap Value Fund I (the “Fund”) (a series of Columbia Funds Series Trust I) at June 30, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 20, 2009
31
Federal Income Tax Information (Unaudited)
98.98% of the ordinary dividend income distributed by the Fund, for the year ended June 30, 2009, qualifies for the corporate dividends received deduction.
For non-corporate shareholders 98.99% or the maximum amount allowable under the Jobs and Growth Tax Relief Reconciliation Act of 2003, of ordinary income distributed by the Fund for the period July 1, 2008 to June 30, 2009 may represent qualified dividend income. Final information will be provided in your 2009 Form 1099-DIV.
32
Fund Governance – Columbia Small Cap Value Fund I
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the Columbia Funds Complex, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the Columbia Funds Complex.
Independent Trustees
| | |
Name, Address and Year of Birth,
Position with Funds, Year First
Elected or Appointed to Office | | Principal Occupation(s) During Past Five Years, Number of Funds in the Columbia
Funds Complex Overseen by Trustee, Other Directorships Held |
| |
| John D. Collins (Born 1938) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 2007) | | Retired. Consultant, KPMG, LLP (accounting and tax firm) from July 1999 to June 2000; Partner, KPMG, LLP from March 1962 to June 1999. Oversees 79, Mrs. Fields Famous Brands LLC (consumer products); Suburban Propane Partners, L.P.; and Montpelier Re (underwriting firm) |
| |
| Rodman L. Drake (Born 1943) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 2007)
and Chairman of the Board
(since 2009) | | Co-Founder of Baringo Capital LLC (private equity) since 2002; President, Continuation Investments Group, Inc. from 1997 to 2001. Oversees 79, Jackson Hewitt Tax Service Inc. (tax preparation services); Crystal Capital River Inc. (real estate investment trust); Student Loan Corporation (student loan provider); Celgene Corporation (global biotechnology company); and The Helios Funds (exchange-traded funds) |
| |
| Douglas A. Hacker (Born 1955) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1996) | | Independent business executive since May 2006; Executive Vice President–Strategy of United Airlines (airline) from December 2002 to May 2006; President of UAL Loyalty Services (airline marketing company) from September 2001 to December 2002; Executive Vice President and Chief Financial Officer of United Airlines from July 1999 to September 2001. Oversees 79, Nash Finch Company (food distributor); Aircastle Limited (aircraft leasing) |
|
| Janet Langford Kelly (Born 1957) |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1996) | | Senior Vice President, General Counsel and Corporate Secretary, ConocoPhillips (integrated energy company) since September 2007; Deputy General Counsel–Corporate Legal Services, ConocoPhillips from August 2006 to August 2007; Partner, Zelle, Hofmann, Voelbel, Mason & Gette LLP (law firm) from March 2005 to July 2006; Adjunct Professor of Law, Northwestern University, from September 2004 to June 2006; Director, UAL Corporation (airline) from February 2006 to July 2006; Oversees 79, None |
| |
| Charles R. Nelson (Born 1942) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1981) | | Professor of Economics, University of Washington, since January 1976; Ford and Louisa Van Voorhis Professor of Political Economy, University of Washington, since September 1993; Adjunct Professor of Statistics, University of Washington, since September 1980; Associate Editor, Journal of Money Credit and Banking, 1993-2008 Consultant on econometric and statistical matters. Oversees 79, None |
33
Fund Governance (continued) – Columbia Small Cap Value Fund I
Independent Trustees (continued)
| | |
Name, Address and Year of Birth,
Position with Funds, Year First
Elected or Appointed to Office | | Principal Occupation(s) During Past Five Years, Number of Funds in the Columbia
Funds Complex Overseen by Trustee, Other Directorships Held |
| |
| John J. Neuhauser (Born 1943) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1985) | | President, Saint Michael’s College, since August 2007; University Professor, Boston College from November 2005 to August 2007; Academic Vice President and Dean of Faculties, Boston College from August 1999 to October 2005. Oversees 79, Liberty All-Star Equity Fund and Liberty All-Star Growth Fund, Inc. (closed-end funds) |
| |
| Jonathan Piel (Born 1938) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 2007) | | Cable television producer and website designer; The Editor, Scientific American from 1984 to 1994; Vice President, Scientific American, Inc., from 1984 to 1994; Member, Advisory Board, Stone Age Institute, Bloomington, Indiana (research institute that explores the effect of technology on human evolution); Member, Board of Directors of the National Institute of Social Sciences, New York City; Member, Board of Trustees of the William Alanson White Institute, New York City (institution for training psychoanalysts); and Member, Advisory Board, Mount Sinai Children’s Environmental Health Center, New York. Oversees 79, None |
| |
| Patrick J. Simpson (Born 1944) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 2000) | | Partner, Perkins Coie LLP (law firm). Oversees 79, None |
|
| Thomas C. Theobald (Born 1937) |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1996) | | Partner and Senior Advisor, Chicago Growth Partners (private equity investing) since September 2004; Managing Director, William Blair Capital Partners (private equity investing) from September 1994 to September 2004. Oversees 79, Anixter International (network support equipment distributor); Ventas, Inc. (real estate investment trust); Jones Lang LaSalle (real estate management services); Ambac Financial Group (financial guaranty insurance) |
| |
| Anne-Lee Verville (Born 1945) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1998) | | Retired since 1997 (formerly General Manager–Global Education Industry (from 1994 to 1997), President–Application Systems Division (from 1991 to 1994), Chief Financial Officer–US Marketing & Services (from 1988 to 1991), and Chief Information Officer (from 1987 to 1988), IBM Corporation (computer and technology)). Oversees 79, None |
Interested Trustee
| | |
| |
| William E. Mayer1 (Born 1940) | | |
c/o Columbia Management Advisors, LLC One Financial Center Boston, MA 02111 Trustee (since 1994) | | Partner, Park Avenue Equity Partners (private equity) since February 1999; Dean and Professor, College of Business, University of Maryland from 1992 to 1997. Oversees 79, Lee Enterprises (print media), WR Hambrecht + Co. (financial service provider); BlackRock Kelso Capital Corporation (investment company) |
| 1 | The Funds currently treat Mr. Mayer as an “interested person” (as defined in the Investment Company Act of 1940) by reason of his affiliation with WR Hambrecht + Co., a registered broker/dealer that may execute portfolio transactions for or engage in principal transactions with the Funds or other funds or accounts advised/managed by the Advisor or other Bank of America affiliates. |
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 1-800-345-6611.
34
Fund Governance (continued) – Columbia Small Cap Value Fund I
Officers
| | |
Name, Address and Year of Birth,
Position with Funds, Year First
Elected or Appointed to Office | | Principal Occupation(s) During Past Five Years |
|
| J. Kevin Connaughton (Born 1964) |
One Financial Center Boston, MA 02111 President (since 2009) | | Managing Director of Columbia Management Advisors, LLC since December 2004; Senior Vice President and Chief Financial Officer–Columbia Funds, from June 2008 to January 2009; Treasurer–Columbia Funds, from October 2003 to May 2008; Treasurer–the Liberty Funds, Stein Roe Funds and Liberty All-Star Funds, December 2000–December 2006; Senior Vice President–Columbia Management Advisors, LLC, from April 2003 to December 2004; President–Columbia Funds, Liberty Funds and Stein Roe Funds, February 2004 to October 2004; Treasurer–Galaxy Funds, September 2002 to December 2005; Treasurer, December 2002 to December 2004, and President, February 2004 to December 2004–Columbia Management Multi-Strategy Hedge Fund, LLC; and a senior officer of various other Bank of America-affiliated entities, including other registered and unregistered funds. |
|
| James R. Bordewick, Jr. (Born 1959) |
One Financial Center Boston, MA 02111 Senior Vice President, Secretary and Chief Legal Officer (since 2006) | | Associate General Counsel, Bank of America since April 2005; Senior Vice President and Associate General Counsel, MFS Investment Management (investment management) prior to April 2005. |
| |
| Linda J. Wondrack (Born 1964) | | |
One Financial Center Boston, MA 02111 Senior Vice President and Chief Compliance Officer (since 2007) | | Director (Columbia Management Group LLC and Investment Product Group Compliance), Bank of America since June 2005; Director of Corporate Compliance and Conflicts Officer, MFS Investment Management (investment management), August 2004 to May 2005; Managing Director, Deutsche Asset Management (investment management) prior to August 2004. |
| |
| Michael G. Clarke (Born 1969) | | |
One Financial Center Boston, MA 02111 Senior Vice President and Chief Financial Officer (since 2009) | | Director of Fund Administration of the Advisor since January 2006; Managing Director of the Advisor September 2004 to December 2005; Vice President Fund Administration June 2002 to September 2004. |
| |
| Jeffrey R. Coleman (Born 1969) | | |
One Financial Center Boston, MA 02111 Deputy Treasurer (since 2008) | | Director of Fund Administration of the Advisor since January 2006; Fund Controller of the Advisor from October 2004 to January 2006; Vice President of CDC IXIS Asset Management Services, Inc. (investment management) from August 2000 to September 2004. |
| |
| Joseph F. DiMaria (Born 1968) | | |
One Financial Center Boston, MA 02111 Chief Accounting Officer and Treasurer (since 2009) | | Director of Fund Administration of the Advisor since January 2006; Head of Tax/Compliance and Assistant Treasurer of the Advisor from November 2004 to December 2005; Director of Trustee Administration (Sarbanes-Oxley) of the Advisor from May 2003 to October 2004. |
35
Fund Governance (continued) – Columbia Small Cap Value Fund I
Officers (continued)
| | |
Name, Address and Year of Birth,
Position with Funds, Year First
Elected or Appointed to Office | | Principal Occupation(s) During Past Five Years |
| |
| Julian Quero (Born 1967) | | |
One Financial Center Boston, MA 02111 Deputy Treasurer (since 2008) | | Senior Tax Manager of the Advisor since August 2006; Senior Compliance Manager of the Advisor from April 2002 to August 2006. |
| |
| Barry S. Vallan (Born 1969) | | |
One Financial Center Boston, MA 02111 Controller (since 2006) | | Vice President–Fund Treasury of the Advisor since October 2004; Vice President–Trustee Reporting of the Advisor from April 2002 to October 2004. |
| |
| Stephen T. Welsh (Born 1957) | | |
One Financial Center Boston, MA 02111 Vice President (since 1996) | | President, Columbia Management Services, Inc. since July 2004; Senior Vice President and Controller, Columbia Management Services, Inc. prior to July 2004. |
36
Important Information About This Report
Transfer Agent
Columbia Management Services, Inc.
P.O. Box 8081
Boston, MA 02266-8081
1-800-345-6611
Distributor
Columbia Management
Distributors, Inc.
One Financial Center
Boston, MA 02111
Investment Advisor
Columbia Management Advisors, LLC
100 Federal Street
Boston, MA 02110
The fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Columbia Small Cap Value Fund I.
A description of the policies and procedures that the fund uses to determine how to vote proxies and a copy of the fund’s voting records are available (i) at www.columbiamanagement.com; (ii) on the Securities and Exchange Commission’s website at www.sec.gov, and (iii) without charge, upon request, by calling 1-800-368-0346. Information regarding how the fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC’s website. Information regarding how the fund voted proxies relating to portfolio securities is also available from the fund’s website, www.columbiamanagement.com.
The fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Please read and consider the investment objectives, risks, charges and expenses for any fund carefully before investing. For a prospectus which contains this and other important information about the fund, contact your Columbia Management representative or financial advisor or go to www.columbiamanagement.com.
Columbia Management Group, LLC (“Columbia Management”) is the investment management division of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Columbia Funds are distributed by Columbia Management Distributors, Inc., member of FINRA, SIPC, part of Columbia Management and an affiliate of Bank of America Corporation.
37
One Financial Center
Boston, MA 02111-2621
Columbia Small Cap Value Fund I
Annual Report, June 30, 2009
©2009 Columbia Management Distributors, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
SHC-42/20102-0609(08/09) 09/85363
Item 2. Code of Ethics.
| | (a) | The registrant has, as of the end of the period covered by this report, adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
| | (b) | During the period covered by this report, there were not any amendments to a provision of the code of ethics adopted in 2(a) above. |
| | (c) | During the period covered by this report, there were no waivers, including any implicit waivers, from a provision of the code of ethics described in 2(a) above that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Trustees has determined that John D. Collins, Douglas A. Hacker, Charles R. Nelson and Anne-Lee Verville, each of whom are members of the registrant’s Board of Trustees and Audit Committee, each qualify as an audit committee financial expert. Mr. Collins, Mr. Hacker, Mr. Nelson and Ms. Verville are each independent trustees, as defined in paragraph (a)(2) of this item’s instructions.
Item 4. Principal Accountant Fees and Services.
Fee information below is disclosed for the two series of the registrant whose report to stockholders is included in this annual filing.
(a) Audit Fees. Aggregate Audit Fees billed by the principal accountant for professional services rendered during the fiscal years ended June 30, 2009 and June 30, 2008 are approximately as follows:
Audit Fees include amounts related to the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
(b) Audit-Related Fees. Aggregate Audit-Related Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended June 30, 2009 and June 30, 2008 are approximately as follows:
Audit-Related Fees include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported in Audit Fees above. In both fiscal years 2009 and 2008, Audit-Related Fees consist of agreed-upon procedures performed for semi-annual shareholder reports.
During the fiscal years ended June 30, 2009 and June 30, 2008, there were no Audit-Related Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(c) Tax Fees. Aggregate Tax Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended June 30, 2009 and June 30, 2008 are approximately as follows:
Tax Fees include amounts for the review of annual tax returns, the review of required shareholder distribution calculations and typically include amounts for professional services by the principal accountant for tax compliance, tax advice and tax planning.
During the fiscal years ended June 30, 2009 and June 30, 2008, there were no Tax Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(d) All Other Fees. Aggregate All Other Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended June 30, 2009 and June 30, 2008 are approximately as follows:
All Other Fees include amounts for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.
Aggregate All Other Fees billed by the registrant’s principal accountant to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant during the fiscal years ended June 30, 2009 and June 30, 2008 are approximately as follows:
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2009 | | 2008 |
$711,800 | | $1,060,800 |
In both fiscal years 2009 and 2008, All Other Fees consist of fees billed for internal control examinations of the registrant’s transfer agent and investment advisor.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
The registrant’s Audit Committee is required to pre-approve the engagement of the registrant’s independent accountants to provide audit and non-audit services to the registrant and non-audit services to its investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) or any entity controlling, controlled by or under common control with such investment adviser that provides ongoing services to the registrant (“Adviser Affiliates”), if the engagement relates directly to the operations and financial reporting of the registrant.
The Audit Committee has adopted a Policy for Engagement of Independent Accountants for Audit and Non-Audit Services (“Policy”). The Policy sets forth the understanding of the Audit Committee regarding the engagement of the registrant’s independent accountants to provide (i) audit and permissible audit-related, tax and other services to the registrant (collectively “Fund Services”); (ii) non-audit services to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and Adviser Affiliates, if the engagement relates directly to the operations or financial reporting of a Fund (collectively “Fund-related Adviser Services”); and (iii) certain other audit and non-audit services to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and Adviser Affiliates. Unless a type of service receives general pre-approval under the Policy, it requires specific pre-approval by the Audit Committee if it is to be provided by the independent accountants. Pre-approval of non-audit services to the registrant, the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and Adviser Affiliates may be waived provided that the “de minimis” requirements set forth under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are met.
Under the Policy, the Audit Committee may delegate pre-approval authority to any pre-designated member or members who are Independent Trustees/Directors. The member(s) to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next regular meeting. The Audit Committee’s responsibilities with respect to the pre-approval of services performed by the independent accountants may not be delegated to management.
The Policy requires the Fund Treasurer and/or Director of Board Administration to submit to the Audit Committee, on an annual basis, a schedule of the types of services that are subject to general pre-approval. The schedule(s) provide a description of each type of service that is subject to general pre-approval and, where possible, will provide estimated fee caps for each instance of providing each service. The Audit Committees will review and approve the types of services and review the projected fees for the next fiscal year and may add to, or subtract from, the list of general pre-approved services from time to time based on subsequent determinations. That approval acknowledges that the Audit Committee is in agreement with the specific types of services that the independent accountants will be permitted to perform.
The Fund Treasurer and/or Director of Board Administration shall report to the Audit Committee at each of its regular meetings regarding all Fund Services or Fund-related Adviser Services initiated since the last such report was rendered, including a general description of the services, actual billed and projected fees, and the means by which such Fund Services or Fund-related Adviser Services were pre-approved by the Audit Committee.
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(e)(2) The percentage of services described in paragraphs (b) through (d) of this Item approved pursuant to the “de minimis” exception under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X during both fiscal years ended June 30, 2009 and June 30, 2008 was zero.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for the fiscal years ended June 30, 2009 and June 30, 2008 are approximately as follows:
| | |
2009 | | 2008 |
$730,300 | | $1,079,900 |
(h) The registrant’s Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments
| | (a) | The registrant’s “Schedule I – Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have not been any material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors, since those procedures were last disclosed in response to requirements of Item 407(c)(2)(iv) of Regulation S-K (as required by Item 22(b)(15) of Schedule 14A) or this Item.
Item 11. Controls and Procedures.
| | (a) | The registrant’s principal executive officer and principal financial officers, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls |
| | and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. |
| | (b) | There was no change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| (registrant) | | Columbia Funds Series Trust I |
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| By (Signature and Title) | | /s/ J. Kevin Connaughton |
| | J. Kevin Connaughton, President |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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| By (Signature and Title) | | /s/ J. Kevin Connaughton |
| | J. Kevin Connaughton, President |
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| By (Signature and Title) | | /s/ Michael G. Clarke |
| | Michael G. Clarke, Chief Financial Officer |
