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 811-21914
RIVERSOURCE SHORT TERM INVESTMENTS SERIES, INC.
(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(Address of principal executive offices) (Zip code)
Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474
(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 671-1947
Date of fiscal year end: July 31
Date of reporting period: July 31, 2010
ITEM 1. REPORTS TO STOCKHOLDERS.
Annual Report
(COLUMBIA MANAGEMENT LOGO)
COLUMBIA
SHORT-TERM CASH FUND
(FORMERLY KNOWN AS RIVERSOURCE SHORT-TERM CASH FUND)
- --------------------------------------------------------------------------------
ANNUAL REPORT FOR THE PERIOD ENDED
JULY 31, 2010
COLUMBIA SHORT-TERM CASH FUND SEEKS TO PROVIDE SHAREHOLDERS WITH MAXIMUM CURRENT
INCOME CONSISTENT WITH LIQUIDITY AND STABILITY OF PRINCIPAL.
Shares of the Fund are issued solely in private placement transactions that do
not involve any public offering within the meaning of Section 4(2) of the
Securities Act of 1933, as amended (the 1933 Act). Investments in the Fund may
be made only by investment companies, common or commingled trust funds or
similar organizations or persons that are accredited investors within the
meaning of the 1933 Act.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 3
Fund Expenses Example.............. 4
Portfolio of Investments........... 5
Statement of Assets and
Liabilities...................... 18
Statement of Operations............ 19
Statements of Changes in Net
Assets........................... 20
Financial Highlights............... 21
Notes to Financial Statements...... 22
Report of Independent Registered
Public Accounting Firm........... 29
Federal Income Tax Information..... 31
Board Members and Officers......... 32
Approval of Investment Management
Services Agreement............... 38
Proxy Voting....................... 41
</Table>
Note: Effective September 27, 2010, the Fund has been renamed. While this
report covers the fiscal period ended July 31, 2010, which is prior to the
name change, the Fund's new name has been reflected throughout.
SEE THE FUND'S PROSPECTUS FOR RISKS ASSOCIATED WITH INVESTING IN THE FUND.
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2 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
PORTFOLIO BREAKDOWN(1) (at July 31, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
Certificates of Deposit 6.2%
- ------------------------------------------------
Commercial Paper 31.7%
- ------------------------------------------------
Repurchase Agreements 7.7%
- ------------------------------------------------
U.S. Government Agencies 36.3%
- ------------------------------------------------
U.S. Government-Insured Debt(2) 18.1%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan). The Fund's
composition is subject to change.
(2) Funding for this debt is provided by the Federal Financing Bank, which is
funded by the U.S. Department of the Treasury.
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COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 3
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur ongoing costs which may include
custodian fees and other nonadvisory expenses. This example is intended to help
you understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended July 31, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Expenses paid during the period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
FEB. 1, 2010 JULY 31, 2010 THE PERIOD(a) EXPENSE RATIO
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,001.20 $0.00(c) 0.00%(c)
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,024.93 $0.00(c) 0.00%(c)
- ------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the Fund's annualized expense ratio as indicated
above, multiplied by the average account value over the period, multiplied
by 182/365 (to reflect the one-half year period).
(b) Based on the actual return of 0.12% for the six months ended July 31, 2010.
(c) Rounds to less than $0.01.
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4 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
JULY 31, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
U.S. GOVERNMENT AGENCIES (36.3%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
Federal Home Loan Bank Discount Notes
08-04-10 0.150% $101,800,000(e) $101,797,964
08-06-10 0.150 50,000,000(e) 49,998,542
08-13-10 0.120 35,000,000(e) 34,998,357
06-21-11 0.750 30,000,000(e) 30,000,000
Federal Home Loan Mortgage Corp. Discount Notes
08-04-10 0.150 67,000,000 66,998,660
08-10-10 0.380 35,000,000(b) 35,000,000
Federal National Mortgage Association Discount Notes
08-02-10 0.070 100,000,000(e) 99,999,444
U.S. Treasury Bills
08-05-10 0.070 40,000,000(e) 39,999,556
08-19-10 0.100 25,000,000(e) 24,998,654
08-26-10 0.150 150,000,000(e) 149,983,678
09-09-10 0.140 200,000,000(e) 199,967,778
09-16-10 0.150 100,000,000(e) 99,979,633
09-23-10 0.160 150,000,000(e) 149,964,563
- -------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCIES
(Cost: $1,083,686,829) $1,083,686,829
- -------------------------------------------------------------------------------------
<Caption>
U.S. GOVERNMENT-INSURED DEBT (18.1%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
Straight-A Funding LLC
U.S. Treasury Government Guaranty(d)
08-09-10 0.370% $50,000,000(c) $49,995,000
08-10-10 0.310 47,500,000(c) 47,495,514
08-11-10 0.290 25,000,000(c) 24,997,632
08-18-10 0.230 25,000,000(c) 24,997,000
08-20-10 0.230 64,026,000(c) 64,017,463
09-02-10 0.410 60,175,000(c) 60,151,833
09-08-10 0.410 50,000,000(c) 49,977,792
09-21-10 0.310 30,100,000(c) 30,086,522
09-21-10 0.340 50,000,000(c) 49,975,444
09-22-10 0.280 26,262,000 26,251,174
09-22-10 0.320 30,000,000(c) 29,985,867
10-05-10 0.340 26,000,000(c) 25,983,793
10-06-10 0.330 30,000,000(c) 29,981,575
10-12-10 0.350 24,645,000(c) 24,627,509
- -------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT-INSURED DEBT
(Cost: $538,524,118) $538,524,118
- -------------------------------------------------------------------------------------
<Caption>
CERTIFICATES OF DEPOSIT (6.2%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
Citibank NA
08-02-10 0.210% $91,900,000 $91,900,000
Royal Bank of Canada
08-02-10 0.180 92,000,000 92,000,000
- -------------------------------------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $183,900,000) $183,900,000
- -------------------------------------------------------------------------------------
<Caption>
COMMERCIAL PAPER (31.8%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED (19.8%)
Amsterdam Funding Corp.
08-02-10 0.300% $50,000,000 $49,998,750
Argento Variable Funding Co. LLC
08-02-10 0.210 30,000,000 29,999,483
Bryant Park Funding LLC
08-09-10 0.280 32,677,000 32,674,468
08-16-10 0.290 50,000,000 49,993,333
Falcon Asset Securitization Co. LLC
08-11-10 0.260 50,000,000 49,995,722
</Table>
See accompanying Notes to Portfolio of Investments.
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COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 5
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMERCIAL PAPER (CONTINUED)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED (CONT.)
FCAR Owner Trust Series I
08-16-10 0.290% $45,000,000 $44,994,000
08-17-10 0.340 30,000,000 29,995,042
08-18-10 0.310 25,000,000 24,996,000
Regency Markets No. 1 LLC
08-12-10 0.330 49,409,000(c) 49,403,236
Salisbury Receivables Co. LLC
08-03-10 0.320 50,000,000(c) 49,998,250
08-30-10 0.260 45,000,000(c) 44,989,875
Sheffield Receivables Corp.
08-16-10 0.380 45,000,000(c) 44,992,000
Thunder Bay Funding LLC
08-16-10 0.270 37,142,000 37,137,378
Windmill Funding Corp.
08-23-10 0.460 50,000,000 49,984,985
---------------
Total 589,152,522
- -------------------------------------------------------------------------------------
BANKING (6.7%)
Barclays US Funding LLC
09-14-10 0.360 50,000,000 49,977,500
HSBC USA Inc.
08-13-10 0.240 50,000,000 49,995,486
08-27-10 0.230 50,000,000 49,991,000
Westpac Banking Corp.
08-30-10 0.300 50,000,000 49,987,083
---------------
Total 199,951,069
- -------------------------------------------------------------------------------------
LIFE INSURANCE (5.3%)
MetLife Short Term Funding LLC
08-12-10 0.330 45,000,000 44,994,749
08-20-10 0.320 34,000,000(c) 33,993,767
09-10-10 0.350 20,000,000 19,992,028
New York Life Capital Corp.
09-07-10 0.310 44,133,000(c) 44,118,559
09-13-10 0.300 15,000,000(c) 14,994,500
---------------
Total 158,093,603
- -------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost: $947,197,194) $947,197,194
- -------------------------------------------------------------------------------------
<Caption>
REPURCHASE AGREEMENTS (7.7%)
EFFECTIVE PRINCIPAL
ISSUER YIELD AMOUNT VALUE(a)
Barclays Bank PLC
dated 07-30-10, matures 08-02-10, repurchase price $140,002,450 (collateralized by:
U.S. Treasury total market value $140,000,041)
2.375% $140,000,000 $140,000,000
Morgan Stanley & Co.
dated 07-30-10, matures 08-02-10, repurchase price $90,001,425 (collateralized by:
U.S. Treasury Inflation-Indexed Bonds total market value $90,000,110)
2.375 90,000,000 90,000,000
- -------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost: $230,000,000) $230,000,000
- -------------------------------------------------------------------------------------
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (26.1%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED COMMERCIAL PAPER (5.2%)
Amsterdam Funding Corp.
08-16-10 0.450% $16,988,100 $16,988,100
Antalis US Funding Corp.
08-17-10 0.380 10,856,676 10,856,676
10-12-10 0.571 4,993,033 4,993,033
Argento Variable Funding Company LLC
08-12-10 0.370 9,996,917 9,996,917
Cancara Asset Securitisation LLC
08-12-10 0.330 999,734 999,734
Grampian Funding LLC
08-09-10 0.370 4,998,304 4,998,304
LMA Americas LLC
08-23-10 0.360 8,997,480 8,997,480
Regency Markets No. 1 LLC
08-09-10 0.360 9,996,700 9,996,700
Rheingold Securitization
10-15-10 0.621 14,979,075 14,979,075
10-25-10 0.621 5,188,855 5,188,855
Royal Park Investments Funding Corp.
09-22-10 0.601 14,978,500 14,978,500
10-06-10 0.551 1,997,250 1,997,250
Tempo Financial Holdings Corp.
08-04-10 0.350 9,999,125 9,999,125
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
6 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (CONTINUED)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED COMMERCIAL PAPER (CONT.)
Thames Asset Global Securities
09-20-10 0.551% $19,971,278 $19,971,278
Versailles Commercial Paper LLC
09-17-10 0.551 9,990,375 9,990,375
Windmill Funding Corp.
09-20-10 0.551 9,985,639 9,985,639
---------------
Total 154,917,041
- -------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT (12.3%)
Banco Popular Caisse d'Epargne
09-24-10 0.670 9,982,907 9,982,907
Bank of Tokyo Securities
10-14-10 0.550 14,978,946 14,978,946
Banque et Caisse d'Epargne de l'Etat
08-16-10 0.400 4,998,223 4,998,223
Barclays Bank PLC
08-31-10 0.421 20,000,000 20,000,000
BNP Paribas
10-15-10 0.411 16,000,000 16,000,000
BRED Banque Populaire
09-08-10 0.600 9,989,677 9,989,677
Credit Agricole
10-12-10 0.413 21,000,000 21,000,000
Credit Industrial et Commercial
08-02-10 0.460 4,000,000 4,000,000
08-18-10 0.680 12,500,000 12,500,000
Deutsche Bank AG
12-06-10 0.527 15,000,000 15,000,000
Dexia Credit Local
08-06-10 0.650 9,000,077 9,000,077
DZ Bank AG
08-09-10 0.470 15,000,000 15,000,000
KBC Bank NV
08-06-10 0.450 25,000,000 25,000,000
Landesbank Hessen Thuringen
08-10-10 0.440 9,995,968 9,995,968
Lloyds Bank PLC
10-14-10 0.520 5,500,000 5,500,000
Macquarie Bank Ltd.
08-03-10 0.400 14,998,833 14,998,833
N.V. Bank Nederlandse Gemeenten
09-13-10 0.380 10,000,000 10,000,000
Natixis
09-29-10 0.490 9,991,568 9,991,568
Norinchukin Bank
08-25-10 0.550 10,000,000 10,000,000
09-21-10 0.560 20,000,264 20,000,264
09-28-10 0.570 5,000,000 5,000,000
10-12-10 0.575 5,000,066 5,000,066
NyKredit Bank
08-06-10 0.460 10,000,000 10,000,000
Overseas Chinese Banking Corp.
08-06-10 0.420 1,500,000 1,500,000
09-21-10 0.590 10,000,000 10,000,000
09-29-10 0.590 10,000,000 10,000,000
Rabobank Group
10-27-10 0.377 7,000,000 7,000,000
11-03-10 0.407 15,000,000 15,000,000
Royal Bank of Scotland
08-09-10 0.320 5,001,072 5,001,072
Societe Generale
09-01-10 0.655 20,000,000 20,000,000
Union Bank of Switzerland
10-18-10 0.455 6,000,000 6,000,000
Westpac Banking Corp.
11-04-10 0.387 15,000,000 15,000,000
---------------
Total 367,437,601
- -------------------------------------------------------------------------------------
COMMERCIAL PAPER (1.2%)
State Development Bank of NorthRhine-Westphalia
10-15-10 0.491 9,987,342 9,987,342
Toyota Motor Credit Corp.
08-23-10 0.531 24,964,299 24,964,299
---------------
Total 34,951,641
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 7
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (CONTINUED)
EFFECTIVE PRINCIPAL
ISSUER YIELD AMOUNT VALUE(a)
REPURCHASE AGREEMENTS (7.4%)(f)
Barclays Capital, Inc.
dated 03-22-10, matures 08-30-10,
repurchase price
$5,001,981 0.460% $5,000,000 $5,000,000
Barclays Capital, Inc.
dated 07-30-10, matures 08-02-10,
repurchase price
$5,000,129 0.310 5,000,000 5,000,000
Cantor Fitzgerald & Co.
dated 07-30-10, matures 08-02-10,
repurchase price
$54,001,335 0.230 54,000,300 54,000,300
Citigroup Global Markets, Inc.
dated 07-30-10, matures 08-02-10,
repurchase price
$22,500,413 0.220 22,500,000 22,500,000
Mizuho Securities USA, Inc.
dated 07-30-10, matures 08-02-10,
repurchase price
$5,000,100 0.240 5,000,000 5,000,000
Morgan Stanley
dated 01-21-10, matures 08-30-10,
repurchase price
$25,009,903 0.460 25,000,000 25,000,000
Morgan Stanley
dated 02-22-10, matures 08-23-10,
repurchase price
$20,007,067 0.530 20,000,000 20,000,000
Morgan Stanley
dated 02-23-10, matures 08-23-10,
repurchase price
$15,005,300 0.530 15,000,000 15,000,000
Pershing LLC
dated 07-30-10, matures 08-02-10,
repurchase price
$45,001,163 0.310 45,000,000 45,000,000
RBS Securities, Inc.
dated 07-30-10, matures 08-02-10,
repurchase price
$4,000,120 0.360 4,000,000 4,000,000
RBS Securities, Inc.
dated 04-01-10, matures 09-03-10,
repurchase price
$15,006,708 0.460 15,000,000 15,000,000
UBS Securities LLC
dated 07-30-10, matures 08-02-10,
repurchase price
$4,375,094 0.210 4,375,017 4,375,017
---------------
Total 219,875,317
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL
RECEIVED FOR SECURITIES ON LOAN
(Cost: $777,181,600) $777,181,600
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $3,760,489,741)(g) $3,760,489,741
=====================================================================================
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on July 31,
2010. The maturity date disclosed represents the final maturity. For
purposes of Rule 2a-7, maturity is the later of the next put or interest
rate reset date.
- --------------------------------------------------------------------------------
8 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(c) Represents a security sold within terms of a private placement memorandum,
exempt from registration under Section 4(2) of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or other
"accredited investors." This security has been determined to be liquid
under guidelines established by the Fund's Board of Directors. This
security may be resold in transactions exempt from registration, normally
to qualified institutional buyers. At July 31, 2010, the value of these
securities amounted to $794,763,131 or 26.65% of net assets.
(d) Funding for this debt is provided by the Federal Financing Bank, which is
funded by the U.S. Department of the Treasury.
(e) At July 31, 2010, security was partially or fully on loan. See Note 4 to
the financial statements.
(f) The table below represents securities received as collateral for repurchase
agreements. This collateral, which is generally high quality short-term
obligations, is deposited with the Fund's custodian and, pursuant to the
terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. The market value of securities held as collateral for repurchase
agreements is monitored on a daily basis to ensure the existence of the
proper level of collateral.
<Table>
<Caption>
BARCLAYS CAPITAL, INC. (0.460%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Banc of America Commercial Mortgage Inc $645,360
Bear Stearns Commercial Mortgage Securities 352,577
Credit Suisse Mortgage Capital Certificates 540,777
Granite Master Issuer PLC 1,573,366
JP Morgan Chase Commercial Mortgage
Securities Corp 269,551
LB Commercial Conduit Mortgage Trust 421,173
Merrill Lynch Mortgage Trust 264,792
Paragon Mortgages PLC 812,939
Wachovia Bank Commercial Mortgage Trust 369,465
- -----------------------------------------------------------
Total market value of collateral securities $5,250,000
- -----------------------------------------------------------
<Caption>
BARCLAYS CAPITAL, INC. (0.310%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Rabobank Nederland $5,250,000
- -----------------------------------------------------------
Total market value of collateral securities $5,250,000
- -----------------------------------------------------------
<Caption>
CANTOR FITZGERALD & CO. (0.230%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Fannie Mae Discount Notes $1,224
Fannie Mae Grantor Trust 11,107
Fannie Mae Interest Strip 610,740
</Table>
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 9
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
CANTOR FITZGERALD & CO. (0.230%) (CONTINUED)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Fannie Mae Pool $5,701,362
Fannie Mae Principal Strip 51,970
Fannie Mae REMICS 4,529,796
Fannie Mae Whole Loan 726
Federal Farm Credit Bank 1,165,953
Federal Home Loan Bank Discount Notes 1,198,927
Federal Home Loan Banks 8,674,501
Federal Home Loan Mortgage Corp 744,374
Federal National Mortgage Association 1,976,016
FHLMC Structured Pass Through Securities 1,686,410
Freddie Mac Coupon Strips 3,932
Freddie Mac Discount Notes 287,886
Freddie Mac Non Gold Pool 2,505,720
Freddie Mac Reference REMIC 43,420
Freddie Mac REMICS 2,720,345
Freddie Mac Strips 364,596
Ginnie Mae I Pool 3,616,076
Ginnie Mae II Pool 3,198,370
Government National Mortgage Association 1,075,538
United States Treasury Bill 11,600,832
United States Treasury Inflation Indexed
Bonds 462,551
United States Treasury Strip Coupon 2,698,026
United States Treasury Strip Principal 149,909
- -----------------------------------------------------------
Total market value of collateral securities $55,080,307
- -----------------------------------------------------------
<Caption>
CITIGROUP GLOBAL MARKETS, INC. (0.220%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Fannie Mae REMICS $8,081,287
Freddie Mac Reference REMIC 776,537
Freddie Mac REMICS 10,894,571
Government National Mortgage Association 3,197,605
- -----------------------------------------------------------
Total market value of collateral securities $22,950,000
- -----------------------------------------------------------
<Caption>
MIZUHO SECURITIES USA, INC. (0.240%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Fannie Mae Pool $1,817,879
Fannie Mae REMICS 1,256,032
Freddie Mac Gold Pool 661,756
Freddie Mac Non Gold Pool 27,902
Freddie Mac REMICS 836,003
</Table>
- --------------------------------------------------------------------------------
10 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
MIZUHO SECURITIES USA, INC. (0.240%)
(CONTINUED)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Ginnie Mae I Pool $499,964
Ginnie Mae II Pool 464
- -----------------------------------------------------------
Total market value of collateral securities $5,100,000
- -----------------------------------------------------------
<Caption>
MORGAN STANLEY (0.460%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Amstel Funding Corp $4,410,181
Argento Variable Fund 3,628,824
Atlantis One Funding Corp 2,940,177
Landesbank Hsn-Thurny 2,940,494
LMA LMA Americas 3,388,022
Romulus Funding Corp 3,767,279
Scaldis Capital Ltd/LLC 4,098,633
Shell International Finance B.V 1,076,390
- -----------------------------------------------------------
Total market value of collateral securities $26,250,000
- -----------------------------------------------------------
<Caption>
MORGAN STANLEY (0.530%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Banc of America Large Loan Inc $404,124
Bear Stearns Commercial Mortgage Securities 93,414
Citigroup Commercial Mortgage Trust 651,599
Citigroup/Deutsche Bank Commercial Mortgage
Trust 725,118
Commercial Mortgage Pass Through Certificates 819,204
Credit Suisse Mortgage Capital Certificates 742,908
Credit Suisse/Morgan Stanley Commercial
Mortgage Certificate 172,951
Federal National Mortgage Association 390,966
GE Capital Commercial Mortgage Corp 21,706
Ginnie Mae I Pool 1,026,234
Ginnie Mae II Pool 4,153,793
Greenwich Capital Commercial Funding Corp 37,989
GS Mortgage Securities Corp II 1,544,183
JP Morgan Chase Commercial Mortgage
Securities Corp 751,057
LB-UBS Commercial Mortgage Trust 1,295,484
Merrill Lynch Floating Trust 219,198
Merrill Lynch Mortgage Trust 593,156
Morgan Stanley Capital I 1,090,757
Morgan Stanley Dean Witter Capital I 3,307
United States Treasury Note/Bond 2,221,391
Wachovia Bank Commercial Mortgage Trust 3,812,273
- -----------------------------------------------------------
Total market value of collateral securities $20,770,812
- -----------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
MORGAN STANLEY (0.530%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Banc of America Large Loan Inc $303,093
Bear Stearns Commercial Mortgage Securities 70,061
Citigroup Commercial Mortgage Trust 488,699
Citigroup/Deutsche Bank Commercial Mortgage
Trust 543,839
Commercial Mortgage Pass Through Certificates 614,403
Credit Suisse Mortgage Capital Certificates 557,181
Credit Suisse/Morgan Stanley Commercial
Mortgage Certificate 129,713
Federal National Mortgage Association 293,225
GE Capital Commercial Mortgage Corp 16,279
Ginnie Mae I Pool 769,676
Ginnie Mae II Pool 3,115,345
Greenwich Capital Commercial Funding Corp 28,492
GS Mortgage Securities Corp II 1,158,137
JP Morgan Chase Commercial Mortgage
Securities Corp 563,292
LB-UBS Commercial Mortgage Trust 971,613
Merrill Lynch Floating Trust 164,398
Merrill Lynch Mortgage Trust 444,867
Morgan Stanley Capital I 818,068
Morgan Stanley Dean Witter Capital I 2,480
United States Treasury Note/Bond 1,666,043
Wachovia Bank Commercial Mortgage Trust 2,859,205
- -----------------------------------------------------------
Total market value of collateral securities $15,578,109
- -----------------------------------------------------------
<Caption>
PERSHING LLC (0.310%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Fannie Mae Benchmark REMIC $116,820
Fannie Mae Pool 18,536,391
Fannie Mae REMICS 1,750,710
Federal Farm Credit Bank 157,797
Federal Home Loan Banks 478,487
Federal Home Loan Mortgage Corp 31,096
Federal National Mortgage Association 3,043
Freddie Mac Gold Pool 4,985,140
Freddie Mac Non Gold Pool 556,976
Freddie Mac REMICS 1,616,092
Ginnie Mae I Pool 1,009,778
Ginnie Mae II Pool 2,030,640
Government National Mortgage Association 526,057
United States Treasury Inflation Indexed
Bonds 924,907
United States Treasury Note/Bond 9,575,322
</Table>
- --------------------------------------------------------------------------------
12 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
PERSHING LLC (0.310%) (CONTINUED)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
United States Treasury Strip Coupon $1,312,809
United States Treasury Strip Principal 2,287,935
- -----------------------------------------------------------
Total market value of collateral securities $45,900,000
- -----------------------------------------------------------
<Caption>
RBS SECURITIES, INC. (0.360%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Accredited Mortgage Loan Trust $45,895
American Express Credit Account Master Trust 20,525
American Express Issuance Trust 3,201
AmeriCredit Automobile Receivables Trust 1,260
Ameriquest Mortgage Securities Inc 308,401
Avery Point CLO Ltd 15,263
BA Credit Card Trust 180,148
Banc of America Commercial Mortgage Inc 92,200
Bank of America Auto Trust 269,800
Bear Stearns Asset Backed Securities Trust 36,217
Capital Auto Receivables Asset Trust 2,428
Capital One Multi-Asset Execution Trust 48,112
Capital One Prime Auto Receivables Trust 18,479
CarMax Auto Owner Trust 22,517
Chase Issuance Trust 1,435
Citibank Credit Card Issuance Trust 158,450
Citigroup Commercial Mortgage Trust 64,712
Citigroup/Deutsche Bank Commercial Mortgage
Trust 583
CNH Equipment Trust 4,508
Commercial Mortgage Pass Through Certificates 20,999
Countrywide Asset-Backed Certificates 178,780
Credit-Based Asset Servicing and
Securitization LLC 150,040
First Franklin Mortgage Loan Asset Backed
Certificates 157,910
Ford Credit Auto Owner Trust 3,037
Franklin Auto Trust 2,156
Goal Capital Funding Trust 24,992
Goldman Sachs Specialty Lending CLO-I Ltd 134,980
Greenwich Capital Commercial Funding Corp 298,738
GS Mortgage Securities Corp II 411,883
Household Automotive Trust 1,312
John Deere Owner Trust 2,424
JP Morgan Chase Commercial Mortgage
Securities Corp 7,811
Keycorp Student Loan Trust 28,829
Marriott Vacation Club Owner Trust 26,657
Massachusetts Educational Financing Authority 64,853
Morgan Stanley Capital I 6,118
Nelnet Student Loan Trust 480,058
</Table>
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 13
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
RBS SECURITIES, INC. (0.360%) (CONTINUED)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Nissan Auto Lease Trust $11,232
Nissan Auto Receivables Owner Trust 11,463
Nordstrom Private Label Credit Card Master
Note Trust 15,490
Peco Energy Transition Trust 4,968
SLM Student Loan Trust 202,944
SMS Student Loan Trust 3,258
Terwin Mortgage Trust 102,709
Volkswagen Auto Lease Trust 331,212
Wachovia Bank Commercial Mortgage Trust 17,040
Wachovia Student Loan Trust 37,735
World Omni Auto Receivables Trust 166,306
- -----------------------------------------------------------
Total market value of collateral securities $4,200,068
- -----------------------------------------------------------
<Caption>
RBS SECURITIES, INC. (0.460%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
280 Funding Corp $642,146
AH Mortgage Advance Trust 232,098
American Home Mortgage Investment Trust 347,642
Banc of America Commercial Mortgage Inc 459,839
Banc of America Large Loan Inc 909,415
Bear Stearns Commercial Mortgage Securities 326,822
Bella Vista Mortgage Trust 16,002
CC Mortgage Funding Corp 97,191
Commercial Mortgage Pass Through Certificates 17,252
Countrywide Home Loan Mortgage Pass Through
Trust 42,193
Credit Suisse First Boston Mortgage
Securities Corp 219,760
Credit Suisse Mortgage Capital Certificates 303,413
First Horizon Alternative Mortgage Securities 18,200
First Republic Mortgage Loan Trust 351,275
Ford Credit Floorplan Master Owner Trust 619,650
GE Dealer Floorplan Master Note Trust 60,093
Greenwich Capital Commercial Funding Corp 438,418
GS Mortgage Securities Corp II 656,253
Harborview Mortgage Loan Trust 66,120
Harley-Davidson Motorcycle Trust 40,874
JP Morgan Chase Commercial Mortgage
Securities Corp 1,400,412
LB-UBS Commercial Mortgage Trust 1,308,920
Leafs CDO I Ltd 348,703
MLCC Mortgage Investors Inc 1,769
Morgan Stanley Capital I 647,343
MortgageIT Trust 30,776
Oak Hill Credit Partners 33,223
</Table>
- --------------------------------------------------------------------------------
14 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
RBS SECURITIES, INC. (0.460%) (CONTINUED)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Sequoia Mortgage Trust $2,075
Wachovia Bank Commercial Mortgage Trust 5,526,892
WaMu Mortgage Pass Through Certificates 559,853
Wells Fargo Mortgage Backed Securities Trust 25,409
- -----------------------------------------------------------
Total market value of collateral securities $15,750,031
- -----------------------------------------------------------
<Caption>
UBS SECURITIES LLC (0.210%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Fannie Mae Interest Strip $994,273
Fannie Mae Principal Strip 189,921
Federal Farm Credit Bank 526,840
Federal Home Loan Mortgage Corp 1,866,772
Freddie Mac Strips 884,723
- -----------------------------------------------------------
Total market value of collateral securities $4,462,529
- -----------------------------------------------------------
</Table>
(g) Also represents the cost of securities for federal income tax purposes at
July 31, 2010.
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 15
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date.
Valuation adjustments are not applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Short-term securities are valued using amortized cost, as permitted under Rule
2a-7 of the Investment Company Act of 1940, as amended. Generally, amortized
cost approximates the current fair value of these securities, but because the
value is not obtained from a quoted price in an active market, such securities
are reflected as Level 2.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as
- --------------------------------------------------------------------------------
16 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
Level 3 investments due to lack of market transparency and corroboration to
support these quoted prices. Additionally, valuation models may be used as the
pricing source for any remaining investments classified as Level 3. These models
rely on one or more significant unobservable inputs and/or significant
assumptions by the Fund Administrator. Inputs used in valuations may include,
but are not limited to, financial statement analysis, capital account balances,
discount rates and estimated cash flows, and comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of July 31, 2010:
<Table>
<Caption>
FAIR VALUE AT JULY 31, 2010
--------------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION(a) IDENTICAL ASSETS INPUTS(b) INPUTS TOTAL
- -----------------------------------------------------------------------------------------------
Short-Term Securities
U.S. Government
Agencies $-- $1,083,686,829 $-- $1,083,686,829
U.S. Government-
Insured Debt -- 538,524,118 -- 538,524,118
Certificates of
Deposit -- 183,900,000 -- 183,900,000
Commercial Paper -- 947,197,194 -- 947,197,194
Repurchase Agreements -- 230,000,000 -- 230,000,000
- -----------------------------------------------------------------------------------------------
Total Short-Term
Securities -- 2,983,308,141 -- 2,983,308,141
- -----------------------------------------------------------------------------------------------
Other
Investments of Cash
Collateral Received
for Securities on
Loan -- 777,181,600 -- 777,181,600
- -----------------------------------------------------------------------------------------------
Total Other -- 777,181,600 -- 777,181,600
- -----------------------------------------------------------------------------------------------
Total $-- $3,760,489,741 $-- $3,760,489,741
- -----------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) There were no significant transfers between Levels 1 and 2 during the
period.
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 800.SEC.0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling 800.345.6611.
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 17
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
JULY 31, 2010
<Table>
<Caption>
ASSETS
Investments, at value*
Securities (identified cost $2,753,308,141) $2,753,308,141
Repurchase agreements (identified cost $230,000,000) 230,000,000
Investments of cash collateral received for securities on loan
Short-term securities (identified cost $557,306,283) 557,306,283
Repurchase agreements (identified cost $219,875,317) 219,875,317
- ---------------------------------------------------------------------------------
Total investments (identified cost $3,760,489,741) 3,760,489,741
Cash 86,925
Accrued interest receivable 92,590
- ---------------------------------------------------------------------------------
Total assets 3,760,669,256
- ---------------------------------------------------------------------------------
LIABILITIES
Dividends payable to shareholders 775,512
Payable upon return of securities loaned 777,181,600
Other accrued expenses 46,406
- ---------------------------------------------------------------------------------
Total liabilities 778,003,518
- ---------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $2,982,665,738
- ---------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 29,826,804
Additional paid-in capital 2,952,853,636
Undistributed net investment income 2,611
Accumulated net realized gain (loss) (17,313)
- ---------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $2,982,665,738
- ---------------------------------------------------------------------------------
Shares outstanding 2,982,680,440
- ---------------------------------------------------------------------------------
Net asset value per share of outstanding capital stock $ 1.00
- ---------------------------------------------------------------------------------
*Value of securities on loan $ 829,579,510
- ---------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
18 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
STATEMENT OF OPERATIONS --------------------------------------------------------
<Table>
<Caption>
YEAR ENDED JULY 31, 2010
INVESTMENT INCOME
Income:
Interest $6,035,167
Income from securities lending -- net 806,986
- -----------------------------------------------------------------------------
Total income 6,842,153
- -----------------------------------------------------------------------------
Expenses:
Custodian fees 44,758
Shareholder reports and communications 11,058
Professional fees 28,135
Professional organization membership dues 6,427
Commitment fees for bank credit facility 23,234
- -----------------------------------------------------------------------------
Total expenses 113,612
- -----------------------------------------------------------------------------
Investment income (loss) -- net 6,728,541
- -----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on security transactions 4,822
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $6,733,363
- -----------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 19
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
YEAR ENDED JULY 31, 2010 2009
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 6,728,541 $ 26,871,635
Net realized gain (loss) on security transactions 4,822 (39,140,572)
Increase from payments by affiliate (Note 6) -- 39,122,218
- ------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 6,733,363 26,853,281
- ------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (6,726,386) (26,871,179)
- ------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS AT CONSTANT $1 NET ASSET VALUE
Proceeds from sales 25,537,736,980 16,234,642,143
Reinvestment of distributions at net asset value 6,588,211 26,941,738
Payments for redemptions (25,552,156,517) (16,490,996,879)
- ------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (7,831,326) (229,412,998)
- ------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (7,824,349) (229,430,896)
Net assets at beginning of year 2,990,490,087 3,219,920,983
- ------------------------------------------------------------------------------------------------
Net assets at end of year $ 2,982,665,738 $ 2,990,490,087
- ------------------------------------------------------------------------------------------------
Undistributed net investment income $ 2,611 $ 456
- ------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
20 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
FINANCIAL HIGHLIGHTS ----------------------------------------------------------
The following table is intended to help you understand the Fund's financial
performance. Certain information reflects financial results for a single share
held for the periods shown. Total returns assume reinvestment of all dividends
and distributions. Total returns are not annualized for periods of less than one
year.
<Table>
<Caption>
YEAR ENDED JULY 31,
-------------------------------------------
PER SHARE DATA 2010 2009 2008 2007(a)
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .00(b) .009 .04 .04
Net gains (losses) (both realized and
unrealized) .00(b) (.011) -- --
Increase from payments by affiliate -- .011 -- --
- ----------------------------------------------------------------------------------------------
Total from investment operations .00(b) .009 .04 .04
- ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.00)(b) (.009) (.04) (.04)
- ----------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------
TOTAL RETURN .25% .92%(c) 4.07% 4.66%
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
Total expenses .00%(d) .01% .01% .01%(e)
- ----------------------------------------------------------------------------------------------
Net investment income (loss) .23% 1.02% 3.93% 5.37%(e)
- ----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $2,983 $2,990 $3,220 $3,229
- ----------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) For the period from Sept. 26, 2006 (when shares became available) to July
31, 2007.
(b) Rounds to less than $0.01 per share.
(c) During the year ended July 31, 2009, the Fund received payments by an
affiliate. Had the Fund not received these payments, the total return would
have been lower by 1.14%.
(d) Rounds to less than 0.01%.
(e) Annualized.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 21
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
1. ORGANIZATION
Columbia Short-Term Cash Fund (the Fund) (formerly known as RiverSource Short-
Term Cash Fund) is a series of RiverSource Short Term Investments Series, Inc.
(the Corporation) and is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as a diversified, open-end management investment
company. The Corporation has 100 billion authorized shares of capital stock that
can be allocated among the separate series as designated by the Corporation's
Board of Directors (the Board). The Fund invests primarily in money market
instruments.
Investments in the Fund may be made only by investment companies, common or
commingled trust funds or similar organizations or persons that are accredited
investors within the meaning of the Securities Act of 1933 (as amended). At July
31, 2010, affiliated funds owned 100% of the Fund's outstanding shares.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
Securities in the Fund are valued utilizing the amortized cost valuation method
permitted in accordance with Rule 2a-7 under the 1940 Act provided certain
conditions are met, including that the Board continues to believe that the
amortized cost valuation method fairly reflects the market-based net asset value
per share of the Fund. This method involves valuing a portfolio security
initially at its cost and thereafter assuming a constant accretion or
amortization to maturity of any discount or premium, respectively. The Board has
established procedures intended to stabilize the Fund's net asset value for
purposes of sales and redemptions at $1.00 per share. These procedures include
determinations, at such intervals as the Board deems appropriate and reasonable
in light of current market conditions, of the extent, if any, to which the
Fund's market-based net asset value deviates from $1.00 per share. In the event
such deviation exceeds 1/2 of 1%, the Board will promptly consider what action,
if any, should be initiated.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. Generally, securities received as
collateral subject to repurchase agreements are deposited with the Fund's
custodian and, pursuant to the terms of the repurchase agreement, must have an
- --------------------------------------------------------------------------------
22 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. The market value of securities held as collateral
for repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income (which includes net short-term capital gains) to
shareholders. No provision for income or excise taxes is thus required. The Fund
is treated as a separate entity for federal income tax purposes.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all tax returns filed for the last three years.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, declared daily and payable monthly, are
reinvested in additional shares of the Fund at net asset value or payable in
cash.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Interest income, including amortization of premium and discount, is
recognized daily.
3. EXPENSES
INVESTMENT MANAGEMENT SERVICES
Under the Investment Management Services Agreement, Columbia Management
Investment Advisers, LLC (formerly known as RiverSource Investments, LLC) (the
Investment Manager), subject to the policies set by the Board, provides
investment management services. The Fund does not pay the Investment Manager a
fee for services, but it does pay taxes, brokerage commissions and nonadvisory
expenses.
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 23
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
COMPENSATION OF BOARD MEMBERS
The Fund does not pay compensation to the board members. Compensation and
certain other core expenses are paid directly by other funds managed by the
Investment Manager that invest in this Fund.
4. LENDING OF PORTFOLIO SECURITIES
The Fund has entered into a Master Securities Lending Agreement (the Agreement)
with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement
authorizes JPMorgan as lending agent to lend securities to authorized borrowers
in order to generate additional income on behalf of the Fund. Pursuant to the
Agreement, the securities loaned are secured by cash or U.S. government
securities equal to at least 100% of the market value of the loaned securities.
Any additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Cash collateral received is invested by the lending agent on behalf of the Fund
into authorized investments pursuant to the Agreement. The investments made with
the cash collateral are listed in the Portfolio of Investments. The values of
such investments and any uninvested cash collateral are disclosed in the
Statement of Assets and Liabilities along with the related obligation to return
the collateral upon the return of the securities loaned. At July 31, 2010,
securities valued at $829,579,510 were on loan, secured by U.S. government
securities valued at $59,642,198 and by cash collateral of $777,181,600 invested
in short-term securities or in cash equivalents.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Net income of
$806,986 earned from securities lending for the year ended July 31, 2010 is
included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
- --------------------------------------------------------------------------------
24 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
5. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
15, 2009, replacing a prior credit facility. The credit facility agreement,
which is a collective agreement between the Fund and certain other funds managed
by the Investment Manager, severally and not jointly, permits collective
borrowings up to $300 million. The borrowers shall have the right, upon written
notice to the Administrative Agent to request an increase of up to $200 million
in the aggregate amount of the credit facility from new or existing lenders,
provided that the aggregate amount of the credit facility shall at no time
exceed $500 million. Participation in such increase by any existing lender shall
be at such lender's sole discretion. Interest is charged to each Fund based on
its borrowings at a rate equal to the sum of the federal funds rate plus (i)
1.25% per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the
amount of such excess. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.10% per annum, in addition to an upfront fee equal to its pro rata share of
0.04% of the amount of the credit facility. Prior to Oct. 15, 2009, the credit
facility agreement, which was a collective agreement between the Fund and
certain other funds managed by the Investment Manager, severally and not
jointly, permitted collective borrowings up to $475 million. Interest was
charged to each Fund based on its borrowings at a rate equal to the federal
funds rate plus 0.75%. The Fund also paid a commitment fee equal to its pro rata
share of the amount of the credit facility at a rate of 0.06% per annum, in
addition to an upfront fee equal to its pro rata share of 0.02% of the amount of
the credit facility. The Fund had no borrowings during the year ended July 31,
2010.
6. PAYMENTS BY AFFILIATE
On Sept. 15, 2008, Lehman Brothers Holdings Inc. (Lehman Brothers) filed a
Chapter 11 bankruptcy petition. At that time, the Fund owned $50 million in
medium term commercial paper issued by Lehman Brothers (the Lehman Notes). The
value of the Lehman Notes declined following Lehman Brothers filing of its
bankruptcy petition. From Sept. 16, 2008 through Sept. 30, 2008, Ameriprise
Financial, Inc. (Ameriprise Financial), parent company of the Investment
Manager, purchased the total $50 million par of the Lehman Notes from the Fund
for cash at a price equal to amortized cost plus accrued interest in accordance
with Rule 17a-9 of the 1940 Act. The amount shown in the Fund's
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 25
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
Statement of Changes in Net Assets as payments by affiliate is equal to the
difference between the fair value of the Lehman Notes at purchase date and the
cash received from Ameriprise Financial.
7. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes. The character of distributions made during
the year from net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to the
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gains were
recorded by the Fund.
The tax character of distributions paid for the periods indicated was as
follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2010 2009
- ----------------------------------------------------------------
Distributions paid from:
Ordinary income $6,726,386 $26,871,179
Long-term capital gain -- --
</Table>
At July 31, 2010, the components of distributable earnings on a tax basis were
as follows:
<Table>
Undistributed ordinary income..................... $778,123
Undistributed accumulated long-term gain.......... $ --
Accumulated realized loss......................... $(17,313)
Unrealized appreciation (depreciation)............ $ --
</Table>
For federal income tax purposes, the Fund had a capital loss carry-over of
$17,313 at July 31, 2010, that if not offset by capital gains will expire in
2017.
For the year ended July 31, 2010, $4,822 of capital loss carry-over was utilized
and/or expired unused. It is unlikely the Board will authorize a distribution of
any net realized capital gains until the available capital loss carry-over has
been offset or expires. There is no assurance that the Fund will be able to
utilize all of its capital loss carry-over before it expires.
8. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through the date of issuance of the Fund's financial statements. There were no
events or transactions that occurred during the period that materially impacted
the amounts or disclosures in the Fund's financial statements.
- --------------------------------------------------------------------------------
26 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
9. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as legacy
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the
Supreme Court), asking the Supreme Court to stay the District Court proceedings
while the Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v.
Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth
Circuit's decision in the Gallus case and remanded the case to the Eighth
Circuit for further consideration in light of the Supreme Court's decision in
Jones v. Harris Associates. On June 4, 2010, the Eighth Circuit remanded the
Gallus case to the District Court for further consideration in light of the
Supreme Court's decision in Jones v. Harris Associates.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 27
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
also agreed to retain an independent distribution consultant to assist in
developing a plan for distribution of all disgorgement and civil penalties
ordered by the SEC in accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the funds' Boards of Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
28 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -----------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
COLUMBIA SHORT-TERM CASH FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Columbia Short-Term Cash Fund (the Fund)
(formerly RiverSource Short-Term Cash Fund) of the RiverSource Short Term
Investment Series, Inc., as of July 31, 2010, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods shown therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of July 31, 2010, by correspondence with the custodian and
brokers, or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audits provide a reasonable basis for our
opinion.
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 29
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued) -----------
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Columbia Short-Term Cash Fund of the RiverSource Short Term Investment Series,
Inc. at July 31, 2010, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the periods shown therein, in
conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
September 20, 2010
- --------------------------------------------------------------------------------
30 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
FEDERAL INCOME TAX INFORMATION ------------------------------------------------
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended July 31, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Qualified Dividend Income for individuals.................... 0.00%
Dividends Received Deduction for corporations................ 0.00%
U.S. Government Obligations.................................. 18.66%
</Table>
The Fund designates as distributions of long-term gains, to the extent necessary
to fully distribute such capital gains, earnings and profits distributed to
shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 31
BOARD MEMBERS AND OFFICERS -----------------------------------------------------
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board. The following is a list of the Fund's Board members.
Each Board member oversees 150 Columbia, RiverSource, Seligman and Threadneedle
funds. Under current Board policy, members generally serve until the next
regular shareholders' meeting, until he or she reaches the mandatory retirement
age established by the Board, or the fifteenth anniversary of the first Board
meeting they attended as members of the Board.
INDEPENDENT BOARD MEMBERS*
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Kathleen Blatz Board member since Chief Justice, Minnesota Supreme Court, 1998-2006; None
901 S. Marquette Ave. 1/11/06 Attorney
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Arne H. Carlson Board member since Chair, RiverSource and Threadneedle Funds, 1999-2006; None
901 S. Marquette Ave. 1/5/99 former Governor of Minnesota
Minneapolis, MN 55402
Age 76
- ------------------------------------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None
901 S. Marquette Ave. 7/11/07 Leadership (consulting company)
Minneapolis, MN 55402
Age 55
- ------------------------------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None
901 S. Marquette Ave. 11/1/04 University; former Dean, McCallum Graduate School of
Minneapolis, MN 55402 Business, Bentley University
Age 59
- ------------------------------------------------------------------------------------------------------------------------------
Anne P. Jones Board member since Attorney and Consultant None
901 S. Marquette Ave. 3/1/85
Minneapolis, MN 55402
Age 75
- ------------------------------------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member since Former Managing Director, Shikiar Asset Management American Progressive
901 S. Marquette Ave. 11/1/05 Insurance; Hapoalim
Minneapolis, MN 55402 Securities USA, Inc.
Age 74
- ------------------------------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries,
901 S. Marquette Ave. since 1/1/07, College Inc. (manufactures
Minneapolis, MN 55402 Board member irrigation systems)
Age 71 since 1/1/02
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
32 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
John F. Maher Board member Retired President and Chief Executive Officer and None
901 S. Marquette Ave. since 12/10/08 former Director, Great Western Financial Corporation
Minneapolis, MN 55402 (financial services), 1986-1997
Age 67
- ------------------------------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None
901 S. Marquette Ave. 11/1/04 real estate and asset management company)
Minneapolis, MN 55402
Age 58
- ------------------------------------------------------------------------------------------------------------------------------
Leroy C. Richie Board member Counsel, Lewis & Munday, P.C. since 1987; Vice Digital Ally, Inc.
901 S. Marquette Ave. since 11/11/08 President and General Counsel, Automotive Legal (digital imaging);
Minneapolis, MN 55402 Affairs, Chrysler Corporation, 1990-1997 Infinity, Inc. (oil
Age 69 and gas exploration
and production); OGE
Energy Corp. (energy
and energy services)
- ------------------------------------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member since Chief Executive Officer and Director, RiboNovix, Inc. Idera
901 S. Marquette Ave. 11/13/02 since 2003 (biotechnology); former President, Aquila Pharmaceuticals,
Minneapolis, MN 55402 Biopharmaceuticals Inc.
Age 66 (biotechnology);
Healthways, Inc.
(health management
programs)
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* Mr. Laikind may be deemed, as a technical matter, an interested person of
RiverSource International Managers Series, Inc. and RiverSource Variable
Series Trust because he serves as an independent director of a broker-dealer
that has executed transactions for subadvisers to certain of the funds.
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 33
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
BOARD MEMBER AFFILIATED WITH THE INVESTMENT MANAGER*
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
William F. Truscott Board member Chairman of the Board, Columbia Management Investment None
53600 Ameriprise since 11/7/01, Advisers, LLC (formerly RiverSource Investments, LLC)
Financial Center Vice President since since May 2010 (previously President, Chairman of the
Minneapolis, MN 55474 2002 Board and Chief Investment Officer, 2001-April 2010);
Age 50 Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010; Chief Executive
Officer, U.S. Asset Management &
President -- Annuities, Ameriprise Financial, Inc.
since May 2010 (previously President -- U.S. Asset
Management and Chief Investment Officer, 2005-April
2010 and Senior Vice President -- Chief Investment
Officer, 2001-2005); Director, President and Chief
Executive Officer, Ameriprise Certificate Company since
2006; Director, Columbia Management Investment
Distributors, Inc. (formerly RiverSource Fund
Distributors, Inc.) since May 2010 (previously Chairman
of the Board and Chief Executive Officer, 2008-April
2010); Chairman of the Board and Chief Executive
Officer, RiverSource Distributors, Inc. since 2006
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* Interested person (as defined under the 1940 Act) by reason of being an
officer, director, security holder and/or employee of the investment manager
or Ameriprise Financial.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling 800.345.6611 or contacting
your financial intermediary.
- --------------------------------------------------------------------------------
34 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
J. Kevin Connaughton President since Senior Vice President and General Manager -- Mutual
One Financial Center 5/1/10 Fund Products, Columbia Management Investment Advisers,
Boston, MA 02111 LLC since May 2010; President, Columbia Funds since
Age 46 2009 (previously Senior Vice President and Chief
Financial Officer, June 2008 -- January 2009);
President, Atlantic Funds and Nations Funds since 2009;
Managing Director of Columbia Management Advisors, LLC,
December 2004 -- April 2010; Treasurer, Columbia Funds,
October 2003 -- May 2008; Treasurer, the Liberty Funds,
Stein Roe Funds and Liberty All-Star Funds, December
2000 -- December 2006; Senior Vice
President -- Columbia Management Advisors, LLC, April
2003 -- December 2004; President, Columbia Funds,
Liberty Funds and Stein Roe Funds, February
2004 -- October 2004
- --------------------------------------------------------------------------------------------------------
Amy K. Johnson Vice President since Senior Vice President and Chief Operating Officer,
5228 Ameriprise Financial 12/5/06 Columbia Management Investment Advisers, LLC (formerly
Center Minneapolis, MN RiverSource Investments, LLC) since May 2010
55474 (previously Chief Administrative Officer, 2009 -- April
Age 45 2010 and Vice President -- Asset Management and Trust
Company Services, 2006-2009 and Vice
President -- Operations and Compliance, 2004-2006);
Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010; Director of Product
Development -- Mutual Funds, Ameriprise Financial,
Inc., 2001-2004
- --------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Chief Financial Officer, Columbia Management Investment
105 Ameriprise 7/10/02 Distributors, Inc. (formerly RiverSource Fund
Financial Center Distributors, Inc.) and of Seligman Data Corp. since
Minneapolis, MN 55474 2008; Vice President -- Investment Accounting,
Age 55 Ameriprise Financial, Inc. since 2002; Chief Financial
Officer, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 35
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Chief Legal Officer and Assistant Secretary, Columbia
5228 Ameriprise Financial General Counsel and Management Investment Advisers, LLC (formerly
Center Secretary since RiverSource Investments, LLC) since June 2005; Vice
Minneapolis, MN 55474 12/5/06 President and Lead Chief Counsel -- Asset Management,
Age 51 Ameriprise Financial, Inc. since May 2010 (previously
Vice President and Chief Counsel -- Asset Management,
2005-April 2010 and Vice President -- Asset Management
Compliance, 2004-2005); Senior Vice President,
Secretary and Chief Legal Officer, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010; Vice
President, Chief Counsel and Assistant Secretary,
Columbia Management Investment Distributors, Inc.
(formerly RiverSource Fund Distributors, Inc.) since
2008; Vice President, General Counsel and Secretary,
Ameriprise Certificate Company since 2005; Chief
Counsel, RiverSource Distributors, Inc. since 2006;
Senior Vice President and Chief Compliance Officer,
USBancorp Asset Management, 2002-2004
- --------------------------------------------------------------------------------------------------------
Michael A. Jones Vice President since Director and President, Columbia Management Investment
100 Federal Street 5/1/10 Advisers, LLC since May 2010; President and Director,
Boston, MA 02110 Columbia Management Investment Distributors, Inc. since
Age 51 May 2010; Senior Vice President, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010;
Manager, Chairman, Chief Executive Officer and
President, Columbia Management Advisors, LLC,
2007 -- April 2010; Chief Executive Officer, President
and Director, Columbia Management Distributors, Inc.,
2006 -- April 2010; former Co-President and Senior
Managing Director, Robeco Investment Management
- --------------------------------------------------------------------------------------------------------
Colin Moore Vice President since Chief Investment Officer, Columbia Management
One Financial Center 5/1/10 Investment Advisers, LLC since May 2010; Senior Vice
Boston, MA 02111 President, Atlantic Funds, Columbia Funds and Nations
Age 52 Funds since May 2010; Manager, Managing Director and
Chief Investment Officer, Columbia Management Advisors,
LLC, 2007- April 2010; Head of Equities, Columbia
Management Advisors, LLC, 2002-Sept. 2007
- --------------------------------------------------------------------------------------------------------
Linda Wondrack Chief Compliance Vice President and Chief Compliance Officer, Columbia
One Financial Center Officer since 5/1/10 Management Investment Advisers, LLC since May 2010;
Boston, MA 02111 Chief Compliance Officer, Columbia Funds since 2007;
Age 46 Senior Vice President and Chief Compliance Officer,
Atlantic Funds and Nations Funds since 2007; Director
(Columbia Management Group, LLC and Investment Product
Group Compliance), Bank of America, June 2005 -- April
2010; Director of Corporate Compliance and Conflicts
Officer, MFS Investment Management (investment
management), August 2004 -- May 2005
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
36 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Vice President -- Compliance, Ameriprise Financial,
2934 Ameriprise Financial Prevention Officer Inc. since 2008; Anti-Money Laundering Officer and
Center since 11/9/05 and Identity Theft Prevention Officer, Columbia Management
Minneapolis, MN 55474 Identity Theft Investment Distributors, Inc. (formerly RiverSource
Age 46 Prevention Officer Fund Distributors, Inc.) since 2008; Anti-Money
since 2008 Laundering Officer, Ameriprise Financial, Inc. since
2005; Compliance Director, Ameriprise Financial, Inc.,
2004-2008
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 37
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT ----------------------------------------------------------------------
Columbia Management Investment Advisers, LLC ("Columbia Management" or the
"investment manager"), formerly known as RiverSource Investments, LLC, a wholly-
owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise Financial"), serves
as the investment manager to the Fund. Under an investment management services
agreement (the "IMS Agreement"), Columbia Management provides investment advice
and other services to the Fund and all Funds branded Columbia, RiverSource,
Seligman and Threadneedle.
On an annual basis, the Fund's Board of Directors (the "Board"), including the
independent Board members (the "Independent Directors"), considers renewal of
the IMS Agreement. Columbia Management prepared detailed reports for the Board
and its Contracts Committee in March and April 2010, including reports based on
data provided by independent organizations and a comprehensive response to each
item of information requested by independent legal counsel to the Independent
Directors ("Independent Legal Counsel") in a letter to the investment manager,
to assist the Board in making this determination. All of the materials presented
in March and April 2010 were first supplied in draft form to designated
representatives of the Independent Directors, i.e., Independent Legal Counsel,
the Chair of the Board and the Chair of the Contracts Committee, and the final
materials were revised to reflect comments provided by these Board
representatives. In addition, throughout the year, the Board (or its committees)
reviews information prepared by Columbia Management addressing the services
Columbia Management provides and Fund performance. The Board accords particular
weight to the work, deliberations and conclusions of the Contracts Committee,
the Investment Review Committee and the Compliance Committee in determining
whether to continue the IMS Agreement. At the April 6-8, 2010 in-person Board
meeting, Independent Legal Counsel reviewed with the Independent Directors,
including in an executive session without management, various factors relevant
to the Board's consideration of advisory agreements and the Board's legal
responsibilities related to such consideration. Following an analysis and
discussion of the factors identified below, the Board, including all of the
Independent Directors, approved renewal of the IMS Agreement.
Nature, Extent and Quality of Services Provided by Columbia Management: The
Board analyzed various reports and presentations it had received detailing the
services performed by Columbia Management, as well as its expertise, resources
and capabilities. The Board specifically considered many developments during the
past year concerning the services provided by Columbia Management, including, in
particular, the continued investment in, and resources dedicated to, the Fund's
operations, most notably, management's announcement of the massive investment
- --------------------------------------------------------------------------------
38 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
made in the acquisition of the long-term asset management business of Columbia
Management Group, LLC (the "Columbia Transaction") and the completed integration
of J. & W. Seligman & Co. Incorporated, acquisitions which should continue to
enhance investment capabilities and provide access to a greater depth of
experienced portfolio managers in key categories. The Board noted, in
particular, that upon the close of the Columbia Transaction, the investment
manager will have grown to 10 investment offices (compared to 6 in 2009). In
addition, the Board reviewed information concerning the investment manager's new
Chief Investment Officer upon the close of the Columbia Transaction, including
the application of his particular investment philosophy, which is intended to
enhance the risk and portfolio management oversight of the entire fund family.
Moreover, in connection with the Board's evaluation of the overall package of
services provided by Columbia Management, the Board considered the quality of
the administrative and transfer agency services provided by Columbia
Management's affiliates to the Fund. The Board also reviewed the financial
condition of Columbia Management and its affiliates, and each entity's ability
to carry out its responsibilities under the IMS Agreement. Further, the Board
considered Columbia Management's ability to retain key personnel in certain
targeted areas and its expectations in this regard. The Board also discussed the
acceptability of the terms of the IMS Agreement (including the relatively broad
scope of services required to be performed by Columbia Management). The Board
concluded that the services being performed under the IMS Agreement were of a
reasonably high quality.
Based on the foregoing, and based on other information received (both oral and
written, including the information on investment performance referenced below)
and other considerations, the Board concluded that Columbia Management and its
affiliates were in a position to continue to provide a high quality and level of
services to the Fund.
Investment Performance: For purposes of evaluating the nature, extent and
quality of services provided under the IMS Agreement, the Board carefully
reviewed the investment performance of the Fund. In this regard, the Board
considered detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund and the
net assets of the Fund. The Board observed that the Fund's investment
performance met expectations.
Comparative Fees, Costs of Services Provided and the Profits Realized By
Columbia Management and its Affiliates from their Relationships with the
Fund: The Board reviewed comparative fees and the costs of services to be
provided
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 39
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT (continued) ----------------------------------------------------------
under the IMS Agreement. The Board accorded particular weight to the notion that
the level of fees should reflect a rational pricing model applied consistently
across the various product lines in the legacy RiverSource Funds' family, while
assuring that the overall fees for each fund (with few defined exceptions) are
generally in line with the "pricing philosophy" (i.e., that the total expense
ratio of each fund, with few exceptions, is at or below the median expense ratio
of funds in the same comparison group). The Board observed that the Fund,
commonly referred to as a "cash pool fund," is designed to serve as a vehicle
for other funds managed by Columbia Management to invest their cash balances as
a way to improve their portfolio diversification and returns. Because Columbia
Management collects management fees on the funds that invest in the Fund, the
Fund does not carry management fees. The Board also noted that the Fund does not
carry administrative fees, transfer agency fees or distribution fees.
The Board also considered various preliminary integration plans in connection
with the Columbia Transaction which, if implemented, would impact the fee
structures of various legacy RiverSource Funds. The Board was satisfied with the
principles underlying these plans, which, at their preliminary stage, are
designed to achieve a rational, consistent pricing model across the combined
fund families, as well as preserve the "pricing philosophy" of the legacy
RiverSource Funds.
The Board also considered the expected profitability of Columbia Management and
its affiliates in connection with Columbia Management providing investment
management services to the Fund. In this regard, the Board referred to a
detailed profitability report, discussing the profitability to Columbia
Management and Ameriprise Financial from managing and operating the Fund,
including data showing comparative profitability over the past two years. In
this regard, the Board observed slightly reduced profitability in 2009 vs. 2008.
The Board concluded that profitability levels were reasonable.
Economies of Scale to be Realized: Given that the Fund does not pay any
investment management services fees, the Board determined not to accord weight
to the lack of any material economies of scale associated with the growth of the
Fund.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the fees were fair and reasonable in light of the extent and
quality of services provided. In reaching this conclusion, no single factor was
determinative. On April 8, 2010, the Board, including all of the Independent
Directors, approved the renewal of the IMS Agreement for an additional annual
period.
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40 COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT
PROXY VOTING -------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling 800.345.6611; contacting your financial intermediary; or searching
the website of the Securities and Exchange Commission (SEC) at
http://www.sec.gov. Information regarding how the Fund voted proxies relating to
portfolio securities is filed with the SEC by August 31 for the most recent 12-
month period ending June 30 of that year, and is available without charge by
visiting columbiamanagement.com; or searching the website of the SEC at
www.sec.gov.
S-6283 F (9/10)
- --------------------------------------------------------------------------------
COLUMBIA SHORT-TERM CASH FUND -- 2010 ANNUAL REPORT 41
Item 2. Code of Ethics.
(a) The Registrant has adopted a code of ethics that applies to the
Registrant's principal executive officer and principal financial officer.
(b) During the period covered by this report, there were not any amendments
to a provision of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, there were no waivers,
including any implicit waivers, from a provision of the code of ethics
described in 2(a) above that relates to one or more of the items set forth
in paragraph (b) of this item's instructions.
Item 3. Audit Committee Financial Expert.
The Registrant's board of directors has determined that independent
directors Pamela G. Carlton, Jeffrey Laikind, John F. Maher and Anne P.
Jones, each qualify as audit committee financial experts.
Item 4. Principal Accountant Fees and Services
(a) Audit Fees. The fees for the year ended July 31, to Ernst & Young LLP for
professional services rendered for the audits of the annual financial
statements for RiverSource Short Term Investments Series, Inc. were as
follows:
2010 - $26,487 2009 - $26,431
(b) Audit-Related Fees. The fees for the year ended July 31, to Ernst & Young
LLP for additional audit-related services rendered related to the
semiannual financial statement review and the 2010 transfer agent 17Ad-13
review for RiverSource Short Term Investments Series, Inc. were as follows:
2010 - $1,866 2009 - $375
(c) Tax Fees. The fees for the year ended July 31, to Ernst & Young LLP for tax
compliance related services rendered for RiverSource Short Term Investments
Series, Inc. were as follows:
2010 - $3,196 2009 - $3,180
(d) All Other Fees. The fees for the year ended July 31, to Ernst & Young LLP
for additional professional services rendered for RiverSource Short Term
Investments Series, Inc. were as follows:
2010 - $0 2009 - $0
(e) (1) Audit Committee Pre-Approval Policy. Pursuant to Sarbanes-Oxley
pre-approval requirements, all services to be performed by Ernst & Young
LLP for the registrant and to the registrant's investment adviser and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant must be
pre-approved by the audit committee.
(e) (2) 100% of the services performed for items (b) through (d) above during
2010 and 2009 were pre-approved by the audit committee.
(f) Not applicable.
(g) Non-Audit Fees. The fees for the year ended July 31, to Ernst & Young LLP
by the registrant for non-audit fees and by the registrant's investment
adviser, and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant were as
follows:
2010 - $2,116,023 2009 - $826,041
(h) 100% of the services performed in item (g) above during 2010 and 2009 were
pre-approved by the Ameriprise Financial Audit Committee and/or the
RiverSource Mutual Funds Audit Committee.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. Investments.
(a) The registrant's "Schedule 1 - Investments in securities of unaffiliated
issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this
Form N-CSR.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not
applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial
officer, based on their evaluation of the registrant's disclosure controls
and procedures as of a date within 90 days of the filing of this report,
have concluded that such controls and procedures are adequately designed to
ensure that information required to be disclosed by the registrant in Form
N-CSR is accumulated and communicated to the registrant's management,
including principal executive officer and principal financial officer, or
persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
(b) There was no change in the registrant's internal controls over
financial reporting that occurred during the registrant's second fiscal
quarter of the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
Item 12. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR,
is attached as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as
Exhibit99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) RiverSource Short Term Investments Series, Inc.t
By /s/ J. Kevin Connaughton
----------------------------------
J. Kevin Connaughton
President and Principal Executive
Officer
Date October 7, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By /s/ J. Kevin Connaughton
----------------------------------
J. Kevin Connaughton
President and Principal Executive
Officer
Date October 7, 2010
By /s/ Jeffrey P. Fox
----------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial
Officer
Date October 7, 2010